Changes to VA Contracting Program Proposed

The Department of Veterans Affairs and Congress are working to make it easier for veterans to take advantage of a special veterans-focused contracting program while also protecting it from abuse.  The VA released proposed amendments to its Veteran-Owned Small Business Verification Guidelines, while Rep. Mike Coffman (R-Colo.), chairman of the Committee on Veterans’ Affairs Subcommittee on Oversight and Investigations, recently introduced a bill he called a “three-pronged approach” to reform how the government awards its contracts and ensure the program “operates effectively for our veterans.”

“Currently, veteran-owned small businesses (VOSB) and service-disabled veteran-owned small businesses (SDVOSB) face incredible challenges getting certified to participate in seeking and securing federal contracts under the program’s rules,” Coffman said in a statement. “With over 50,000 small businesses attempting to use congressionally established VOSB and SDVOSB contracting programs, it is critical that we protect our nation’s veterans seeking federal contracts from the VA and Small Business Administration.”

The bill, entitled the Improving Opportunities for Service-Disabled Veteran-Owned Small Business Act of 2015, would create an appeals process that lets a business owner take their case to the SBA’s office of hearings and appeals. The decision of the office would be considered the final word.

“Increasing SBA’s role in the appellate process will limit confusion in how to appeal and ensure a more predictable pattern in the final decisions,” Coffman said. “It will also ensure impartiality by not having VA review its own previously denied claims.”

The proposed legislation also would require the VA to follow the SBA’s regulations when verifying VOSBs and SDVOSBs, and aligns the definitions of VOSB and SDVOSB so that “variations between the Small Business Act and the Vets First Program are not used to justify additional inconsistencies between the VA and SBA programs.”

Congress created the Veterans First contracting program in 2006 with the goal of awarding more contracts to veteran-owned small businesses and service-disabled veteran-owned small businesses. VA is responsible for verifying the ownership of these businesses in order to participate in the program.

During a joint subcommittee hearing on the program last week, Coffman shared that according to an Office of Inspector General report for 2015, VA procurements total $91.5 billion, of which $3.9 billion went to veteran-owned small businesses, and $3.5 billion of that money went to service-disabled, veteran-owned businesses.

In a statement from Rep. Jeff Miller (R-Fla.) chairman of the Committee on Veterans Affairs and one of the six co-sponsors of Coffman’s bill, said the legislation would cut “needless red tape” and streamline the verification process, which can help “ensure veteran business owners are properly recognized for their service, while reducing fraud and freeing up more resources for veteran support.”

Last week the VA also published proposed amendments to its verification program.  “The Verification Program has been the subject of reports from both the Government Accountability Office (GAO) and VA’s Office of Inspector General stating that despite VA’s Verification Program, fraud still exists in the Veterans First Contracting Program,” the proposed rule summary stated. “Some stakeholder feedback has been that the current regulations … are too open to interpretation and are unnecessarily more rigorous than similar certification programs run by the Small Business Administration (SBA).”

Among the changes to the rule would be:

  • Clarify the eligibility requirements for businesses to obtain “verified” status,
  • Add and revise definitions, reorder requirements, redefine the definition of “control” and explain examination procedure and review processes.

Public comments on the proposed rule are due by Jan. 5.