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john.walters

VA v. SBA SDVOB

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The short answer is “yes”. It’s not a case, however, of the VA or any other company/corporation sharing definitions with the SBA. There is simply one definition for a service-disabled veteran-owned business. That is: “a small business for which (1) not less than 51 percent of which is owned by service-disabled veterans or, if a publicly owned business, not less than 51 percent of the stock is owned by one or more service-disabled veterans; and (2) the management and daily business operations are controlled by veterans with a disability which is service connected or, in the case of a service-disabled veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran. I would recommend you check out the following links, which may be helpful to your inquiry: http://www.sba.gov/content/8a-business-development-0 ; http://www.sba.gov/content/veteran-service-disabled-veteran-owned

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They each write thier own regulations and have their own interpretations of the criteria to be used in determining status. See 13 CFR 125 for the SBA rules and 38 CFR 74 for the VA rules.

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The service-disabled veteran-owned business program definitions in VA and SBA regulations, and the agency interpretations, are interdependent. The SBA relies on the VA to define "service disabled".See 13 CFR 125.8(d). The VA relies on SBA to define "small business concern". See 38 CFR 74.1 and 48 CFR 2.101. See also 38 CFR 74.2(e) and 74.13(d).

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Thanks to all for the replies. I am more concerned about deciphering the SBA's version of determining control vs. the VA's version. they sound the same but are worded very differently so might not be?

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Please cite the differing sections that concern you.

38 CFR 74.4 and 13 CFR 125.10 both tend to concern the same things, but 125.10 (SBA) tends to be more forthright in what 'must' be and written more clearly.

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38 CFR 74.4 and 13 CFR 125.10 both tend to concern the same things, but 125.10 (SBA) tends to be more forthright in what 'must' be and written more clearly.

For the SBA regs, don't forget to look at the OHA decisions. They frequently add more clarity to what the regs mean than a pure reading of the regs. There is no similar body of decisions for the VA.

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I have looked at what I could find out about the two sets of rules and I haven't sorted it out in the limited time that I have to devote to it. It's very complicated and confusing. I won't offer any analysis here, because I haven't done enough research. If the issue is important to you the best advice I can offer is to seek the advice of an attorney who practices in this area. Good luck.

An editorial comment: As with so many other things, Congress has made a hash out of the SDVO SBC programs, good intentions notwithstanding. Our Legislative Branch is incompetent. I'm not referring to the current ideological divide, but to the inability of Congress to write coherent legislation that is well-integrated with the legislation that went before. The same problem plagues some of the regulatory bodies of the Executive Branch, like the FAR councils. It may well be that our political-bureaucratic system has become too complex to function well. Whether we're talking about health care or contracting programs for service-disabled veterans, Congress and the Executive Branch are dysfunctional.

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Seeking an attorney is sound advice but you might also consider contacting both the VA and the SBA offices that deal with veteran programs to get assistance on your question. I believe in contacting each you could talk specifics about your particular question and the cost will be significantly less to do so than contacting a lawyer. I think you will find the following websites helpful for both contact purposes and your own research. As you explore these sites note that the VA effort on eligibility discussion is related to the VIP Program for the VA and the SBA effort regards eligibility for FAR SDVOB program and is of sorts more overarching per this quote from 38 CFR 74.2--

"(e) U.S. Small Business Administration (SBA) Protest Decisions. Any firm registered in the VetBiz VIP database that is found to be ineligible due to an SBA protest decision or other negative finding will be immediately removed from the VetBiz VIP database. Until such time as CVE receives official notification that the firm has proven that it has successfully overcome the grounds for the determination or that the SBA decision is overturned on appeal, the firm will not be eligible to participate in the 38 U.S.C. 8127 program."

http://www.vetbiz.gov/

http://www.sba.gov/about-offices-content/1/2985

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I have looked at what I could find out about the two sets of rules and I haven't sorted it out in the limited time that I have to devote to it. It's very complicated and confusing. I won't offer any analysis here, because I haven't done enough research. If the issue is important to you the best advice I can offer is to seek the advice of an attorney who practices in this area. Good luck.

