This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

40141 

Vol. 87, No. 128 

Wednesday, July 6, 2022 

SMALL BUSINESS ADMINISTRATION 

13 CFR Parts 121, 125, and 128 

RIN 3245–AH69 

Veteran-Owned Small Business and 

Service-Disabled, Veteran-Owned 

Small Business—Certification 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Proposed rule. 

SUMMARY: The Small Business 

Administration (SBA) is proposing to 

amend its regulations to implement a 

statutory requirement to certify VeteranOwned Small Business Concerns and 

Service-Disabled Veteran-Owned Small 

Business Concerns participating in the 

Veterans Certification Program. 

DATES: Comments must be received on 

or before August 5, 2022. 

ADDRESSES: You may submit comments, 

identified by RIN 3245–AH69, by any of 

the following methods: 

1. Federal eRulemaking Portal: 

https://www.regulations.gov. Follow the 

instructions for submitting comments. 

2. For Mail, Paper, Disk, or CD/ROM 

Submissions: Timothy Green, U.S. 

Small Business Administration, Office 

of Veterans Business Development, 409 

Third Street SW, 5th Floor, Washington, 

DC 20416. 

3. Hand Delivery/Courier: Timothy 

Green, U.S. Small Business 

Administration, Office of Veterans 

Business Development, 409 Third Street 

SW, 5th Floor, Washington, DC 20416. 

Instructions: SBA will post all 

comments on www.regulations.gov. If 

you wish to submit confidential 

business information (CBI) as defined in 

the User Notice at www.regulations.gov, 

please submit the information to 

Timothy Green, U.S. Small Business 

Administration, Office of Veterans 

Business Development, 409 Third Street 

SW, 5th Floor, Washington, DC 20416, 

or send an email to Timothy.green@

sba.gov. Highlight the information that 

you consider to be CBI and explain why 

you believe SBA should hold this 

information as confidential. SBA will 

review the information and make the 

final determination on whether it will 

publish the information. 

FOR FURTHER INFORMATION CONTACT: 

Timothy Green, U.S. Small Business 

Administration, Office of Veterans 

Business Development, 409 Third Street 

SW, 5th Floor, Washington, DC 20416; 

(202) 205–6777; Timothy.green@

sba.gov. This phone number may also be 

reached by individuals who are deaf or 

hard of hearing, or who have speech 

disabilities, through the Federal 

Communications Commission’s TTYBased Telecommunications Relay 

Service teletype service at 711. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The U.S. Small Business 

Administration (SBA) is seeking input 

and comments on a proposed rule to 

establish a certification program for 

Veteran-Owned Small Businesses (VO 

SBC) and Service-Disabled VeteranOwned Small Businesses (SDVO SBC). 

SBA is planning to amend its 

regulations to implement section 862 of 

the National Defense Authorization Act 

for Fiscal Year 2021, Public Law 116– 

283, 128 Stat. 3292 (January 1, 2021) 

(NDAA 2021). 

The Veteran-Owned Small Business 

and Service-Disabled Veteran-Owned 

Small Business Programs, set forth in 38 

U.S.C. 8127, authorize Federal 

contracting officers to restrict 

competition to eligible VO SBCs and 

SDVO SBCs for Department of Veterans 

Affairs (VA) contracts. To be eligible for 

VA contracts, VO SBCs and SDVO SBCs 

must be verified by VA’s Center for 

Verification and Evaluation (CVE) in 

accordance with 38 U.S.C. 8127. There 

is currently no Government-wide SDVO 

SBC certification program, and firms 

seeking to be awarded SDVO SBC sole 

source or set-aside contracts with 

Federal agencies other than the VA, 

only need to self-certify their status as 

set forth in section 36 of the Small 

Business Act, 15 U.S.C. 657f. 

NDAA 2021 amended the VO SBC/ 

SDVO SBC requirements to transfer the 

responsibility for certification of VO 

SBCs and SDVO SBCs to SBA as of 

January 1, 2023 (Transfer Date) and 

created a certification requirement at 

SBA for SDVO SBCs seeking sole source 

and set-aside contracts across the 

Federal Government. Section 862 also 

created a one-year grace period after the 

Transfer Date for businesses currently 

self-certifying to file an application for 

SDVO SBC certification with SBA. Selfcertified SDVO SBCs that submit an 

application within the one-year grace 

period will maintain eligibility until 

SBA makes a final eligibility decision. 

With the exception of this grace period, 

once this rulemaking is finalized, VO 

SBCs and SDVO SBCs that are not 

certified by SBA’s Veterans Certification 

Program (Vets Program) will not be 

eligible to receive sole source or setaside VO SBC or SDVO SBC awards 

across the Federal Government. 

Firms verified by VA’s CVE prior to 

the Transfer Date will be deemed 

eligible by SBA during the time that 

remains in the firm’s three-year term of 

eligibility. To remain certified by SBA 

after the Transfer Date, those verified 

firms will be required to meet all 

conditions of eligibility as described in 

SBA’s revised regulations. With this 

rulemaking, SBA is also proposing to 

grant reciprocity to participants in 

SBA’s 8(a) Business Development and 

Women-Owned Small Business (WOSB) 

programs that are owned and controlled 

by one or more veterans, or in the case 

of an SDVO SBC, service-disabled 

veterans. Both the 8(a) and WOSB 

programs require applicants to 

demonstrate ownership and control to 

be eligible for certification. The 

ownership and control requirements for 

those programs are basically the same as 

those set forth in this proposed rule for 

VO SBCs and SDVO SBCs, and the 

rulemaking would provide an expedited 

application and review process for 8(a)/ 

WOSB-certified firms seeking VO SBC/ 

SDVO SBC certification. In such cases, 

SBA would confirm the identified 

individual’s eligibility as a veteran or 

service-disabled veteran before granting 

certification. SBA believes reciprocity 

between SBA’s certification programs 

would create program administration 

efficiencies as well as reduced 

processing time for applicants. 

SBA proposes to implement the 

Veterans Certification Program in a new 

13 CFR part 128. As proposed, 13 CFR 

part 128 would be organized into the 

following subparts: Subpart A— 

Provisions of General Applicability, 

Subpart B—Eligibility Requirements for 

the Veterans Certification Program, 

Subpart C—Certification of VO SBC or 

SDVO SBC Status, Subpart D—Federal 


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Contract Assistance, Subpart E— 

Protests Concerning VO SBC and SDVO 

SBCs, Subpart F—Penalties and 

Retention of Records, and Subpart G— 

Surplus Personal Property for VeteranOwned Small Business Programs. SBA’s 

proposed rule is an effort to create a 

seamless transfer of the VO SBC/SDVO 

SBC verification function from VA to 

SBA. To accomplish this task, SBA 

consolidated existing regulations for the 

SDVO SBC program at 13 CFR part 125 

with VA’s CVE verification guidelines at 

38 CFR part 74. To further ensure 

continuity for Vets Program participants 

during and after the transfer, SBA 

generally adopted VA’s application 

guidelines, rules on continuing 

eligibility, program examinations, and 

program exit procedures at 38 CFR part 

74 with few exceptions. 

Concurrently, SBA proposes to amend 

13 CFR part 125 to remove SDVO SBC 

regulations in subparts A through F, 

consisting of §§ 125.11 through 125.100, 

and include them in 13 CFR part 128. 

SBA also proposes to amend references 

to part 125 in SBA’s size regulations at 

13 CFR part 121. 

II. Section-by-Section Analysis 

For ease of review, SBA organized 

proposed part 128’s ‘‘Section-by-Section 

Analysis’’ into subparts and sections. 

Each section has a citation, heading, and 

the section’s source citation. The source 

citations correspond to either 13 CFR 

part 125 or 38 CFR part 74. Sections 

with no corresponding regulation are 

marked ‘‘New.’’ 

Subpart A—Provisions of General 

Applicability 

Section 128.100 What is the purpose 

of this part? (New) 

Proposed § 128.100 would add a 

general purpose section for the Veterans 

Certification Program with statutory 

authority for contractual assistance to 

VO SBCs and SDVO SBCs. There was no 

equivalent section in previous SDVO 

regulations at part 125 and SBA is 

proposing this amendment to match the 

general applicability subparts found in 

SBA’s other certification programs. 

Section 128.101 What type of 

assistance is available under this part? 

(New) 

Given the unique nature of VA’s 

contractual assistance program, SBA 

believes it is important to distinguish 

the differences in contractual assistance 

available between VO SBC/SDVO SBC 

contracts at VA and SDVO SBC 

contracts across the rest of the Federal 

Government. Accordingly, this 

proposed amendment adds the two 

types of assistance available to 

participants in the Veterans 

Certification Program. There was no 

equivalent section in previous SDVO 

SBC regulations in part 125. 

Section 128.102 What definitions are 

important in the Veterans Certification 

Program? (Former § 125.11 and 38 CFR 

74.1) 

Section 128.102 as proposed, 

consolidates the definitions sections of 

13 CFR 125.11 and 38 CFR 74.1. In 

general, § 128.102 would adopt VA’s 

existing definitions which applied to 

the verification process, remove 

duplicate definitions between VA and 

SBA regulations, remove VA definitions 

that referenced SBA’s definitions at 

§ 125.11, and eliminate definitions that 

are no longer applicable to the SBA’s 

new certification program. Section 

125.11 currently includes a definition of 

VO SBC and SDVO SBC. SBA is 

proposing to move these definitions into 

the eligibility section at § 128.200 in 

subpart B. 

Subpart B—Eligibility Requirements for 

the Veterans Certification Program 

Section 128.200 What are the 

requirements a concern must meet to 

qualify as a VO SBC or SDVO SBC? 

(New) 

As proposed, this section would 

reflect the separate and distinct 

eligibility requirements for certification 

as a VO SBC or SDVO SBC. Proposed 

§ 128.200 would incorporate the 

definitions of VO SBC and SDVO SBC 

previously included as definitions in 

§ 125.11. Proposed § 128.200 would also 

expand how SBA currently defines a VO 

SBC/SDVO SBC. Previously, only VO 

SBC/SDVO SBCs that were small in 

their primary North American Industry 

Classification System (NAICS) code 

were considered eligible. This proposed 

amendment would allow an entity to 

apply for certification if the concern, 

with its affiliates, meets the size 

standard corresponding to any NAICS 

code under which it currently conducts 

business activities. Given that 

‘‘currently conducts business activities’’ 

is not defined in regulations, SBA is 

seeking comment on how best to define 

this term for the purposes of 

certification. For set aside or sole source 

VO or SDVO contracts, certified firms 

would still be required to be small 

within the size standard corresponding 

to the NAICS code assigned to the 

contract. This proposed amendment is 

also reflected in the definitions section 

at § 128.102 and application procedures 

at § 128.303. 

Pursuant to NDAA 2021, the proposed 

section would add paragraph (c)(1) to 

require participants to certify with SBA 

and paragraph (c)(2) to clarify that 

certification is only required for sole 

source and set-aside awards. Firms that 

do not apply for certification in the Vets 

Program may continue to self-certify 

their status, receive contract awards 

outside the Vets Program through open 

competition or other types of set-asides, 

and count toward an agency’s goals. For 

example, a self-certified SDVO SBC may 

be awarded a small business set-aside 

and the agency may count the award as 

both a small business and SDVO SBC 

toward the agency’s goals. For those 

purposes only, contracting officers 

would be able to accept selfcertifications without requiring them to 

verify any documentation. 

Section 128.201 What other eligibility 

requirements apply for individuals or 

businesses? (Former 38 CFR 74.2(b) 

Through (f)) 

Section 128.201 as proposed, would 

add conditions of eligibility for 

certification which are incorporated 

from additional eligibility requirements 

for verification by CVE at § 74.2(b) 

through (f). This rulemaking proposes to 

eliminate consideration of whether an 

individual who is currently 

incarcerated, or on parole or probation 

owns or controls an applicant concern 

in determining whether the applicant 

possesses good character and qualifies 

as a VO SBC or SDVO SBC. SBA 

believes that its role should be limited 

to determining whether an applicant is 

owned and controlled by one or more 

veterans or service-disabled veterans. 

Whether an individual involved with 

the applicant is currently incarcerated, 

or on parole or probation is a 

responsibility issue, and whether a 

concern possesses the responsibility to 

perform a contract is a contract specific 

issue, not an underlying eligibility 

issue. SBA views the issues as to 

whether the concern has the necessary 

integrity to perform a contract in the 

same way as it does questions relating 

to whether the concern has the 

necessary financial wherewithal, 

capacity or tenacity, and perseverance 

to perform a contract. All are 

responsibility issues determined by a 

contracting officer relating to a specific 

contract. SBA’s certification as to 

whether an applicant is owned and 

controlled by one or more veterans or 

service-disabled veterans should be 

limited to consideration of an 

individual’s status as a veteran or 

service-disabled veteran, the ownership 

and control of the applicant, and 

ensuring that the applicant qualifies as 


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small under the size standard 

corresponding to any work that it 

currently performs and would continue 

to seek to perform through the VO or 

SDVO small business programs. Thus, 

as proposed, the good character review 

would be limited to ensuring that an 

applicant or principal was not debarred 

or suspended. SBA also considered 

retaining a modified good character 

requirement that could render an 

applicant ineligible if there were 

outstanding issues relating to moral 

turpitude or business integrity, but 

again concluded that that would also be 

more appropriately considered by a 

contracting officer as an issue of 

responsibility. SBA specifically requests 

comments on this issue. 

The regulations at 38 CFR 74.2(a) 

currently include ownership and 

control as a condition of eligibility. As 

proposed, § 128.200 already requires 

ownership and control as an eligibility 

requirement, so it was not included in 

this section. While drafting this 

proposed section, SBA considered 

adopting additional eligibility 

requirements found in other SBA 

programs such as 8(a) additional 

eligibility requirements in § 124.108. 

However, for continuity purposes, SBA 

is proposing to adopt the additional 

eligibility requirements directly from 38 

CFR part 74. 

Section 128.202 Who does SBA 

consider to own a Veteran-Owned or 

Service-Disabled Veteran-Owned SBC? 

