Question 1

What happens to SDVOSB contracts when the company is acquired?

Accepted Answer

When an SDVOSB is acquired by a non-SDVOSB entity, the acquired firm loses SDVOSB status. Existing SDVOSB set-aside contracts can generally be completed, but the firm cannot bid on new SDVOSB set-asides after losing status. IDIQs and multiple-award contracts require recertification, and future task orders may not be available. The acquisition must be reported to contracting officers within 30 days.

Question 2

What happens to SDVOSB set-aside contracts after a merger?

Accepted Answer

After a merger or acquisition, the surviving entity must recertify its SDVOSB status. If the surviving entity does not qualify as an SDVOSB, it cannot be awarded new SDVOSB set-aside contracts but can generally complete existing ones. For IDIQ and multiple-award contracts, the contracting officer must be notified within 30 days and recertification is required at each order. Loss of SDVOSB status may affect future task order eligibility.

Question 3

Can SDVOSB status be transferred when selling the business?

Accepted Answer

No. SDVOSB status is based on the personal characteristics of the veteran owner and cannot be bought or sold. If a business is sold, the buyer must independently qualify as an SDVOSB. Existing SDVOSB set-aside contracts may require novation approval from the contracting agency and recertification. Buyers who acquire an SDVOSB but are not veterans cannot continue to bid as an SDVOSB.

Question 4

What causes an SDVOSB to lose its status?

Accepted Answer

An SDVOSB loses status when it no longer meets eligibility requirements. Common causes include: exceeding the applicable SBA size standard, transferring more than 49% ownership to non-veterans, a veteran owner losing operational control, the veteran owner's death without a qualifying successor, or the veteran owner's disability status being revoked. Merger with or acquisition by a non-SDVOSB firm also triggers loss of status for recompetes.

What happens to SDVOSB contracts when the company is acquired?

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