House Discusses Veteran Contracting in VA

This week the House VA subcommittees on Economic Opportunity and Oversight & Investigations hosted a joint hearing on VA's contracting procedures with veteran-owned small businesses. The subcommittees sought to address concerns raised in a recent Government Accountability Office, or GAO, report on potential ongoing fraud within the approval process for contractors and inconsistencies in standards for VA's Center for Veterans Enterprise, or CVE, when approving veteran entrepreneurs to do business with the government.

To view the archived webcast of the hearing, click here.

To see a full list of witnesses and to read their prepared remarks, click here.

CVE is the office within VA responsible for vetting veteran-owned small businesses, or VOSBs, and service-disabled veteran-owned small businesses, or SDVOSBs, who wish to secure VA contracts. Once approved by CVE, businesses can then bid on projects set aside for veterans.

Unfortunately, VA is the only agency within the federal government that currently administers a strict policy of vetting veteran business owners prior to awarding contracts. According to the recent GAO report, which you can read here, he Small Business Administration continues to rely on a self-certification system, creating the potential for fraudulent businesses to secure veteran set-aside contracts.

However, the veterans' community has started to raise concerns over the efficiency of CVE's business processes, which were revised in 2010 and have potentially locked thousands of legitimate businesses out of contracts with VA, while only serving to catch minimal fraudulent acts.

During the hearing, Thomas Leney, executive director of VA's Office of Small and Disadvantaged Businesses, sought to explain how VA interpreted the changes to the approval policy in 2010, and explained that 59 fraudulent businesses had been caught as a result. However, Leney went on to explain that up to 60 percent of businesses that applied with CVE were initially rejected for failing to comply with strict ownership and control criteria outlined in the Code of Federal Regulations.

Leaders from both subcommittees balked at these numbers and sought clarification from Leney on how CVE determined whether businesses were eligible.

Rick Weidman, who testified on behalf of the Veterans Entrepreneurship Task Force, or VET-Force, presented his concerns on the current state of CVE and recommended specific steps to simply the process for veteran applicants.

In his remarks, Weidman encouraged CVE to first split the process into two phases: CVE would first validate veterans' status for applicants, then validate ownership and control of the business in a transparent manner. To read Weidman's full recommendations, click here.

Your VFW has also consistently advocated to improve CVE businesses processes in an effort to strike the balance between detecting fraud and offering veterans timely access to government set-aside contracts.

The VFW will continue to work diligently alongside our partners in the veterans' community to call for improved business processes within CVE, ensuring veteran entrepreneurs can do business with the federal government. Check back regularly for updates.