(Former § 125.12) 

While SBA’s existing ownership 

requirements at § 125.12 apply to both 

VO SBC and SDVO SBCs, § 125.12 refers 

only to service-disabled veterans. This 

section as proposed, would add a 

reference to veterans in the following 

section: § 128.202(a) through (g), which 

correspond to current regulations at 

§ 125.12(a) through (g). 

Proposed § 128.202(f) would 

incorporate 38 CFR 74.3(b) requiring 

participants to notify SBA of any change 

of ownership. In § 125.12(f), SBA 

addresses change of ownership but does 

not require notification to the agency. 

Proposed § 128.202(f) would require 

participants to notify SBA of a change 

of ownership and attest to continued 

eligibility in accordance with proposed 

§ 128.307. There are no other proposed 

amendments to SBA’s existing 

ownership regulations at § 125.12. SBA 

is also requesting comment on this 

section as proposed, including any 

suggested amendments to VO/SDVO 

ownership; for example, whether the 

proposed regulations at § 128.202 

should more closely match the WOSB/ 

Economically Disadvantaged WOSB 

(EDWOSB) ownership regulations found 

at 13 CFR 127.201. 

Section 128.203 Who does SBA 

consider to control a Veteran-Owned or 

Service-Disabled Veteran-Owned SBC? 

(Former § 125.13) 

Proposed § 128.203 would include 

SBA’s existing control requirements at 

§ 125.13 and revise the section to add 

reference to veterans. SBA previously 

administered only the SDVO SBC selfcertification program and § 125.13 did 

not specifically reference VOSB 

requirements. To be verified by VA and 

subsequently certified by SBA on the 

Transfer Date, VO SBCs are required to 

meet the same control requirements as 

SDVO SBCs per 38 CFR 74.4. There are 

no other proposed amendments to 

SBA’s existing control regulations at 

§ 125.133. As proposed, SBA control 

regulations do not address franchise, 

license, or distributor agreements. SBA 

is seeking comment as to whether these 

types of agreements should be 

addressed within proposed § 128.203. 

For example, should SBA take a similar 

approach to the agency’s loan assistance 

regulations in § 121.301(f)(5)? 

Current SBA regulations at § 125.13(i), 

(k), and (l) list several ‘‘rebuttable 

presumptions’’ of control by a nonveteran. As proposed, SBA is adopting 

those existing regulations in full but is 

soliciting comment as to whether those 

rebuttable presumptions should be 

viewed merely as factors of control by 

non-veterans rather than conditions of 

ineligibility that an applicant must 

rebut. Additionally, SBA is requesting 

comment on whether any of the 

rebuttable presumptions as proposed 

should be amended. SBA is also 

requesting comment on this section as 

proposed including any suggested 

amendments to VO SBC/SDVO SBC 

control. For example, whether the 

proposed regulations at § 128.203 

should more closely match the WOSB/ 

EDWOSB control regulations found at 

13 CFR 127.202. 

Section 128.204 What size standards 

apply to VO SBC and SDVO SBCs? 

(Former § 125.14) 

Proposed § 128.204 would include 

SBA’s existing size requirements at 

§ 125.14 and revise the section to 

incorporate VO SBCs. SBA previously 

administered only the SDVO SBC selfcertification program, so § 125.14 did 

not specifically reference VO SBC 

requirements. To be verified by VA and 

subsequently certified by SBA on the 

Transfer Date, VO SBCs are required to 

meet the same size requirements as 

SDVO SBCs. As such, this section 

would also be amended to reflect the 

VO SBCs. 

Subpart C—Certification of VO SBC or 

SDVO SBC Status 

Subpart C as proposed, would adopt 

VA’s existing application and oversight 

guidelines at 38 CFR 74.10 through 

74.22 and incorporate these sections 

into SBA certification for VO SBC and 

SDVO SBCs. References to VA’s 

application, the CVE program, the term 

‘‘verification,’’ the Vendor Information 

Pages (VIP) database, and VA forms 

would be removed throughout proposed 

§§ 128.300 through 128.310 and 

replaced where relevant with SBA, 

certification, and references to SBA’s 

database and online application system. 

VA’s Records Management section (38 

CFR 74.25 through 74.29) would not be 

incorporated into subpart C, as these 

provisions are no longer applicable to 

this program. SBA will seek Office of 

Management and Budget (OMB) 

approval for the information collection 

required for this program. SBA does not 

anticipate collecting additional 

information that was not previously 

collected by VA. 

Section 128.300 How is a concern 

certified as a VO SBC or SDVO SBC? 

(Former § 74.2) 

Proposed § 128.300 would include 

VA’s eligibility requirements at 38 CFR 

74.2(a), with proposed revisions to 

remove references to VA and to reflect 

SBA’s certification program. SBA’s 

proposed rule would also grant 

certification based on an applicant’s 

participation in SBA’s 8(a) Business 

Development and WOSB/EDWOSB 

programs. SBA anticipates that many 

participants may seek multiple 

certifications and believes reciprocity 

between SBA’s certification programs 

will create program administration 

efficiencies as well as reduce the 

processing time for applicants. In 

granting certification for these programs, 

SBA reviews ownership and control of 

the applicant to determine eligibility. 

The ownership and control 

requirements that apply to 

disadvantaged individuals for 8(a) 

certification and those applying to 

women for WOSB/EDWOSB 

certification are basically the same as 

those applying to veterans and servicedisabled veterans for the Veterans 

Certification Program. An applicant 

would be required to certify that there 

are no material changes in its ownership 

or control since its 8(a) or WOSB 

certification, and SBA would then 

accept its previous determinations that 

the identified individual owned and 

controlled the VO SBC/SDVO SBC 


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applicant. In such cases, SBA would 

confirm the identified individual’s 

eligibility as a veteran or servicedisabled veteran. 

There is likelihood that 8(a) or WOSB 

firms granted reciprocity will have 

remaining ‘‘time in program’’ on their 

existing certifications that would not 

align with the proposed three-year 

eligibility period for this Vets Program. 

In these instances, SBA would align 

recertification based on the firm’s 

existing certification eligibility period. 

As an example, a WOSB firm certified 

in 2022 would be required to reapply for 

WOSB certification at the end of their 

three-year eligibility period in 2025. If 

granted reciprocity into the proposed 

Vets Program in 2023, that firm would 

have two remaining years of eligibility. 

In 2025, the firm would apply for 

recertification to WOSB and then if 

eligible, would be granted a three-year 

eligibility period for both programs. 

That firm would then be required to 

update their status in the Veterans 

Certification Program to reflect 

recertification by WOSB. SBA is seeking 

comment on this approach to 

recertification and whether SBA should 

amend 8(a) regulations at part 124 and 

WOSB/EDWOSB regulations at 13 CFR 

part 127 to reflect reciprocity between 

programs. 

Section 128.301 Where must an 

application be filed? (Former § 74.10) 

Proposed § 128.301 would include 

VA’s requirements at 38 CFR 74.10 for 

application to CVE, propose revisions to 

remove references to VA, and reflect 

that an applicant must apply to SBA for 

certification after the rule is effective. At 

the time of this proposed rule, SBA has 

not announced its application platform 

or certification database for the Vets 

Program. Accordingly, the proposed 

amendments have general references to 

this technology. When finalized, the 

rule will include instructions to apply 

online and access the certification 

database. 

Section 128.302 How does SBA 

process applications for certification? 

(Former § 74.11) 

Proposed § 128.302 would include 

VA’s guidelines for application 

processing by CVE at 38 CFR 74.11, 

propose revisions to remove references 

to VA, and reflect SBA’s certification 

program. As proposed, this section 

would remove specific processing 

guidelines in § 128.302(a) as SBA has 

not established the policies and 

procedures for application processing at 

this time. SBA also proposes to add an 

additional sentence at the end of 

§ 128.302(e) to establish SBA’s authority 

to decertify a firm in the event that the 

firm failed to inform SBA of any 

changed circumstance in accordance 

with § 128.306. The regulation at 38 

CFR 74.11(e)(1), which requires 

participants to notify VA of bankruptcy 

details within 30 days, would be 

incorporated into §§ 128.302(e) and 

128.307 to require participants to notify 

SBA in the event of a bankruptcy filing. 

Section 128.303 What must a concern 

submit to apply for VO SBC or SDVO 

SBC certification? (Former § 74.12) 

Proposed § 128.303 would amend 

VA’s documentation requirements at 38 

CFR 74.12 for application to CVE. This 

amendment would include general 

requirements for submission to SBA 

rather than list each document 

individually as with the current VA 

regulation. As proposed, this section 

would grant certification based on 

participants in SBA’s 8(a) Business 

Development and WOSB/EDWOSB 

programs that are owned and controlled 

by one or more veterans, or in the case 

of SDVO SBCs, service-disabled 

veterans. The proposed amendment 

would demonstrate how applicants may 

submit documentation as evidence of 

program eligibility. Proposed § 128.303 

would add paragraphs (d) and (e) to 

require a concern to provide a full 

explanation in the case of an applicant 

that was previously decertified, 

previously denied certification, or failed 

to notify SBA of a material change 

affecting its eligibility. SBA is seeking 

comment whether an explanation in 

these circumstances should be required 

as part of an application and if so, 

should SBA establish a time limit for 

reapplication in which an explanation 

would be required (e.g., A firm that 

reapplies within three years of denial 

would be required to provide an 

explanation of that denial. If that firm 

reapplies after a period of three years, it 

would not be required to submit an 

explanation with the application). 

In terms of demonstrating that an 

applicant qualifies as a small business, 

the proposed rule would provide that an 

applicant must demonstrate that it 

qualifies as small under the size 

standard corresponding to any NAICS 

code under which it currently conducts 

business activities. SBA believes that 

this standard makes more sense than 

requiring an applicant to qualify as 

small under the size standard 

corresponding to its primary industry 

classification. In order to be eligible for 

a specific SDVO or VO small business 

contract, a firm must qualify as small 

under the size standard corresponding 

to the NAICS code assigned to that 

contract. Whether a firm qualifies as 

small under its primary industry 

classification is not relevant to that 

determination (unless the size standard 

for the firm’s primary industry 

classification is the same as that for the 

NAICS code assigned to the contract, 

but even then, the only relevant size 

standard is that corresponding to the 

NAICS code assigned to the contract). 

SBA believes that a firm that does not 

qualify as small under its primary 

industry classification should not be 

precluded from seeking and being 

awarded SDVO or VO small business 

contracts if it qualifies as small for those 

contracts. SBA believes that the 

certification process should ensure that 

an applicant is owned and controlled by 

one or more veterans or service-disabled 

veterans and that it could qualify as a 

small business for a VO or SDVO setaside contract. As such, SBA believes 

that requiring an applicant to 

demonstrate that it qualifies as small for 

any industry under which it currently 

conducts business is more appropriate 

than requiring it to demonstrate that it 

qualifies as small under its primary 

industry classification. 

Section 128.304 Can an applicant 

appeal SBA’s initial decision to deny an 

application? (Former § 74.13) 

Proposed § 128.304 would include 

VA’s regulation at 38 CFR 74.13 for a 

denied application with CVE and 

proposed revisions would remove 

references to VA and reflect SBA’s 

certification program. In addition, this 

section would add a sentence at the 

beginning of § 128.304(a) which would 

clearly establish that there is no 

reconsideration process for initial 

applications once they have been 

denied. SBA believes that the appeals 

process with SBA’s Office of Hearings 

and Appeals (OHA) as outlined in 13 

CFR part 134 serves as an adequate 

substitute for the process of 

reconsideration. Given that this 

proposed rule would eliminate 

reconsideration upon initial application, 

SBA proposes to shorten the 

reapplication period after denial from 6 

months to 90 calendar days. SBA seeks 

comment on the proposed elimination 

of the reconsideration process. If, on 

appeal, OHA overturns SBA’s initial 

decision to deny an applicant, should 

SBA consider a reconsideration process 

where the remanded application is then 

denied for reasons other than those 

identified in the initial application? 

Should SBA allow a reconsideration of 

all denials prior to OHA appeal? SBA 

also requests comment specifically on 

denial decisions based solely on 

eligibility as a veteran or servicedisabled veteran. Current VA 


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regulations do not allow for 

reconsideration of these types of 

denials. Should SBA allow for 

reconsideration in these limited 

circumstances? 

This section as proposed would not 

incorporate 38 CFR 74.13(b) through (f): 

paragraph (b) reconsideration of veteran 

eligibility criteria, paragraph (c) 

reconsideration, paragraph (d) is no 

longer applicable as it references an 

SBA determination on size, paragraph 

(e) is a duplicate of paragraph (b), and 

paragraph (f) is a second reference to the 

reconsideration process. 

Section 128.305 Can an applicant or 

participant reapply for certification? 

(Former § 74.14) 

As proposed, § 128.305 would include 

VA’s 38 CFR 74.14 reapplication 

requirements, proposed revisions would 

remove references to VA and to reflect 

SBA’s certification program. SBA’s 

proposed rule would adopt the VA 

requirement that the applicant must 

wait for a period of 90 calendar days 

after a denial decision before a new 

application will be processed by SBA. 

As proposed participants may reapply 

for certification within 120 calendar 

days of the end of their eligibility period 

and the subsequent eligibility period 

would be based on the date of the new 

determination letter. SBA is requesting 

comment on this proposed procedure 

for recertification. Specifically, should 

SBA reduce the window for applicants 

to reapply prior to the end of eligibility 

period and if an applicant successfully 

reapplies to the Vets Program, should 

the eligibility period be based on the 

original date that eligibility was set to 

expire as opposed to the date of the 

determination letter? 

Section 128.306 What length of time 

may a business participate in the 

Veterans Certification Program? (Former 

§ 74.15) 

Proposed § 128.306 would include 

VA’s 38 CFR 74.15 program eligibility 

term and continuing obligation 

requirements, including a provision 

specifying that a business concern 

would receive an eligibility term of 

three years from the date of SBA’s 

approval letter establishing its VO SBC 

or SDVO SBC certified status. Proposed 

revisions would remove references to 

VA and reflect SBA’s certification 

program. SBA does not believe that 

yearly recertification is necessary, but 

requests comments as to whether 

recertification every three years is the 

appropriate term of certification. 

