Bill to Streamline SDVOSB Verification Process Introduced

2012-08-10-salzman-375x250Representative Mike Coffman, who serves the sixth district of Colorado, and five co-sponsors introduced HR 3945 Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2015, on November 5, 2015.

Coffman’s legislation uses a three-pronged approach to reform the current process of ensuring VOSBs (Veteran-Owned Small Businesses) and SDVOSBs (Service-Disabled Veteran-Owned Small Businesses) are properly awarded Department of Veterans Affairs (VA) contract:

  • The bill harmonizes the definitions of VOSB and SDVOSB, ensuring that small variations between the Small Business Act and the Vets First Program are not used to justify additional inconsistencies between the VA and SBA programs.
  • The bill requires the VA to follow US Small Business Administration (SBA) regulations when verifying and certifying VOSBs and SDVOSBs, ensuring consistency in the awards process between the VA and SBA. For example, a SDVOSB can qualify at one agency and not another for procurement preferences, an inconsistency that often adds cost, confusion, and opens the door to fraud.
  • The bill created an appeals process for SDVOSBs to challenge an agency decision, which, by increasing the SBA’s role in the appellate process, will limit confusion in how to appeal and ensure more a more predictable pattern in the final decisions and also ensure impartiality by not having VA review its own previously denied claims.

“Congress must take steps to ensure the VA’s program operates effectively for our veterans,” said Coffman on November 6. “Currently, VOSBs and SDVOSBs face incredible challenges getting certified to participate in seeking and securing federal contracts under the program’s rules. The bill I introduced … reforms, streamlines, and simplifies the current process the VA and the SBA use to be certified as eligible.”

Collectively, VSOBs and SDVOSBs in communities across the country received nearly $20 billion in federal prime contracts in FY2014, with nearly $14 billion awarded to SDVOSBs.

The bill is co-sponsored by Veterans’ Affairs Committee Chairman Jeff Miller (R-FL), Small Business Committee Chairman Steve Chabot (R-OH), Rep. Nydia Velázquez (D-NY), Rep. Gerry Connolly (D-VA), Rep. Richard Hanna (R-NY), and Rep. Seth Moulton (D-MA).

“This bill will reform an excessive and redundant bureaucracy that’s making business even more complicated for the people it was meant to help. By cutting needless red tape and streamlining the verification process, we can ensure veteran business owners are properly recognized for their service, while reducing fraud and freeing up more resources for veteran support,” said Rep. Jeff Miller, Chairman, House Committee on Veterans’ Affairs.

Coffman, who served in both the United States Army and Marine Corps as both enlisted and an officer, has submitted similar bills for passing in previous sessions of Congress. He has a combined 21 years of military service and started a small property management business in Aurora, CO during the 1980s. He currently serves on the Armed Services Committee and Veteran’s Affairs Committee, where he is the Chairman of the Subcommittee on Oversight and Investigations.

The introduction of this bill comes on the heels of testimony offered by a spokesman for the Government Accountability Office (GAO) in which he described the VA’s process for verifying owners of small businesses trying to become certified as either a VOSB or SDVOSB.

“[The] VA uses contractors to support its verification program and Federal employees oversee the contractors and review and approve verification decisions,” according to the GAO spokesman. “As of September 1, 2015, the Center for Verification and Eligibility (CVE) had 15 federal employees in 156 contract staff — employed by 5 different contractors — verifying applications or filling supporting roles.”

Further, the GAO spokesman testified that while the average processing time has decreased, 15 percent of applications take four months or longer to process, from the small business owner’s submission to final determination.

According to the GAO, the CVE, in FY2015, performed 606 post verification site visits and issue 25 cancellations to firm’s found noncompliant with program regulations at the time of the site visit.  The GAO also spoke with “verification assistance counselors” who agreed that the VA’s determination letters to applicants could be clearer and that they include regulatory compliance language that could be difficult for some applicants to understand.

As of September 2015, the CVE has implemented a Pilot Verification Process, which include the following changes:

  • Veteran applicants will have a case manager who will be familiar with the veteran’s application and any issues.
  • CVE staff will interview veterans early, which should help staff identify issues up front.
  • One CVE contractor evaluates each application for regulatory compliance, instead of having two CVE contractors evaluatie each application for regulatory compliance, as has been the practice.

US Federal Contractor Registration, the world’s largest third-party government contracting agency makes becoming certified as a SDVOSB or VOSB even easier, because it submits all required paperwork on behalf of a client and makes sure that the paperwork is error-free. This can help speed up CVE approval and the verification process. And, should the CVE need more information, US Federal Contractor Registration steps in on behalf of its clients and gets the CVE what it needs.

“Our guiding principle is that we’re here to make getting government contracts as easy as possible for owners of small businesses,” said US Federal Contractor Registration President Eric Knellinger. “Our goal isn’t just to help businesses survive – we help them thrive. And by helping them complete this certification and registration process, they can then focus on running their business, bidding on contract, and then fulfilling them.”

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