The Department of Veterans Affairs (VA) published an Interim Final Rule in the February 21, 2017, edition of the Federal Register, increasing the period for re-verification examination by VA’s Center for Verification and Evaluation (CVE) of Service-Disabled Veteran-Owned Small Business (SDVOSB) and Veteran-Owned Small Business (VOSB) program participants from two years to three years.
The purpose of this change, effective February 21, 2017, is to reduce the administrative burden on SDVOSBs and VOSBs participating in VA acquisition set-aside for these types of firms pursuant to the authorities of Public Law 109-461, the Veterans Benefits, Health Care and Information Technology Act of 2006 (the Act), implemented by the VA as the “Veterans First Contracting Program.”
The Act requires VA to verify ownership and control of SDVOSBs and VOSBs in order for those firms to participate in acquisitions VA sets aside for SDVOSBs and VOSBs. VA has continuously administered the verification program since February 2010, at which time re-verification was required annually. In June 2012, the re-examination period was extended to two years.
In changing from a biennial re-examination eligibility period to three years, VA believes it adequately balances maintaining program integrity while reducing the administrative burden on SDVOSBs and VOSBs. In reaching this determination, VA cited statistical data from Fiscal Year 2016, which showed out of 1,109 reverification applications, only ten were denied, ergo, only 0.9 percent of reverification applications were found to be ineligible after two years.
VA relies very heavily on its initial eligibility examination of firms, which it describes as robust, and as such believes the integrity of the program will not be compromised by extending the period for reverification.
As part of its initial examination, VA CVE reviews personal and company documentation to verify ownership and control by Veterans of the business applying for verification. Documents include personal and company financial statements; Federal personal and business income tax returns; personal history statements; articles of incorporation/organization; corporate by-laws or operating agreements; organizational, annual, and board/member meeting records; stock ledgers and certificates; State-issued certificates of good standing; contract, lease, and loan agreements; payroll records; bank account signature cards; and various licenses.
Additionally, VA conducts random, unannounced site examinations of participants in order to examine or further examine a participant’s eligibility, including upon VA’s receipt of specific or credible information that the participant is no longer eligible. Additionally, VA contracting officers and competing SDVOSBs and VOSBs have the right to raise a SDVOSB/VOSB status protest to VA’s Office of Small and Disadvantaged Business Utilization should either have a reasonable basis upon which to challenge the SDVOSB/VOSB status of a VA CVE-verified firm.
VA regulations mandate program participants maintain eligibility during its tenure, and if ownership or control changes occur, participants are required to notify VA’s CVE of any changes which would adversely affect the participant’s eligibility as a VA CVE-verified SDVOSB/VOSB.
VA maintains the Vendor Information Pages (VIP) Database, a database of firms verified by CVE and eligible to receive awards under the Veterans First Contracting Program. As of February 24, 2017, the VIP Database list 9,287 firms (6,917 SDVOSBs and 2,370 VOSBs).
VA’s current Veteran Small Business Regulations are codified at 38 C.F.R. Part 74.
Written comments on the Interim Final Rule must be submitted on or before April 24, 2017. Comments may be submitted directly to VA at the address shown in the Federal Register Notice or at www.regulations.gov. Comments should indicate they are submitted in response to “RIN 2900-AP93—VA Veteran-Owned Small Business Verification Guidelines.” Note that all comments received will be available for public inspection at VA’s Central Office in Washington, DC.
About the Author:
Wayne Simpson is a seasoned former Federal executive and acquisition professional who is also a highly-motivated and demonstrative small business advocate, with nearly 38 years of Federal Civilian Service with the U.S. Department of Veterans Affairs (VA), and its predecessor organization, the Veterans Administration.