Procurement Preferences for Small Business Concerns Owned and Controlled by Service-Disabled Veterans

On December 16,2003, the Veterans Benefits Act of 2003 (Public Law 108-183) was enacted amending the Small Business Act (15 U.S.C. 631 et seq.) to establish a procurement program for Small Business Concerns owned and controlled by service- disabled veterans.

Section 308 of that law provides that contracting officers may award a sole source or set- aside contract to Service-Disabled Veteran Owned Small Business Concerns (SDVOSBCs), if certain conditions are met. Specifically, a contracting officer may award a sole source contract to any small business concern owned and controlled by service-disabled veterans if –

• such concern is determined to be a responsible contractor with respect to performance of such contract opportunity and the contracting officer does not have a reasonable expectation that 2 or more small business concerns owned and controlled by service- disabled veterans will submit offers for the contracting opportunity;
• the anticipated award price of the contract (including options) will not exceed-

- $5.0M in the case of a contract opportunity assigned a North American Industry Classification System code for manufacturing;

- or 0 $3.0M in the case of any other contract opportunity;

• in the estimation of the contracting officer, the contract award can be made at a fair and reasonable price.

Additionally, a contracting officer may award contracts on the basis of competition restricted to small business concerns owned and controlled by service-disabled veterans if the contracting officer has a reasonable expectation that not less than 2 small business concerns owned and controlled by service-disabled veterans will submit offers and that the award can be made at a fair market price.

Frequently Asked Questions

Q. Is a formal certification required from the SBA, or any other federal agency, to participate in the SDVOSBC procurement program?

No. A SDVOSBC will be able to "self-represent" its status as a SDVOSBC to the contracting activity as part of its offer. However, for sole source procurements, the SBA or the contracting officer may protest the proposed awardee's service-disabled veteran status, and for competitive set-asides, any interested party may protest the apparent successful offeror's SDVOSBC status.

Q. What are the basic requirements for business concerns to participate in the SDVOSBC procurement program?

• The SDVOSBC must be a small business;
• 51 percent of the SDVOSBC must be unconditionally and directly owned by one or more service-disabled veterans; and
• The management and daily business operations of the SDVOSBC must be controlled by one or more service-disabled veterans (or in the case of a veteran with permanent and severe disability, the spouse or a permanent caregiver of such veteran).

Q. What is SBA's definition of a small business concern?

A small business is a concern that is organized for profit, with a place of business in the United States, and which operates primarily within the United States or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor. Further, the concern cannot be dominant in its primary field, on a national basis. Finally, the business concern's size can not exceed the size standard established for its industry in the North American Industrial Classification System (NAICS) code. The most common size standards are as follows:

• Construction - General building and heavy construction contractors have a size standard of $28.5 million in average annual receipts. Special trade construction contractors have a size standard of$12 million.
• Manufacturing - For approximately 75 percent of the manufacturing industries, the size standard is 500 employees. A small number have a 1,500 employee size standard and the balance have a size standard of either 750 or 1,000 employees.
• Mining - All mining industries, except mining services, have a size standard of 500 employees.
• Retail Trade - Most retail trade industries have a size standard of $6 million in average annual receipts. A few, such as grocery stores, department stores, motor vehicle dealers and electrical appliance dealers, have higher size standards. None are above $24.5 million.
• Services - For the service industries, the most common size standard is $6 million in average annual receipts. Computer programming, data processing and systems design have a size standard of $21 million. Engineering and architectural services have different size standards, as do a few other service industries. The highest annual receipts size standard in any service industry is $30 million. Research and development and environmental remediation services are the only service industries with size standards stated in number of employees.
• Wholesale Trade - When acting as a dealer on Federal contracts the small business size standard is 500 employees. In addition, on procurement set-aside for small business over $25,000, the firm must deliver the product of a small domestic manufacturer, as set forth in SBA's non-manufacturer rule, unless waived by the SBA for a particular class of product. However, for those procurements made under the Simplified Acquisition Procedures of the FAR and where the purchase does not exceed $25,000, the non-manufacturer may deliver the goods of any domestic manufacturer.
• Other Industries - Other industry divisions include: Agriculture; transportation, communications, electric, gas, and sanitary services; and finance, insurance and real estate. Because of wide variation in the structure of the industries in these divisions, there is no common pattern of size standards. For specific size standards refer to the size regulations in 13 CFR § 121.201 or the table of small business size standards.

Q. Who is a service-disabled veteran?

A service-disabled veteran is a person who served in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable, and whose disability was incurred or aggravated in line of duty in the active military, naval, or air service.

The definitions of the terms "veteran" and "service-disabled veteran" are derived from Title 38 U.S.C. § 101.

Q. What percentage of a concern must be owned by a service-disabled veteran for it to be qualified as a SDVOSBC?

At least 51 percent of the small business concern must be directly and unconditionally owned by service-disabled veteran(s).

In the case of a small business concern which is a partnership, at least 51 percent of every class of partnership interest must be unconditionally owned by one or more service-disabled veterans. The ownership must be reflected in the small business concern's partnership agreement.

In the case of a small business concern which is a limited liability company, at least 51 percent of each class of member interest must be unconditionally owned by one or more service-disabled veterans.

In the case of a small business concern which is a corporation, at least 51 percent of each class of voting stock outstanding and 51 percent of the aggregate of all stock outstanding must be unconditionally owned by one or more service-disabled veterans.

Stock options, held by non service-disabled veterans, are given present effect. Any unexercised stock options or similar agreements held by service-disabled veterans will be disregarded. However, any unexercised stock options or similar agreements (including rights to convert non-voting stock or debentures into voting stock) held by non-service, disabled veterans will be treated as exercised.

Q. Who does SBA considered to control a SDVOSBC?

Control is not the same as ownership, although both may reside in the same person. Control is regarded as including both the strategic policy setting exercised by boards of directors and the day-to-day management and administration of business operations. A SDVOSBC's management and daily business operations must be conducted by one or more service-disabled veterans, or in the case of a veteran with a permanent and severe disability, the spouse or permanent caregiver of such veteran.

Service-disabled veterans managing the service-disabled veteran owned small business concern must have managerial experience of the extent and complexity needed to run the service-disabled veteran owned small business. However, a service-disabled veteran individual need not have the technical expertise or possess a required license to control a service-disabled veteran owned small business concern if he or she has ultimate managerial and supervisory control over those who possess the required licenses or technical expertise.

Finally, a service-disabled veteran, or in the case of a veteran with a permanent and severe disability, the spouse or permanent caregiver of such veteran, must hold the highest officer position in the concern.

• Control over a partnership - in the case of a partnership, one or more service-disabled veterans, or in the case of a veteran with a permanent and severe disability, the spouse or permanent caregiver of such veteran, must serve as general partners with control over all partnership decisions.
• Control over a limited liability company - in the case of a limited liability company, one or more service-disabled veterans, or in the case of a veteran with a permanent and severe disability, the spouse or permanent caregiver of such veteran, must serve as managing members with control over all decisions of the limited liability company.
• Control over a corporation - in the case of a corporation, one or more service-disabled veterans, or in the case of a veteran with a permanent and severe disability, the spouse or permanent caregiver of such veteran, must control the Board of Directors.

Q. How does SBA view the management and daily business operations of a SDVOSBC controlled by the spouse or permanent caregiver of a veteran with permanent and severe disability?

The management and daily business operations of an SDVOSBC may be controlled by a spouse or permanent caregiver (the spouse, or an individual, 18 years of age or older, who is legally designated, in writing, to undertake responsibility for managing the well- being of the service-disabled veteran) of a service-disabled veteran with a permanent and severe disability (a veteran with a service-connected disability that has been determined by the U.S. Department of Veterans Affairs to have a permanent and total disability for purposes of receiving disability compensation or a disability pension).

Q. What documentation should I have to confirm my status as a service-disabled veteran?

Contact the National Archives and Records Administration at htto://www.archives.gov to request certified copies of your Department of Defense discharge papers that demonstrates a service-incurred disability. Additionally, if you have been adjudicated by the Department of Veterans Affairs as having a service-connected disability, contact your local VA regional office for appropriate documentation.

Available Procurement Assistance for SDVOSBC

• Register your SDVOSBC in the Central Contractor Registration data base at http://www.ccr.gov
• Procurement Technical Assistance Program (PTAP), administered by the Defense Logistics Agency, on behalf of the Secretary of Defense, provide assistance to business firms in marketing products and services to the Federal, state and local governments. Web Site: http://www.dla.mil/db/procurem.html
• SBA's Procurement Center Representatives, located in area offices, review and evaluate the small business programs of federal agencies and assist small businesses in obtaining federal contracts and subcontracts. Web Site: h!!Q:/ /www.sba.gov/GC/pcr.html
• SBA's Commercial Market Representatives (CMR's), located in area offices, conduct compliance reviews of prime contractors, counsel small businesses on how to obtain subcontracts, conduct matchmaking activities to facilitate subcontracting to small business, and provide orientation and training on the Subcontracting Assistance Program for both large and small businesses.

Web Site: http:/ /www.sba.gov/GC/indexcontacts-cmrs.html

• Offices of Small & Disadvantaged Business Utilization (OSDBU) OSDBU's were established under the authority of Public Law 95-507. They are responsible for promoting the use of small, small disadvantaged, (8a), HUBZone, veteran-owned, service disabled veteran-owned small firms, and women-owned small businesses in compliance with federal laws, regulations, and policies. They also assist such firms in obtaining contracts and subcontracts with federal agencies and their prime contractors.

Web Site: http:/ /www.osdbu.gov/Listofmembers.html

Points of Contact for Assistance and Guidance:

SBA's Office of Veterans Business Development - 202-205-6773 Web Site -- http://www.sba.govNETS/

SBA's Veterans Business Outreach Centers:

• The Research Foundation of the State University of New York Mike Ross

41 State Street

Albany, NY 12246

Phone: 518-443-5398 ext. 163 Fax: 518-443-5275

Email: Rossdm@nyssbdc.org

Webpage: www.nyssbdc.org/vboc

• The University of West Florida in Pensacola

Douglas Davis

GCCC/SBDCNBOC

2500 Minnesota Avenue Lynn Haven, FL 32444

Phone: 1-800-542-7232 or 850-271-1108 Fax: 850-271-1109

Email: vboc@knology.net

Webpage: http:/ /www.vboc.org

• The University of Texas - Pan American

Jessica Lopez

1201 West University Drive Edinburg, TX 78539-2999 Phone: 956-292-7535 Fax: 956-316-2612

Email: vboc@}2anam.edu

Webpage: http:/ /www.coserve.org/vboc

• Vietnam Veterans of California - VBOC

Indria Gillespie

7270 E. Southgate Drive

Sacramento, California 95823

Phone: 916-393-8387 .

Fax: 916-393-8389

Email: igillesQie@vboc-ca.org

Webpage: http:/ /www.vboc-ca.org

SBA's District Office Veterans Business Development Officers:

VBDO CITY, STATE, ZIP ADDRESS TELEPHONE

Vacant Boston, MA 02222-1093 10 Causeway Street, Room 265 (617) 565-5567

John C. Gardner Augusta, ME 04330 68 Sewall Street, Room 512 (207) 622-8555

Karlene Normandin Concord, NH 03301 143 North Main Street, Suite 202 (603) 225-1400 ext. 121

Harvey Morrison Hartford, CT 06106-1800 330 Main Street, 2nd Floor (860) 240-4700 ext.232

Thomas Schroeder Montpelier, VT 05601-0605 P.O. Box 605 (802) 828-4422 ext.204

Norm Deragon Providence, RI 02903 380 Westminster Street, Room 511 (401) 528-4576

Richard Keffer Buffalo, NY 14202 111 West Huron Street, Room 1311 (716) 551-5664)

Frank Dito New York, NY 10278 26 Federal Plaza, Room 3100 (212) 264-2846

Martin F. McHenry Newark, NJ 07102 Two Gateway Center, 15th Floor (973) 645-2427

David Brinck Syracuse, NY 13202-2413 401 South Salina St, 5th Floor (315) 471-9393 ext.230

Ana Maria Vera San Juan, PR 00918-2038 Citibank Tower 252 Ponce De Leon

Ave Ste. 200 (787) 766-5422

Howard Garrity Elmira, NY 14901 333 East Water Street, 4th floor (607) 734-8130 ext.30

Carl Christensen C'sted St. Croix, VI 00820 Sunny Isle Professional Bldg,

Suites 5 &6 (340) 778-5380

Dan O’Connell Albany, NY 12205 Chamber of Commerce

1 Computer Dr. So. (518) 446-1118 ext.231

Joe McDevitt Philadelphia, PA 19107 900 Market Street, 5th Floor (215) 580-2706

Stanley Karwacki Baltimore, MD 21201-2525 10 South Howard Street, Suite 6220 (410) 962-6195 ext.340

Donald Nemchick Pittsburgh, PA 15212 700 River Avenue, Suite 510 (412) 322-6441

Leroy Harris Richmond, VA 23240-0126 400 North 8th Street, Suite 1150 (804) 771-2400 ext. 132

Seth Jones Washington, DC 20005 1110 Vermont Avenue, 9th Floor (202) 606-4000 ext. 269

Joe McDevitt McDevitt covers use Philadelphia, PA address tel.

Wilkes-barre, PA and fax no. (215) 580-2706

William Durham Charleston, WV 25301 405 Capital Street, Suite 412 (304) 347-5220

Robert Williamson Wilmington, DE 19801-3011 824 North Market Street, Suite 610 (302) 573-6315

Jorge Valentin Stone Atlanta, GA 30303 Harris Tower, 233 Peachtree

NE, St. Ste.1900 (404) 331-0100 ext. 609

Raymond Hembree Birmingham, AL 35211 801 Tom Martin Drive, Suite 201 (205) 290-7340 ext.226

Elliot Cooper Columbia, SC 29201 1835 Assembly Street, Room 358 (803) 765-5339

Vacant Jackson, MS 39201 210 East Capitol Street, Suite 900 (601) 965-4378 ext.241

Charles Atwood Jacksonville, FL 32256-7504 7825 Baymeadows Way, Suite 100B (904) 443-1951

Tommie Causey Louisville, KY 40202 2900 West Broadway, Suite 3 (502) 574-1143

Frank Velasco Miami, FI 33131 100 South Biscayne Boulevard,

7th floor (305) 536-5521 ext. 122

Don Winters Nashville, TN 37228 50 Vantage Way, Suite 201 (615) 736-5881 ext.248

Gary Reed Gulfport, MS 39501-1949 2909 13th Street, Suite 203 (228) 863-4449 ext.14

Mitch De Mallie Charlotte, NC 28210-2227 6302 Fairview Road, Suite 300 (704) 344-6590 ext. 1116

Steve Konkle Chicago, IL 60661 500 W. Madison Street, Room 1250 (312) 886-4208

John Renner Cleveland, OH 44114-2507 1111 Superior Avenue Street,

Room 630 (216) 522-4180 ext. 211

Douglas Sweazy Columbus, OH 43215-2542 2 Nationwide Plaza, Suite 1400 (614) 469-6860 ext. 276

Charles (Ted) Davis Detroit, MI 48226 477 Michigan Avenue, Room 515 (313) 226-6075 ext 245

VBDO CITY, STATE, ZIP ADDRESS TELEPHONE

Darrell Mowery Indianapolis, IN 46204-1873 429 N. Pennsylvania Street,

Suite 100 (317) 226-7272 ext.214

George Saumweber Minneapolis, MN 55403 100 N. 6th Street, Suite 210-C (612) 370-2322

Ronald Carlson Cincinnati, OH 45202 550 Main Street, Room 2-522 (513) 684-2814 ext.205

John Lonsdale Milwaukee, WI 53203 310 W. Wisconsin Avenue,

Suite 400 (414) 297-1231

Jim Ryan Springfield, IL 62704 511W.Capitol Avenue, Suite302 (217)492-4416 ext109

Billy Medina Ft.Worth,TX 76155 4300 Amon Carter Blvd, Suite 114 (817) 684-5517ext.5517

John Tillotson Albuquerque, NM 87102 625 Silver Avenue SW, Suite 320 (505) 346-6736

Frederico Manzanares Harlingen, TX 78550-6855 222 E. Van Buren, Suite 500 (956) 427-8533 ext. 226

Stephen Curry Houston, TX 77074 8701 South Gessner Drive,

Suite 1200 (713) 773-6500 ext.242

Andy LaMonica Little Rock, AR 72202 2120 River Front Drive, Suite 250 (501) 324-5871 ext.239

Armando Garcia Lubbock, TX 79401-2693 1205 Texas Avenue, Room 408 (806) 472-7462 ext.244

Willie Williams New Orleans, LA 70130 365 Canal Street, Suite 2820 (504) 589-2706

Sandra Ransome Oklahoma City, OK 73102 301 N.W.6 Street, Suite 116 (405) 609-8019

Fernando J. Guerra San Antonio, TX 78232 17319 San Pedro Building 2,

Suite 200 (210) 403-5925

Daniel Chacon EI Paso, TX 79935 10737 Gateway West, Suite 320 (915) 633-7031 ext.231

F. Steven Parker Kansas City, MO 64105 323 W. 8th Street, Suite 501 (816) 374-6701 ext.226

Dennis Larkin Omaha, NE 68154-3949 11145 Mill Valley Road (402) 221-7208 ext. 252

Patrick Carney Witchita, KS 67202-1212 271 West 3rd North, Suite 2500 (316) 269-6273 ext.225

Gary Ayers St. Louis, MO 63102 200 North Broadway, Suite 1500 (314) 539-6600 ext.245

Tom Harbison Des Moines, IA 50309-2186 210 Walnut Street, Room 749 (515) 284-4653

Vacant Cedar Rapids, IA 52401-1806 215 4th Avenue SE, Suite 200 (319) 362-6405 ext.218

M. Brent Jones Springfield, MO 65807-5254 830 E. Primrose Street, Suite 101 (417) 890-8501 ext.209

Jeanette Deherrera Denver, CO 80202 721 19th Street, Suite 426 (303) 844-2607 ext.226)

Dave Denke Casper, WY 82602 100 East B Street, Suite 4001 (307) 261-6523

Eric Giltner Grand Forks, ND 58201 1501 28th Avenue South (701) 746-5160

Robert Much Helena, MT 59626 10 West 15th Street, Suite 1100 (406) 441-1081 ext.130

Jon Uebelhack Salt Lake City, UT 84138 125 South State Street, Room 2231 (801) 524-3224

Debra Anderson Sioux Falls, SD 57104-6727 110 South Phillips Avenue,

Suite 200 (605) 330-4243 ext.16

Chuck Stewart San Francisco, CA 94105 455 Market Street, 6th Floor (415) 744-6791

James Pipper Phoenix, AZ 85004-1093 2828 N. Central Avenue, Suite 800 (602) 745-7230

Barbara Madel Glendale, CA 91203-2304 330 North Brand Blvd., Suite 1200 (818) 552-3314

Maria Hughes San Diego, CA 92101-3500 550 West C Street Suite 550 (619) 557-7250 ext.1139

Pete Peterson Las Vegas, NV 89101 400 South Fourth Street, Suite 250 (702) 388-6800

Kimberly Hite Honolulu, HI 96850-4981 300 Ala Moana Boulevard,

Room 2-235 (808) 541-3024

Reynold Johnson Fresno, CA 93727-1547 2719 North Air Fresno Drive,

Suite 200 (559) 487-5785 ext.114

James A. Bryant Sacramento, CA 95814 650 Capitol Mall, Suite 7-500 (916) 930-3721

Sami Morcos Santa Ana, CA 92701 200 W. Santa Ana Blvd., Suite 700 (714) 550-7420 ext.3802

Kenneth Lujan Hagatna, GU 96919-2003 400 Route 8, Suite 302 (671) 472-7277

Tom Ewbank Seattle, WA 98101-1128 1200 6th Ave, Suite 1700 (206) 553-2746

Richard Blum Spokane, WA 99201 801 West Riverside Avenue,

Suite 200 (509) 353-2807

Terrence Moore Anchorage, AK 99501 510 "L" Street, Suite 310 (907) 271-4854

James Steiner Portland, OR 97201-5494 1515 SW Fifth Avenue, Suite 1050 (503) 326-2586

Rod Grzadzieleski Boise, ID 83702-5745 1020 Main Street, Suite 290 (208) 334-1696 ext.233