By Eric Byrd, KYPTAC Procurement Consultant
This article was originally published in our monthly KYPTAC Newsletter. If you have any questions about this topic, your KYPTAC consultant is here to help! Not a client? Sign up here.
If you are a Veteran Owned Small Business (VOSB) or a Service-Disabled Veteran Owned Business (SDVOSB), you should have received notice that as of October 24, 2022, the U.S. Office of Veteran Affairs (VA) Center for Verification and Evaluation (CVE) is no longer accepting applications for VOSB and SDVOSB certifications.
You may question why the process for obtaining the VOSB certifications is changing. This change was mandated by law on January 1, 2021, as part of the William H. Thornberry National Defense Authorization Act of 2021. Specifically, section 862 of the law directs the U.S. Small Business Administration (SBA) to create a government certification program for the VOSB and SDVOSB certifications. This is an effort to house all small business certifications in one easy-to-access location. The delay in accepting new applications will allow the transfer of the certification process from the VA to the SBA.
How does this transition affect your current certification? As in most cases with the federal government, it depends. If your business is already certified through the CVE, you do not need to worry about SBA certification until the end of your three-year eligibility term per the SBA’s proposed rule from July 2022. VA-verified SDVOSBs whose eligibility lapses prior to the January 1, 2023, transfer date will automatically revert to a self-certified SDVOSB status as registered in the System for Award Management (SAM). (This is if eligibility lapses solely due to passage of the expiration date and not due to a determination that the business is ineligible.)
Self-certified SDVOSBs may continue to participate in the SBA program for contracts at agencies other than the VA, based on a one-year grace period provided by law. If a self-certified SDVOSB applies to SBA for certification during the grace period, the SDVOSB may continue to utilize its self-certified status until SBA has acted upon the certification application. Otherwise, the firm’s status as a self-certified SDVOSB terminates on January 1, 2024, which is the one-year anniversary of the transfer date.
Self-certification will not be an option for VOSBs because verified VOSB status is required for VA contracts, and no other federal agency has authority to set aside or sole source to VOSBs. Self-certified VOSB status does not establish eligibility for contracting.
The SBA will start to accept VOSB and SDVOSB applications beginning January 2023. While we do not have an exact date at this time, we have been told by the SBA that they anticipate the process of accepting new applications to start somewhere mid-month of January 2023. Based on the guidance provided so far, it appears that regardless of the criteria, all entities must start the new certification process with the SBA in 2024 and beyond.
According to the SBA, a new platform is being developed that will host the VOSB and SDVOSB certification process. The new platform will eventually house all SBA certifications in one centralized location. This is an effort to streamline the process for businesses applying for multiple certifications. Once an initial application has been completed, only supplemental documents will be required to verify other aspects of ownership, control and/or location of the business.
So, what is the benefit of obtaining a small business certification through the SBA? The federal government has specific socio-economic goals designated for each SBA certification. The government’s goal is to annually award a minimum of 23% of the federal budget to small businesses. In the 2020 budget, the federal government awarded 26.01% of its budget to small businesses, for a total of $145.7 billion.
In addition to VOSB and SDVOSB, the other small business certifications offered by SBA are Women Owned Small Business (WOSB), Economically Disadvantaged Women Owned Small Business (EDWOSB), Historically Underutilized Business Zone (HUBZone) and 8(a). These certifications can limit the competition pool for contract opportunities and can qualify a business for sole source contracts. SBA certifications are always offered at no cost to the business. You can contact your KYPTAC procurement consultant for assistance in preparing and submitting the application for any of these certifications.
To stay up-to-date on the upcoming changes with VOSB and SDVOSB certifications, visit the SBA website or contact your KYPTAC procurement consultant with any questions. If you are not sure how to connect with your consultant, you can request assistance by contacting us at firstname.lastname@example.org or by registering on our website.