Current law regarding service-disabled, veteran-owned small businesses ultimately does not create the same benefits for them as those extended to other marginalized entrepreneurs.
Since its inception in 1969, the mission of the Small Business Administration’s 8(a) program has been to ease access to the economic mainstream for individuals subjected to racial or ethnic prejudice and diminished capital and credit opportunities. Firms that qualify receive special access to federal contracting and management and technical assistance from the SBA for up to nine years. In the program’s nearly 30 years of existence, more than $65 billion in federal contracting has been channeled to 8(a) firms.
During that period, the bar needed to prove social disadvantage is been lowered from “clear and convincing” to a “preponderance” of evidence. To qualify, an applicant’s personal net worth must not exceed $250,000, not counting a primary residence or investment in the business.
Contracts with an anticipated value of less than $3 million — $5 million in the manufacturing sector— may be awarded on a noncompetitive basis if the contract promotes the firm’s business plan of growth and development. Contracts greater than these amounts can be awarded after competition among eligible 8(a) participants.
In 1999, Congress said that, as a goal, 3 percent of all prime contracts should go to veterans. In 2003, it passed the Veterans Benefits Act, which added a contracting mechanism to help agencies reach the 3 percent level. Section 308 of that law established a sole-source and set-aside procurement program for service-disabled, veteran-owned small businesses concerns. Unlike the 8(a) program, which allows any qualified firm to receive sole-source contracts, the veterans measure requires agencies only to assert that the service-disabled, veteran-owned business receiving the sole-source contract is the only such firm that could provide the work or service.
Our service-disabled veterans deserve, at the very least, equality in benefits to those granted in the 8(a) business development program. We should recognize that our service-disabled veterans gave a part of themselves in the defense of this nation. The National Defense Industrial Association strongly supports the value of the 8(a) Program, but also we also advocate parity for service-disabled veterans in meeting the legislated 3 percent goal for contracting.
Chandra Burnside is manager of government policy and director of NDIA’s Small Business Division. For more information on the activities of that organization, please contact her at cburnside@ndia.org.
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