DoD Updated SDVOSB Subcontracting Goal Reporting Requirements (Policy Update)

The Department of Defense issued an interim final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to strengthen subcontracting plan reporting for SDVOSBs. The change responds to longstanding concerns from the SBA and SDVOSB advocacy groups that DoD agencies were conflating SDVOSB and VOSB subcontract dollars in aggregate reporting, obscuring actual SDVOSB performance.

Under the updated DFARS Subpart 219.7, large prime contractors on DoD contracts exceeding $1.5M (or $750K for construction) must now maintain separate eSRS reporting line items for: (1) SDVOSB subcontracting dollars — contracts with SBA VetCert-certified SDVOSBs, (2) VOSB-only subcontracting dollars — certified VOSBs that are not SDVOSBs, and (3) combined veteran-owned subcontracting — legacy aggregate figure maintained for backward compatibility.

Prime contractors that fail to meet committed SDVOSB subcontracting goals on negotiated plans may face: liquidated damages equal to the difference between committed and actual SDVOSB subcontracting, negative past performance ratings in CPARS under 'utilization of small businesses,' and potential suspension from future set-aside awards at DoD component agencies.

For SDVOSB subcontractors: registration in SBA's VetCert database is now required before a prime contractor can credit SDVOSB subcontract dollars toward its plan goals. Self-certification in SAM.gov is no longer sufficient for DoD subcontracting plan credit. Prime contractors are also required to report any SDVOSB subcontractor that fails to receive awarded subcontract tasks within 90 days of prime award.