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Veteran-Owned Small Business (VOSB) Guide for Contractors

Veteran-Owned Small Business (VOSB) Guide for Contractors

Veteran-owned businesses make up a significant part of the U.S. economy. As of 2021, there were nearly 338,000 such businesses nationwide, accounting for 5.9% of all businesses.

Most veteran-owned businesses are small businesses. The majority (54%) of veteran-owned firms have just one to four employees and 71.3% have between one and nine. With that in mind, lawmakers have made it their business to help veteran entrepreneurs succeed — especially those who own small businesses.

In 1999, Congress passed the Veterans Entrepreneurship and Small Business Development Act. The new law directed that aid be given both to veterans and service-disabled veterans. As a result, the federal government now prioritizes contracts for veteran-owned small businesses (VOSB) and service-disabled veteran-owned small businesses (SDVOSB).

What are these small businesses, and do you qualify?

Table of Contents

What are VOSBs and SDVOSBs?

What are VOSBs and SDVOSBs

The U.S. Department of Veterans Affairs and the U.S. Small Business Administration oversee veteran-owned small business (VOSB) and service-disabled veteran-owned small business (SVOSB) programs.

Veterans Affairs awards a large amount of money each year to veterans through set-aside contracts and contract awards offered under its Veterans First Contracting Program. Set-asides are contracts open only to small businesses. Some are open to all small businesses, but others are open only to businesses that participate in SBA contracting assistance programs.

Disabled veterans can receive funds through the SDVOSB program, which seeks to award at least 3% of annual federal contracting dollars to small businesses owned by disabled veterans.

If you are a veteran or service-disabled veteran who owns a small business, here’s everything you need to know about certification, verification, resources, and federal contracts.

Types of Veteran-Owned Small Business Certifications

Public and private certifications are available for veteran-owned small businesses. Government certification is necessary to be eligible for set-asides and obtain federal contracts.

Veteran-Owned Small Business (VOSB) Certification

VOSB certification is open to veterans who have served in the armed services.

Eligibility Requirements

The veteran small business owner must:

  • Be formally verified as a veteran-owned small business (at least 51% of the business must be veteran-owned).
  • Be actively involved in the company’s daily operations and management.
  • Have served on duty with the Air Force, Army, Coast Guard, Marines, or Navy.
  • Have been honorably discharged or released.

Service-Disabled Veteran-Owned Business (SDVOSB) Certification

To obtain SDVOSB certification, a small-business owner must meet the same criteria as a veteran applying for VOSB certification. In addition, the applicant must provide proof of disability from either the Department of Veterans Affairs (VA) or the Department of Defense. For contracting purposes, there is no minimum disability rating to participate.

Eligibility Requirements

Under federal regulations, the veteran small business owner must:

  • Be formally verified as a veteran-owned small business (at least 51% of the business must be veteran-owned).
  • Be actively involved in the company’s daily operations and management.
  • Have served on duty with the Air Force, Army, Coast Guard, Marines, or Navy.
  • Have been honorably discharged or released.
  • Submit a disability rating letter from Veterans Affairs or a disability determination from the Department of Defense.

Veteran’s Business Enterprise (VBE) Certification

Veteran’s Business Enterprise certification is provided through the National Veteran-Owned Business Association (NaVOBA). You don’t need to be certified; this is a marketing tool that facilitates business with corporations. Small businesses must submit a non-refundable fee to apply.

Eligibility Requirements

The veteran small business owner must:

  • Own a majority (at least 51%) of the small business.
  • Validate veteran status through ID.Me.
  • Submit a non-refundable application fee based on company revenue, under the following schedule:
    • Less than $1 million – $350
    • $1 million to $4.99 million – $550
    • $5 million to $9.99 million – $800
    • $10 million to $19.99 million – $1,200
    • $20 million to $49.99 million – $1,500
    • $50 million or more – $2,000
  • Complete the application form.
  • Submit application-related documents based on company type (corporation, limited liability corporation, or sole proprietorship).

Where To Get VOSB or SDVOSB Certification

In order to get VOSB or SDVOSB certified, you’ll need to apply. The process requires you to provide documentation and undergo a series of steps, during which your application will be reviewed, a recommendation made, and your application referred for approval or denial.

How to certify your VOSB or SDVOSB

Department of Veterans Affairs (VA)

The VA certifies small businesses through its Vets First Verification Program, administered by the Office of Small & Disadvantaged Business Utilization (OSDBU). The VA’s Center for Verification and Evaluation (CVE) verifies eligibility using a four-step process.

  • Intake — You’ll need to provide documentation, such as business licenses, permits, owner resume, payroll, contract information, and tax documents. Verification assistance counselors are available to help with this process.
  • Assessment — A verification team may conduct a telephone interview with the applicant, and an assessor will be assigned to review the documents you’ve provided.
  • Federal review — The assessor submits the application for federal review, along with a recommendation on whether to approve or deny the application.
  • Decision — A federal employee reviews the assessor’s recommendation and sends it to the CVE for a decision.

VetBiz

VetBiz offers a portal that provides information, resources, and applications regarding VOSB, SDVOSB, and other services.

This VA-administered site can help you get started with the verification program for VOSB or SDVOSB, provides training, and contains a database of veteran small-business owners verified under the two programs. (This database contains vendor information pages, and is therefore known as the VIP database.)

