SDVOSB and VOSB: Veteran-Owned Small Business Federal Contracting Guide

The federal government has a 3% statutory goal for Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and provides special set-aside authority at the Department of Veterans Affairs (VA) for both SDVOSBs and Veteran-Owned Small Businesses (VOSBs) more broadly. In FY2024, VA alone awarded over $7 billion in veteran-owned set-aside contracts under the Veterans First Contracting Program.

If you are a veteran or service-disabled veteran who owns a small business, these programs represent one of the fastest paths to federal contracting revenue.

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VOSB vs. SDVOSB: Key Differences

At the VA: The VA's Veterans First Contracting Program prioritizes SDVOSBs first, then VOSBs. Non-veteran firms compete only if not enough veteran-owned firms are available.

Outside the VA: SDVOSB set-asides are the primary mechanism. Pure VOSB set-asides are much rarer outside the VA context.

If you have any service-connected disability — even a 0% rating — pursue SDVOSB certification. The disability does not need to be debilitating; any service-connected condition qualifies.

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SDVOSB Eligibility Requirements

1. Veteran Status

The qualifying owner must be a veteran as defined by 38 U.S.C. 101(2) — meaning they served in the US military (Army, Navy, Air Force, Marine Corps, Coast Guard, Space Force, or reserves) and were discharged under conditions other than dishonorable.

2. Service-Connected Disability (for SDVOSB)

The veteran must have a service-connected disability as determined by the Department of Veterans Affairs (VA) or the Department of Defense (DoD). The disability rating percentage does not matter for eligibility — even a 0% rating qualifies if it is officially service-connected.

Getting your disability determination: If you served and were separated for a medical condition, or developed a condition related to your service, file a disability claim with the VA. The claims process can take months — start early.

3. 51% Ownership by Qualifying Veteran(s)

At least 51% of the business must be unconditionally owned by one or more qualifying veterans with service-connected disabilities (for SDVOSB). For VOSB, the 51%+ must be owned by any honorably discharged veteran(s).

4. Management and Control

The qualifying veteran(s) must:

• Hold the highest officer position (CEO, President, Managing Member)
• Control day-to-day management and major business decisions
• Not be subject to supermajority voting requirements or veto rights by non-veteran owners

5. Small Business Size Standard

The firm must qualify as small under the SBA size standard for the relevant NAICS code.

6. US Citizenship

The qualifying veteran owners must be US citizens.

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The SBA Certification Process (Required Since 2023)

Important: The SBA took over SDVOSB certification from the VA's CVE (Center for Verification and Evaluation) in 2023. All SDVOSB firms must now be certified by the SBA through certify.sba.gov — not the VA. Legacy VA CVE certifications required transition.

Application Steps

Step 1: Obtain your VA disability rating letter You need documentation from the VA confirming your service-connected disability rating. This is the official proof of SDVOSB eligibility.

Step 2: Gather business documentation

• Articles of incorporation/organization
• Operating agreement or bylaws
• Stock ledger or membership certificates
• Business tax returns (3 years)
• Personal tax returns (3 years)
• Business licenses

Step 3: Submit via Certify.SBA.gov Upload all documentation and complete the online application. The SBA targets a 90-day review period.

Step 4: Site visit (possible) The SBA may conduct an interview or site visit to verify the veteran is genuinely in control of operations.

Step 5: Certification Approved SDVOSB certification appears in your SAM.gov profile. Annual review is required.

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VA Veterans First Contracting Program: Your Biggest Opportunity

The VA's Veterans First Contracting Program (38 U.S.C. 8127-8128) requires the VA to award contracts to veteran-owned businesses whenever possible. It establishes a contracting priority hierarchy:

1. SDVOSBs (highest priority — the VA must use them first when available)
2. VOSBs (second priority)
3. SBA programs (8(a), HUBZone, WOSB, small business)
4. Full and open competition (only if no qualified veteran firms are available)

This means at the VA, you are evaluated before 8(a) firms and before the broader small business pool — a significant advantage.

