SDVOSBs in Today’s Market
“Let us work together to improve our record for awarding contracts to these very important people, the brave men and women who sacrificed their health in service to their country. We can meet, even exceed- the 3% statutory minimum goal for awarding contracts to firms owned by our service-disabled veterans.”
Former Secretary of State Colin L. Powell
America’s 23 million small businesses employ more than 50 percent of the private workforce and generate more than half of the nation’s GDP. In addition, these 23 million businesses are the principle source of new jobs in the U. S. economy. (source www.sba.gov) In recognition of the outstanding service of our nation’s veterans and the significant potential impact small businesses have on the economy, Presidents Clinton, Bush and Obama have supported programs that are designed to assist SDVOSB to become more successful.
The Veterans Entrepreneurship and Small Business Development Act of 1999 (Public Law 106-50) established an annual government-wide goal of not less than 3% of the total value of all prime contract and subcontract awards for participation by small business concerns owned and controlled by service-disabled veterans.
On December 16, 2003, the Veterans Benefits Act of 2003 (Public Law 108-183) was passed by Congress. Section 308 of the Act (Public Law 108-183) established a procurement program for Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBC). This procurement program provides that federal contracting officers may restrict competition to SDVOSBCs and award a sole source or set-aside contract where certain criteria are met.
The Small Business Administration has issued an interim final rule, establishing a Service-Disabled Veteran-Owned Small Business Concern Program. This program establishes the criteria to be used in federal contracting to determine service-disabled veteran status; business ownership and control requirements; guidelines for establishing sole source and set-aside procurement opportunities; and protest and appeal procedures for SDVOSBC procurements.
Purpose of the SDVOSBC Program
The purpose of the Service-Disabled Veteran-Owned Small Business Concern Procurement Program is to provide procuring agencies with the authority to set acquisitions aside for exclusive competition among service-disabled veteran-owned small business concerns, as well as the authority to make sole source awards to service-disabled veteran-owned small business concerns if certain conditions are met. (See Code of Federal Regulations (CFR) 13 C.F.R. § 125.8-125.10).
Some highlights of Public Law 108-183:
- -Takes P.L. 106-50, which establishes a desired goal of 3 percent of federal-wide total value of procurement contracts and subcontracts to be awarded to SDVOSB, one step further with specific implementation guidance for contracting officers.
- -SDVOSB, as the intended outcome beneficiary, will be the most impacted group as a result of successful implementation of P.L. 108-183.
- -Provides that SDVOSB are eligible for Sole Source Contracts.
- -Provides that SDVOSB are eligible for Restricted Competition.
Public Law 108-183 is designed to assist the federal government and SDVOSB in achieving the 3 percent goal.
- -Significant contract procurement power backed by federal regulations (PL 108-183).
- -Access to set asides, sole source awards, and restricted competition.
- -Teaming, Joint Ventures and partnering with Service Disabled Veteran Owned Businesses provides a competitive advantage in the marketplace as well as opportunities to grow market share and to pre-empt competitors.
- -Low overhead, minimal operating costs and streamlined management of a small business offer exceptional market flexibility.
- -Joining a network that includes: All of the nation’s federal organizations to include the Military Services, private commercial entities, other SDVOSB and the nation’s veterans.
Set Aside Requirements and Exemptions
A Contracting Officer (CO) may set-aside requirements if:
- 1. The requirement is not exempted from SDVO contracting, the CO considers setting aside the requirement for 8(a), HUBZone, or SDVO SBC participation before considering setting aside the requirement as a small business set-aside.
- 2. There is a reasonable expectation that at least two responsible SDVO SBC will submit offers; and
- 3. The award can be made at a fair market price.
A contracting activity may not make a requirement available for a SDVO contract if and be exempted if:
- 1. The requirement would be fulfilled through the award of Federal Prison Industries, Inc. or Javits-Wagner-O’Day Act participating non-profit agencies for the blind and severely disabled.
- 2. The requirement is currently being performed by an 8(a) participant or SBA has accepted that requirement for performance under the authority of the Section 8(a) Program.
Sole Source Contracts
A CO may award a sole source contract if:
- 1. If the requirement is not exempted from SDVO contracting and cannot be set-aside.
- 2. The CO does not have a reasonable expectation that at least two responsible SDVO SBCs will submit offers.
- 3. The anticipated award price of the contract, including options, will not exceed:
- - $5.0M for manufacturing requirements
- – $3.0M for all other requirements
- 4. Award can be made at a fair market price.
Simplified Acquisition Threshold
If the requirement is at or below the simplified acquisition threshold, the CO may set-aside the requirement for consideration among SDVOSBCs using simplified acquisition procedures or may award a sole source contract to a SDVOSBC. A sole source award is only permissible where there is only one SDVO SBC that perform the contract in accordance with Federal Acquisition Regulations § 19.406 (a)(3).
Additional Information can be found at:
Department of the Army Office of Small and Disadvantaged Business Units (DA OSADBU):
Small Business Administration’s Office of Veterans Business Development:
Department of Veterans Affairs: