Question 1

What is a Service-Disabled Veteran-Owned Small Business (SDVOSB)?

Accepted Answer

A Service-Disabled Veteran-Owned Small Business (SDVOSB) is a small business that is at least 51% owned and controlled by one or more service-disabled veterans. The veteran must have a service-connected disability rating from the Department of Veterans Affairs (VA) or the Department of Defense (DoD). SDVOSBs are eligible for exclusive set-aside contracts and sole-source awards under federal procurement rules.

Question 2

What is the difference between SDVOSB and VOSB?

Accepted Answer

A Veteran-Owned Small Business (VOSB) is owned and controlled by any veteran, including those without a service-connected disability. An SDVOSB is a subset of VOSB — the veteran must have a documented service-connected disability. SDVOSBs receive a higher priority in VA procurement under the Veterans First Contracting Program, and both designations qualify for separate set-aside pools at the VA.

Question 3

How does a business register as an SDVOSB?

Accepted Answer

To register as an SDVOSB, you must: (1) register in SAM.gov with a valid UEI, (2) apply for SBA VetCert certification at certify.sba.gov, submitting required documents including military service records, VA disability rating, ownership documents, and financial statements. After SBA approves your VetCert certification, your status is reflected in SAM.gov. Self-certification alone is no longer sufficient for most contracts.

Question 4

What is SBA's VetCert program?

Accepted Answer

SBA's VetCert (Veteran Small Business Certification) program is the official federal certification for SDVOSBs and VOSBs. As of January 1, 2023, SBA assumed responsibility for SDVOSB certification from the VA's Center for Verification and Evaluation (CVE). VetCert certification is required to compete for SDVOSB set-aside contracts across all federal agencies, including the VA. Certifications are valid for three years.

Question 5

What is an SBA size standard?

Accepted Answer

An SBA size standard defines the maximum size a business can be and still qualify as 'small' for federal contracting purposes under a specific NAICS code. Size standards are set by SBA and vary by industry — expressed either as average annual receipts (in millions) or number of employees. Qualifying as small is required to participate in set-aside programs including SDVOSB, 8(a), HUBZone, and WOSB.

Question 6

What is the difference between revenue-based and employee-based size standards?

Accepted Answer

Revenue-based size standards (expressed in millions of dollars) apply to most service and retail industries. The firm's average annual receipts over the past three fiscal years must not exceed the threshold. Employee-based size standards apply to manufacturing, mining, and some other industries — the average number of employees over the past 12 months must not exceed the threshold. Some NAICS codes use a different measure entirely.

Question 7

What is an SDVOSB set-aside contract?

Accepted Answer

An SDVOSB set-aside is a federal contract reserved exclusively for competition among Service-Disabled Veteran-Owned Small Businesses. Contracting officers use set-asides when they reasonably expect to receive offers from at least two eligible SDVOSBs at a fair market price (the 'rule of two'). Set-asides help ensure SDVOSBs get a fair share of federal contract dollars as mandated by Congress.

Question 8

What is an SDVOSB sole-source contract?

Accepted Answer

An SDVOSB sole-source contract is awarded to a single SDVOSB without competition. Contracting officers may award sole-source contracts when only one SDVOSB can satisfy the requirement, or when the acquisition is urgently needed. For civilian agencies, the sole-source threshold is generally $4.5 million for services and $7.5 million for manufacturing. VA has separate sole-source thresholds under Veterans First.

Question 9

Can an SDVOSB form a joint venture to pursue set-aside contracts?

Accepted Answer

Yes. SDVOSBs can form joint ventures (JVs) to pursue set-aside contracts. The JV must be controlled by the SDVOSB member — meaning the SDVOSB must be the managing venturer and must perform at least 40% of the work. The SDVOSB must also be responsible for managing the JV on a day-to-day basis. The JV agreement must be in writing and meet SBA regulatory requirements.

Question 10

What is an approved mentor-protégé joint venture?

Accepted Answer

An approved mentor-protégé joint venture (MP JV) is a formally structured JV between an SBA-approved mentor (usually a large business) and its protégé (an SDVOSB). MP JVs receive special regulatory benefits: the JV is not subject to size affiliation with the mentor, and the JV's past performance counts for the protégé. The JV must be approved by SBA before submitting offers on set-aside contracts.

Question 11

What are the limitations on subcontracting for SDVOSB set-asides?

Accepted Answer

For SDVOSB set-aside contracts, the prime contractor must comply with limitations on subcontracting in FAR 52.219-14. For service contracts: the SDVOSB must perform at least 50% of the cost of personnel. For supply contracts: at least 50% of the cost of manufacturing. For construction: at least 15% of the cost of the contract. Similarly situated subcontractors (also SDVOSBs) count toward these requirements.

Question 12

What is the labor hours rule for SDVOSB service contracts?

Accepted Answer

For SDVOSB service contracts, the prime must perform at least 50% of the cost of the contract incurred for personnel — meaning direct labor costs. This does not include materials, ODCs (other direct costs), or travel. The 50% is measured against the total personnel cost, not total contract value. Similarly situated subcontractors (other SDVOSBs) count toward the SDVOSB prime's 50%.

Question 13

What are the key elements of an SDVOSB set-aside proposal?

Accepted Answer

SDVOSB set-aside proposals typically include: Technical volume (approach, methodology, staffing), Management volume (organization, key personnel, transition plan), Past performance volume (relevant prior contracts, CPARS), and Price volume (labor rates, ODCs, fee structure). The solicitation's evaluation factors determine weighting. Proposals must include SBA VetCert certificate numbers and may require representations confirming SDVOSB status and size.

Question 14

How should an SDVOSB decide whether to bid on a contract?

Accepted Answer

A disciplined bid/no-bid decision should assess: technical fit (can you perform the work?), competitive position (do you have relevant past performance and relationships?), price competitiveness (can you compete on cost?), availability (do you have staff and resources?), and strategic alignment (does this contract advance your growth goals?). Bidding indiscriminately wastes resources — a focused pipeline wins more contracts than a shotgun approach.

Question 15

What is an SDVOSB status protest?

Accepted Answer

An SDVOSB status protest challenges whether the apparent awardee actually meets the eligibility requirements for SDVOSB status — i.e., whether the firm is genuinely owned and controlled by a service-disabled veteran. Status protests are distinct from size protests. They are filed with SBA's Office of Hearings and Appeals (OHA) and must be filed within five business days of notification of the award.

Question 16

Who can file an SDVOSB status or size protest?

Accepted Answer

Any interested party can file an SDVOSB status or size protest. Interested parties include any offeror that submitted a timely proposal for the contract. The contracting officer can also refer a matter to SBA for review without a formal protest. Agencies themselves can initiate reviews. Third parties with no stake in the contract generally cannot file protests.

Question 17

How does VA treat SDVOSBs vs. VOSBs in contracting?

Accepted Answer

Under VA's Veterans First Contracting Program (38 USC 8127), VA must first consider SDVOSBs, then VOSBs, before using other small business programs or full-and-open competition. SDVOSBs have the highest priority. If the VA contracting officer cannot identify at least two SDVOSBs to meet the rule of two, they cascade to VOSBs. Only if the VOSB requirement also cannot be met do they consider other set-aside categories.

Question 18

What is the VA Veterans First Contracting Program?

Accepted Answer

The VA Veterans First Contracting Program (VFCP) is established under 38 U.S.C. 8127-8128 and requires VA to prioritize SDVOSBs and VOSBs in procurement. VA contracting officers must conduct market research to find SDVOSBs and VOSBs before using other procurement methods. The program requires SBA VetCert certification for both SDVOSB and VOSB status. VA has its own sole-source thresholds and set-aside rules under this program.

Question 19

What is a federal mentor-protégé program?

Accepted Answer

A mentor-protégé program pairs a large, experienced business (mentor) with a smaller, less-experienced firm (protégé) to help the protégé grow and develop capabilities. The federal government operates several mentor-protégé programs, including SBA's All Small Mentor-Protégé Program and DoD's Mentor-Protégé Program. Benefits include technical assistance, business development support, and the ability to form joint ventures that compete for set-aside contracts without affiliation.

Question 20

Can an SDVOSB participate in SBA's Mentor-Protégé Program?

Accepted Answer

Yes. Under SBA's All Small Mentor-Protégé Program, any SBA-certified small business — including SDVOSBs — can participate as a protégé. The SDVOSB protégé can form an approved joint venture with its mentor and compete for any federal small business set-aside, including SDVOSB set-asides, without being considered affiliated with the mentor for size purposes. This is one of the most powerful tools for growing SDVOSB firms.

SDVOSB FAQ — 201 Answered Questions

Eligibility & Certification

Registration & Verification

Size Standards

Set-Aside Contracts

Joint Ventures & Teaming

Contract Performance

Proposal Writing & BD

Protest & Compliance

VA & VOSB Programs

Mentor-Protégé Program

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