U.S. Small Business Administration

1. U.S. Small Business Administration Service Disabled Veteran Owned Small Business Procurement Program Issues January 13, 2010

2. Authorities Public Law 106-50 - The Veteran's Entrepreneurship and Development Act of 1999 Public Law 108-183 – The Veterans Benefits Act of 2003 SBA Final Rule – 70 FR 14523 (March 23, 2005) 3% Government-wide goal for Prime and Subcontract Awards to SDVOSB concerns

3. Code of Federal Regulations (CFR) 13 C.F.R. § 125.8-125.10). 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.

4. Qualifications of a Service-Disabled Veteran (SDV) • A Service-Disabled Veteran is a person who served in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable, and whose disability was incurred or aggravated in line of duty in the active military, naval, or air service. • A veteran with a 0 to 100% disability rating is eligible to self-represent as a Service-Disabled Veteran for federal contracting purposes • The Veterans Benefits Act of 2003 that established restricted contracting in Federal procurement for Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBC) did not require a formal process to certify concerns as SDVO. • SDVOSBC is self-certification for Federal contracts.

5. SBA is the coordinating entity for veteran contracting advocacy for the Federal Government and the adjudicating agency. • Disability Adjudication through VA and DOD records i.e. DD-214 or a Claim Adjudication Letter issued by the VA. • VA maintains a data base of companies it has verified as SDVO for its internal contracting programs but other agencies are not granted access. The VA and SBA are currently seeking an agreement granting wider access and to resolve the certification issue. • VA now has its own statutory Vet and SDVet small business set-aside program that differs from other agencies.

6. Issues with Protest • Requirements of the program • 51% Unconditionally owned by SDVOSB • Management and daily business operation controlled by SDVOSB • Joint Ventures are allowed (13 CFR 125.15(b)) • An SDVOSB may joint venture with one or more other small business concerns. (sometimes protest filers do not know specifics of JV) • The SDVOSB must manage the venture and an SDVO SBC employee must be the project manager. • SBA does not admin the contract, so we have no way of verifying actual contract performance and management issues.

7. Subcontracting Limitations (13 CFR 125.6(b)) • Services – 50% labor spent on SDVOSBC personnel • Supplies – 50% labor performed by SDVOSB • General Construction – 15% labor spent on SDVOSB personnel • Special Trade Construction – 25% of labor spent on SDVOSB personnel • Verification is through certified payrolls by the contracting officer. • JV must also meet Limitation on Subcontracting requirements • Non-Manufacturers (13 CFR 121.406(b)) – SDVOSB cannot exceed 500 employees. End item must be manufactured by a SB?

8. How does a joint venture qualify as a SDVOSB ? • A joint venture’s ability to qualify as an SDVOSB primarily centers on control of the joint venture. The SDVOSB must be the managing venture, an employee of the SDVOSB must be the project manager, 51% of the net profits of the joint venture must go to the SDVOSB. • (See 13 C.F.R. §125.15 (b)).

9. When will SBA accept an SDVO SBC protest? • SBA will consider an SDVOSBC protest only if the protester presents credible evidence that the concern is not fifty-one percent (51%) owned/controlled, by a veteran with a service connected disability. (See 13 C.F.R. §125.26). • Contracting Officer is an interested party for purposes of filing SDVOSB status protests. (See 13 C.F.R. § 125.25(e)).

10. SBA Timeline for SDVOSBProtest SBA has fifteen (15) working days to render a decision after receipt of a protest. The SBA may request an extension from the Contracting Officer if more time is needed. See 13 C.F.R. §125.127 (c)).

11. When is a SDVO SBC eligible foran Award? In order to be eligible for award of an SDVO SBC set-aside contract, a firm must represent at the time of its offer that it is an eligible SDVO SBC. (See FAR §52.219-1 and §52.219-27).

12. When is a SDVO SBC eligible foran Award? • The Contracting Officer has the authority to reject an offeror based on his or her own SDVO status determination SDVO status protests are decided by the SBA Director for Government Contracting • However, a solicitation may require bidders to provide proof that the veteran owner possesses a service-connected disability that has been recognized by a cognizant authority (e.g., a copy of the veteran’s DD-214 or a claim adjudication letter from the Department of Veterans Affairs) along with their proposals. When a bidder fails to provide such proof, a Contracting Officer may reject a bid as non-responsive. (See 13 C.F.R. § 125.8. and 13 C.F.R. §125.8-125.10).

13. Protests and Appeals • What can be Protested: • SDVOSB Status • Size Status. • Status and size protest are filed separately with the Contracting Officer (CO) or SBA. • Who may Protest: • SBA or Contracting • Any Interested Party. • When are protests submitted: • By COB on the 5th Business Day; • Sealed Bid: Later than that: Untimely • Where are Protests Submitted: • To the Contracting Officer • How are Protest Submitted? • In writing.

14. Protests and Appeals (Cont) • Appeals • Interested parties may appeal the protest determination • Appeals are submitted to SBA’s Office of Hearings and Appeals • Due 10 days after receipt of protest determination • Appeals are filed in accordance with 13 CFR 134.501 • Decision within 15 business days of close of record