For the Veterans Among Us

Not just thank you for your service, although we certainly do! Fourteen states do more than say thank you. They have specifically included VOSBs (Veteran Owned Small Business) and SDVOSBs (Service Disabled Veteran Small Business) in their procurement opportunities and SDMWVLGBTBE (Small Disadvantaged or Disabled, Minority, Women, Veteran, Lesbian, Gay, Bisexual or Transgendered Business Enterprise) certification programs. This generally translates into specific goals for all contracts issued at the state level, and many more opportunities for a veteran owned business to bid as either prime or sub-contractor.

Virginia has the highest percentage goal for contract participation at 40% for SDMWVLGBTBEs certified in their SWaM (Small, Minority and Women) program, while New York’s overall MWBE (Minority and Women Business Enterprise) goal is 30% and SDVOSB is currently at 6%. Pennsylvania’s governor recently announced his desire for 30% SDMWVLGBTBE participation. Next up, Minnesota with 6% VOSB/SDVOSB goals, followed by Michigan’s SDVOSB bidders may receive up to 10% preference in bidding while Michigan’s SDVOSB spend goal is 5%. In Maryland, the goal is 2% for VOSB, 3% SDVOSB and another 5% for small. (Note: while Maryland may permit combining 10% into a single set aside goal, our experience has been that a certified prime is often restricted on how much of the goal it can self-fulfill on a specific procurement.) Arkansas pulls SDVOSBs into its MWBE program with a 5% goal. California, Illinois, Indiana and Massachusetts have 3% VBE goals. Wisconsin offers a 5% preference in bidding to SDVOSBs, while Washington encourages its agencies to award 5% of contracts to VOSB/SDVOSBs.

Unfortunately, there is not a standard process for state certification of VOSB/SDVOSB enterprises. Each is a little bit different:

  • States that certify VOSBs (no disability required) and SDVOSBs: Florida, Illinois, Indiana (must be VA verified to be eligible), Maryland (must be VA verified to be eligible), Massachusetts (must be VA verified or USBLN certified to be eligible), Minnesota (must be VA verified to be eligible) and New Jersey
  • States that certify SDVOSBs: Arkansas, California, Michigan, Washington and Wisconsin

As noted, a number of states require the business to hold a verification from the VA (Veterans Administration) program, so we’ll talk about navigating that program. Verification (certification by another name) by the VA is a multi-step process, and it does take some time. The first step, make sure all your information is up-to-date in BIRLS (the Beneficiary Identification Record Locator System aka the Beneficiary Identification and Records Locator Subsystem). If you have never claimed benefits, you will need to work with the VA to create your initial record. BIRLS will be cross-referenced when you get to step two … create a vendor profile in the VA’s VIP portal.  When creating your account, you’ll be asked to provide your business’s Dun & Bradstreet – DUNS – Number. If you don’t have one,  get it before you start your profile.  By the way, there is no cost to get a DUNS so shy away if asked for money.  You can apply for a DUNS via this web form. The VIP portal will confirm information in the BIRLS system, of particular interest: date of birth and social security number. You will also have to complete and electronically sign a VA Form 0877 before you begin providing information about your business.

We recently supported a client through the entire VOSB verification process. First thing you should know, the VA has a pretty large backlog of veterans seeking VOSB verification, so be prepared to spend some time waiting. For example, the initial application was completed in January, then a generic list of pre-qualification questions were sent to us. We had the answers prepared well in advance of the verification analyst’s early March request. Once the actual process began there were a couple of stumbling blocks, mostly in interpretation and differences in document names. For example, the client’s home state issues a certificate of formation for all business types. Three times we had to explain that this LLC didn’t have any articles of incorporation (the term the VA used though traditionally LLCs have articles of organization).  This state’s certificate of formation does not include any articles. Once this outstanding document request was  considered resolved the VA issued confirmation of VOSB status at the end of April. The entire verification process took a little over four months.

The states that do not require VA verification have their own certification process to seek  VOSB or SDVOSB status. We’ve found that in those cases most states require that both the business and veteran owner be domiciled within the state. Another fairly standard requirement for SDVOSBs is that the veteran owner must have a service-connected disability of at least 10% or more to be eligible. Always research the certifier’s eligibility requirements before starting the certification process.

Our colleague John Scifers (from SCIGON Solutions) shared that VOSB/SDVOSB certification “can also be helpful at the municipal level. For example, the City of Chicago has a 5% price preference for VOSB/SDVOSB firms on contracts over $100K. Cook County has a similar program.” He also points out that other benefits may be available to veteran owned businesses, such as California’s waiver of business license fees.

Check with your state’s Department of Veterans Affairs or similar agencies and non-profits offering veteran services.  These organizations should be able to provide information on any regional or local procurement benefits that might be available. We also recommend giving John’s article, Tips for Emerging Veteran Entrepreneurs, a read.

We expect this trend of state procurement goals for veteran and service disabled veteran participation to continue as various legislatures work toward increasing opportunities for their returning veteran constituents. You can use this tracker developed by the National Veteran Owned Business Association  to keep up-to-date on what states are doing to increase their engagement with veteran owned businesses.