Proposals to Improve VA’s Veteran-owned Small Business (VOSB) Verification

December 2, 2015

Proposed Rule and New Legislation Take Different Approaches to Ease VOSB Requirements

Efforts continue to make it easier for Veteran-owned (VOSB) and Service-disabled Veteran-owned Small Businesses (SDVOSBs) to become verified under the U.S. Department of Veterans Affair’s Veterans First Contracting Program.  The VA issued a proposed rule on November 6th that would ease ownership and control requirements in an effort to strike a better balance between ensuring that SDVOSBs are owned and controlled by veterans and not discouraging minority investment and participation in veteran-owned businesses.

On that same day, Congressman Mike Coffman (CO-06), introduced the Improving Opportunities for Service-Disabled Veteran-Owned Small Business Act of 2015 (HR 3945) to reform, streamline, and simplify the current process the VA and the SBA use to be certified as eligible, largely by bringing the VA’s definition and requirements into line with those of the SBA SDVOSB program.  However, if the changes proposed in the VA’s new rule are adopted, the VA’s ownership and control definitions will actually be less restrictive than those currently in force under the SBA program.

See these two articles below for an excellent discussion of both proposals.  And keep your eye on their progress in the coming months.

VA Proposes SDVOSB Overhaul

Source:, Steven Koprince, November 6, 2015

In a proposed rule released today, the VA is seeking to “find an appropriate balance between preventing fraud in the Veterans First Contracting Program and providing a process that would make it easier for more VOSBs to become verified.” And while the proposal isn’t perfect, it looks like a step in the right direction.

The VA’s proposal attempts to strike a better balance between ensuring that SDVOSBs are owned and controlled by veterans, on the one hand, while on the other hand tacitly acknowledging that overly-stringent “unconditional” ownership and control provisions can discourage minority investment and participation in veteran-owned businesses.

To that end, the VA proposes to amend its “ownership” regulation, which currently requires the veteran to “unconditionally” own his or her interest. This requirement has come under fire, including by the Court of Federal Claims, because the VA previously interpreted it to prohibit commonplace ownership transfer restrictions, such as a minority owner’s right of first refusal to buy a veteran’s shares in the event the veteran wished to sell those shares. (The VA changed its internal interpretation of the rule in 2013).
–  Read More ...

Clarification, cutting ‘red tape’ at heart of proposed changes to VA contracting program

Source: Federal News Radio, Meredith Somers, November 11, 2015

Rep. Mike Coffman (R-Colo.), chairman of the Committee on Veterans’ Affairs Subcommittee on Oversight and Investigations, recently introduced a bill he called a “three-pronged approach” to reform how the government awards its contracts and ensure the program “operates effectively for our veterans.”

“Currently, veteran-owned small businesses (VOSB) and service-disabled veteran-owned small businesses (SDVOSB) face incredible challenges getting certified to participate in seeking and securing federal contracts under the program’s rules,” Coffman said in a statement. “With over 50,000 small businesses attempting to use congressionally established VOSB and SDVOSB contracting programs, it is critical that we protect our nation’s veterans seeking federal contracts from the VA and Small Business Administration.”

The bill, entitled the Improving Opportunities for Service-Disabled Veteran-Owned Small Business Act of 2015, would create an appeals process that lets a business owner take their case to the SBA’s office of hearings and appeals. The decision of the office would be considered the final word.        Read More …


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