Overview
Subpart 19.14 prescribes the policies and procedures for the Service-Disabled Veteran-Owned Small Business (SDVOSB) Program, established by the Veterans Benefit Act of 2003. It provides the framework for Federal agencies to provide contracting assistance to SDVOSB concerns through competitive set-asides and sole-source awards.
Key Rules
- Certification Requirement: Effective January 1, 2024, SDVOSBs must be formally certified by the Small Business Administration (SBA) and designated as such in the System for Award Management (SAM) to be eligible for set-asides or sole-source awards (unless an application was pending prior to December 31, 2023).
- The "Rule of Two" for Set-Asides: A contracting officer may set aside an acquisition for SDVOSBs if there is a reasonable expectation that at least two eligible SDVOSB concerns will submit offers and the award can be made at a fair market price.
- Sole-Source Thresholds: Sole-source awards can be made if only one SDVOSB is likely to submit an offer, provided the price (including options) does not exceed:
- $8.5 million for manufacturing NAICS codes.
- $5 million for all other NAICS codes.
- Order of Precedence: Contracting officers must consider SDVOSB set-asides before considering SDVOSB sole-source awards or general small business set-asides.
- Exclusions: This subpart does not apply to requirements currently performed by Federal Prison Industries (UNICOR), AbilityOne, or the 8(a) Program (unless SBA consents to a release).
- Mandatory Clause: Contracting officers must include FAR clause 52.219-27 in all SDVOSB set-aside or sole-source solicitations and contracts.
Responsibilities
- Contracting Officers (COs):
- Conduct market research to determine if the "Rule of Two" can be met.
- Verify the SDVOSB’s certification status in SAM/SBA databases before evaluation and award.
- Remove offerors from consideration if they do not meet the January 1, 2024, certification criteria.
- Coordinate with the SBA Procurement Center Representative (PCR) regarding set-aside recommendations.
- Small Business Administration (SBA):
- Determines SDVOSB eligibility and manages the certification program.
- Updates SAM within 2 days if a concern fails to update its status following a negative eligibility determination.
- Appeals CO decisions to reject set-asides or sole-source awards.
- SDVOSB Concerns:
- Must obtain SBA certification to participate.
- Must update SAM within 2 days of a final SBA decision finding them ineligible.
- Must comply with the Limitations on Subcontracting (FAR 52.219-14).
Practical Implications
- Certification Transition: The shift to mandatory SBA certification (moving away from self-certification) means COs must be more diligent in checking SAM. Any firm merely "self-representing" as an SDVOSB without a pending or approved SBA certification is now ineligible for award.
- Competitive Strategy: If a CO receives only one acceptable offer for an SDVOSB set-aside, they should still make the award to that firm. If zero offers are received, the set-aside must be withdrawn and re-evaluated for a general small business set-aside.
- Joint Ventures: For a Joint Venture to win an SDVOSB contract, the managing partner must be an SBA-certified SDVOSB, and the JV itself must comply with specific SBA requirements (13 CFR 128.402).
- Market Research Criticality: Because COs are required to consider SDVOSB set-asides before general small business set-asides, high-quality market research is essential to justify the procurement strategy and defend against potential SBA appeals.