Paragraphs (e) and (f) of this section 

would include the consequences of a 

program examination referenced in 

paragraph (d). For organizational 

purposes, SBA would redesignate 

paragraphs (e) and (f) as paragraphs 

(d)(1) and (2), respectively. SBA’s 

proposed rule would adopt VA’s 

eligibility period of three years. SBA is 

soliciting comment on whether that 

period is appropriate for the proposed 

SBA Vets Program. 

Section 128.307 What are a 

participant’s ongoing obligations to 

SBA? (Former § 74.3(b)) 

Proposed § 128.307 would include 38 

CFR 74.3(b) that requires participants to 

notify CVE of any change of ownership; 

proposed revisions would remove 

references to VA and to reflect SBA’s 

certification program. This section as 

proposed does not require prior SBA 

approval of a material change. SBA is 

soliciting comment as to whether this 

section should require SBA approval 

prior to a material change that could 

affect eligibility. Sections 36 and 36A of 

the Small Business Act (15 U.S.C. 657f 

and 657f–1) ‘‘require the periodic 

recertification’’ of a firm’s status as an 

eligible VO SBC or SDVO SBC. As noted 

above in § 128.306, SBA is proposing 

that a VO SBC or SDVO SBC 

certification generally last three years. 

SBA has interpreted the ‘‘periodic 

recertification’’ requirement set forth in 

the Small Business Act to require 

recertification every three years. This 

proposed rule would not require 

participants to recertify on an annual 

basis as an ongoing obligation. SBA 

requests comments as to whether three 

years is the appropriate length of time 

to require recertification. SBA wants to 

ensure that it meets its statutory 

mandate, but at the same time does not 

want to impose any unnecessary 

burdens on VO SBCs and SDVO SBCs. 

Section 128.308 What is a certification 

examination and what will SBA 

examine? (Former § 74.20) 

Proposed § 128.308 would include 

VA’s 38 CFR 74.2(a) verification exam 

requirements, with revisions that would 

remove references to VA and to reflect 

SBA’s certification program. 

Section 128.309 What are the ways a 

business may exit certification status? 

(Former § 74.21) 

Proposed § 128.309 would include 

VA’s 38 CFR 74.21 guidelines on exiting 

the CVE program, with revisions that 

would remove references to VA and 

reflect SBA’s certification program. The 

proposed section would also include 

paragraph (d)(10) which adds failure to 

recertify as good cause to remove a firm 

from the Vets Program. 

Section 128.310 What are the 

procedures for decertification? (Former 

§ 74.22) 

Proposed § 128.310 would include 

VA’s 38 CFR 74.22 guidelines on 

canceling program participation by the 

agency; proposed revisions would 

remove references to VA and to reflect 

SBA’s certification program. 

Subpart D—Federal Contract Assistance 

Section 128.400 What are VO and 

SDVO contracts? (Former § 125.17) 

As proposed, § 128.400(a) would 

amend the text in § 125.17 to reflect 

VA’s authority to award set-aside and 

sole source to VO SBCs and SDVO 

SBCs. The amendment references the 

VA Acquisition Regulation (VAAR) at 

chapter 8 of title 48, Code of Federal 

Regulations. An additional amendment 

at § 128.400(b) as proposed, would 

distinguish VA contracts from SDVO 

SBC contracts with the rest of the 

Federal Government. 

Section 128.401 What requirements 

must an SDVO SBC meet to submit an 

offer on a contract? (Former § 125.18) 

As proposed, § 128.401 would amend 

the current regulation at § 125.18(a) to 

require certification to be eligible for a 

VO or SDVO SBC set-aside or sole 

source contract. The proposed rule 

would add § 128.401(a)(2)(i) and (ii) to 

allow an uncertified VO SBC or SDVO 

SBC to submit an offer while their 

application is pending with SBA. SBA 

intends to prioritize those applications 

where the contracting officer has 

identified the applicant as the apparent 

successful offeror. This proposed rule 

would also amend former paragraph (b) 

at § 125.18 to add eligibility for VO SBC 

joint ventures (JV) in the Vets Program 

and reference § 128.402, a new standalone section to address JV requirement 

for VOVO SBCs and SDVO SBCs. The 

remaining paragraphs in § 125.18 would 

add references to VO SBCs. 

Section 128.402 May a joint venture 

submit an offer on a VO SBC or SDVO 

SBC requirement? (Former § 125.18(b)) 

As stated above, SBA is proposing a 

stand-alone § 128.402 that would 

address JV requirements for VOVO SBCs 

and SDVO SBCs. Section 128.402(a) as 

proposed, generally would state 

conditions upon which a JV may be 

certified by SBA and as set forth in 48 

CFR part 819, includes the requirement 

that all joint ventures must be certified 

to be awarded a VO SBC or SDVO SBC 

contract with VA. SBA does not intend 

to require SDVO SBC JVs to certify for 

contracts with the rest of the Federal 

Government. 


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The proposed rule would also add 

paragraph (b)(11) in § 128.402 to 

provide that a VO SBC or SDVO SBC 

participant cannot be a joint venture 

partner on more than one joint venture 

that submits an offer for a specific VO 

SBC or SDVO SBC contract. Although 

the proposed rule would apply this 

requirement to all contracts, procuring 

agencies and small businesses have 

raised concerns to SBA in the context of 

multiple award contracts where it is 

possible that one firm could be a 

member of several joint ventures that 

receive contracts. In such a situation, 

several agencies were troubled that 

orders under the Multiple Award 

Contract may not be fairly competed if 

one firm was part of two or more quotes. 

They believed that one firm having 

access to pricing information for several 

quotes could skew the pricing received 

for the order. 

Sections 128.403 Through 128.408 

(Former §§ 125.21 Through 125.26) 

Generally, §§ 128.403 (former 

§ 125.21) ‘‘requirements not available to 

VO or SDVO contracts,’’ 128.405 (former 

§ 125.23) ‘‘sole source contracts to VO 

and SDVO SBCs,’’ and 128.406 (former 

§ 125.24) ‘‘VO or SDVO contracts at or 

below the simplified acquisition 

threshold’’ would be amended to 

distinguish VA procurements from all 

other procurements. As previously 

stated, VAAR specifically governs 

requirements exclusive to VA prime and 

subcontracting actions at chapter 8 of 

title 48, Code of Federal Regulations, 

and supplements the Federal 

Acquisition Regulation (FAR), which 

contains guidance applicable to most 

Federal agencies. 

As proposed, § 128.404(d) would add 

a requirement that prohibits agencies 

from requiring one or more 

certifications in addition to its VO SBC/ 

SDVO SBC certification. This 

amendment is already included in 

SBA’s regulations at § 125.2(e)(6)(i) but 

had not been added to the SDVO SBC 

program. 

No amendments are proposed were 

made to existing regulations in either 

§ 128.407 or § 128.408 currently at 

§ 125.25 or § 125.526. 

Subpart E—Protests Concerning VO 

SBCs and SDVO SBCs 

Section 128.500 What are the 

requirements for filing a VO SBC and 

SDVO SBC status protest? (New) 

As proposed, § 128.500 would serve 

as the sole section addressing status 

protests for VO SBCs and SDVO SBCs. 

Currently, SBA’s Director of 

Government Contracting processes all 

status protests of self-certified SDVO 

SBCs for non-VA contracts in 

accordance with 13 CFR part 125 and 

SBA’s OHA hears all challenges to a VO 

SBC or SDVO SBC’s inclusion in the VA 

database in accordance with 38 U.S.C. 

8127(f)(6)(B)(i). NDAA 2021 transfers 

the entirety of 38 U.S.C. 8127(f) to 15 

U.S.C. 657f and authorizes OHA to 

review all status protests of VO SBCs 

and SDVO SBCs, regardless of the 

procurement agency. Accordingly, 

proposed part 128 would not include 

§§ 125.27 through 125.31 on SDVO SBC 

status protests. Proposed § 128.500 

would add paragraph (a) to reflect 

revised status protest procedures 

described above with a reference to part 

134. Paragraph (b) as proposed would 

distinguish separate procedures for size 

and status protests. Amendments to part 

134 are not included in this proposed 

rule and will be amended separately to 

reference SBA’s Veterans Certification 

Program. 

Subpart F—Penalties and Retention of 

Records 

The proposed rule would adopt SBA’s 

existing regulations at 13 CFR 125.32 

and 33 (former §§ 125.32 and 125.33) 

and revise the sections to add reference 

to VO SBCs. SBA previously 

administered only the SDVO SBC selfcertification program, so §§ 125.32 and 

125.33 did not specifically reference VO 

SBC requirements. 

Subpart G—Surplus Personal Property 

for Veteran-Owned Small Business 

Programs 

Section 128.700 How does a small 

business concern owned and controlled 

by veterans obtain Federal surplus 

personal property? (Former § 125.100) 

The Veterans Small Business 

Enhancement Act provides that VO 

SBCs should be considered for surplus 

personal property distributions. Those 

firms seeking to participate in the 

program are required to be verified by 

VA’s CVE as a condition of eligibility. 

Section 128.700(a)(1) would amend this 

regulation to reflect the transfer of 

certification to SBA as mandated by 

NDAA 2021. 

Part 121 

This proposed rule would amend 

references to the current SDVO SBC 

program in part 121. These amendments 

would correspond to the newly-created 

part 128. 

SBA has not proposed amendments to 

part 124, 127, or 134 with this 

rulemaking. However, SBA is seeking 

comment whether the final rule should 

include amendments to these parts to 

reflect the proposed Vets Program. For 

example, part 124 may need to be 

amended to reflect reciprocity with the 

proposed Vets Program; part 127 grants 

reciprocity to firms verified by CVE and 

would be amended to reference this 

Vets Program; and part 134 would need 

to be amended to remove references to 

CVE and update procedures for denial, 

cancellation, and inclusion in the SBA 

database. 

III. Compliance With Executive Orders 

12866, 12988, 13132, 13175, 13563, the 

Congressional Review Act (5 U.S.C. 

801–808), the Paperwork Reduction Act 

(44 U.S.C., Ch. 35), and the Regulatory 

Flexibility Act 

Executive Order 12866 

The Office of Management and Budget 

(OMB) has determined that this 

proposed rule is a significant regulatory 

action for the purposes of Executive 

Order 12866. Accordingly, the next 

section contains SBA’s Regulatory 

Impact Analysis. 

Regulatory Impact Analysis 

1. Is there a need for the regulatory 

action? 

This rulemaking is necessary to 

satisfy statutory requirements to 

implement section 862 of the National 

Defense Authorization Act for Fiscal 

Year 2021 amendments to the Small 

Business Act which requires SBA to 

certify VO SBCs and SDVO SBCs. 

2. What is the baseline, and the 

incremental benefits and costs of this 

regulatory action? 

OMB directs agencies to establish an 

appropriate baseline to evaluate any 

benefits, costs, or transfer impacts of 

regulatory actions and alternative 

approaches considered. The baseline 

should represent the agency’s best 

assessment of what the world would 

look like absent the regulatory action. 

For a regulatory action that modifies or 

replaces an existing regulation, a 

baseline assuming no change to the 

regulation generally provides an 

appropriate benchmark for evaluating 

benefits, costs, or transfer impacts of 

proposed regulatory changes and their 

alternatives. 

Baseline 

Section 862 of NDAA 2021 amended 

sections 36 and 36A of the Small 

Business Act to require SBA to certify 

the status of VO SBCs and SDVO SBCs 

seeking sole source and set-aside 

contracts across the Federal 

Government. This regulation would 

replace VA’s existing regulations 

governing the verification of VO SBCs 


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and SDVO SBCs for sole source or setaside contracts awarded by VA. Prior to 

NDAA 2021, SDVO SBC firms seeking 

to contract with Federal agencies other 

than VA only needed to self-certify their 

status. SDVO SBC firms currently selfcertifying must apply within a one-year 

grace period after the Transfer Date. 

SBA’s proposed regulations will not 

add any additional burden to current 

participants in VA’s VIP Verification 

Program. The VIP Verification Program 

has a three-year term of eligibility and 

to enter the program, applicants submit 

an online application with documents 

supporting the application. To remain 

in the program, VA requires participants 

to notify the agency of a change in 

circumstances such as a change in 

ownership or control of the firm. VA 

also requires participants to undergo a 

program examination to verify the 

accuracy of any statement or 

information provided as part of the 

verification application process. At the 

end of the three-year term of eligibility, 

a participant must reapply to the 

program using the same procedures as 

the initial application. 

With the proposed regulations, SBA 

would institute the same process of 

initial application, program 

examination, and reapplication at the 

end of the applicant’s three-year term of 

eligibility. Firms verified by VA prior to 

the Transfer Date would be deemed 

eligible by SBA for the time that 

remains in the firm’s three-year term of 

eligibility. To remain certified by SBA 

after the Transfer Date, those verified 

firms would be required to meet all 

conditions of eligibility as described in 

the proposed regulation such as 

certification examinations and 

reapplication at the end of the firm’s 

term of eligibility. Current participants 

in the VIP Verification Program would 

have no additional cost burden 

associated with the SBA’s proposed 

regulations implementing the Veterans 

Certification Program. VA existing 

regulations for VO SBCs and SDVO 

SBCs that contract solely with the VA 

serve as an appropriate benchmark for 

this regulatory impact analysis. 

Accordingly, this analysis will focus on 

the benefits and costs to those 

previously self-certified SDVO SBCs 

that would be required to certify with 

SBA. 

Benefit 

The benefit of the proposed regulation 

is a reduction in the ambiguity and 

uncertainty for contracting officers in 

the process of making Federal contract 

awards to eligible SDVO firms that were 

previously only required to self-certify. 

Under the existing system for agencies 

outside of VA, the burden of SDVO SBC 

eligibility compliance is placed upon 

the awarding contracting officer. 

Contracting officers must review the 

documentation of the apparent 

successful offeror on a SDVO SBC 

contract. Under this proposed rule, the 

burden is placed upon SBA. All a 

contracting officer needs to do is to 

confirm that the firm is in fact a 

certified SDVO SBC in SBA’s 

certification database and a responsible 

contractor. A contracting officer would 

not have to look at any documentation 

provided by a firm or prepare any 

internal memorandum memorializing 

any review. This will encourage more 

contracting officers to set aside 

opportunities for SDVO SBC Vets 

Program participants as the validation 

process will be controlled by SBA in the 

System for Award Management (SAM), 

the Dynamic Small Business Search 

(DSBS) database, and SBA’s certification 

database. The reduced responsibility to 

verify eligibility at contract award may 

also result in a minor cost savings to the 

contracting agencies. 