You can contact VetBiz by email at VIP@VA.Gov, by phone at 866-584-2344, or by mail at 810 Vermont Avenue NW, Washington, DC 20420.

Veterans First Contracting Program

This program allows the VA to set aside procurement opportunities specifically for verified VOSB and SDVOSB small businesses. This involves being listed in the VIP database mentioned above.

Only verified businesses listed in the database have access to the opportunities available under his program. They will then be eligible to subcontract with VA’s prime contractors.

Small Business Administration (SBA)

VOSB verification is currently handled through the VA, but the VA will transfer this process to the SBA on January 1, 2023. This is due to the National Defense Authorization Act (NDAA) of 2021. VOSB and SDVOSBs that have already been verified won’t lose their status during this transfer, and no action is required on their part at this time.

VOSB certification with the SBA

Private Sector Contract Certification

Contract certification through the private sector is available through the National Veteran Business Development Council (NVBDC) and National Veteran-Owned Business Association (NaVOBA). Applicants for NVBDC certification must have served 180 days on active duty and received an honorable discharge. As with the NaVOBA, there is a fee to apply, with the following schedule in effect, based on annual revenue:

  • Less than $1 million – $350
  • $1 million to $4.99 million – $600
  • $5 million to $9.99 million – $900
  • $10 million to $49.99 million – $1,200
  • $50 million to $99.99 million – $1,500
  • $100 million or more – $2,500

Private-sector certification can open up additional resources for veterans and opportunities to small businesses. For one thing, it can create access to corporations that recognize those certifications.

NaVOBA requirements are detailed above. Criteria for service-disabled veteran-owned small business certification are similar to those laid out by federal programs and NaVOBA. In addition, NVBDC requires business owners to show independence: an ability to perform in their area of expertise without relying substantially on non-veteran-owned businesses.

How Long Is VOSB or SDVOSB Certification Valid?

Going through the VOSB and SDVOSB certification process takes about 90 days. Once approved, these certifications remain valid for up to three years. In addition, you’ll need to renew your System for Award Management (SAM) registration, which you’ll need in order to work with the government every year.

The renewal process is similar to the initial application process and essentially requires you to update your business owner information and sign a new VA Form 0877.

Resources for VOSB and SDVOSB

Several resources are available to assist with the verification process. Here are a few of them:

HUBZone Program

The HUBZone program allows participants to compete for HUBZone’s set-aside contracts. It also provides a 10% price evaluation preference to HUBZone-certified businesses in full and open contract competitions.

U.S. General Services Administration (GSA)

The GSA’s Office of Small and Disadvantaged Business Utilization (OSDBU) advocates for small businesses, including veteran and disabled-veteran-owned businesses. The GSA also allows veteran-owned small businesses to access federally owned surplus property that’s no longer being used. This property is made available through the Federal Surplus Personal Property Donation Program.

Federal Award Management Registration (FAMR)

FAMR is an independent consulting firm that helps businesses navigate the federal marketplace. It can help with SBA, VA, or GSA certifications. It also helps market small businesses to federal contracting officers.

Association of Procurement Technical Assistance Centers (APTAC)

APTAC provides workshops for small businesses and helps them connect with other businesses and buyers. It also provides one-on-one counseling and provides help for navigating contracting opportunities for VOSBs and SDVOSBs.

VOSB or SDVOSB Benefits for Contractors

A wide variety of construction contracts are available to small businesses from the government. In 2018, for example, construction contracts and spending by the federal government totaled $21.3 billion, according to the U.S. Census Bureau. VOSBs and SDVOSBs can get a leg up on some of that money.

  • 3% of federal contracts every year: That’s the minimum goal under the Veterans Entrepreneurship and Small Business Development Act of 1999.
  • Subcontracting opportunities: Large companies are more likely to seek you out as a subcontractor.
  • Tax benefits: Some state tax benefits may be available to SDVOSBs.
  • Set-asides: Some federal government agencies make SDVOSB set-aside contracts.

VA procurement priorities: The VA places the highest priority for procurements on SDVOSBs, followed by VOSBs.

Benefits for VOSBs and SDVOSBs

How To Advertise Your VOSB or SDVOSB

Programs are available to help you advertise your VOSB or SDVOSB. Among them are BuyVeteran.com and the Veterans Business Network.

BuyVeteran.com offers a business directory that covers everything from barbershops to construction companies. The Veterans Business Network has its own directory of veteran-owned businesses covering many industries. These allow potential customers to search for veteran-owned businesses by industry and location.

In addition to submitting your business to these directories, you can try more traditional methods like local advertising, setting up Yelp and Google Business pages, and promoting your business on social media.

Get Started

Whether you’re a returning service member who is starting a construction company or an established general contractor, a wealth of government contracting opportunities are available to you.

You’ll need to meet certain criteria and be certified to be eligible for government contracts and set-asides. But once you are, you’ll have an advantage — not just with government contacts, but with the public: 70 percent of Americans say they’d prefer to buy from a veteran-owned business.

With advertising and networking benefits available from places like BuyVeteran.com, you can market your small business effectively and reach customers who will be eager to engage your services.

Whether you’re fulfilling a government contract or doing a private job, there are plenty of ways to succeed with a veteran-owned business.

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