The landmark Veterans Entrepreneurship and Small Business Development Act of 1999 (Public Law 106-50) established a goal for all federal agencies to spend at least 3 percent of procurement dollars issued as prime and sub-contracts with service-disabled, veteran-owned businesses (SDVOBs). The U.S. Small Business Administration (SBA) releases data each year reporting on each agency’s performance. In Fiscal Year 2009, the most recent data available, only two federal agencies issuing more than $500 million annually in contracts exceeded the 3 percent benchmark – the Department of Veterans Affairs, with 16.95 percent, and the Environmental Protection Agency, with 7.75 percent.
“The agency understands that expanding business opportunities for veterans is one important way to honor the men and women who have served our country,” said Jeanette Brown, director of Small Business Programs for the EPA. “We also understand the important role the small business community plays in the American economy.”
The EPA's strategy for contracting with SDVOBs demonstrates the agency’s commitment to maximize opportunities for vetrepreneurs. The strategy includes reserving some contracts exclusively for SDVOSBs, encouraging and facilitating participation by SDVOBs in competitions for award of agency contracts, encouraging agency contractors to subcontract with SDVOBs and training agency personnel on applicable law and policies relating to participation of SDVOBs, according to Brown.
“In 2011, EPA will continue to strive to be a federal leader in small business contracting, which includes exceeding the national standards for contracting to SDVOBs,” Brown said. “The agency is committed to finding new and innovative ways to reach the veteran community, which includes working more closely with the Department of Veterans Affairs and expanding our SDVOB Counseling Sessions to regions outside of Washington, D.C.”
Sorry Scorecard
In Fiscal Year 2009, the federal government issued $539 billion worth of contracts. This translates to more than $16 billion that should have gone to SDVOBs. While the federal government as a whole has made progress and increased SDVOB spending each year (with the exception of 2002, see chart 1), the 3 percent benchmark is seemingly out of reach. In Fiscal Year 2009, the federal government on the whole only awarded 1.92 percent of contract dollars to SDVOBs, not quite two-thirds of the way to the goal. It’s also important to note that the 3 percent benchmark is not a ceiling, it’s a threshold.
The SBA is responsible for the management and oversight of the small business procurement process across the federal government and negotiates with federal departments concerning their prime contracting goals and achievement with small businesses to ensure that small businesses have the best opportunity to provide goods and services to the federal government.
The Small Business Goaling Report documents the small-business procurement spending by each federal department. Each fiscal year, the SBA publishes Small Business Procurement Scorecards that provide an assessment of federal achievement in prime contracting to small businesses.
More Legislation Fails to Yield Results
Several other pieces of legislation have been passed in the last decade designed to bolster the program and increase federal spending with SDVOBs. The Veteran Benefits Act of 2003 (Public Law 108-183) improved upon PL 106-50 by adding section 308-36, which created the opportunity for contracting officers to award sole-source contracts to SDVOBs if certain criteria were met as part of the to the Procurement Program for Small Business Concerns Owned and Controlled by Service-Disabled Veterans.
In October 2004, President George W. Bush issued Executive Order 13360 to ensure federal agencies implement section 15(g) of the Small Business Act (15 U.S.C. 644(g)). In addition, EO 13360 mandated heads of all federal agencies to develop and implement a publicly available strategic plan that outlines how each agency will spend 3 percent of its procurement with SDVOBs and to report the agency’s performance to the U.S. Small Business Administration (SBA).
EO 13360 also required the SBA to “designate an appropriate entity” within the administration to coordinate with the Department of Veterans Affairs’ Center for Veterans Enterprise (CVE) to provide service-disabled veteran businesses information and assistance concerning participation in federal contracting and to advise and assist heads of agencies in their implementation of this order.
So far, So good
The news isn’t all bad. From FY 2008 to FY 2009, SDVOB spending increased by .44 percent across the entire federal government. This is the second year in a row the amount jumped by nearly half of a percentage point. While just slightly less than the increase in 2008, the increase makes FY 2009 the best year ever for SDVOB spending.
Not surprisingly, the Department of Veterans Affairs (VA) is by far the best performing federal agency in terms of spending with veteran-owned businesses and those owned by service-disabled veterans. In FY 2009, the VA increased its spending in FY 2008 of spent 11.76 percent with SDVOBs to nearly 17 percent. Even more impressive, the VA spent nearly 20 percent more with veteran-owned business in FY 2009. Part of the VA’s success is yet another piece of legislation, Public Law 109-461. This law requires the VA to set annual goals to award no less than 7 percent of all contracts to service-disabled, veteran-owned businesses and 10 percent to all VOBs. To learn more about PL 109-461 visit www.navoba.com.
Room for Improvement
Although most agencies have been inching closer to the goal, many agencies have a long way to go. The Office of Personnel Management (OPM) was the worst performing agency on NaVOBA’s Report Card, posting only a scant .14 percent of its contract spending with SDVOBs and only 1.04 percent with VOBs. The Department of Education (DoE) also ranked poorly as it posted only .47 percent of its procurement spending with SDVOBs and .98 percent with VOBs.