VA Contract Scope

The VA is the second-largest federal civilian agency by contract spending (behind DoD). Its contracting covers:

• Healthcare services (medical, dental, mental health)
• Medical equipment and supplies
• IT systems and cybersecurity
• Construction and facilities management
• Professional services (consulting, staffing)
• Logistics and supply chain

VA-Specific Set-Aside Thresholds

At the VA, contracting officers must set aside contracts exclusively for veteran-owned firms when:

• There is a reasonable expectation of receiving offers from at least two qualifying veteran firms
• The award can be at a fair and reasonable price

There is no minimum dollar threshold for VA veteran set-asides — even micro-purchases can be restricted.

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SDVOSB Set-Asides Outside the VA

Beyond the VA, SDVOSB set-asides are available government-wide. Federal agencies can restrict competition to SDVOSB firms when:

• Two or more SDVOSBs are likely to bid
• The award can be at a fair market price
• The contract is expected to exceed the micro-purchase threshold

Sole-source authority (FAR 19.1406): Contracting officers may award SDVOSB sole-source contracts (no competition) for:

• Up to $4.5 million for services and goods
• Up to $7 million for manufacturing

Sole-source awards require a written justification and are less common than set-aside competitions, but they are available. Building relationships with contracting officers who want to award to SDVOSB firms but need a non-competitive mechanism is how you position for sole-source consideration.

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Building Your VA and Federal Contracting Strategy

Register in VetBiz.VA.gov

Even though SBA now handles certification, the VA still maintains the VetBiz.gov Vendor Information Pages (VIP) database. Ensure your firm is listed there after SBA certification syncs.

Target VA Medical Centers Directly

VA Medical Centers (VAMCs) have independent acquisition authorities. A small SDVOSB with local relationships can win contracts at a single VAMC without competing nationally. Identify your nearest VAMC's acquisition department and introduce yourself.

Build Past Performance at the VA First

VA contracts are often the most accessible entry point for SDVOSBs. Win one or two small VA contracts, build strong CPARS ratings, and use that record to pursue larger VA awards and non-VA federal contracts.

Watch for BPA and IDIQ Opportunities

VA-wide IDIQ contracts and BPAs are placed under the VA Federal Supply Schedule. Many SDVOSBs establish themselves as subcontractors to VA prime contractors before competing as primes.

Attend VAMCONs and Vendor Outreach Sessions

The VA holds regular vendor outreach events (sometimes called VAMCONs — VA Acquisition and Maturity Conferences). These are among the most accessible federal procurement events for small SDVOSB firms to meet contracting officers face-to-face.

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Common SDVOSB Certification Mistakes

1. Waiting too long for the VA disability rating: If you do not yet have a service-connected disability determination, you cannot apply for SDVOSB. File your VA claim before starting the business certification process.

2. Shared control arrangements: If your non-veteran spouse or partner effectively controls day-to-day operations (even as COO or CFO), the SBA may find the veteran does not have "control" as required.

3. Missing the SBA transition deadline: Former VA CVE-certified SDVOSBs needed to transition to SBA certification. Verify your certification is SBA-issued and current in certify.sba.gov.

4. Confusing VA set-asides with non-VA set-asides: The Veterans First Contracting Program applies only to the VA. Outside the VA, standard SDVOSB set-aside rules apply, which are less aggressive.

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Key Takeaways

• SDVOSB requires a service-connected VA disability rating — any rating qualifies, not just significant disabilities.
• SBA now certifies SDVOSB firms through certify.sba.gov — VA CVE certification is no longer the primary authority.
• VA Veterans First Contracting Program prioritizes SDVOSBs over all other categories — the VA is the most favorable federal agency for veteran-owned businesses.
• SDVOSB sole-source authority allows non-competitive awards up to $4.5M — build relationships with contracting officers to pursue this.
• Start at local VA Medical Centers — they have independent acquisition authority and are accessible entry points for small SDVOSBs.
• Your VA disability rating is the key documentation — obtain it before applying for SDVOSB certification.

Find SDVOSB federal contract opportunities →