Cost 

While current participants in the Vet 

VIP Verification Program would have no 

additional costs associated with the 

proposed regulations, SBA anticipates 

costs associated with self-certified 

SDVO SBCs currently seeking contracts 

with the rest of the Federal Government. 

Previously, those firms only needed to 

self-certify their status to pursue SDVO 

SBC sole source and set-asides. With 

NDAA 2021, those firms must apply to 

SBA for certification within a one-year 

grace period ending on January 1, 2024. 

Eligible SDVO SBC firms that are 

certified by SBA after the Transfer Date 

will then be required to meet all 

program eligibility requirements going 

forward to include: notify SBA of a 

change in circumstances, undergo a 

program certification examination, and 

reapply for certification at the end of 

their eligibility period. 

To estimate the number of SDVO SBC 

applicants within the first year of the 

certification, SBA reviewed firms 

actively registered as SDVO SBCs in 

SAM. SBA believes that the number of 

firms listed in SAM is the most recent 

and reliable data to estimate 

participation and total costs of the Vets 

Program for the purposes of this 

regulatory impact study. Registration in 

SAM is required for all businesses 

seeking to contract with the Federal 

Government, registrants may select to 

represent themselves as SDVO SBCs 

without going through a certification 

process, and firms must recertify their 

registration one-year after initial SAM 

registration. While it is not anticipated 

that every firm registered as an SDVO 

SBC in SAM will apply for certification 

within the first year of the Vets Program, 

SAM registrations serve as what SBA 

would consider the maximum number 

of firms that would likely seek 

certification. 

Accordingly, SBA estimates that as 

many as 21,468 self-certified SDVO 

SBCs could apply for initial certification 

within the first year of the program. 

This estimate is based on 32,284 SDVO 

SBC firms registered in SAM and 

excludes 10,816 firms registered in SAM 

but already verified by VA as of 

December 2021. 

SDVO SBCs Registered in SAM ......................................................................................................................................................... 32,284 

Less: VA-Verified SDVO SBCs Included in SAM ............................................................................................................................... 10,635 

Self-Certified SDVO SBCs .................................................................................................................................................................. 21,649 

Less: VA-Verified VO SBCs Self-Certified as SDVO SBCs ............................................................................................................... 181 

Self-Certified SDVO SBCs Anticipated to Seek SBA Certification ..................................................................................................... 21,468 

The following table represents the 

estimated total number of Program 

Participant actions during the first five 

years of the Vets Program. 


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NUMBER OF PROGRAM PARTICIPANTS

Year Initial applications Program 

examinations Recertifications Yearly totals 

1 ............................................................................................... 17,174 1,025 2,114 19,288 

2 ............................................................................................... 8,500 560 2,006 10,506 

3 ............................................................................................... 7,500 420 527 8,027 

4 ............................................................................................... 7,500 810 7,715 15,215 

5 ............................................................................................... 7,500 635 4,202 11,706 

Totals ................................................................................ 48,174 3,455 16,565 64,739 

For the purposes of this proposed 

rule, SBA estimated ‘‘time to complete’’ 

for three types of certification actions: 

initial application, program 

examination, and reapplication at the 

end of the eligibility period. For the 

initial application, SBA estimates that 

applicants would complete the 

application process in 1 hour, a program 

examination in 1 hour, and 

reapplication in 1 hour. The estimated 

time to complete would include 

entering information into SBA’s online 

application platform and submission of 

supporting documentation to prove 

eligibility. It also assumes that the 

information requested by SBA during 

initial certification is already held by 

the firms during the ordinary course of 

business and would require minimum 

preparation prior to submission. 

Similarly, participants would be 

minimally burdened during program 

examinations and reapplications. 

During their period of eligibility, 

participants would be required to 

review, maintain, and update 

documentation submitted to SBA during 

initial certification. In the event of a 

change in circumstances while in the 

Program, participants would have 

previously notified SBA of the change 

and already uploaded documentation to 

support eligibility. SBA’s proposed rule 

would not require additional 

information or documents that the firm 

would not already have on hand and 

would not impose additional burden on 

the participant. SBA is soliciting 

comment as to whether these times to 

complete these actions are reasonable. 

Hourly cost to the participant is based 

on estimated manager’s salary of $93.44/ 

hour (based on the median hourly wage 

of $46.72 for construction managers, 

according to the BLS 2020 Occupational 

Outlook Handbook, plus 100% for 

benefits and overhead). Based on an 

estimate of 1 hour per program action 

and an hourly cost of $93.44, the fiveyear total cost burden for the proposed 

rule would be $3,219,569. SBA 

estimates that an applicant’s cost 

burden to apply and maintain eligibility 

for this proposed Program would 

require 3 total hours at a cost burden of 

$280.32 per applicant. 

COSTS TO PARTICIPANTS

Year Initial applications Program 

examinations Recertifications Yearly totals 

1 ............................................................................................... $1,604,776 $95,776 $197,532 $1,898,084 

2 ............................................................................................... 794,240 52,326 187,441 1,034,007 

3 ............................................................................................... 700,800 39,712 49,243 789,755 

4 ............................................................................................... 700,800 75,686 720,923 1,497,410 

5 ............................................................................................... 700,800 59,334 392,672 1,152,807 

Totals ................................................................................ 4,501,416 322,835 1,547,811 6,372,062 

SBA believes that participants would 

not incur any start-up costs, operation 

or maintenance costs, service costs, or 

require additional capital as a result of 

this proposed rule because there should 

be no cost in setting up or maintaining 

systems to collect the required 

information. As stated previously, the 

information requested should be 

collected and retained by the applicant 

in the ordinary course of business. SBA 

is soliciting comment as to whether this 

assumption is accurate. 

SBA estimates the cost to the 

government of implementing the 

certification program to be $30M across 

fiscal year (FY) 2022 and FY2023 and 

approximately $20M annually 

thereafter. SBA worked with VA and 

OMB to secure a $10M transfer from 

VA’s Supply Fund to cover transition 

costs, including tech system 

development. An additional $20M was 

requested in the President’s Budget for 

FY2023 for year one program 

operations. SBA and VA anticipate an 

up to 250% surge in application volume 

relative to VA’s current volume. The 

increase in volume will be handled 

primarily by surging contract support. 

SBA’s $20M request includes $2.5M for 

full time equivalents (FTEs) (current 

salaries and expenses (S&E) for VA FTEs 

assigned to the program), $1.35M for 

information technology (IT) overhead 

(system maintenance and standard IT 

services for staff and contractors), and 

$16M in contract costs (based on FY21 

VA contract costs scaled to account for 

application surge and projected 

efficiencies). The cost of operating the 

program may decrease after the initial 

application surge, but would rise every 

third year when the 2023 cohort is up 

for recertification. This cost estimate 

also eliminates CVE’s costs of 

administering the program. CVE 

reported a cost of $12,302,497 for 14,762 

cases in FY2021. This cost is not 

directly comparable to SBA’s estimate, 

however, because it excludes items like 

some support costs, that are included in 

SBA’s cost estimate. 

3. What are the alternatives to this 

rulemaking? 

This proposed rule would implement 

specific statutory provisions in Section 

862 of the 2021 NDAA. There are no 

alternatives that would meet the 

statutory requirements. 

Executive Order 12988 

This proposed rule meets applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988, Civil 


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Justice Reform, to minimize litigation, 

eliminate ambiguity, and reduce 

burden. The action does not have 

retroactive or preemptive effect. 

Executive Order 13132 

This proposed rule does not have 

federalism implications as defined in 

Executive Order 13132. It will not have 

substantial direct effects on the States, 

on the relationship between the 

National Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government, as specified in the 

Executive order. As such it does not 

warrant the preparation of a federalism 

assessment. 

Executive Order 13175 

This proposed rule does not have 

tribal implications under Executive 

Order 13175, Consultation and 

Coordination with Indian Tribal 

Governments, because it would not have 

a substantial direct effect on one or 

more Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes, or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

Executive Order 13563 

This Executive order directs agencies 

to, among other things: (a) Afford the 

public a meaningful opportunity to 

comment through the internet on 

proposed regulations, with a comment 

period that should generally consist of 

not less than 60 days; (b) provide for an 

‘‘open exchange’’ of information among 

government officials, experts, 

stakeholders, and the public; and (c) 

seek the views of those who are likely 

to be affected by the rulemaking, even 

before issuing a notice of proposed 

rulemaking. As far as practicable or 

relevant, SBA considers these 

requirements in developing this rule, as 

discussed below. 

1. Did the agency use the best 

available techniques to quantify 

anticipated present and future costs 

when responding to E.O. 12866 (e.g., 

identifying changing future compliance 

costs that might result from 

technological innovation or anticipated 

behavioral changes)? 

To the extent possible the agency 

utilized the most recent data available 

in the Federal Procurement Data 

System-Next Generation, SAM, and 

VA’s VIP database. 

2. Public participation: Did the 

agency: (a) Afford the public a 

meaningful opportunity to comment 

through the internet on any proposed 

regulation, with a comment period that 

should generally consist of not less than 

60 days; (b) provide for an ‘‘open 

exchange’’ of information among 

Government officials, experts, 

stakeholders, and the public; (c) provide 

timely online access to the rulemaking 

docket on Regulations.gov; and (d) seek 

the views of those who are likely to be 

affected by rulemaking, even before 

issuing a notice of proposed 

rulemaking? 

The proposed rule will have a 30-day 

comment period and will be posted on 

www.regulations.gov to allow the public 

to comment meaningfully on its 

provisions. SBA believes a 30-day 

comment period is reasonable and 

sufficient for this proposed rule for 

several reasons. First, SBA believes a 

30-day comment period is sufficient for 

this proposed rule because the rule does 

not propose significant changes to the 

programs that are not statutorily 

mandated. In drafting this proposed 

rule, SBA sought to minimize the 

impact to the certification process as the 

certification authority moves to SBA 

and generally adopted VA’s existing 

program guidelines in 38 CFR part 74. 

Second, SBA anticipates that this 

proposed rule will receive a substantial 

number of comments from the public, 

even with a 30-day comment period. 

Third, SBA and VA have taken 

significant efforts to engage the veteran 

small business community during 

preparations for the transfer and have 

used this engagement as consideration 

while drafting this proposed rule. 

Finally, a 30-day comment period is 

needed due to the time required to 

promulgate a final rule to be effective on 

January 1, 2023. SBA intends to use 

these comments as an integral 

component in drafting the final rule. 

3. Flexibility: Did the agency identify 

and consider regulatory approaches that 

reduce burdens and maintain flexibility 

and freedom of choice for the public? 

This rulemaking is necessary to 

satisfy statutory requirements to 

implement section 862 of 2021 NDAA 

2021. A description of the need for this 

regulatory action and the benefits and 

costs associated with this action, 

including possible distributional 

impacts that relate to Executive Order 

13563, are included above in the 

Regulatory Impact Analysis under 

Executive Order 12866. 

Congressional Review Act (5 U.S.C. 801– 

808) 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as amended by the 

Small Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a ‘‘major rule’’ may take 

effect, the agency promulgating the rule 

must submit a rule report, which 

includes a copy of the rule, to each 

House of the Congress and to the 

Comptroller General of the United 

States. SBA will submit a report 

containing this rulemaking and other 

required information to the U.S. Senate, 

the U.S. House of Representatives, and 

the Comptroller General of the United 

States. A major rule cannot take effect 

until 60 days after it is published in the 

Federal Register. This rulemaking has 

been reviewed and determined by OMB 

not to be a ‘‘major rule’’ under 5 U.S.C. 

804(2). 

Paperwork Reduction Act, 44 U.S.C. Ch. 

35 

In carrying out its statutory mandate 

to certify VO SBC and SDVO SBC firms, 

SBA intends to collect information from 

VO SBC and SDVO SBC applicants or 

participants through an online 

application system. This collection of 

information will require submission or 

retention of documents that support the 

applicant’s certification and continued 

eligibility. 

SBA intends to implement a 

certification and information collection 

platform that replicates the currently 

approved information collection by 

VA’s CVE (OMB Control Number 2900– 

0675). In other words, the information 

collected by SBA will include eligibility 

documents previously collected by VA. 

SBA does not anticipate that these 

changes would impact the content of the 

information currently collected or add 

additional burden to what is currently 

required by VA for verification. 

As discussed above, this rule 

proposes to fully implement the 

statutory requirement for small business 

concerns to be certified by SBA in order 

to be awarded a set-aside or sole source 

contract under the Veterans 

Certification Program. As a result of 

these changes, the rule proposes to 

eliminate SDVO SBC self-certification 

and set the standards for certification by 

SBA. SBA anticipates that these changes 

would impact firms currently selfcertifying; however, this impact would 

be minimal as this information is 

already held by applicants during the 

ordinary course of business and would 

require minimum preparation prior to 

submission. 

At this time, SBA does not have an 

OMB-approved method for collection 

but intends to have approval for the 

collection of information before the rule 

is finalized. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA), 

5 U.S.C. 601, requires administrative 

agencies to consider the effect of their 

actions on small entities, small 


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nonprofit enterprises, and small local 

governments. According to the 

Regulatory Flexibility Act (RFA), 5 

U.S.C. 601, when an agency issues a 

rulemaking, it must prepare a regulatory 

flexibility analysis to address the impact 

of the rule on small entities. However, 

section 605 of the RFA allows an agency 

to certify a rule, in lieu of preparing an 

analysis, if the rulemaking is not 

expected to have a significant economic 

impact on a substantial number of small 

entities. The RFA defines ‘‘small entity’’ 

to include ‘‘small businesses,’’ ‘‘small 

organizations,’’ and ‘‘small 

governmental jurisdictions.’’ This 

proposed rule concerns various aspects 

of SBA’s contracting programs. As such, 

the rule relates to small business 

concerns, but would not affect ‘‘small 

organizations’’ or ‘‘small governmental 

jurisdictions.’’ SBA’s contracting 

programs generally apply only to 

‘‘business concerns’’ as defined by SBA 

regulations, in other words, to small 

businesses organized for profit. ‘‘Small 

organizations’’ or ‘‘small governmental 

jurisdictions’’ are non-profits or 

governmental entities and do not 

generally qualify as ‘‘business concerns’’ 

within the meaning of SBA’s 

regulations. 