The Department of Justice (DoJ) also missed the 3 percent mark as it only spent .8 percent of its procurement with SDVOBs and 2.48 percent with VOBs. David Sutton, director of the Office of Small and Disadvantaged Business Utilization (OSDBU) for the DoJ said part of the problem lies in the fact that much of what the department purchases is not something small businesses can provide.
“Due to the types of services we procure, many of our procurements are either beyond the capability of SDVOSBs or not are not suitable for award to small businesses,” Sutton said. “However, we are making progress toward attaining our goal by identifying procurements that are suitable for award to SDVOBs and making awards to those firms.”
What are Agencies Doing to Achieve the Goal?
Edward M. Cafiero, business enterprise development officer for the Small and Disadvantaged Business Utilization Office at the Department of Transportation (DoT) said the Obama administration set a goal for government contracts awarded to veteran-owned small business.
“The U.S. Department of Transportation is committed to reaching that goal, and to making sure that those who serve our nation benefit from improved access to procurement information and opportunities,” Cafiero said.
The DoT recently established a task force to help implement a SDVOB program to assist veteran-owned businesses. As part of this effort, DoT's Office of Small and Disadvantaged Business Utilization (OSDBU) appointed an SDVOB coordinator to facilitate the program.
“We also recently hosted an outreach event at DoT headquarters specifically for SDVOBs,” Cafiero said. “In addition, all of our outreach efforts promote the use of available SDVOSB databases for market research and inclusion/consideration. Secretary [Ray] LaHood cares deeply about improving veterans' access to contracting opportunities, and keynoted this year's 6th Annual National Veterans Small Business Conference in Las Vegas.”
Ranking 5th on NaVOBA’s Report Card, the Department of Energy spent 1.19 percent of its procurement with SDVOBs – an increase of more than 128 percent over 2008. William Valdez, OSDBU director for DoE, stressed the importance placed on improving opportunities for small businesses by not only the DoE, but the Obama administration as well.
“This administration has focused on policies that accelerate our economic growth so that we are producing jobs at a faster pace,” Valdez said. “Small businesses create two out of every three net new jobs in the country, and that’s why we continue to invest in small businesses. Veteran-owned small businesses are an important part of this investment.”
Although DoE’s SDVOB numbers have been getting better, Valdez said there is still room for improvement.
“Over the past nine years, the DOE has nearly doubled prime and subcontract achievement, with the support of top-level attention to small business objectives, increased outreach, and new tools to prime contractors, such as set-asides for service-disabled, veteran-owned businesses,” Valdez said.
What can Vetrepreneurs do to better position their businesses to land federal contracts?
Sutton said in order to increase their chances of landing contracts, vetrepreneurs should ensure their average number of employees, average annual revenues, and past performance included in SBA’s Dynamic Small Business Search are complete and accurate.
“In addition, their capabilities narrative should contain all relevant key words that a contracting officer might use as search criteria when trying to identify SDVOSB sources,” Sutton said. “Veteran business owners who have Federal Supply Schedule contracts should check postings daily. They should check opportunities posted on the Federal Business Opportunities website daily.”
Sutton also said it’s important to review annual forecasts of contracting opportunities prepared by the various departments and, when a procurement method has not been identified, work through the OSDBU director to try to have the requirement set-aside for SDVOSBs.
“DoJ remains fully-committed to working toward attaining the 3 percent SDVOB goal, but we need the help of the SDVOB community,” Sutton said.
There’s Strength in Numbers
The largest impediment to the growth of the SDVOB program and the realization of the 3 percent benchmark across the entire federal government has consistently been the small number of vetrepreneurs who have raised their hand and promoted their veteran-owned status. According to a Dynamic Small Business Search of the U.S. Small Business Administration’s database, there are fewer than 50,000 VOBs registered to sell to the federal government. That’s barely more than 1 percent of American vetrepreneurs.
Put simply, there is strength in numbers. Everything that the veteran business movement hopes to accomplish at the federal government level is amplified exponentially when the veteran business movement represents more than 3 million engaged voters from every voting constituency in every city and state across America. If you want the government to take the veteran business movement seriously, you need to take action. Every time you patronize a small business, ask if the owner's a vet. If they are, tell them about the movement and get their business registered on www.buyveteran.com.
Brown stressed the importance of networking with other businesses and developing key networking strategies.
Make a point of meeting and speaking with other EPA prime and sub contractors that have successfully worked on environmental-related contracts in the past to learn from their experiences and to evaluate potential teaming opportunities,” Brown said. To learn more about the EPA Mentor Protégé Program visit www.epa.gov/osdbu/pdfs/protege.pdf
If you want the government to take the veteran business movement seriously, you need to take action. Every time you patronize a small business, ask if the owner's a vet. If they are, tell them about the movement and get their business registered on www.buyveteran.com.
“The U.S. Department of Transportation is committed to reaching that goal, and to making sure that those who serve our nation benefit from improved access to procurement information and opportunities” – Edward M. Cafiero, business enterprise development officer for the of Small and Disadvantaged Business Utilization Office at the Department of Transportation"
“[The] DoJ [Department of Justice] remains fully-committed to working toward attaining the 3 percent SDVOB goal, but we need the help of the SDVOB community.”— David Sutton, director of the Office of Small and Disadvantaged Business Utilization (OSDBU) for the Department of Justice.”