An editorial comment: As with so many other things, Congress has made a hash out of the SDVO SBC programs, good intentions notwithstanding. Our Legislative Branch is incompetent. I'm not referring to the current ideological divide, but to the inability of Congress to write coherent legislation that is well-integrated with the legislation that went before. The same problem plagues some of the regulatory bodies of the Executive Branch, like the FAR councils. It may well be that our political-bureaucratic system has become too complex to function well. Whether we're talking about health care or contracting programs for service-disabled veterans, Congress and the Executive Branch are dysfunctional.

Amen, Brother. Preach on.

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Seeking an attorney is sound advice but you might also consider contacting both the VA and the SBA offices that deal with veteran programs to get assistance on your question. I believe in contacting each you could talk specifics about your particular question and the cost will be significantly less to do so than contacting a lawyer. I think you will find the following websites helpful for both contact purposes and your own research. As you explore these sites note that the VA effort on eligibility discussion is related to the VIP Program for the VA and the SBA effort regards eligibility for FAR SDVOB program and is of sorts more overarching per this quote from 38 CFR 74.2--

"(e) U.S. Small Business Administration (SBA) Protest Decisions. Any firm registered in the VetBiz VIP database that is found to be ineligible due to an SBA protest decision or other negative finding will be immediately removed from the VetBiz VIP database. Until such time as CVE receives official notification that the firm has proven that it has successfully overcome the grounds for the determination or that the SBA decision is overturned on appeal, the firm will not be eligible to participate in the 38 U.S.C. 8127 program."

http://www.vetbiz.gov/

http://www.sba.gov/a...-content/1/2985

There does seem to be some confusion as to which agency's regs apply in a particular situation. See the COFC bid protest decision in Bluestar for an example of this. http://www.uscfc.uscourts.gov/sites/default/files/MILLERC.BLUESTAR092211.pdf

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The problem is that there are two programs with different statutory authorities. There is a governmentwide program authorized by 15 USC 657f and one applicable only to the VA authorized by 38 USC 8127 - 8128. The governmentwide program is implemented by Title 13 of the CFR and FAR Part 19 (48 CFR 19). The VA program is implemented by Title 38 of the CFR and VA FAR Supplement 48 CFR 819.

There seems to be no issue that it is the SBA which must decide whether a firm is small. The issue seems to be who gets to decide if the business is owned and controlled by a service disabled veteran and who gets to hear an appeal on a decision in that matter. See the SBA OHA decision, Benetech, LLC, SBA No. VET-225 (Nov. 2, 2011):

... VA's veteran-owned small business verification program is unrelated to SBA's SDVO SBC eligibility protest process. The Veterans Small Business Verification Act requires VA to verify the status of veteran owned businesses listed in VA's www.vetbiz.gov vendor information pages (VIP). 38 U.S.C. § 8127(f); Veterans' Benefits Act of 2010, Pub. L. 111-275 § 104, 124 Stat. 2864, 2867 (2010). The VIP is a database of firms eligible to participate in VA's veteran-owned small business contracting program. 38 C.F.R. § 74.1. In order to be eligible for a contract issued under VA's veteran-owned small business contracting program, a business must be listed in the database. The VA must obtain documentation from each firm listed in the database to verify that it is a veteran-owned business, and every business in the database must satisfy the requirements of the verification process. The process is regulated by Title 38 of the C.F.R., Part 74.

In contrast, under the regulations governing SBA's SDVO SBC contracting program, a protest challenging a firm's SDVO SBC status can be initiated in conjunction with any federal procurement set aside for SDVO SBCs, not only procurements within the VA's contracting program. The process is regulated by 13 C.F.R. Part 125. All firms submitting offers on SDVO SBC set aside contracts must meet the eligibility requirements set forth in those regulations. Although the processes may pose similar questions relating to ownership and control, the two programs are employed by two separate federal agencies, and they are ultimately unrelated. See Matter of SDV Solutions, Inc., SBA No. VET-185 (2010) (“ecause the VA's verification program is administered by the VA, it is not something SBA has to consider and to my knowledge has never been considered by SBA to date.”). Whereas the verification process relates to VA's own database and VA's own contracting program, the SDVO SBC protest process is government-wide. The VA is free to regulate its own contracting program, and Appellant has cited no regulation to support the argument that VA should have suspended its own verification process while the SBA protest was pending.