As stated in the regulatory impact 

analysis, this rulemaking will impact 

approximately 21,468 service-disabled 

veteran-owned small businesses. If 

adopted in final form, these businesses 

will have to apply to SBA for 

certification. However, SBA has 

proposed to minimize the impact on VO 

SBCs and SDVO SBCs by accepting 

verifications already received from VA’s 

CVE program during the term of the 

firm’s eligibility period, and by 

providing SDVO SBC firms that selfcertify a one-year grace period to apply 

for certification. The additional costs to 

VO SBCs and SDVO SBCs for 

certification should be minimal, because 

the required documentation already 

exists and is maintained in the normal 

course of business: such as articles of 

incorporation, bylaws, stock ledgers or 

certificates, tax records, etc. In addition, 

applicants must already provide this 

information to VA’s CVE for 

verification. SBA does not anticipate 

that these changes would impact the 

content of the information currently 

collected. Thus, the Administrator 

certifies that the rulemaking is not 

expected to have a significant economic 

impact on a substantial number of small 

entities. 

List of Subjects 

13 CFR Part 121 

Administrative practice and 

procedure, Government procurement, 

Government property, Grant programs— 

business, Individuals with disabilities, 

Loan programs—business, Small 

businesses. 

13 CFR Part 125 

Government contracts, Government 

procurement, Reporting and 

recordkeeping requirements, Small 

businesses, Technical assistance. 

13 CFR Part 128 

Government contracts, Government 

procurement, Reporting and 

recordkeeping requirements, Small 

businesses, Technical assistance, 

Veterans. 

For the reasons stated in the 

preamble, SBA proposes to amend 13 

CFR chapter I as follows: 

PART 121—SMALL BUSINESS SIZE 

REGULATIONS 

■ 1. The authority citation for part 121 

is revised to read as follows: 

Authority: 15 U.S.C. 632, 634(b)(6), 

636(a)(36), 662, 694a(9), and 9012. 

§ 121.103 [Amended] 

■ 2. Amend § 121.103 by removing the 

references to ‘‘§ 125.18(b)(2) and (3)’’ in 

paragraph (h)(1)(ii) and adding in their 

place a reference to ‘‘§ 128.402(b)(2) and 

(3)’’. 

§ 121.404 [Amended] 

■ 3. Amend § 121.404 by removing the 

reference to ‘‘§ 125.18(b)(2) and (3)’’ in 

paragraph (d) and adding in its place a 

reference to ‘‘§ 128.402(b)(2) and (3)’’. 

PART 125—GOVERNMENT 

CONTRACTING PROGRAMS 

■ 4. The authority citation for part 125 

is revised to read as follows: 

Authority: 15 U.S.C. 632(p), (q), 634(b)(6), 

637, 644, 657b, and 657r. 

Subparts A through F [Removed] 

■ 5. Remove subparts A through F, 

consisting of §§ 125.11 through 125.100. 

■ 6. Add part 128 to read as follows: 

PART 128—VETERANS 

CERTIFICATION PROGRAM 

Subpart A—Provisions of General 

Applicability 

Sec. 

128.100 What is the purpose of this part? 

128.101 What type of assistance is available 

under this part? 

128.102 What definitions are important in 

the Veterans Certification Program? 

Subpart B—Eligibility Requirements for the 

Veterans Certification Program 

Sec. 

128.200 What are the requirements a 

concern must meet to qualify as a VO 

SBC or SDVO SBC? 

128.201 What other eligibility requirements 

apply for individuals or businesses? 

128.202 Who does SBA consider to own a 

VO SBC or SDVO SBC? 

128.203 Who does SBA consider to control 

a VO SBC or SDVO SBC? 

128.204 What size standards apply to VO 

SBCs and SDVO SBCs? 

Subpart C—Certification of VO SBC or 

SDVO SBC Status 

Sec. 

128.300 How is a concern certified as a VO 

SBC or SDVO SBC? 

128.301 Where must an application be 

filed? 

128.302 How does SBA process 

applications for certification? 

128.303 What must a concern submit to 

apply for VO SBC or SDVO SBC 

certification? 

128.304 Can an Applicant appeal SBA’s 

initial decision to deny an application? 

128.305 Can an Applicant or Participant 

reapply for certification? 

128.306 What length of time may a business 

participate in SBA’s Veterans 

Certification Program? 

128.307 What are a Participant’s ongoing 

obligations to SBA? 

128.308 What is a certification examination 

and what will SBA examine? 

128.309 What are the ways a business may 

exit certification status? 

128.310 What are the procedures for 

decertification? 

Subpart D—Federal Contract Assistance 

Sec. 

128.400 What are VO and SDVO contracts? 

128.401 What requirements must a VO SBC 

or SDVO SBC meet to submit an offer on 

a contract? 

128.402 May a joint venture submit an offer 

on a VO SBC or SDVO SBC requirement? 

128.403 What requirements are not 

available for VO or SDVO contracts? 

128.404 When may a contracting officer set 

aside a procurement for VO SBCs or 

SDVO SBCs? 

128.405 When may a contracting officer 

award sole source contracts to VO SBCs 

and SDVO SBCs? 

128.406 Are there VO or SDVO contracting 

opportunities at or below the simplified 

acquisition threshold? 

128.407 May SBA appeal a contracting 

officer’s decision not to make a 

procurement available for award as an 

SDVO contract? 

128.408 What is the process for such an 

appeal? 

Subpart E—Protests Concerning VO SBCs 

and SDVO SBCs 

Sec. 

128.500 What are the requirements for 

filing a VO SBC and SDVO SBC status 

protest? 


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Subpart F—Penalties and Retention of 

Records 

Sec. 

128.600 What are the requirements for 

representing VO SBC or SDVO SBC 

status, and what are the penalties for 

misrepresentation? 

128.601 What must a concern do in order 

to be identified as a SDVO SBC in any 

Federal procurement databases? 

Subpart G—Surplus Personal Property for 

Veteran-Owned Small Business Programs 

Sec. 

128.700 How does a small business concern 

owned and controlled by veterans obtain 

Federal surplus personal property? 

Authority: 15 U.S.C. 632(q), 634(b)(6), 644, 

645, 657f, 657f–1. 

Subpart A—Provisions of General 

Applicability 

§ 128.100 What is the purpose of this part? 

Section 8127 of Title 38 within the 

U.S. Code (38 U.S.C. 8127) authorizes 

certain procurement mechanisms to 

provide Veteran-Owned Small Business 

Concerns (VO SBC) and ServiceDisabled Veteran-Owned Small 

Business Concerns (SDVO SBC) with 

contracting assistance opportunities at 

the Department of Veterans Affairs (VA). 

Section 36 of the Small Business Act (15 

U.S.C. 657f) authorizes certain 

procurement mechanisms to provide 

SDVO SBCs with contracting assistance 

opportunities across the Federal 

Government. In addition, sections 36 

and 36A of the Small Business Act (15 

U.S.C. 657f,657f–1) authorize the Small 

Business Administration (SBA) to 

certify the status of VO and SDVO SBCs. 

This part implements these mechanisms 

and ensures that the program created, 

referred to as the Veterans Certification 

Program, is substantially related to this 

important congressional goal in 

accordance with applicable law. 

§ 128.101 What type of assistance is 

available under this part? 

Contracting officers are authorized to 

restrict competition or award sole 

source contracts or orders to eligible 

Service-Disabled Veteran-Owned Small 

Businesses. In addition, 48 CFR chapter 

8 authorizes VA contracting officers to 

restrict competition or award sole 

source contracts or orders to eligible 

Veteran-Owned and Service-Disabled 

Veteran-Owned Small Businesses. 

§ 128.102 What definitions are important in 

the Veterans Certification Program? 

Applicant means a firm applying for 

inclusion in the certification database. 

Contracting officer has the meaning 

given such term in section 2101 of the 

Office of Federal Procurement Policy 

Act (41 U.S.C. 2101). 

Day-to-day operations of a firm means 

the marketing, production, sales, and 

administrative functions of the firm. 

Eligible individual means a veteran, 

service-disabled veteran, or surviving 

spouse, as defined in the United States 

Code and this part. 

ESOP has the meaning given the term 

‘‘employee stock ownership plan’’ in 

section 4975(e)(7) of the Internal 

Revenue Code of 1986 (26 U.S.C. 

4975(e)(7)). 

Extraordinary circumstances, for 

purposes of this part, are only the 

following: 

(1) Adding a new equity stakeholder; 

(2) Dissolution of the company; 

(3) Sale of the company; 

(4) The merger of the company; and 

(5) Company declaring bankruptcy. 

Interested party means the contracting 

activity’s contracting officer, SBA, any 

concern that submits an offer for a 

specific sole source or set-aside VO or 

SDVO contract or order (including 

Multiple Award Contracts), or any 

concern that submitted an offer in full 

and open competition and its 

opportunity for award will be affected 

by a reserve of an award given to a VO 

or SDVO SBC. 

Joint venture is an association of two 

or more business concerns for which 

purpose they combine their efforts, 

property, money, skill, or knowledge in 

accordance with this part. A joint 

venture must be comprised of at least 

one service-disabled veteran-owned (or 

veteran-owned as applicable) small 

business. For VA contracts, a joint 

venture must be in the form of a 

separate legal entity. 

Negative control includes, but is not 

limited to, instances where a minority 

shareholder has the ability, under the 

concern’s charter, by-laws, or 

shareholder’s agreement, to prevent a 

quorum or otherwise block action by the 

board of directors or shareholders. 

Non-veteran means any individual 

who does not claim veteran status, or 

upon whose status an Applicant or 

Participant does not rely in qualifying 

for certification. 

Participant means a veteran-owned or 

service-disabled veteran-owned small 

business concern that has certified 

status with SBA. 

Permanent caregiver, for purposes of 

this part, is the spouse, or an individual, 

18 years of age or older, who is legally 

designated, in writing, to undertake 

responsibility for managing the wellbeing of the service-disabled veteran 

with a permanent and severe disability, 

as determined by the Department of 

Veterans Affairs’ Veterans Benefits 

Administration, to include housing, 

health and safety. A permanent 

caregiver may, but does not need to, 

reside in the same household as the 

service-disabled veteran with a 

permanent and severe disability. In the 

case of a service-disabled veteran with 

a permanent and severe disability 

lacking legal capacity, the permanent 

caregiver shall be a parent, guardian, or 

person having legal custody. There may 

be no more than one permanent 

caregiver per service-disabled veteran 

with a permanent and severe disability. 

(1) A permanent caregiver may be 

appointed, in a number of ways, 

including: 

(i) By a court of competent 

jurisdiction; 

(ii) By the Department of Veterans 

Affairs, National Caregiver Support 

Program, as the Primary Family 

Caregiver of a Veteran participating in 

the Program of Comprehensive 

Assistance for Family Caregivers (this 

designation is subject to the Veteran and 

the caregiver meeting other specific 

criteria as established by law and the 

Secretary and may be revoked if the 

eligibility criteria do not continue to be 

met); or 

(iii) By a legal designation. 

(2) Any appointment of a permanent 

caregiver must in all cases be 

accompanied by a written determination 

from the Department of Veterans Affairs 

that the veteran has a permanent and 

total service-connected disability as set 

forth in 38 CFR 3.340 for purposes of 

receiving disability compensation or a 

disability pension. The appointment 

must also delineate why the permanent 

caregiver is given the appointment, 

must include the consent of the veteran 

to the appointment and how the 

appointment would contribute to 

managing the veteran’s well-being. 

Primary industry classification means 

the six-digit North American Industry 

Classification System (NAICS) code 

designation which best describes the 

primary business activity of the 

Participant. The NAICS code 

designations are described in the NAICS 

Manual published by the U.S. Office of 

Management and Budget. 

Principal place of business means the 

business location where the individuals 

who manage the concern’s day-to-day 

day operations spend most working 

hours and where top management’s 

current business records are kept. If the 

office from which management is 

directed and where the current business 

records are kept are in different 

locations, SBA will determine the 

principal place of business for program 

purposes. 

Service-connected has the meaning 

given that term in 38 U.S.C. 101(16). 


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Service-disabled veteran is a veteran 

who possesses either a valid disability 

rating letter issued by the Department of 

Veterans Affairs, establishing a serviceconnected rating between 0 and 100 

percent, or a valid disability 

determination from the Department of 

Defense or is registered in the 

Beneficiary Identification and Records 

Locator Subsystem or successor system, 

maintained by Department of Veterans 

Affairs’ Veterans Benefits 

Administration as a service-disabled 

veteran. Reservists or members of the 

National Guard disabled from a disease 

or injury incurred or aggravated in line 

of duty or while in training status also 

qualify. 

Service-disabled veteran with a 

permanent and severe disability means 

a veteran with a service-connected 

disability that has been determined by 

the Department of Veterans Affairs, in 

writing, to have a permanent and total 

service-connected disability as set forth 

in 38 CFR 3.340 for purposes of 

receiving disability compensation or a 

disability pension. 

Small business concern means, at the 

time of qualification, a concern that, 

with its affiliates, meets the size 

standard corresponding to any NAICS 

code under which it currently conducts 

business activities, pursuant to part 121 

of this chapter. At time of contract offer, 

a VO or SDVO SBC must be small 

within the size standard corresponding 

to the NAICS code assigned to the 

contract. 

Surviving spouse has the meaning 

given the term in 38 U.S.C. 101(3). 

Unconditional ownership means 

ownership that is not subject to 

conditions precedent, conditions 

subsequent, executory agreements, 

voting trusts, restrictions on or 

assignments of voting rights, or other 

arrangements causing or potentially 

causing ownership benefits to go to 

another (other than after death or 

incapacity). The pledge or encumbrance 

of stock or other ownership interest as 

collateral, including seller-financed 

transactions, does not affect the 

unconditional nature of ownership if 

the terms follow normal commercial 

practices and the owner retains control 

absent violations of the terms. 

