VOSB or WOSB – Which Classification is Right for You?

Contributed By US Federal Contractor Registration Federal Bid Trainer John Wayne II

Here’s what I know to be true – if you want to improve your chances of winning a government contract, then take advantage of all relevant and applicable classifications that you can. Native America? Than aim to be classified as a Native American-owned business. A woman with more than 51% ownership of a small business? Then aim to be classified as a Woman-Owned Small Business (WOSB). Veteran? Than aim to be classified as a Veteran-Owned Small Business (VOSB).

Why?

Simple economics.

The government is required to set aside 23 percent of ALL federal contracts for small businesses. Of this 23 percent, the federal government further sets aside specific portions for small businesses that are classified as minority-owned, woman-owned, veteran-owned, small disadvantaged, 8(a) certified, and HUBZone certified.

Knowing that the percentage of contracts you’re eligible to be receive increases depending on the classifications for which you qualify, I often get asked if one type of classification is better than another type of classification. In other words, if you’re a veteran, does it make sense to partner with a wife/girlfriend and give her 51 percent ownership of the business so you qualify as veteran-owned and woman-owned, or is it OK to simply become certified as a veteran-owned small business and retain sole ownership?

Hands down, if you’re a male and you qualify as a veteran-owned business, then that’s the best type of qualification to have – and here’s seven reasons why. (The following addresses what to do if you’re a male and a veteran. If you’re a female and a veteran, apply for both certifications. You’ll have access to a larger percentage of the contracts set aside for specific types of small businesses).

  1. Available contracts – Woman-owned small businesses and veteran-owned small businesses each qualify for five percent of the 23 percent of contracts set aside for small businesses. But that doesn’t mean that a WOSB and a VOSB has the same opportunities. Currently, there are 80,000 WOSBs but only 40,000 VOSBs. Become certified as a VOSB and you have twice as many chances of winning a government than you would if you become certified as a WOSB.
  2. Veterans Stick Together – Only a veteran knows what another veteran went through during his or her military service. Veterans tend to stick together, and with many procurement officers retired military, then that could give a leg up to veterans bidding on opportunities.
  3. Burden of Proof – Becoming certified as a VOSB means proving that you’re a veteran, but becoming certified as a WOSB – especially if you aim to make your wife/girlfriend the primary shareholder of your company – means proving that she is active in the business. She can’t be primary shareholder in name only. Get caught lying to the government and you risk not only losing any contract you’ve received but also being forced to pay back any contract monies you’ve received and also penalties of between $10,000 and $100,000. You also may face jail time if you’re caught lying to the federal government.
  4. Sexist Procurement Officers – I hate to say it, but in my years of working with business owners, I’ve seen firsthand qualified women get passed over for opportunities that ultimately go to less-qualified men. Why? Because some procurement officers are sexist. I wish I didn’t have to include this reason on this list, but I want to be sure you have all of the information you need to make a decision.
  5. Future Issues – What happens if you give your wife/girlfriend primary ownership of your business and then your relationship ends? She can take the business with her, but she can never take away your status as a veteran.
  6. Military Experience Preferred – The U.S. Veterans Administration and the military are big spenders with federal contractors. In my experience, I’ve seen them favor veterans over other types of small business owners.
  7. Additional Opportunities – If you’re a service-disabled veteran, then you’re entitled to getting access to between three percent and eight percent of other contracts. Woman-owned small businesses don’t get that type of access.

USFCR helps small businesses qualify to bid on and receive government contracts. This help not only includes completing your System for Award Management (SAM) Registration but also completing the steps necessary to earn one or more types of set-aside classifications. You can reach me directly at 877-252-2700 ext. 747 or by emailing jwayne@usfcrgov.com, and we can discuss how I can help you succeed as a government contractor.

John Wayne II is one of the top No-Bid Simplified Acquisition Experts at US Federal Contractor Registration and a skilled federal government marketplace analyst/trainer who specializes in simplified acquisition contracts, mirco-purchases, sole-source contracting, subcontracts, federal Small Business, Women, Minority, Veteran, Service Disabled Veteran, 8A and HUBZone set-aside qualifications, and basic government registrations. John has personally assisted and mentored more than 10,000 small businesses, nonprofits, and federal government agencies.

Filed under: Contracting News