SBA Issues Proposed Rule for VOSB and SDVOSB Certification
On July 6, 2022, the Small Business Administration ("SBA") issued its proposed rule to implement a statutory requirement from the National Defense Authorization Act for Fiscal Year 2021 ("2021 NDAA") to certify veteran-owned small businesses ("VOSB") and service-disabled veteran-owned small businesses ("SDVOSB").
Once SBA's rulemaking is finalized, VOSBs and SDVOSBs must be certified to be eligible to receive sole source or set-aside VOSB or SDVOSB awards at the Department of Veterans Affairs and SDVOSB awards across the federal government. Notably, the proposed rule provides that certifications will generally last for three years.
Comments on the proposed rule are due on or before August 5, 2022.
Quick Glance
The 2021 NDAA amended the VOSB/SDVOSB requirements to transfer the responsibility for certification of VOSB and SDVOSBs to SBA as of January 1, 2023 (Transfer Date).
The 2021 NDAA created a certification requirement at SBA for SDVOSBs seeking sole source and set-aside contracts across the Federal Government.
The 2021 NDAA, Section 862, also created a one-year grace period after the Transfer Date for businesses currently self-certifying to file an application for SDVOSB certification with SBA.
SBA proposes to implement the Veterans Certification Program ("VCP") in a new regulation under 13 CFR Part 128.
SBA proposes to amend 13 CFR Part 125 to remove SDVOSB regulations in subparts A through F, consisting of §§ 125.11 through 125.100, and include them in 13 CFR Part 128.
This proposed amendment would allow an entity to apply for certification if the concern, with its affiliates, meets the size standard corresponding to any NAICS code under which it currently conducts business activities.
Firms that do not apply for certification in the Vets Program may continue to self-certify their status, receive contract awards outside the Vets Program through open competition or other types of set-asides, and count toward an agency's goals (e.g., a self-certified SDVOSB may be awarded a small business set-aside and the agency may count the award as both a small business and SDVOSB toward the agency's goals).
The proposed rule would also add a regulation to provide that a VOSB or SDVOSB participant cannot be a joint venture partner on more than one joint venture that submits an offer for a specific VOSB or SDVOSB contract.
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