VA is the U.S. Department of Veterans 

Affairs. 

Veteran has the meaning given the 

term in 38 U.S.C. 101(2). A Reservist or 

member of the National Guard called to 

Federal active duty or disabled from a 

disease or injury incurred or aggravated 

in line of duty or while in training 

status also qualifies as a veteran. 

Veterans Affairs Acquisition 

Regulation (VAAR) is the set of rules 

that specifically govern requirements 

exclusive to VA prime and 

subcontracting actions. The VAAR, 48 

CFR chapter 8, supplements the Federal 

Acquisition Regulation (FAR) in 48 CFR 

chapter 1, which contains guidance 

applicable to most Federal agencies. 

Subpart B—Eligibility Requirements 

for the Veterans Certification Program 

§ 128.200 What are the requirements a 

concern must meet to qualify as a VO SBC 

or SDVO SBC? 

(a) Qualification as a Veteran-Owned 

Small Business Concern. To qualify as a 

VO SBC, a business entity must be: 

(1) A small business concern under 

the size standard corresponding to any 

NAICS code under which it currently 

conducts business activities; 

(2) Not less than 51 percent of which 

is owned by one or more veterans or, in 

the case of any publicly owned 

business, not less than 51 percent of the 

stock (not including any stock owned by 

an ESOP) of which is owned by one or 

more veterans; and 

(3) The management and daily 

business operations of which are 

controlled by one or more veterans. 

(b) Qualification as a Service-Disabled 

Veteran-Owned SBC. To qualify as an 

SDVO SBC, a business entity must be: 

(1) A small business concern under 

the size standard corresponding to any 

NAICS code under which it currently 

conducts business activities; 

(2) Not less than 51 percent of which 

is owned by one or more servicedisabled veterans or, in the case of any 

publicly-owned business, not less than 

51 percent of the stock (not including 

any stock owned by an ESOP) of which 

is owned by one or more servicedisabled veterans; and 

(3) The management and daily 

business operations of which are 

controlled by one or more servicedisabled veterans or, in the case of a 

veteran with a disability that is rated by 

the Secretary of Veterans Affairs as a 

permanent and total disability who are 

unable to manage the daily business 

operations of such concern, the spouse 

or permanent caregiver of such veteran. 

(c) Veteran-Owned SBC and ServiceDisabled Veteran-Owned SBC 

certifications. (1) A concern must be 

certified as a VO or SDVO SBC pursuant 

to § 128.300 in order to be awarded a 

VO or SDVO set-aside or sole source 

contract. 

(2) Other small business concerns that 

do not seek SDVO set-aside or sole 

source contracts may continue to selfcertify their status, receive prime 

contract or subcontract awards outside 

the programs, and count toward an 

agency’s goal for awards. 

§ 128.201 What other eligibility 

requirements apply for individuals or 

businesses? 

(a) Suspension and debarment. In 

order to be eligible for VO or SDVO SBC 

certification and to remain certified, the 

concern and any of its owners must not 

have an active exclusion in the System 

for Award Management at the time of 

application or recertification or at any 

time during the concern’s period of 

eligibility. If, after certifying the 

Participant’s eligibility, SBA discovers 

that a firm has an active exclusion, SBA 

will remove the Participant from the 

certification database immediately, 

notwithstanding the provisions of 

§ 128.308. 

(b) Good character. Individuals 

having an ownership or control interest 

in certified businesses must have good 

character. If, after certifying a 

Participant’s eligibility, the person(s) 

controlling the Participant is found to 

lack good character, SBA will 

immediately terminate the Participant’s 

certification, notwithstanding the 

provisions of § 128.310. 

(c) False statements. If, during the 

processing of an application, SBA 

determines, by a preponderance of the 

evidence standard, that an Applicant 

has knowingly submitted false 

information, regardless of whether 

correct information would cause SBA to 

deny the application, and regardless of 

whether correct information was given 

to SBA in accompanying documents, 

SBA will deny the application. If, after 

certifying the Participant’s eligibility, 

SBA discovers that false statements or 

information have been submitted by a 

firm, SBA will remove the Participant 

from the certification database 

immediately, notwithstanding the 

provisions of § 128.310. Whenever SBA 

determines that the Applicant submitted 

false information, the matter will be 

referred to the SBA Office of Inspector 

General for review. In addition, SBA 

may request that debarment proceedings 

be initiated by the agency. 

(d) Financial obligations. Neither an 

Applicant firm nor any of its eligible 

individuals that fail to pay significant 

financial obligations, including 

unresolved tax liens and defaults on 

Federal loans, other governmentassisted financing, owed to the Federal 

Government is eligible for certification. 

However, a firm will not be ineligible to 

participate in the Veterans Certification 

Program if the firm or the affected 

principals can demonstrate that the 

financial obligations owed have been 

settled, discharged, or forgiven by the 

Federal Government. If after certifying 

the Participant’s eligibility SBA 

discovers that the Participant no longer 


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satisfies this requirement, SBA will 

remove the Participant from the 

certification database in accordance 

with § 128.310. 

(e) Protest decisions or other negative 

findings. Any firm verified in the 

certification database that is found to be 

ineligible by a VO or SDVO status 

protest decision will be immediately 

removed from the certification database, 

notwithstanding the provisions of 

§ 128.310. Any firm certified in the 

certification database that is found to be 

ineligible due to an SBA protest 

decision or other negative finding may 

be immediately removed from the 

certification database, notwithstanding 

the provisions of § 128.310. Until such 

time as SBA receives official 

notification that the decision is 

overturned on appeal or the firm applies 

for and receives certified status from 

SBA, the firm will not be eligible to 

participate in the Veterans Certification 

Program. 

(f) System for Award Management 

(SAM) registration. All Applicants and 

Participants must be registered in SAM 

at https://www.sam.gov, or successor 

system, prior to application submission. 

§ 128.202 Who does SBA consider to own 

a VO SBC or SDVO SBC? 

Generally, a concern must be at least 

51% unconditionally and directly 

owned by one or more veterans, or in 

the case of an SDVO SBC, servicedisabled veterans. More specifically: 

(a) Ownership must be direct. 

Ownership by one or more veterans, or 

in the case of an SDVO SBC, servicedisabled veterans, must be direct 

ownership. A concern owned 

principally by another business entity 

that is in turn owned and controlled by 

one or more veterans or service-disabled 

veterans does not meet the requirement 

in this paragraph (a). Ownership by a 

trust, such as a living trust, may be 

treated as the functional equivalent of 

ownership by veterans or servicedisabled veterans where the trust is 

revocable, and veterans or servicedisabled veterans, respectively, are the 

grantors, trustees, and the current 

beneficiaries of the trust. 

(b) Ownership of a partnership. In the 

case of a concern which is a 

partnership, at least 51% of aggregate 

voting interest must be unconditionally 

owned by one or more veterans, or in 

the case of an SDVO SBC, servicedisabled veterans. The ownership must 

be reflected in the concern’s partnership 

agreement. 

(c) Ownership of a limited liability 

company. In the case of a concern 

which is a limited liability company, at 

least 51% of each class of member 

interest must be unconditionally owned 

by one or more veterans, or in the case 

of an SDVO SBC, service-disabled 

veterans. 

(d) Ownership of a corporation. In the 

case of a concern which is a 

corporation, at least 51% of the 

aggregate of all stock outstanding and at 

least 51% of each class of voting stock 

outstanding must be unconditionally 

owned by one or more veterans, or in 

the case of an SDVO SBC, servicedisabled veterans. In the case of a 

publicly-owned business, not less than 

51 percent of the stock (not including 

any stock owned by an ESOP) must be 

unconditionally owned by one or more 

veterans. 

(e) Stock options’ effect on ownership. 

In determining unconditional 

ownership, SBA will disregard any 

unexercised stock options or similar 

agreements held by veterans, or in the 

case of an SDVO SBC, service-disabled 

veterans. However, any unexercised 

stock options or similar agreements 

(including rights to convert non-voting 

stock or debentures into voting stock) 

held by non-veterans or non-servicedisabled veterans, in the case of an 

SDVO SBC, will be treated as exercised, 

except for any ownership interests 

which are held by investment 

companies licensed under 15 U.S.C. 681 

et seq. 

(f) Change of ownership. A concern 

may change its ownership or business 

structure so long as one or more 

veterans, or in the case of an SDVO SBC, 

service-disabled veterans own and 

control it after the change. A concern 

must notify SBA of a change of 

ownership in accordance with § 128.307 

and attest to continued eligibility. 

(g) Dividends and distributions. One 

or more veterans or, in the case of an 

SDVO SBC, service-disabled veterans 

must be entitled to receive: 

(1) At least 51 percent of the annual 

distribution of profits paid to the 

owners of a corporation, partnership, or 

limited liability company concern; 

(2) 100 percent of the value of each 

share of stock owned by them in the 

event that the stock or member interest 

is sold; 

(3) At least 51 percent of the retained 

earnings of the concern and 100 percent 

of the unencumbered value of each 

share of stock or member interest owned 

in the event of dissolution of the 

corporation, partnership, or limited 

liability company; and 

(4) An eligible individual’s ability to 

share in the profits of the concern must 

be commensurate with the extent of his/ 

her ownership interest in that concern. 

(h) Community property. Ownership 

will be determined without regard to 

community property laws. 

(i) Surviving spouse. (1) A small 

business concern owned and controlled 

by one or more service-disabled 

veterans immediately prior to the death 

of a service-disabled veteran who was 

the owner of the concern, the death of 

whom causes the concern to be less than 

51 percent owned by one or more 

service-disabled veterans, will continue 

to qualify as a small business concern 

owned and controlled by servicedisabled veterans during the time period 

specified in paragraph (i)(2) of this 

section if: 

(i) The surviving spouse of the 

deceased veteran acquires such 

veteran’s ownership interest in such 

concern; 

(ii) Such veteran had a serviceconnected disability (as defined in 38 

U.S.C. 101(16)); and 

(iii) For a Participant, immediately 

prior to the death of such veteran, and 

during the period described in 

paragraph (i)(2) of this section, the small 

business concern is included in the 

certification database. 

(2) The time period described in 

paragraph (i)(1)(iii) of this section is the 

time period beginning on the date of the 

veteran’s death and ending on the 

earlier of— 

(i) The date on which the surviving 

spouse remarries; 

(ii) The date on which the surviving 

spouse relinquishes an ownership 

interest in the small business concern; 

(iii) In the case of a surviving spouse 

of a veteran with a service-connected 

disability rated as 100 percent disabling 

or who dies as a result of a serviceconnected disability, is 10 years after 

the date of the death of the veteran; or 

(iv) In the case of a surviving spouse 

of a veteran with a service-connected 

disability rated as less than 100 percent 

disabling who does not die as a result 

of a service-connected disability, is 3 

years after the date of the death of the 

veteran. 

§ 128.203 Who does SBA consider to 

control a VO or SDVO SBC? 

(a) General. To be an eligible VO SBC, 

the management and daily business 

operations of the concern must be 

controlled by one or more veterans. To 

be an eligible SDVO SBC, the 

management and daily business 

operations of the concern must be 

controlled by one or more servicedisabled veterans (or in the case of a 

veteran with permanent and severe 

disability, the spouse or permanent 

caregiver of such veteran). Control by 

one or more veterans, or in the case of 


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an SDVO SBC, service-disabled 

veterans, means that both the long-term 

decision-making and the day-to-day 

management and administration of the 

business operations must be conducted 

by one or more veterans or servicedisabled veterans (or in the case of a 

veteran with permanent and severe 

disability, the spouse or permanent 

caregiver of such veteran). 

(b) Managerial position and 

experience. A veteran, or in the case of 

an SDVO SBC, a service-disabled 

veteran (or in the case of a servicedisabled veteran with permanent and 

severe disability, the spouse or 

permanent caregiver of such veteran) 

must hold the highest officer position in 

the concern (usually President or Chief 

Executive Officer (CEO)) and must have 

managerial experience of the extent and 

complexity needed to run the concern. 

The veteran or service-disabled veteran 

manager (or in the case of a veteran with 

permanent and severe disability, the 

spouse or permanent caregiver of such 

veteran) need not have the technical 

expertise or possess the required license 

to be found to control the concern if the 

veteran or service-disabled veteran can 

demonstrate that he or she has ultimate 

managerial and supervisory control over 

those who possess the required licenses 

or technical expertise. 

(c) Control over a partnership. In the 

case of a partnership, one or more 

veterans, or in the case of an SDVO SBC, 

service-disabled veterans (or in the case 

of a veteran with permanent and severe 

disability, the spouse or permanent 

caregiver of such veteran) must serve as 

general partners, with control over all 

partnership decisions. 

(d) Control over a limited liability 

company. In the case of a limited 

liability company, one or more veterans, 

or in the case of an SDVO SBC, servicedisabled veterans (or in the case of a 

veteran with permanent or severe 

disability, the spouse or permanent 

caregiver of such veteran) must serve as 

management members, with control 

over all decisions of the limited liability 

company. 

(e) Control over a corporation. One or 

more veterans, or in the case of an 

SDVO SBC, service-disabled veterans 

(or in the case of a veteran with 

permanent and severe disability, the 

spouse or permanent caregiver of such 

veteran) must control the Board of 

Directors of the concern. 

