Thursday, December 20, 2012
SDVOSBs: Government Uses VetBiz Veterans Affairs Database More Often than Self-Certification to Ensure Status
In 2011, the Senate passed the Small Business Contracting Fraud Prevention Act in response to widespread concerns on potential fraud in the government contracting industry by companies falsely claiming to be service-disabled veteran owned small businesses (SDVOSBs). This bill would require businesses to be certified as service-disabled veteran owned small businesses on the VetBiz Vendor Information Pages (VIP) maintained by the Department of Veterans Affairs’ Center for Veterans Enterprise prior to receiving awards that are set-aside by other government agencies for SDVOSBs. The SBA’s SDVOSB self-certification rules used by other government agencies differ (and are traditionally less stringent)than the VA-required application process for certification to compete for VA contracts.
Even though the bill has not become law, many agencies are using the VIP database as a reference point when considering whether companies are truly SDVOSB contractors. Although an agency could not necessarily exclude a bidder from competition due to the fact that the bidder was not certified as an SDVOSB by the VA, the SBA Office of Hearings and Appeals has held that a business’ complete absence from the VIP database provides a valid ground for an SBA eligibility protest. For these reasons, it makes sense for any service-disabled veteran owned contractor to consider obtaining the VA certification.
The VA will reject a company’s application if the company’s corporate documents do not comply with the VA certification requirements. Unfortunately, the VA process requires a mandatory six-month waiting period to reapply if a company’s initial application is rejected, so a flaw in the initial application can be costly. Potential applicants are encouraged to review their corporate documentation prior to submitting their applications to avoid delays.