Business Journals: Bill strips VA of authority over veteran small business contracting program

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Washington D.C., July 30, 2013 | DJ Jordan, Joel Hannahs ((202) 225-5821) | comments

Washington Business Journals:
Bill strips VA of authority over veteran small business contracting program

Thursday, July 30, 2013
By Jill R. Aitoro

U.S. Rep. Mike Coffman, R-Colo., will introduce a bill this week that strips the Department of Veterans Affairs of its control over a program that decides who qualifies to bid for contracts set aside by the agency for veteran small businesses.

The measure is a direct response to an outcry from the veteran community, which has accused the VA of a “gotcha” mentality with a program created to weed out fraud. That mentality, critics say, has caused legitimate small businesses to be frozen out of opportunities and in some cases branded as shams, as I've reported extensively.

"Service-disabled veteran small business owners have paid a hefty price for our nation, and the least we can do is ensure that programs intended to encourage entrepreneurship do not themselves become yet another obstacle to success,” Coffman said in an emailed statement. “Many of the certification, appellate, and excessive cost problems at the VA have been well-documented by veterans, and even by the Government
Accountability Office. It’s past time to create a clear and transparent set of rules and processes for the government to follow.”

The bill, a copy of which was obtained by Washington Business Journal, would transfer to the Small Business Administration control and administration of the Vets First program — which verifies the status of veteran-owned and service-disabled small businesses for the purposes of bidding on VA contracts. In fiscal 2012, 42 percent of the 4,500 applicants were denied verification as service-disabled, veteran-owned small businesses by the VA’s Center for Veterans Enterprise.

Beyond concerns about fairness, the program costs money to run. According to the House Small Business Committee, which is expected to release the bill Wednesday as a joint effort with the House Veterans Affairs Committee, the VA is currently spending about $33 million per year on the verification program, and has more than 120 employees devoted to the process. This duplicates efforts already under way through similar programs operated by the SBA.

"It's important that there's a single standard that would remove the confusion for veterans, and set the stage for consistent determinations" about a contractor's status, said Marc Goldschmitt, CEO of Goldschmitt and Associates LLC and a member of advocacy groups VET Force and the National Veterans Small Business Coalition.

Practically speaking, he added, it also will allow companies to submit documentation once to the SBA and have that documentation available for all of the programs that they might apply for, streamlining the process significantly.

The bill also provides veterans that are denied from the program with the opportunity to appeal the decision through the SBA's Office of Hearings and Appeals — an option that previously was not available. And it addresses some uncertainty about what happens to a small business owned by a service-disabled veteran when he or she dies.

So will the bill pass?

"Considering that the veteran community would strongly support these initiatives, and that it appears that they'd be palatable to the House and probably Senate, I believe there will be quick action and passage of the bill," Goldschmitt told me.

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