Question 1

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 2

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 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.

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

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