Government Contracts SBA Issues Rule on Ownership and Control of SDVOSBs
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Thursday, October 18, 2018

SBA Issues Rule on Ownership and Control of SDVOSBs

By Government Contracts Editorial Staff

A final rule amends the Small Business Administration’s regulations to implement provisions of the National Defense Authorization Act for Fiscal Year 2017 (PL 114-328), which placed responsibility for issuing regulations relating to ownership and control for the Department of Veterans Affairs’ verification of veteran-owned and service-disabled veteran-owned small business concerns with the SBA. Section 1832 of the NDAA requires the VA and SBA to standardize definitions for VOSBs and SDVOSBs and directs the VA to use the regulations established by the SBA for establishing ownership and control of VOSBs and SDVOSBs. The NDAA also provided a single definition of ownership and control for these concerns, which will apply to the VA in its verification and Vets First Contracting Program procurements, and all other government acquisitions which require self-certification. The legislation also provided that in certain circumstances a firm can qualify as VO or SDVO when there is a surviving spouse or an employee stock ownership plan. In response to the NDAA, SBA is amending the definitions in SBA 125.11 by incorporating language from VA’s regulations and also from SBA’s 8(a) Business Development program regulations. The amendments to SBA 125.12 describe who SBA considers to own an SDVOSB. Changes to SBA 125.13 incorporate provisions from SBA’s 8(a) BD program and VA’s former ownership and control regulations to describe who SBA considers to control an SDVOSB. SBA made changes to the proposed rule (¶70,425.617) for clarity. SBA had proposed to make technical changes to SBA 125.22 and SBA 125.23, but these have already been implemented pursuant to another rule (¶70,425.620). For the text of the final rule, which went into effective October 1, 2018, see ¶70,425.629.

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