Seize Exclusive Federal Opportunities: A Strategic Guide to Navigating SDVOSB and 8(a) Certifications for Small Businesses

Introduction

The U.S. Federal Government employs a strategic instrument to foster economic proliferation: targeting or “set-aside” opportunities specifically designed for small business enterprises. Historically, the mere classification as a “small business” might have sufficed to merit these specialized opportunities in government contracting. However, with the current landscape showcasing an expansive registry of over one million government contractors, the lion’s share being “small businesses,” any given “small business” set-aside could attract a deluge of submissions, ranging from scores to hundreds.

Grasping the nuanced criteria the government employs to categorize an enterprise as “small” is paramount. This classification oscillates across industry sectors, typically delineating companies with annual revenues ranging between $18 to $32 million, as averaged over the preceding triennium. Certain niche sectors permit boundless revenue streams, juxtaposed with an employee count threshold, exemplified by the online publishing sphere, which operates under the paradigm of unrestricted revenues with a workforce of fewer than 1000. Predominantly, the “self-certified” small business designation emerges as the prevalent archetype.

Set-Asides and Special Interest Groups

The General Services Administration (GSA) provides a reasonably adequate definition of the various socio-economic designations, so I don’t see a reason to define them further here. Instead, I’ll discuss some advantages.

SDVOSB

Service-disabled veteran-owned small businesses (SDVOSB) are veteran-owned and controlled businesses primarily (51% or greater) owned by an individual that the Department of Veterans Affairs recognizes as having a service-connected disability or impairment. The SDVOSB certification requires a compensable or identified disability or physical impairment directly connected to the business owner’s military service that impairs the veteran’s lifestyle and earning potential by at least 10%. This is evidenced (only) by the approval of a claim by the Department of Veterans Affairs and the awarding of compensation of at least a 10% disability and pension. If the business owner receives a check from the VA every month and receives VA-provided healthcare, they will likely qualify for SDVOSB certification.

SDVOSBs have several advantages. First, there are millions of veterans, so like a small business, “veteran-owned business set-asides” will probably have dozens or hundreds of offers submitted. Statistically, around 20% of veterans have a service-connected disability, so an “SDVOSB-set-aside” will trim that potential level of competition down to something like 4-10 offers that are likely to be submitted.

Some federal agencies, namely the Department of Veterans Affairs and, to a lesser extent, the Department of Defense, will use veteran-owned suppliers whenever possible.

There are relatively few SDVOSB companies relative to other certifications, but in my experience, the number of SDVOSB set-asides will vary and always be smaller than for other groups. I previously determined that about 4% of federal contracts will be set aside for SDVOSBs, but this has fallen off further between 2021 and the present.

8(a) Small Businesses

8(a) small businesses are similar to SDVOSBs, although they are owned at least 51% by an economically and socially disadvantaged individual. An adjusted gross income of $250k or less over the last three years, and the (admittedly confusing) requirements of a personal net worth of $250k or less AND less than $4 million of assets. The easy way to clarify the strange dual requirements for personal net worth and assets is to consider someone who may have several rental properties with mortgages on them. In aggregation, the houses or apartments may be worth close to $4 million, but the equity and cash would have to be less than $250k. (Being near the ceiling for assets while remaining under $250k net worth is admittedly doubtful for the post-2010 lending environment).

Like the SDVSOB, 8(a) certification set-asides will narrow the field of potential offerors for a set-aside contract opportunity, improving the odds of success.

Get Involved

Do you qualify for one of these categories? SSRJ specializes in obtaining certifications for small businesses. Contact us.