Service-Disabled Veteran-Owned Businesses
The Veterans Entrepreneurship and Small Business Development Act of 1999 (Public Law 106-50 Download Adobe Reader to read this link content) 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 Download Adobe Reader to read this link content) 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).
In order to be eligible for the SDVOSBC, you and your business must meet the following criteria:
SDVO Business Control
To be an eligible SDVOSBC the following must be met:
- Control by one or more service-disabled veterans means that both the long-term decision making and the day-to-day management and administration of the business operations must be conducted by one or more service-disabled veterans
- The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a service-disabled veterans or, in the case of a service-disabled veteran with permanent and severe disability, the spouse of permanent caregiver of such veteran
- A concern owned principally by another business entity that is in turn owned and controlled by one or more service-disabled veterans does not meet this requirement.
Set Aside Requirements and Exemptions
This section serves as information for both a SDVOSBC as well as a contracting officer representing a SDVOSBC in bidding for a government contract.
A Contracting Officer (CO) may set-aside requirements if:
A contracting activity may not make a requirement available for a SDVO contract if and be exempted if:
Sole Source Contracts
A CO may award a sole source contract if:
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 Contract Requirements
There are some limitations on subcontracting that a SDVO SBC Prime or Sub-contractor can subcontract for:
- 50% of the contract performance incurred for SDVO SBC personnel
- 50% of the cost of manufacturing the supplies
- 15% of the contract performance incurred for SDVO SBC personnel
- 25% of the contract performance incurred for SDVO SBC personnel
Executive Order 13360
Executive Order 13360 signed in October 2004, requires each agency to: