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How to Obtain a Veteran Owned Business Certification

Veteran’s Day reminds us to honor those who have served their nation as a member of the armed forces and to thank them for the sacrifices that they have made to preserve and defend our freedom. If you have served in the military and are thinking about what’s next, the possibility of going into business for yourself might make sense.

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Managing and Running Your Own Business

The skills and experience you acquired during your service can translate well into managing and running a business for yourself. And obtaining certification as a veteran-owned business can provide you with a competitive advantage that can open up opportunities to grow your business through preferential treatment on contracts that have mandates and incentives to place business with veteran-owned and other disadvantaged businesses.

If you decide to take on the challenge of running your own business, you will be in good company. According to data released by the U.S. Census Bureau in January of 2021 from their 2019 Annual Business Survey, veteran-owned businesses in the U.S. numbered over 330,000 and represented 5.9% of all businesses, employing some 3.9 million people and generating estimated revenues of $947.7 billion.1

In this article, we will provide an understanding of what the different types of veteran-owned business certifications are and discuss the process for how to obtain them. Additionally, the article will address contracting opportunities that are available for veteran businesses. Lastly, a compendium of informational resources that can be of additional value to veteran business owners and those service veterans who are seeking to start new business ventures will be provided.

Who is Considered a Veteran for Eligibility as a Veteran Business?

The U.S. Department of Veterans Affairs (VA)2 cites Title 38 CFR Part 74 and 13 CFR Part 125 and defines eligible veterans as follows:

  1. “A Veteran is a person who served on active duty with the Army, Air Force, Navy, Marine Corps, or Coast Guard for any length of time and who was discharged or released under conditions other than dishonorable.”
  2. “Reservists or members of the National Guard called to federal active duty or disabled from a disease or injury incurred or aggravated in the line of duty or while in training status also qualify as Veterans.”
  3. “A Service-disabled Veteran is a Veteran who possesses either a disability rating letter issued by VA establishing a Service-connected rating between 0 and 100 percent, or a disability determination from the Department of Defense.”

What Certifications are Available to Veteran Businesses?

There are several different types of certifications and verifications that signify veteran business ownership status, and these are managed differently and have different requirements. These primary veteran business certifications include3:

  • Service-Disabled Veteran-Owned Small Business (SDVOSB)
  • Veteran-Owned Small Business (VOSB)
  • Veteran Administration (VA) Certified Veteran Enterprise (CVE) Veteran Owned Small Business
  • Service-Disabled Veteran-Owned Small Business Concern (SDVOSBC) Program

The first two of these business certifications are ones for which the business owner may self-certify – the other two have more formal verification processes associated with them.

Service-Disabled Veteran-Owned Small Business (SDVOSB)

The federal government has an established goal to award a minimum of 3% of all contracting dollars each year to SDVOSBs3. The eligibility requirements for being certified as a service-disabled veteran-owned small business are as follows4,5:

  • The Service-Disabled Veteran (SDV) must be capable of documenting that they have a disability that is related to their military service as established by the Veterans Administration (VA) or the Department of Defense (DoD).
  • Their business must qualify as being a small business based on standards established by the Small Business Administration. You can use their size standards tool to make this determination or use the SBA Table of Size Standards which provides this data organized by the North American Industry Classification System (NAICS) code associated with the business. Note that the size standards are expressed in terms of either average annual receipts or average annual employment (number of employees), depending on the NAICS code. Federal code sections 13 CFR § 121.104 and 13 CFR § 121.106 describe the methodology for calculating average annual receipts and average annual employment, respectively.
  • A minimum of 51% of the business must be owned and controlled by one or more service-disabled veterans and the SDV must hold the highest officer position in the business. In the case of a veteran with a permanent severe disability, the veteran’s spouse or permanent caregiver may assume the highest role as an exception.
  • One or more SDVs must be directly involved in managing the day-to-day operations of the business including making relevant long-term business decisions. There is an underlying presumption that a veteran who is not able to work in the firm during normal business hours and who does not live within a reasonable commuting distance from the business’ headquarters or other job site locations would not qualify as being in control of the business operations on a day-to-day basis.

Veteran-Owned Small Business (VOSB)

If you are a veteran but did not suffer a service-related disability that would qualify you to operate as an SDVOSB, you can still certify as a Veteran-Owned Small Business (VOSB). While the SDVOSB is a more formal certification process, the VOSB is a self-certification process that can be initiated by the business owner.

Veteran Administration (VA) Certified Veteran Enterprise (CVE) Veteran Owned Small Business

The Veteran’s Administration also offers a verification program that allows veteran businesses to obtain a Certified Veteran Enterprise (CVE) certification issued through the VA and which allows those businesses to compete for contracts under what is termed the Veterans First Contracting Program6.

The VA process for verification called the Vets First Verification Program, verifies the SDVOSBs and VOSBs using Title 38 Code of Federal Regulations (CFR) Part 74 and 13 CFR Part 125 with regard to Veteran eligibility, ownership, and control of the business. Once verified, these businesses are able to compete for awards designated under VA set-asides. As of the date of publication of this article, over 15,000 veteran businesses were verified under the program, with 12,000+ being verified as SDVOSBs and 3,000+ verified as VOSBs7.

