Veterans have made a unique sacrifice to protect our freedoms and security, often serving for long periods far from home. During these absences, Veterans sacrificed the chance to build and maintain businesses and grow personal networks that are so important to a successful venture. In recognition of this, Congress has provided opportunities in the government marketplace for those who have served our nation honorably in uniform.
As a Veteran, I take a special interest in helping Veteran-Owned Small Businesses (VOSBs) and Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) succeed as government contractors.
The Small Business Administration oversees a program of prime contract set-asides (contracts that are available only to SDVOSBs) and prime contractor requirements to subcontract with both VOSBs and SDVOSBs. This program now requires certification of VOSBs and SDVOSBs to be eligible for these special opportunities.
Significantly, Congress has directed that the Department of Veterans Affairs must buy all goods, services and construction services from Veteran-owned small businesses, provided there are two or more small Veteran-owned businesses that can perform the contract. This program uses set-aside prime contracts for both VOSBs and SDVOSBs.
I have worked with many companies all across the country in matters involving government contracting. I have assisted dozens of companies with establishing businesses that are eligible for certification, or revising company documents to make the business eligible for certification.
If you are a Veteran thinking about starting a business — or a non-Veteran thinking of starting a business with one or more Veterans — contact me to discuss the following important considerations:
1. Selection of the proper business entity or arrangement: corporation, LLC, joint venture or prime-contractor subcontractor relationship. In order to compete for contracts as a VOSB or SDVOSB, your firm must be “small” under the SBA size standards. These regulations include complicated “affiliation” rules that treat some business partners, including joint venturers, co-owners and subcontractors, as if they we part of the Veteran-owned prime contractor. This can be a costly mistake, both in terms of lost business opportunities and adverse enforcement actions, including allegations of fraud and potential suspension and debarment proceedings.
2. Preparation of compliant business governance documents: corporate bylaws and LLC operating agreements. Too many small business government contractors rely on template agreements, often using fill-in-the blank forms found on the Internet. These templates and forms are almost always non-compliant with basic rules of the SBA certification process. Too often, a business owner finds this out during a SBA size or status protest proceeding that ends with the loss of a large government contract. Do not shirk this important step — seek competent legal advice and build your business on a strong foundation.
3. Completion of other typical “start up” actions: including drafting initial minutes, establishing a bank account, obtaining business identification numbers (EIN and DUNS numbers to start) and choosing the proper VOSB certification or self-representation strategy. Note that this important decision may depend on whether you want to pursue state contracting programs for Veterans in your area, in addition to federal prime contracts and subcontracts.
Contact me to discuss how best to plan and execute your business strategy. There is no charge for a half-hour initial consultation. I offer reduced rates for Veteran businesses, and fixed-price packages for some basic business startup scenarios.
Tim Connelly