2017 NDAA threatens VA Authority on SD/VOSB Programs

Posted (Last updated )

** Updated 12.14.16

SDVOSB Programs: 2017 NDAA Modifies Ownership & Control Criteria – December 12, 2016, By Steven Koprince, LinkedIn Pulse

The 2017 National Defense Authorization Act makes some important adjustments to the criteria for ownership and control of a service-disabled veteran-owned small business.

The 2017 NDAA modifies how the ownership criteria are applied in the case of an ESOP, specifies that a veteran with a permanent and severe disability need not personally manage the company on a day-to-day basis, and, under limited circumstances, permits a surviving spouse to continue to operate the company as an SDVOSB.

As I discussed in a separate blog post last week, the SBA and VA currently operate separate SDVOSB programs, and each agency has its own definition of who qualifies as an SDVOSB. The 2017 NDAA consolidates these definitions by requiring the VA to use the SBA’s criteria for ownership and control.

In addition to…

G2X TAKE: It will take a while to unpack the many provisions and modifications included as part of the 2017 National Defense Authorization Act. One seemingly subtle change that could have a big impact for those firms focused on VA is modification of the “ownership & control criteria” for SDVOSBs.

What does that mean? Many new or existing firms who previously would not have met the required qualifications will now be able to gain the valuable SDVOSB status. With the Kingdomware rule in effect, the VA is spending huge dollars with SDVOSBs, which will only increase the interest. Check out the full Koprince article above as he does a great job breaking down which firms and management structures might benefit from these changes.

Do you have another read? Let us know your “take” by commenting below. 

SDVOSB Programs: 2017 NDAA Sharply Curtails VA's Authority – December 5, 2016, By Steven Koprince, via LinkedIn Pulse

The 2017 National Defense Authorization Act will essentially prevent the VA from developing its own regulations to determine whether a company is a veteran-owned small business.

Yes, you heard me right. If the President signs the current version of the 2017 NDAA into law, the VA will be prohibited from issuing regulations regarding the ownership, control, and size status of an SDVOSB or VOSB–which are, of course, the key components of SDVOSB and VOSB status. Instead, the VA will be required to use regulations developed by the SBA, which will apply to both federal SDVOSB programs: the SBA’s self-certification program and the VA’s verification program.

In my experience, the typical SDVOSB believes that VA verification applies government-wide, and relies on that VetBiz “seal” as proof of SDVOSB eligibility for all agencies’ SDVOSB procurements. But contrary to this common misconception, there are two separate and distinct SDVOSB programs. The SBA’s self-certification program (which is the “original” SDVOSB set-aside program) is authorized by the Small Business Act, which is codified in Title 15 of the U.S. Code and implemented by the SBA in its regulations in Title 13 of the Code of Federal Regulations. The VA’s separate program is codified in Title 38 of the U.S. Code and implemented by the VA in its regulations in Title 38 of the Code of Federal Regulations.

There are some important differences between the two programs. For example, the VA requires that the service-disabled veteran holding…

G2X TAKE: How and what the full impact of this might look like will be left for another day, but news that the 2017 National Defense Authorization Act in its current form may not only change how Veteran Owned Small Businesses are verified, but also how they may operate their business will be of great interest to SD/VOSB and Non-SD/VOSBs alike.

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