Service-Disabled Veteran-Owned Small Business Concern (SDVOSBC) Program

The Small Business Administration (SBA) offers a Service-Disabled Veteran-Owned Small Business Concern (SDVOSBC) Program that enables participating businesses to compete for certain federal contract opportunities that are managed using set-asides as described below.

Contracting Opportunities Available to Veteran Businesses

The federal government awards a portion of their contracting dollars to veteran-owned businesses and aims to award a minimum of 3% of all contracting dollars specifically to SDVOSBs4. There are also what are referred to as small business set-asides, where the government limits competition and helps small businesses more effectively compete to win business opportunities.

Set aside contracts  generally are of two types8:

  • Competitive set-aside contracts
  • Sole source set aside contracts

Most contracts that are designated as set-asides are issued as competitive set-aside contracts, meaning that more than one business is qualified to provide the needed products or services under the contract. Competitive contracts are almost always issued in cases where the government contracts value is less than $150,000.

Sole source contracts are much rarer and imply that there is only a single business entity that is capable of fulfilling the contract requirements. These contracts are issued without a competitive bid process but in many cases must be publicly announced and permit interested businesses to submit a bid. In some of these instances, the contract may be withdrawn as sole source and issued as competitive8.

The specific opportunities for which the business wishes to compete, and the government agency involved in the bid, will determine which certification/verification program is needed. For any contracts issued by either the Department of Veterans Affairs or the Federal Aviation Administration, a formal verification for the veteran’s business (either VOSB or SDVOSB) is required. For contracts issued by other federal agencies, SDVOSBs may participate in set aside contracts and only require a self-certification process, not formal verification.

How to Obtain Veteran Business Certification and Verification

The first step towards becoming certified involves deciding which types of opportunities the business has an interest in pursuing. If you are not interested in working with federal agencies such as the Department of Veterans Affairs or the FAA, going through the process for formal certification may not be necessary. Other federal agencies will accept your VOSB or SDVOSB status using the self-certification process.

If you don’t feel as if you wish to pursue government contract business at all, you can still promote yourself as a veteran-owned business via your website, marketing materials, and promotions. Many businesses that want to purchase products and services from veteran-owned businesses will accept your DD Form 214 as proof of veteran status. You can also investigate obtaining the commercial certificates that are issued by the National Veteran-Owned Business Association (NaVOBA) to designate your business as a NaVOBA Certified Veteran’s Business Enterprise™. These certificate programs are for the Certified Veteran’s Business Enterprises™ (VBE) and Certified Service-Disabled Veteran’s Business Enterprises™ (SDVBE) and represent a private-sector program that can be used to help businesses interested in contracting with the corporate allies of NaVOBA. These private sector veteran business certifications are designed to make it easier for corporations with supplier diversity programs to be able to source from veteran-owned businesses in the same way as they do for other disadvantaged or diverse businesses, such as minority- or women-owned businesses. In essence, these certifications are on par with those offered by organizations such as the National Minority Supplier Development Council (NMSDC) or the Women’s Business Enterprise National Council (WBENC). Be advised that there is a non-refundable application fee that ranges from $350 - $2000, depending on the business's annual revenue.

If you do wish to pursue more formal status, you may want to consider doing that through the Department of Veterans Affairs as they have a formal verification program for VOSBs and SDVOSBs. The Vets First Verification Program as managed under the Center for Verification and Evaluation (CVE) provides information on all aspects of the process, including the specific documentation that will be needed for verification.            

Compendium of Support Resources for Veteran-Owned Businesses

Below are listed a number of resources available to small business owners and veteran-owned businesses, which include government sites as well those from other non-profit and dedicated groups and organizations. These resources can provide additional information to veterans and other small business owners about a range of topics relating to running a small business, competing for contracts, training programs, and obtaining certifications.

Summary

This article reviewed the different certification options that are available for veteran-owned businesses and provided information on eligibility and how to pursue them. To learn more about other topics, consult our additional guides or visit the Thomas Supplier Discovery Platform to locate potential sources of supply or view details on specific products.

NaVOBA Certified Veteran’s Business Enterprise™, Certified Veteran’s Business Enterprises™ (VBE), and Certified Service-Disabled Veteran’s Business Enterprises™ (SDVBE) are all trademarks of the National Veteran-Owned Business Association (NaVOBA), Carnegie, PA.

Sources:

  1. Annual Business Survey Release Provides Data on Minority-Owned, Veteran-Owned, and Women-Owned Businesses
  2. Preparing for Verification
  3. Understanding Veteran-Owned Business Certifications | US Veterans Magazine
  4. https://www.sba.gov/federal-contracting/contracting-assistance-programs/veteran-assistance-programs
  5. Veteran-Owned Small Business Contracting (VOSB & SDVOSB)
  6. Vets First Verification Program - Office of Small & Disadvantaged Business Utilization
  7. Home · VetBiz Portal
  8. Types of contracts
  9. What is a veteran-owned business certification, and how do you get it?
  10. How to Get a Veteran-Owned Business Certification
  11. How to Get Certified as a Veteran-Owned Business
  12. Government Contracting for Your Veteran-Owned Small Business