Inconsistencies between VA's and SBA's VOSB Programs Coming to an End 2-23-18

On January 10, 2018, the Department of Veterans Affairs (VA) issued its proposed regulation to implement the requirement in the National Defense Authorization Act for Fiscal Year 2017 (NDAA) that only the Small Business Administration (SBA) determine whether concerns are "unconditionally owned and controlled" by veterans or disabled veterans for purposes of veteran-owned and service-disabled veteran owned small businesses programs (VOSB and SDVOSB).

Currently, the VA and SBA maintain separate VOSB and SDVOSB set-aside programs, and their divergent regulations and findings on what constitutes the requisite "ownership and control" have caused inconsistencies and confusion for contractors. For example, in Veterans Contracting Group, Inc. v. United States, No. 17-1188C, issued by the Court of Federal Claims on December 11, 2017, the Court upheld a ruling by the SBA’s Office of Hearings and Appeals that left a concern eligible for the VA’s SDVOSB program but ineligible to participate in the SBA’s SDVOSB program. The Court references that the agencies’ respective programs "have materially diverged" and, as in this case, have produced "draconian and perverse" results.

The NDAA’s requirement that only the SBA issue the regulations and determinations for ownership and control, and the VA’s proposed rule implementing it should remedy this inconsistency and confusion. The VA’s proposed rule can be reviewed in the attachment. Comments are due not later than March 12, 2018.