A veteran-owned small business is a business that is at least 51% owned by one or more veterans. In the case of publicly owned businesses, at least 51% of the stock is owned by one or more veterans and the management and daily business operations are controlled by one or more veterans. VOSBs are not eligible for sole source contracts and procurement set-asides however the FAR requires federal agencies to actively encourage their prime contractors to use VOSBs as subcontractors. All contracts valued at $100,000 or more include a clause, which requires the prime contractor to provide the maximum practicable opportunity to VOSBs to compete for subcontracts (FAR 2.101).
Veteran-Owned Small Business as used in this provision means a small business that:
- Is at least 51% unconditionally owned by one or more veterans (as defined at 38 U.S.C. 101(2)); or in the case of any publicly owned business, at least 51% of the stock of which is unconditionally owned by one or more veterans; and
- Whose management and daily business operations are controlled by one or more veterans
The purpose of the Veterans Entrepreneurship and Small Business Development Act of 1999 is to expand existing small business programs and establish new assistance programs for veterans who own and operate small business firms. The act also establishes the Associate Administrator of Veterans Business Development within the Small Business Administration.
To prove that you are a veteran, you will need to have a Department of Defense Form 214 (DD 214), which is issued upon a military service member’s retirement, separation or discharge from active-duty military. However, registering as a veteran-owned is not as cut and dry as registering as another small business. Aside from the Veterans Affairs office, there’s no single government body or third-party operation you can turn to receive your certification. For that reason, many people forgo certification altogether unless their goal is to compete for government contracts. Even if you’re not interested in working with the government, research by the National Veteran Owned Business Association shows that 70 percent of Americans would prefer to do business with a veteran-owned business than one that is not veteran-owned. Advertising your “veteran-owned business” status on your storefront, signage, website, letter head, and at the bottom of e-mails may be all you need to attract new business. In many cases, such as doing business with local contractors, suppliers, and even large corporation, a formal certification isn’t necessary.
The first step of getting certified through the VA is registering with the VetBiz Registry, which is a veteran business database. The Center for Veterans Enterprise provides the registry as well as step-by-step guidelines on applying for certification with the VA. As mentioned earlier, you’ll also be required to have the DD Form 214.
Once the VA begins the verification process, Forman says they will evaluate partnership agreements, corporate charters, and organizational charters, board of directors, mission statements, inventory, service providers, bank statements and tax information, so it’s a good idea to have these records organized and prepared. A select few businesses will also be subject to on-site visits, both announced and unannounced, during the verification process.
Many large corporations include veteran-owned businesses in their supplier diversity programs and have their own certification process. The majority will accept your DD 214 as proof and not require any further registration through the VA’s office. The VA is the only government agency with a formal verification process.
Prime contractors submitting Small Business Subcontracting Plans in accordance with FAR 52.219-9 shall include goals for awards to veteran-owned small business concerns. On October 22, 2001, the FAR was amended to add a subcontracting plan goal requirement for service disabled veteran-owned small business concerns.
The VA has a number of contracts set aside that fall first to service-disabled veterans and then to veterans. This program is especially appealing to veterans who have not achieved service-disabled status, because the federal government does not provide set asides to veteran-owned businesses, rather it sets goals that may or may not get met.
Register with the VA even if you’re not doing business with the federal government. “If you go through the VA it can help you with marketing. A lot of regional governments and corporations will do business with you based on that certification.”
Although you have registered with the VA, you must also register with the Central Contractor Registration (CCR) to be eligible for any government contracts. The CCR’s site has a complete list of guidelines explaining what you’ll need to register. The links below will direct you to all the information you’ll need to apply;
- A Tax Identification Number (TIN) is either an Employer Identification Number or a Social Security Number. If you receive a new EIN number, it may take two to five weeks to become active, meaning you will have to wait to register with the CCR. To obtain an EIN.
- The North American Industry Classification System (NAICS) is the standard by
- which the government classifies businesses. To figure out what NAICS code your business operates under, A DUNS number is a nine-digit identification number for your business.
However; getting on the GSA schedule is no easy task. First, you’ll have to review the list of GSA schedules to determine which category your products and services fall under. Again you will need to register with the CCR, complete the Online Representations and Certifications Application, and obtain an Open Ratings Past Performance Evaluation. The application information is available on the GSA’s website and training sessions are also offered throughout the year. The training will teach you not only how to successfully apply, but also how to understand government agency procurement programs.
For more information contact the Small Business Administration at www.sba.gov.