What is SDVOSB?
A Service-Disabled Veteran-Owned Small Business (SDVOSB) is a small business concern that is at least 51% owned and controlled by one or more veterans with a service-connected disability as defined by the U.S. Department of Veterans Affairs. Under FAR 19.14 and 13 CFR Part 128, federal agencies may set aside contracts exclusively for verified SDVOSBs or award sole-source contracts to them. Since January 2023, the SBA manages the SDVOSB certification program through the Veterans Small Business Certification (VetCert) portal, replacing the previous VA verification process.
Real-World Example
A cybersecurity firm certified as an SDVOSB wins a $4.2 million task order under the STARS III contract vehicle to provide continuous monitoring services for the Department of Homeland Security. The agency set the requirement aside exclusively for SDVOSBs, limiting competition to verified firms. The contractor leveraged its SDVOSB status and past performance on similar DHS work to submit a competitive proposal and secure the award within 90 days of solicitation.
Why It Matters for Contractors
SDVOSB certification opens doors to billions of dollars in annual set-aside and sole-source contracting opportunities across every federal agency. The government's statutory goal is to award at least 3% of all federal prime contracting dollars to SDVOSBs. Agencies actively seek verified SDVOSBs to meet this target, giving certified firms a significant competitive advantage in less crowded procurement pools compared to full-and-open competition.
Key Facts
- The federal government's statutory goal is to award at least 3% of all prime contract dollars to SDVOSBs annually.
- SDVOSB sole-source awards are permitted up to $5 million for services and $8 million for manufacturing under FAR 19.1406.
- SBA's VetCert program requires recertification every three years to maintain active SDVOSB status.
- The Department of Veterans Affairs applies additional restrictions under the Veterans First Contracting Program (38 U.S.C. § 8127), prioritizing SDVOSB and VOSB set-asides for VA procurements.
- An SDVOSB must meet the applicable SBA size standard for its primary NAICS code to qualify for set-aside contracts.
Related Terms
- VOSB — A Veteran-Owned Small Business shares ownership requirements but does not require a service-connected disability.
- Set-Aside — The procurement mechanism that restricts competition to specific small business categories like SDVOSB.
- Sole-Source — A non-competitive award method available to SDVOSBs within established dollar thresholds.
- HUBZone — Another SBA socioeconomic program with its own set-aside authority that SDVOSBs may also qualify for simultaneously.