SDVOSB or VOSB?

eCertify was recently awarded the status of Service-Disabled Veteran-Owned Small Business (SDVOSB) by the Department of Veterans’ Affairs. If you are a veteran, own a business, and want to compete for or bid on government contracts, then applying for Veteran-Owned Small Business (VOSB) or Service-Disabled Veteran-Owned Small Business (SDVOSB) status is a good route to take. For one, the Department of Veterans Affairs (VA) only awards contracts to Veteran-Owned Businesses. This allows the veteran business to compete with a much smaller pool of contractors than if the bid were to be open to the general public.  

Veteran-Owned Businesses are Encouraged to Bid

Many other government agencies such as U.S. Army Corp of Engineers (USACE), Naval Facilities Engineering Systems Command (NAVFAC), and General Services Administration (GSA) seek out Veteran-Owned businesses in their solicitations. They set aside money in many of their Requests for Proposals (RFP) for small businesses, and more specifically, veteran-owned businesses. It is part of a government program to set aside funds to help small businesses grow. 

Joint Venture Loop-Hole?

For the most part, the program has been successful. However, some companies exploit the program for profit. Many large businesses are unable to bid on projects set aside for small businesses, and many small businesses lack the experience, resources, or desire to pursue government contracts. In this instance, many Joint Ventures are formed between a large business and a small business. This creates a loophole where the money is paid to the small business, but most of the funds still end up with the large business. The small business then takes a percentage off the top. Ultimately, in this instance, the government wastes money, and it would have spent less had it simply awarded the large business the contract. The small business takes the cash and repeats the process. This is a rare instance of how the program is ineffective in promoting economic growth to small businesses. 

Subcontracting Plan

Some projects are too large for small businesses to handle. So the contract must be awarded to a larger contractor with more experience and resources. However, even with large contracts, the federal government ensures that the large contractor develops a Subcontracting Plan and a Small Business Participation Plan. Within the solicitation, there are specific small business participation goals that the large contractor must achieve, which require them to set aside funds for small businesses. Participating in the SBA’s small business program will enable you to compete with projects of all shapes and sizes.