(1) SBA will deem veteran or servicedisabled veteran individuals to control 

the Board of Directors where: 

(i) A single veteran or service-disabled 

veteran individual owns 100% of all 

voting stock of an Applicant or concern; 

(ii) A single veteran or servicedisabled veteran individual owns at 

least 51% of all voting stock of an 

Applicant or concern, the individual is 

on the Board of Directors and no super 

majority voting requirements exist for 

shareholders to approve corporation 

actions. Where super majority voting 

requirements are provided for in the 

concern’s articles of incorporation, its 

by-laws, or by state law, the veteran or 

service-disabled veteran individual 

must own at least the percent of the 

voting stock needed to overcome any 

such super majority voting 

requirements; or 

(iii) More than one veteran, or in the 

case of an SDVO SBC, service-disabled 

veteran shareholder seeks to qualify the 

concern (i.e., no one individual owns 

51%), each such individual is on the 

Board of Directors, together they own at 

least 51% of all voting stock of the 

concern, no super majority voting 

requirements exist, and the veteran or 

service-disabled veteran shareholders 

can demonstrate that they have made 

enforceable arrangements to permit one 

of them to vote the stock of all as a block 

without a shareholder meeting. Where 

the concern has super majority voting 

requirements, the veteran or servicedisabled veteran shareholders must own 

at least that percentage of voting stock 

needed to overcome any such super 

majority ownership requirements. In the 

case of super majority ownership 

requirements where there is more than 

one eligible individual, the veteran or 

service-disabled veteran shareholders 

can demonstrate that they have made 

enforceable arrangements to permit one 

of them to vote the stock of all as a block 

without a shareholder meeting. 

(2) Where an Applicant or concern 

does not meet the requirements set forth 

in paragraph (e)(1) of this section, the 

veteran or service-disabled veteran 

individual(s) upon whom eligibility is 

based must control the Board of 

Directors through actual numbers of 

voting directors or, where permitted by 

state law, through weighted voting (e.g., 

in a concern having a two-person Board 

of Directors where one individual on the 

Board is a veteran or service-disabled 

veteran and one is not, the veteran or 

service-disabled veteran vote must be 

weighted—worth more than one vote— 

in order for the concern to be eligible). 

Where a concern seeks to comply with 

this paragraph (e)(2): 

(i) Provisions for the establishment of 

a quorum cannot permit non-veteran or, 

in the case of an SDVO SBC, nonservice-disabled veteran Directors to 

control the Board of Directors, directly 

or indirectly; and 

(ii) Any Executive Committee of 

Directors must be controlled by veteran 

or, in the case of an SDVO SBC, servicedisabled veteran directors unless the 

Executive Committee can only make 

recommendations to and cannot 

independently exercise the authority of 

the Board of Directors. 

(3) Non-voting, advisory, or honorary 

Directors may be appointed without 

affecting veteran or service-disabled 

veteran individuals’ control of the Board 

of Directors. 

(4) Arrangements regarding the 

structure and voting rights of the Board 

of Directors must comply with 

applicable state law. 

(f) Super majority requirements. One 

or more veteran or, in the case of an 

SDVO SBC, service-disabled veterans 

must meet all super majority voting 

requirements, regardless of legal 

structure of the Applicant firm. An 

Applicant must inform the SBA, when 

applicable, of any super majority voting 

requirements provided for in its articles 

of incorporation, its by-laws, by state 

law, or otherwise. Similarly, after being 

certified, a Participant must inform the 

SBA of changes regarding super 

majority voting requirements. 

(g) Licenses. A firm must obtain and 

keep current any and all required 

permits, licenses, and charters, required 

to operate the business. 

(h) Unexercised rights. A veteran or, 

in the case of an SDVO SBC, servicedisabled veteran owner’s unexercised 

right to cause a change in the control or 

management of the Applicant concern 

does not in itself constitute control and 

management, regardless of how quickly 

or easily the right could be exercised. 

(i) Control by non-veterans or nonservice-disabled veterans. Non-veteran, 

or in the case of an SDVO SBC, nonservice-disabled veteran individuals or 

entities may not control the firm. There 

is a rebuttable presumption that nonveteran or, in the case of an SDVO SBC, 

non-service-disabled veteran 

individuals or entities control or have 

the power to control a firm in any of the 

following circumstances, which are 

illustrative only and not inclusive: 

(1) The non-veteran or, in the case of 

an SDVO SBC, non-service-disabled 

veteran individual or entity who is 

involved in the management or 

ownership of the firm is a current or 

former employer or a principal of a 

current or former employer of any 

veteran, in the case of an SDVO SBC, 

service-disabled veteran individual 

upon whom the firm’s eligibility is 

based. However, a firm may provide 

evidence to demonstrate that the 

relationship does not give the nonveteran or non-service-disabled veteran 


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actual control over the concern and 

such relationship is in the best interests 

of the concern. 

(2) One or more non-veterans or, in 

the case of an SDVO SBC, non-servicedisabled veterans receive compensation 

from the firm in any form as directors, 

officers, or employees, including 

dividends, that exceeds the 

compensation to be received by the 

highest-ranking officer (usually CEO or 

President). The highest-ranking officer 

may elect to take a lower amount than 

the total compensation and distribution 

of profits that are received by a nonveteran or, in the case of an SDVO SBC, 

non-service-disabled veteran only upon 

demonstrating that it helps the concern. 

(3) In circumstances where the 

concern is co-located with another firm 

in the same or similar line of business, 

and that firm or an owner, director, 

officer, or manager, or a direct relative 

of an owner, director, officer, or 

manager of that firm owns an equity 

interest in the concern. 

(4) In circumstances where the 

concern shares employees, resources, 

equipment, or any type of services, 

whether by oral or written agreement 

with another firm in the same or similar 

line of business, and that firm or an 

owner, director, officer, or manager, or 

a direct relative of an owner, director, 

officer, or manager of that firm owns an 

equity interest in the concern. 

(5) A non-veteran or, in the case of an 

SDVO SBC, non-service-disabled 

veteran individual or entity, having an 

equity interest in the concern, provides 

critical financial or bonding support. 

(6) In circumstances where a critical 

license is held by a non-veteran or, in 

the case of an SDVO SBC, non-servicedisabled individual, or other entity, the 

non-veteran or non-service-disabled 

individual or entity may be found to 

control the firm. A critical license is 

considered any license that would 

normally be required of firms operating 

in the same field or industry, regardless 

of whether a specific license is required 

on a specific contract. 

(7) Business relationships exist with 

non-veteran or, in the case of an SDVO 

SBC, non-service-disabled veteran 

individuals or entities which cause such 

dependence that the Applicant or 

concern cannot exercise independent 

business judgment without great 

economic risk. 

(j) Critical financing. A non-veteran 

or, in the case of an SDVO SBC, nonservice-disabled veteran individual or 

entity may be found to control the 

concern through loan arrangements with 

the concern or the veteran(s)/servicedisabled veteran(s). Providing a loan or 

a loan guaranty on commercially 

reasonable terms does not, by itself, give 

a non-veteran or non-service-disabled 

veteran individual or entity the power 

to control a firm, but when taken into 

consideration with other factors may be 

used to find that a non-veteran or, in the 

case of an SDVO SBC, non-servicedisabled veteran firm or individual 

controls the concern. 

(k) Normal business hours. There is a 

rebuttable presumption that a veteran 

or, in the case of an SDVO SBC, servicedisabled veteran does not control the 

firm when the veteran or, in the case of 

an SDVO SBC, service-disabled veteran 

is not able to work for the firm during 

the normal working hours that 

businesses in that industry normally 

work. This may include, but is not 

limited to, other full-time or part-time 

employment, being a full-time or parttime student, or any other activity or 

obligation that prevents the veteran or, 

in the case of an SDVO SBC, servicedisabled veteran from actively working 

for the firm during normal business 

operating hours. 

(l) Close proximity. There is rebuttable 

presumption that a veteran or, in the 

case of an SDVO SBC, service-disabled 

veteran does not control the firm if that 

individual is not located within a 

reasonable commute to firm’s 

headquarters and/or job-sites locations, 

regardless of the firm’s industry. The 

veteran or, in the case of an SDVO SBC, 

service-disabled veteran’s ability to 

answer emails, communicate by 

telephone, or to communicate at a 

distance by other technological means, 

while delegating the responsibility of 

managing the concern to others is not by 

itself a reasonable rebuttal. 

(m) Exception for ‘‘extraordinary 

circumstances.’’ SBA will not find that 

a lack of control exists where a veteran 

or, in the case of an SDVO SBC, servicedisabled veteran does not have the 

unilateral power and authority to make 

decisions in ‘‘extraordinary 

circumstances.’’ The only circumstances 

in which the exception in this 

paragraph (m) applies are those 

articulated in the definition of the term 

in § 128.102. 

(n) Exception for active duty. 

Notwithstanding the provisions of this 

section requiring a veteran or, in the 

case of an SDVO SBC, service-disabled 

veteran to control the daily business 

operations and long-term strategic 

planning of a concern, where a veteran 

or, in the case of an SDVO SBC, servicedisabled veteran individual upon whom 

eligibility is based is a reserve 

component member in the United States 

military who has been called to active 

duty, the concern may elect to designate 

in writing one or more individuals to 

control the concern on behalf of the 

veteran or, in the case of an SDVO SBC, 

service-disabled veteran during the 

period of active duty. The concern will 

not be considered ineligible based on 

the absence of the veteran or servicedisabled veteran during the period of 

active duty. The concern must keep 

records evidencing the active duty and 

the written designation of control and 

provide those documents to SBA. 

§ 128.204 What size standards apply to VO 

SBCs and SDVO SBCs? 

(a) At time of contract offer, a VO or 

SDVO SBC must be small within the 

size standard corresponding to the 

NAICS code assigned to the contract. 

(b) If the contracting officer is unable 

to verify that the VO or SDVO SBC is 

small, the concern shall be referred to 

the responsible SBA Government 

Contracting Area Director for a formal 

size determination in accordance with 

part 121 of this chapter. 

Subpart C—Certification of VO SBC or 

SDVO SBC Status 

§ 128.300 How is a concern certified as a 

VO SBC or SDVO SBC? 

(a) A small business concern must be 

unconditionally owned and controlled 

by one or more eligible veterans, in the 

case of an SDVO SBC, service-disabled 

veterans or surviving spouses, have 

completed the online application forms, 

submitted required supplemental 

documentation to SBA, and have been 

examined by SBA. 

(b) A certified Participant in SBA’s 

8(a) Business Development (BD) 

Program that is owned and controlled 

by one or more veterans, or in the case 

of SDVO SBC, service-disabled veterans. 

The eligible individual(s) for both 

designations must be the same 

individual(s) to receive expedited 

review. 

(c) A certified Participant in SBA’s 

Women Owned Small Business (WOSB) 

or Economically Disadvantaged WOSB 

(EDWOSB) Program that is owned and 

controlled by one or more veterans, or 

in the case of SDVO SBC, servicedisabled veterans. The eligible 

individual(s) for both designations must 

be the same individual(s) to receive 

expedited review. 

§ 128.301 Where must an application be 

filed? 

An application for certification must 

be electronically filed in the database 

located on SBA’s web portal. Guidelines 

and forms are located on the web portal. 

Upon receipt of the Applicant’s 

electronic submission, an 

acknowledgment message will be 

dispatched to the concern containing 


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estimated processing time and other 

information. 

§ 128.302 How does SBA process 

applications for certification? 

(a) SBA’s Director of Government 

Contracting (D/GC) or designee is 

authorized to approve or deny 

applications for certification. SBA will 

receive, review, and examine all 

certification applications. 

(b) SBA, in its sole discretion, may 

request clarification of information 

relating to eligibility at any time in the 

eligibility determination process. SBA 

will take into account any clarifications 

made by an Applicant in response to a 

request for such SBA. 

(c) SBA, in its sole discretion, may 

request additional documentation at any 

time in the eligibility determination 

process. Failure to adequately respond 

to the documentation request shall 

constitute grounds for a denial or 

administrative removal. 

(d) An Applicant’s eligibility will be 

based on the totality of circumstances 

existing on the date of application, 

except where clarification is made 

pursuant to paragraph (b) of this section, 

additional documentation is submitted 

pursuant to paragraph (c) of this section, 

as provided in paragraph (e) of this 

section or in the case of amended 

documentation submitted pursuant to 

§ 128.304(a). The Applicant bears the 

burden to establish its status as a VO 

SBC or SDVO SBC. 

(e) Changed circumstances for an 

Applicant occurring subsequent to its 

application and which affect eligibility 

will be considered and may constitute 

grounds for denial of the application. 

The Applicant must inform SBA of any 

changed circumstances that could affect 

its eligibility for the program (e.g., 

ownership, control changes, or 

bankruptcy filing) during its application 

review and may withdraw their 

application at that time. The D/GC may 

propose decertification for any VO SBC 

or SDVO SBC that failed to inform SBA 

of any changed circumstances that 

affected its eligibility for the program 

during the processing of the application. 

(f) The decision of the D/GC to 

approve or deny an application will be 

in writing. A decision to deny 

certification status will state the specific 

reasons for denial and will inform the 

Applicant of any appeal rights. 

(g) If the D/GC approves the 

application, the date of the approval 

letter is the date of Participant 

certification for purposes of determining 

the Participant’s certification term of 

eligibility. For approvals contingent on 

reciprocity due to participation in SBA’s 

other certification programs (e.g., WOSB 

or 8(a)), the approval letter will contain 

a date for the Vets Program certification 

which aligns with the remaining time in 

the other program(s) in which the 

Applicant is participating. 

(h) The decision may be sent by mail, 

commercial carrier, or other electronic 

means. It is the responsibility of the 

Applicant to ensure all contact 

information is current in the Applicant’s 

profile. 

§ 128.303 What must a concern submit to 

apply for VO SBC or SDVO SBC 

certification? 

(a) To be certified by SBA as a VO or 

SDVO SBC, a concern must provide 

documents and information 

demonstrating that it is owned and 

controlled by one or more veterans or, 

in the case of an SDVO SBC, servicedisabled veterans and qualifies as a 

small business concern as defined in 

part 121 of this chapter under the size 

standard corresponding to any NAICS 

code under which it currently conducts 

business activities. SBA maintains a list 

of the minimum required documents 

that can be found on SBA’s website. A 

concern may submit additional 

documents and information to support 

its eligibility. The required documents 

must be provided to SBA during the 

application process electronically. This 

may include, but is not limited to, 

corporate records, business and 

personal financial records, including 

copies of Federal personal and business 

tax returns as filed with the Internal 

Revenue Service, and individual and 

business banking information. From the 

time the Applicant submits the 

application, the Applicant must also 

retain on file, at the principal place of 

business, a complete copy of all 

supplemental documentation required 

by, and provided to, SBA for use in 

certification examinations. 

