The U.S. government offers stipulations for contracts based on several elements, such as women-owned small businesses and veteran assistance programs. For example, service disabled veteran owned small businesses (SDVOSB) are awarded three percent (3%) of all federal contracts. In 2020, the federal government spent over $665 billion on contracts government wide. Three percent of $665 billion is a sizable amount of funds.
This is an incredible opportunity for disabled veteran owned businesses to compete with other small and medium sized businesses for federal contracts. Companies that partner with a certified disabled veteran owned company are much more likely to be awarded a contract.
Qualifying for SDVOSB
To become an SDVOSB, a company must be formally verified by the Department of Veterans Affairs Center for Verification and Evaluation. To qualify, a veteran owned business must:
- Be a small business per the Small Business Administration’s size standards
- Be at least 51 percent owned and controlled by one or more service disabled veterans
- Have one or more service disabled veterans manage day-to-day operations who also make long-term decisions
- Have eligible veterans with a service connected disability
All required documentation is submitted to veterans affairs (VA) to formally verify veterans and service disabled.
Benefits of SDVOSB
The federal government commits to awarding at least three percent of all federal contracts to SDVOSBs each year. Also, competition for federal contracts is limited to certain businesses that participate in the SDVOSB program. Companies that partner with qualified SDVOSBs for federal contracts increase their chances of being awarded the contract.
What Are Set-Aside Contracting Opportunities?
A set-aside contract helps limit competition for federal contract awards to small businesses. Called “small business set-sides,” these federal contracts help level the playing field so small businesses can compete and win.
There are two types of federal set-aside contracts:
- Competitive set-aside contracts. For instance, at least two small businesses could complete the work requested or supply the purchased products. The federal government “sets aside” the contract for small businesses. As the SBA website reports, “With few exceptions, this happens automatically for all government contracts under $150,000.” Some set-asides are open to any small business. But, some are open only to small businesses that participate in SBA contracting assistance programs.
- Sole-source set-aside contracts. The federal government encourages competitive bidding for contracts, but there are exceptions. A sole-source contract can be issued without the competitive bidding process. This normally happens when a single small business can fulfill the requirements of the contract.
SDVOSB Set-Sides
Set-asides help small businesses in certain socio economic categories compete on a level playing field. The federal government aims to set aside at least three percent of all contracts awarded annually to SDVOSBs. As such, any company that partners with a certified SDVOSB gains a better chance of being awarded a federal contract.
Joint Ventures
Any time two or more small businesses partner to create a joint venture, they can better compete against larger companies. By pooling their efforts, they offer a stronger case for being awarded a contract.
A caveat of joint ventures is the development of a mentor protege relationship. This program lets SDVOSBs partner with a large business to compete at the same level for government contracts.
Final Thoughts
Federal contracting dollars are awarded every year, with some businesses struggling to compete. You don’t have to bear the burden alone. When you partner with a service disabled veteran owned small business, you increase your likelihood of being awarded a contract.
But not every veteran owned small business is a certified service disabled one. Work with a small business that brings extensive value to your proposal and an SDVOSB offering the expertise you need.
