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Legislation introduced to phase out SDVOSB self-certification
Published on 12/04/2018

Legislation has recently been introduced in the U.S. House of Representatives, by House Committee on Small Business Chairman Steve Chabot (R-OH) and House Committee on Veterans' Affairs Chairman Phil Roe (R-TN), that would streamline the current federal-level certification process for service-disabled-veteran-owned small businesses (SDVOSBs).

At present, there are effectively two such certifications available, one through the Department of Veterans Affairs (VA), and one through the Small Business Administration (SBA), the latter of which allows prospective SDVOSBs to self-certify themselves as such. The VA's program is required for SDVOSBs to do business with the VA, but the SBA self-certification for SDVOSBs attains everywhere else.

Under the proposed legislation (the Verification Alignment and Service-disabled Business Adjustment Act, or the VA-SBA Act), all SDVOSB certifications would be consolidated under the SBA, but the SBA would be tasked with developing and enforcing explicit certification requirements, ending the self-certification regime currently in place under the SBA. The VA-SBA Act would also specify that the new SDVOSB certification be accepted across all government agencies, and retain the contracting preferences SDVOSBs currently receive from the VA's "rule of two" procurement rules (as it exists as a consequence of the Kingdomware Technologies, Inc vs. United States decision from the Supreme Court).

A press release from the House Small Business Committee on the VA-SBA Act describes the current SBA self-certification regime as having lead to "years of fraud, waste, and abuse, as it has allowed companies not owned by service-disabled veterans to take advantage of the system." U.S. Representative Jack Bergman (R-Mich.) is also quoted in the release as saying that the proposed legislation "will make the federal government operate more efficiently and logically by instituting badly needed safeguards in the SDVOSB contracting program."

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