I'm not sure what any of that really means.

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I actually think there is a clear line on who decides matters of control related to SDVOB procurements made by the VA under their set aside program or for FAR procurements made by other agencies with my read of the cases cited verifying this line however I do believe the point has been made with regard to the original question posed in this thread....

The VA and the SBA DO NOT share definitions/regulations for their respective service-disabled veteran-owned business programs. A person attempting to determine matters related to "control" for procurements with the VA only or Federal agencies at large or both would be well advised to contact each agency's available veteran business counselors as well as seek independent counsel. Even with such effort a conclusion on a specific control matter would be settled through a protest decision.

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Carl wrote:

The VA and the SBA DO NOT share definitions/regulations for their respective service-disabled veteran-owned business programs.

That's wrong. I cited regulations above showing that they do share some definitions. They share the definitions of small business concern, service connected, service disabled, veteran, spouse, and service-disabled veteran with a permanent and severe disability. What they don't appear to share, but might, is the definition of control with respect to whether a service disabled veteran controls a SDVO SBC.

Here was the original inquiry:

I am more concerned about deciphering the SBA's version of determining control vs. the VA's version. They sound the same but are worded very differently so might not be?

I don't know the answer to that. There are two issues: first, the wording of the definitions, and second, the agency interpretations.

If such information matters, if something is at stake, then the best thing for the original poster to do is ignore all of us and see a knowledgeable attorney. While it is nice to suggest calling the agencies, I do not recommend it. You will have no relationship with whomever you are talking. You are not paying them, and they face no consequences for being wrong in what they tell you. Many government employees do not fully understand the regulations under which they must work or their agency's interpretations of those regulations. (All you have to do to confirm that is ask contracting officers some questions about the Federal Acquisition Regulation.) I would be astounded if you could get an SBA or VA employee to explain the difference, if any, between their agencies' respective definitions of control. You will have no recourse if the information they give turns out to be wrong.

Business owners and managers must have reliable information, especially when dealing in government contracts. In my experience, the most reliable information pertaining to regulatory interpretation and application comes from attorney practitioners, who will write down the advice that you ask for.

Carl is correct that such advice is more expensive than calling the agencies. But I say that you are putting yourself at risk in dealing with the government if you cannot afford to buy professional legal advice about the rules occasionally. Free information is often worth what you pay for it.

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Vern - We disagree and I take firm exception to your opinion that my quote that SBA and VA DO NOT share the same regulations as “wrong”.

First to imply “share” means to me that they use the same definitions and they do not just as you have stated in most of your posts in this thread. 13 CFR 125 wording is completely different than 38 CFR 74 with regard to some very important definitions for the programs. In some cases each regulation, 13 CFR and 38 CFR do make reference to the respective regulations of each and if this meets your standard of “sharing” then so be it. However I to advise caution as verification under to CFR 38 to participate solely in the VETBiz VIP program does in practice have a different standard under these definitions. Case in point is one of the SBA OHA cases referenced in this thread. For purposes of the definitions I have provided below some additional citations from each regulation. I know you know where to find them I elected to post them for the good of the order.

Further to your position that one should not seek out advice from each agency on the matter of control I am in firm disagreement. One of the primary arguments that you state is “you are not paying them”. Maybe you do not pay taxes to keep civil servants around but I sure do. With regard to your other statements readers should simply consider, per the websites I furnished, that each agency is charged with, and has specific business counselors, to help answer veteran business questions and I would strongly suggest that they could trust them to do their best at doing so. Maybe you wouldn’t contact them but I would. In support of this avenue of advice many including yourself suggest that a poster might want to consider contacting a CO or other agency expert for assistance. My suggestion is to do the very same thing with regard to questions regarding each agencies (VA and SBA) program regulations and policies regarding SDVOB. Yes the level of help will depend on the individual capabilities just like it does with ALL OF US in this forum which gives specific highlight to your statement “free information is often worth what you pay for it.”

Bottom line my advice stands on how to seek advice with regard to matters of control and other issues that must be addressed to be verified for participation in the VETBiz VIP program or for self certifying as SDVOB for procurements made under FAR Subpart 19.14.

13 CFR 125.8

(f) Service-disabled veteran is a veteran with a disability that is

service-connected.

