Bill to give SBA complete oversight of veteran small business program

Wednesday - 7/31/2013, 5:54am EDT

House lawmakers want to give the Veterans Affairs Department's authority to verify service-disabled veteran-owned small businesses to the Small Business Administration.

Rep. Mike Coffman (R-Colo.) is expected to introduce a bill Wednesday to change the SDVOSB and veteran-owned small business programs by making it less cumbersome and confusing and more transparent.

"Many of the certification, appellate and excessive cost problems at the VA have been well-documented by veterans, and even by the Government Accountability Office," said Coffman in a statement. "It's past time to create a clear and transparent set of rules and processes for the government to follow on behalf of service-disabled veteran-owned small business contractors."

Rep. Mike Coffman (R-Colo.)

GAO found last August that VA continued to struggle with its processes to verify veteran-owned small businesses. This was the ninth such report since 2009 finding major problems with VA's efforts.

Lawmakers have tried to get VA to improve its oversight of the program.

Veterans who own small businesses also have grown frustrated with VA's inconsistent application of the verification rules.

"As my committee has found, the current system allows firms SBA would not certify to receive these contracts, taking away opportunity from legitimate veteran-owned companies," said Rep. Sam Graves (R-Mo.), chairman of the Small Business Committee. "This is an important step to reducing fraud in SDVOSB contracting."

Coffman's bill, Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2013, would transfer VA's authority to SBA within 180 days of the legislation becoming law.

Coffman said in the release that the VA is currently spending about $33 million per year on verifying companies and has more than 120 full-time employees working on the process.

"Similar programs at SBA operate more efficiently with a fraction of the cost and personnel," he said. "This would provide SDVOSB and VOSB with better service while using taxpayer funds more efficiently."

It also would unify the definition of SDVOSB and VOSB by letting VA determine when an individual is a veteran or service-disabled veteran, and entrust SBA with deciding whether a firm is a small business owned and controlled by a veteran or service-disabled veteran.

Coffman said he believes this "unified definition would reduce opportunities for fraud, since firms will no longer be able to say that they qualify under one definition but not the other."

The legislation also would create an appeal process where service-disabled or veteran-owned small firms can challenge an agency's decision to whether they qualify for the set-asides and special designation.

The Senate does not have a companion bill. The upper chamber has introduced several veteran-owned small business bills that address certain issues in the House legislation, but none that mirror it to a great extent.

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