Question 1

What happens to SDVOSB status if the veteran owner dies or becomes incapacitated?

Accepted Answer

If the veteran owner dies, SDVOSB status generally ends unless a surviving spouse exception applies or another qualifying veteran inherits the ownership and control. If the veteran becomes permanently incapacitated and unable to manage the firm, a surviving spouse may temporarily maintain status. Businesses should have succession plans in place. On existing SDVOSB contracts, performance can typically continue to completion regardless of a status change.

Question 2

Can the surviving spouse of a service-disabled veteran maintain SDVOSB status?

Accepted Answer

Yes, but only in limited circumstances. If a service-disabled veteran who was unable to manage the business due to a permanent and severe disability or death leaves the business to a surviving spouse, the spouse may temporarily retain SDVOSB status. This exception is narrow and time-limited. Once the spouse remarries or the business is transferred, SDVOSB status generally ends.

Question 3

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.

Question 4

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.

What happens to SDVOSB status if the veteran owner dies or becomes incapacitated?

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