(g) SBC owned and controlled by service-disabled veterans (also

known as a Service-Disabled Veteran-Owned SBC) is a concern--

(1) Not less than 51% of which is owned by one or more service-

disabled veterans or, in the case of any publicly owned business, not

less than 51% of the stock of which is owned by one or more service-

disabled veterans;

(2) The management and daily business operations of which are

controlled by one or more service-disabled veterans or, in the case of a

service-disabled veteran with permanent and severe disability, the

spouse or permanent caregiver of such veteran; and

(3) That is small as defined by Sec. 125.11.

38 CFR 74

Service-disabled veteran is a veteran who possesses either a

disability rating letter issued by the Department of Veterans Affairs,

establishing a service-connected rating between 0 and 100 percent, or a

disability determination from the Department of Defense.

Service-disabled veteran-owned small business concern is a business

not less than 51 percent of which is owned by one or more service-

disabled veterans, or in the case of any publicly owned business, not

less than 51 percent of the stock of which is owned by one or more

service-disabled veterans; the management and daily business operations

of which are controlled by one or more service-disabled veterans, or in

the case of a veteran with a permanent and severe disability, a spouse or permanent caregiver of such veteran. In addition, some businesses may be owned and operated by an eligible surviving spouse. Reservists or members of the National Guard disabled from a disease or injury incurred or aggravated in line of duty or while in training status also qualify.

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You are wrong. Your analysis is superficial and half-baked. Here is what I said:

They share the definitions of small business concern, service connected, service disabled, veteran, spouse, and service-disabled veteran with a permanent and severe disability. What they don't appear to share, but might, is the definition of control with respect to whether a service disabled veteran controls a SDVO SBC.

Here is SBA's 13 CFR 125.8:

Section 125.8 What definitions are important in the Service-Disabled Veteran-Owned (SDVO) Small Business Concern (SBC) Program?

(a) Contracting Officer has the meaning given such term in section 27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C. 423(f)(5)).

(B) Interested Party means the contracting activity's contracting officer, the SBA or any concern that submits an offer for a specific SDVO contract.

( c) Permanent caregiver is the spouse, or an individual, 18 years of age or older, who is legally designated, in writing, to undertake responsibility for managing the well-being of the service-disabled veteran with a permanent and severe disability, to include housing, health and safety. A permanent caregiver may, but does not need to, reside in the same household as the service-disabled veteran with a permanent and severe disability. In the case of a service-disabled veteran with a permanent and severe disability lacking legal capacity, the permanent caregiver shall be a parent, guardian, or person having legal custody. There may be no more than one permanent caregiver per service-disabled veteran with a permanent and severe disability.

(d) Service-Disabled Veteran with a Permanent and Severe Disability means a veteran with a service-connected disability that has been determined by the VA, in writing, to have a permanent and total service-connected disability as set forth in 38 CFR 3.340 for purposes of receiving disability compensation or a disability pension.

(e) Service-Connected has the meaning given that term in section 101(16) of Title 38, United States Code.

(f) Service-disabled veteran is a veteran with a disability that is service-connected.

(g) SBC owned and controlled by service-disabled veterans (also known as a Service-Disabled Veteran-Owned SBC) is a concern—

(1) Not less than 51% of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51% of the stock of which is owned by one or more service-disabled veterans;

(2) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a service-disabled veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran; and

(3) That is small as defined by [section] 125.11.

(h) Spouse has the meaning given the term in section 101(31) of Title 38, United States Code.

(i) Veteran has the meaning given the term in section 101(2) of Title 38, United States Code.

The definition of contracting officer is the same for all agencies.

Note in the definition of Service-Disabled Veteran with a Permanent and Severe Disability the reference to the definition in 38 CFR 3.340, the VA's regulation.

Note in the definition of service-connected the reference to 38 USC 101(16), the VA statute.

Note in the definition of spouse the reference to 38 USC 101(31), the VA statute.

Note in the definition of veteran the reference to 38 USC 101(2), the VA statute.

Note the references in my earlier post.

It is unavoidable that SBA and VA share some definitions. For instance, only SBA can say who is small. VA has no statutory authority to do that. SBA has no authority to say who is a veteran or who is service disabled. Bottom line: some of the definitions are identical and others are interdependent.

