WASHINGTON - Today, House Committee on Small Business Chairman Steve Chabot (R-OH) and House Committee on Veterans’ Affairs Chairman Phil Roe, M.D. (R-TN) released statements following the introduction of new legislation to better enable the Small Business Administration (SBA) and Department of Veterans Affairs (VA) to fulfill their designated responsibilities and streamline programs within the agencies. H.R. 7169, the Verification Alignment and Service-Disabled Business Adjustment (VA-SBA) Act was introduced by the House Small Business Committee’s Chairman of the Subcommittee on Investigations, Oversight, and Regulations Trent Kelly (R-MS).
Currently, SBA certifies small businesses that participate in federal contracting preference programs. However, Service Disabled Veteran Owned Small Businesses (SDVOSB) are the exception – they are verified by VA to qualify for VA contracts, and are uniquely allowed to self-certify through SBA to obtain federal contracts from all other federal government agencies. The ability of SDVOSBs to do so has led to years of fraud, waste, and abuse, as it has allowed companies not owned by service-disabled veterans to take advantage of the system. It also has created two separate classes of SDVOSBs: those that are verified by VA, and those that have self-certified at SBA. The VA-SBA Act would require SBA to certify all SDVOSB applications, as it does for all other small businesses, and would preserve the unique Veterans Owned Small Business contracting preference in VA.
“Our nation’s veterans learn skills while serving that make them top notch entrepreneurs,” said Chairman Chabot. “With 2.52 million small businesses majority-owned by veterans, it’s important they have access to the resources they need to start a small business without the red tape and confusion that can come from government agencies. The VA-SBA Act will open doors for veteran-owned small businesses and expedite the process of becoming an entrepreneur. I look forward to ensuring veterans are able to continue their contributions to the American economy. I thank the House Committee on Veterans’ Affairs Chairman Roe, House Committee on Small Business Subcommittee on Investigations, Oversight and Regulations Chairman Kelly, and Veterans' Affairs Subcommittee on Oversight and Investigations Chairman General Bergman for their dedication and leadership to ensure this program gets a necessary update. America’s heroes deserve the full support of Congress in all aspects of life, especially as they work to bring their business dreams to life.”
“Different treatment of SDVOSBs depending on which federal agency they contract with is confusing and inefficient," said Chairman Roe. "VA requires a rigorous verification process, while other agencies allow nearly anyone to self-certify. This situation has created more problems than good, and it is high time to fix it. Bad actors are taking advantage of this exception and companies that are not owned and controlled by service-disabled veterans are fraudulently representing themselves to obtain contracts. This legislation fixes the disparity in the law and ensures that SBA is able to fully manage all small business certifications, as they should, and allows the workforce VA to focus on their core mission. I am grateful to full committee Chairman Chabot, House Committee on Veterans' Affairs' Subcommittee on Oversight and Investigations Chairman General Jack Bergman (R-Mich.) and subcommittee Chairman Kelly for their efforts to provide this necessary reform to the law.”
“Service-disabled veteran-owned small businesses (SDVOSBs) and veteran-owned small businesses (VOSBs) are essential components of our nation’s small business operations,” said Rep. Kelly. “It is important that we relieve regulatory burdens that make it more difficult for them to compete for government contracts. Additionally, it is vital that the process become more streamlined which is the purpose of this important legislation.”
"This legislation is the result of a close partnership between our two committees," said Rep. Bergman. "Chairman Kelly and I convened a joint oversight hearing to study the issue in July, and after months of consultation with the veterans service organizations, the veteran small business community and the agencies, the VA-SBA Act is a sound solution,” said Bergman. “It will make the federal government operate more efficiently and logically by instituting badly needed safeguards in the SDVOSB contracting program. Every contract that gets siphoned off by a fraudulent company denies a service-disabled veteran entrepreneur a contracting opportunity that he or she earned. The loophole that allows this to happen must be closed."
