On October 1, 2018, significant changes occurred to both the Small Business Administration, Service Disabled Veteran Owned Small Business (SDVOSB) and Veteran Owned Small Business Certification (VOSB) process and the Veteran’s Administration SDVOSB and VOSB process.

The U.S. Small Business Administration amended its regulations to implement provisions of the National Defense Authorization Act for Fiscal Year 2017. The Act placed the responsibility for issuing regulations related to ownership and control for the Department of Veterans Affairs verification of Veteran-Owned Small Business Concerns with the SBA.  There will now be one definition of ownership and control which will apply to the Department of Veterans Affairs in its verification and its Vets First Contracting Program procurements and all other government acquisition which require self-certification. The legislation also provided that in certain circumstances a firm can qualify as a veteran owned or service disabled veteran owned when there is a surviving spouse or an employee stock ownership plan.

While many of these changes are an attempt to bring these two programs into alignment, there are some differences and still some ambiguity. Many of these changes are still being digested by both of the applicable agencies, the applicants and CVE counselors. As a CVE counselor, I will be writing a series of articles about these changes, as they become clearer.

One significant change concerns community property states. In previous applications, residents in community property states, where one spouse was not a veteran, were required to sign a transmutation of property agreement where the non-veteran spouse had to waive their right to the business should the veteran who owns the business pass away. Even if the veteran who owned the business was a 100% owner, the fact that the business would go to the non-veteran was an issue for the Veteran’s Administration.

This is no longer true. Non-veteran spouses in community property states will no longer be required to sign this agreement. This should greatly relieve the flow of paper to the VA and the responsibility of reviewers to ensure that this process was being followed.

As we digest the changes and as the process smooths out, watch for this column to highlight important changes that may affect your decision to apply for CVE certification.