Here is what you wrote:

The VA and the SBA DO NOT share definitions/regulations for their respective service-disabled veteran-owned business programs.

You overstated your case. If you had pointed to some specific definitions you may have been correct. But you didn't. You made a gross generalization. As to your taking firm exception, am I supposed to care? Where do you think you are -- in court? On the playground? Spare me your sensitivities. Calm down and just point to facts. I dellberately said "That's wrong" and not "Carl is wrong" because so many of you sensitive people can't stand directness in writing or speech.

I'm going to be on the road for the next several hours, so I won't be able to post a response to your next riposte for a while. But I'll get to it eventually.

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Vern –

You can apply “share” as a generalization if you want but I won’t and think that my position is supported by the definitions I have already posted as reference and the following –

From the VAAR – 852.219-10 (emphasis added)

VA NOTICE OF TOTAL SERVICE-DISABLED VETERAN-OWNED SMALL BUSINESS SET-ASIDE (DEC 2009)

(a) Definition. FOR THE DEPARTMENT OF VETERAN AFFAIRS, “Service-disabled veteran-owned small business concern”:

(1) Means a small business concern:

(i) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans (or eligible surviving spouses);

(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans (or eligible surviving spouses) or, in the case of a service-disabled veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran;

(iii) The business meets Federal small business size standards for the applicable North American Industry Classification System (NAICS) code identified in the solicitation document; and

(iv) The business has been verified for ownership and control and is so listed in the Vendor Information Pages database, (http://www.VetBiz.gov).

From SBA OHA decision, Benetech, LLC, SBA No. VET-225 (Nov. 2, 2011) which you referenced -

“Although the processes may pose similar questions relating to ownership and control, the two programs are employed by two separate federal agencies, and they are ultimately unrelated.”

PS – Are you sure I am the one that is too sensitive? Go back and look at your own post! You actually wrote “Carl wrote” and then posted my quote so I guess you can attribute the quote to anyone you want but by my read you said I wrote it, which I did, and that the quote was wrong. My name + my quote = me wrong. My firm exception still stands.

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Carl:

We disagree. You are wrong. The SBA and VA share several SDVO SBC program definitions. I have expressly identified some of them and their respective sources. Neither agency can define SDVO SBC in their own program without reference to the regulations of the other agency. The SBA and VA SDVO SBC program regulations are interdependent for that reason.

I'm content to let other Wifcon members reach their own conclusions based on our respective posts.

Vern

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Vern - Our previous posts have noted an interdependency of SBA and VA regulations however "share" implies another standard. Further for you to state that neither VA or SBA can “define SDVO SBC in their own program without reference to the regulations of the other agency” I would very cautious as to make such a statement is wrong by read of applicable references . These references follow and provide that the VA does have the authority to define SDVO SBC status in finality or otherwise transfer that authority by Economy Act Agreement to another agency, specifically SBA. This example alone demonstrates the use of "share" as a standard of interdependency is much to general in my view.

VAAR 819.307 SDVOSB/VOSB Small Business Status Protests. Link to full text

http://www.va.gov/oal/library/vaar/vaar819.asp#819307

As supported by this SBA OHA decision No. VET-199 -

“…. there is nothing in the applicable statutes or regulations which might permit SBA’s OHA to reach out and take appellate jurisdiction over the VA’s OSDBU’s SDVO SBC status determination. There is simply no regulation that gives OHA jurisdiction over the OSDBU’s determinations, and, therefore, OHA has no jurisdiction to review them.

In fact, VA’s own regulation provides that the OSDBU’s SDVO status determination is final. 48 C.F.R. § 819.307©. In fact, VA’s own regulation provides that the OSDBU’s SDVO status determination is final. 48 C.F.R. § 819.307©. VA’s regulation provides for a determination by the OSDBU until execution of an interagency agreement with SBA, which will allow for referral of SDVO SBC status protests to the SBA’s D/GC. Id. This agreement is not yet in place. The result of this regulation is that VA has created its own SDVO status protest process with which neither SBA nor OHA may interfere.

Link to full text - http://archive.sba.gov/aboutsba/sbaprograms/oha/allcases/VET/VET-199.pdf

~

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