Service Disabled Veteran Owned Small Business

What Is a Service Disabled Veteran Owned Small Business?
A Service Disabled Veteran Owned Small Business (SDVOSB) is defined by the SDVOSB Contracting Program for federal agencies as:

  • A business considered small by Small Business Administration size standards.
  • A business owned and controlled by one or more service-disabled veterans (0-100% rating).

When Was the SDVOSB Program Established?
President George W. Bush issued Executive Order 13360 on Oct. 20, 2004, outlining the responsibilities of Federal agencies to provide Federal contracting and subcontracting opportunities to SDVOSBs.

Public Law 106-50 established a contracting goal for Federal agencies to award 3% of prime contracts to SDVOSBs. Large Prime Contractors have SDVOSB subcontracting goals.

What Are SDVOSB Set Aside Solicitations?
Funds can be set aside for SDVOSBs if the contracting officer has a reasonable expectation that two or more qualified SDVOSBs will submit offers, and the contract will be awarded at a fair market price. There is no dollar limit on SDVOSB set-asides.

If only one offer is received, the contracting officer may make an award at a fair market price.

If the contracting officer receives no acceptable offers from SDVOSBs, the set-aside shall be withdrawn, and the requirements, if still valid, set aside for other small business programs.

What Are SDVOSB Sole Source Awards?
Sole-source contracts can be awarded if the contracting officer determines that a qualified SDVOSB is available to perform the contract, and the anticipated award value of the proposed contract, including options, will not exceed:

  • $5 million for a requirement within the North American Industry Classification System (NAICS) for manufacturing, or
  • $3 million for a requirement within all other NAICS codes.

This provides a great benefit to the government when the time frame for awarding a contract to meet customer requirements is extremely shortened.

What Are the Federal Requirements for SDVOSB Certification?
There is no Federal SDVOSB certification program. The service disabled veteran business owner self represents his status and small business status in contract representations and certifications.

However, the Department of Veterans Affairs (VA) has a formal process for certifying that a small business meets all of the requirements under the service disabled veteran owned small business program. ITC received its VA certification in 2007.

What Are the Limitations on Subcontractors by Prime SDVOSBs?

  • 50% of direct labor services
  • 50% of cost of manufacturing
  • 15% of labor costs for General construction
  • 25% of labor costs for Special Trade construction
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