(b) A small business concern that is 

certified by the 8(a) BD Program and the 

individual(s) on whom 8(a) BD Program 

eligibility is based is one or more 

veterans, or service-disabled veterans in 

the case of an SDVO SBC, may use 

documentation of its most recent annual 

review, or documentation of its 8(a) 

acceptance if it has not yet had an 

annual review, in support of its 

application for certification. An 

Applicant must certify that there are no 

material changes in its ownership or 

control since its 8(a) certification or 

annual review and demonstrate that the 

individuals who own and control it are 

veterans or, in the case of an SDVO SBC, 

service-disabled veterans. 

(c) A small business concern that is 

certified by the WOSB/EDWOSB 

Program and the individual(s) on whom 

WOSB/EDWOSB Program eligibility is 

based is one or more veterans, or 

service-disabled veterans in the case of 

an SDVO SBC, may use documentation 

of its most recent annual recertification, 

or documentation of its acceptance in 

support of its application for 

certification. An Applicant must certify 

that there are no material changes in its 

ownership or control since its WOSB 

certification or recertification and 

demonstrate that the individuals who 

own and control it are veterans or, in 

the case of an SDVO SBC, servicedisabled veterans. 

(d) If a concern was decertified or 

previously denied certification within 

the past 3 years, it must include with its 

application for certification a full 

explanation of why it was decertified or 

denied certification, and what, if any, 

changes have been made. If SBA is not 

satisfied with the explanation provided, 

SBA will decline to certify the concern. 

(e) If the concern was decertified for 

failure to notify SBA of a material 

change affecting its eligibility pursuant 

to § 128.307, it must include with its 

application for certification a full 

explanation of why it failed to notify 

SBA of the material change. If SBA is 

not satisfied with the explanation 

provided, SBA will decline to certify the 

concern. 

§ 128.304 Can an Applicant appeal SBA’s 

initial decision to deny an application? 

(a) An Applicant may appeal SBA’s 

decision to deny an application by filing 

an appeal with the SBA’s Office of 

Hearings and Appeals (OHA) after the 

Applicant receives the denial in 

accordance with part 134 of this 

chapter. The filing party bears the risk 

that the delivery method chosen will 

not result in timely receipt by OHA. 

(b) The decision may be sent by mail, 

commercial carrier, or other electronic 

means. 

§ 128.305 Can an Applicant or Participant 

reapply for certification? 

(a) Once an application, an appeal of 

a denial of an application, or an appeal 

of a certified status decertification has 

been denied, or a certified status 

decertification which was not appealed 

has been issued, the Applicant or 

Participant shall be required to wait for 

a period of 90 calendar days before a 

new application will be processed by 

SBA. 

(b) Participants may recertify within 

120 calendar days prior to the 

termination of their eligibility period. If 

a Participant is found to be ineligible, 

the Participant will forfeit any time 

remaining on their eligibility period and 

will be immediately removed from the 


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certification database. An Applicant 

removed pursuant to this section may 

appeal the decision to OHA in 

accordance with § 128.304. The date of 

a new determination letter certifying an 

Applicant will be the beginning of the 

next 3-year eligibility period. 

§ 128.306 What length of time may a 

business participate in SBA’s Veterans 

Certification Program? 

(a) A Participant receives an eligibility 

term of 3 years from the date of SBA’s 

approval letter establishing certified 

status. There is no limitation on the 

number of times a business may 

recertify to continue eligibility past an 

initial 3-year term. 

(b) The Participant must maintain its 

eligibility during its tenure and must 

inform SBA of any changes that may 

affect its eligibility within 30 calendar 

days in accordance with § 128.307. 

(c) The eligibility term may be 

shortened by removal pursuant to 

§ 128.201, recertification pursuant to 

§ 128.305(b), failure to maintain 

certification pursuant to § 138.307, 

voluntary withdrawal by the Participant 

pursuant to § 128.309, decertification 

pursuant to § 128.310, or an adverse 

status protest pursuant to part 134 of 

this chapter. 

(d) SBA may initiate a certification 

examination whenever it receives 

credible information concerning a 

Participant’s eligibility as a VO or SDVO 

SBC. Upon its completion of the 

examination, SBA will issue a written 

decision regarding the continued 

eligibility status of the questioned 

Participant. 

(1) If SBA finds that the Participant 

does not qualify as a VO or SDVO SBC, 

the procedures at § 128.310 will apply, 

except as provided in § 128.201. 

(2) If SBA finds that the Participant 

continues to qualify as a VO or SDVO 

SBC, the original eligibility period 

remains in effect. 

§ 128.307 What are a Participant’s ongoing 

obligations to SBA? 

Once certified, a VO SBC or SDVO 

SBC must notify SBA of any material 

changes that could affect its eligibility 

within 30 calendar days of any such 

change and attest to continued 

eligibility. Material changes include, but 

are not limited to, a change in the 

ownership, business structure, 

management, or bankruptcy. The 

notification must be in writing and must 

be uploaded into the concern’s profile 

with SBA. The method for notifying 

SBA can be found on SBA’s web page. 

A concern’s failure to notify SBA of 

such a material change may result in a 

certification examination as described 

in § 128.308, and/or decertification and 

removal from the certification database 

for the program (or any successor 

system) as a designated certified VO 

SBC or SDVO SBC. In addition, SBA 

may seek the imposition of penalties 

under § 128.600. 

§ 128.308 What is a certification 

examination and what will SBA examine? 

(a) General. A certification 

examination is an investigation by SBA 

officials, which verifies the accuracy of 

any statement or information provided 

by a certified Participant. Thus, 

examiners may verify that the 

Participant currently meets the 

eligibility requirements of this part, and 

that it met such requirements at the time 

of its application or its most recent size 

recertification. An examination may be 

conducted on a random, unannounced 

basis, or upon receipt of specific and 

credible information alleging that a 

Participant no longer meets eligibility 

requirements in this part. 

(b) Scope of examination. SBA may 

conduct the examination at one or all of 

the Participant’s offices or work sites. 

SBA will determine the location(s) of 

the examination. SBA may review any 

information related to the concern’s 

eligibility requirements under this part 

including, but not limited to, 

documentation related to the legal 

structure, ownership, and control. 

Examiners may review any or all of the 

organizing documents, financial 

documents, and publicly available 

information as well as any information 

identified in § 128.303. 

§ 128.309 What are the ways a business 

may exit certification status? 

A Participant may: 

(a) Voluntarily decertify its status by 

submitting a written request to SBA 

requesting that the concern be removed 

from public listing in the certification 

database; or 

(b) Delete its record entirely from the 

certification database; or 

(c) SBA may remove a Participant 

immediately pursuant to § 128.201; or 

(d) SBA may remove a Participant 

from public listing in the certification 

database for good cause upon formal 

notice to the Participant in accordance 

with § 128.310. Examples of good cause 

include, but are not limited to, the 

following: 

(1) Submission of false information in 

the Participant’s application. 

(2) Failure by the Participant to 

maintain its eligibility for program 

participation. 

(3) Failure by the Participant for any 

reason, including the death of an 

individual upon whom eligibility was 

based, to maintain ownership, 

management, and control by veterans, 

service-disabled veterans, or surviving 

spouses. 

(4) Failure by the concern to disclose 

to SBA the extent to which non-veteran 

or, in the case of an SDVO SBC, nonservice-disabled veteran persons or 

firms participate in the management of 

the Participant. 

(5) Failure to make required 

submissions or responses to SBA or its 

agents, including a failure to make 

available financial statements, requested 

tax returns, reports, information 

requested by SBA or SBA’s Office of 

Inspector General, or other requested 

information or data within 30 calendar 

days of the date of request. 

(6) Cessation of the Participant’s 

business operations. 

(7) Failure by the concern to provide 

SBA notification within 30 calendar 

days of any change in ownership. 

(8) Failure to inform SBA of any such 

changed circumstances, as outlined in 

§ 128.307. 

(9) Failure by the concern to obtain 

and keep current any and all required 

permits, licenses, and charters, 

including suspension or revocation of 

any professional license required to 

operate the business. 

(10) SBA will decertify a concern 

found to be ineligible during a status 

protest. 

(e) The examples of good cause listed 

in paragraph (d) of this section are 

intended to be illustrative only. Other 

grounds for decertifying a Participant 

include any other cause of so serious or 

compelling a nature that it affects the 

present responsibility of the Participant. 

§ 128.310 What are the procedures for 

decertification? 

(a) General. When SBA believes that 

a Participant’s certified status should be 

cancelled prior to the expiration of its 

eligibility term, SBA will notify the 

Participant in writing. The Notice of 

Proposed Decertification Letter will set 

forth the specific facts and reasons for 

SBA’s findings and will notify the 

Participant that it has 30 calendar days 

from the date SBA sent the notice to 

submit a written response to SBA 

explaining why the proposed ground(s) 

should not justify decertification. 

(b) Recommendation and decision. 

Following the 30-day response period, 

the D/GC will consider any information 

submitted by the Participant. Upon 

determining that decertification is not 

warranted, the D/GC will notify the 

Participant in writing. If decertification 

appears warranted, the D/GC will 

determine whether to cancel the 

Participant’s certified status. 


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(c) Notice requirements. Upon 

deciding that decertification is 

warranted, the D/GC will issue a Notice 

of Certified Status Decertification. The 

Notice will set forth the specific facts 

and reasons for the decision and will 

advise the concern that it may re-apply 

after it has met all eligibility criteria in 

this part and completed the waiting 

period as set forth in § 128.305(a). 

(d) Effect of decertification. After the 

effective date of decertification, a 

Participant is no longer eligible to 

appear as ‘‘certified’’ in the certification 

database. However, such concern is 

obligated to perform previously 

awarded contracts to the completion of 

their existing term of performance. 

(e) Appeals. A Participant may file an 

appeal with OHA concerning the Notice 

of Certified Status Decertification 

decision in accordance with part 134 of 

this chapter. The decision on the appeal 

shall be final. 

Subpart D—Federal Contract 

Assistance 

§ 128.400 What are VO and SDVO 

contracts? 

(a) For VA procurements, the VAAR 

specifically governs requirements 

exclusive to VA prime and 

subcontracting actions. The VAAR, 48 

CFR chapter 8, supplements the Federal 

Acquisition Regulation (FAR), which 

contains guidance applicable to most 

Federal agencies. 

(b) For all other SDVO contracts, 

including Multiple Award Contracts 

(see § 125.1 of this chapter), such are 

available to an SDVO SBC through any 

of the following procurement methods: 

(1) Sole source awards to an SDVO 

SBC; 

(2) Set-aside awards, including partial 

set-asides, based on competition 

restricted to SDVO SBCs; 

(3) Awards based on a reserve for 

SDVO SBCs in a solicitation for a 

Multiple Award Contract (see § 125.1 of 

this chapter); or 

(4) Orders set aside for SDVO SBCs 

against a Multiple Award Contract, 

which had been awarded in full and 

open competition. 

§ 128.401 What requirements must a VO 

SBC or SDVO SBC meet to submit an offer 

on a contract? 

(a) General. (1) In order for a concern 

to submit an offer and be eligible for the 

award of a VO or SDVO set-aside or sole 

source contract, the concern must 

qualify as a small business concern 

under the size standard corresponding 

to the NAICS code(s) assigned to the 

contract and be a certified VO SBC or 

SDVO SBC, or represent that it has 

submitted a complete application for 

VO SBC or SDVO SBC certification to 

SBA and has not received a negative 

eligibility determination regarding that 

application. 

(2) If a concern is not certified by SBA 

at the time of offer, the concern must 

represent to the contracting officer for 

the particular contract that it has 

submitted a complete application to 

SBA for VO SBC or SDVO SBC 

certification. 

(i) If a concern becomes the apparent 

successful offeror while its application 

for VO or SDVO SBC certification is 

pending, the contracting officer for the 

particular contract must immediately 

inform SBA’s D/GC. SBA will then 

prioritize the concern’s VO or SDVO 

SBC application and make a 

determination regarding the firm’s 

status within 15 calendar days from the 

date that SBA received the contracting 

officer’s notification. 

(ii) If the contracting officer does not 

receive an SBA determination within 15 

calendar days after the SBA’s receipt of 

the notification, the contracting officer 

may presume that the apparently 

successful offeror is not an eligible VO 

SBC or SDVO SBC and may award the 

subject contract accordingly to the next 

highest evaluated offeror, unless the 

contracting officer grants SBA an 

extension to the 15-day response period. 

(b) Joint ventures. A business concern 

seeking a VO SBC or SDVO SBC 

contract as a joint venture may submit 

an offer if the joint venture meets the 

requirements as set forth in § 128.402. 

(c) Non-manufacturers. A certified VO 

SBC or SDVO SBC which is a nonmanufacturer may submit an offer on a 

VO or SDVO contract for supplies if it 

meets the requirements of the nonmanufacturer rule set forth at 

§ 121.406(b)(1) of this chapter. 

(d) Multiple Award Contracts—(1) VO 

or SDVO status. With respect to 

Multiple Award Contracts, orders issued 

against a Multiple Award Contract, and 

Blanket Purchase Agreements issued 

against a Multiple Award Contract: 

(i) SBA determines VO or SDVO small 

business eligibility for the underlying 

Multiple Award Contract as of the date 

a business concern certifies its status as 

a certified VO or SDVO small business 

concern as part of its initial offer (or 

other formal response to a solicitation), 

which includes price, unless the firm 

was required to recertify under 

paragraph (e) of this section. 

(A) Unrestricted Multiple Award 

Contracts or set-aside Multiple Award 

Contracts for other than VO or SDVO. 

For an unrestricted Multiple Award 

Contract or other Multiple Award 

Contract not specifically set aside for 

VO or SDVO small business concerns, if 

a business concern is a certified as a VO 

or SDVO small business concern at the 

time of offer and contract-level 

recertification for the Multiple Award 

Contract, it is a VO or SDVO small 

business concern for goaling purposes 

for each order issued against the 

contract, unless a contracting officer 

requests recertification as a VO or SDVO 

small business for a specific order or 

Blanket Purchase Agreement. Except for 

orders and Blanket Purchase 

Agreements issued under any Federal 

Supply Schedule contract, if an order or 

a Blanket Purchase Agreement under an 

unrestricted Multiple Award Contract is 

set aside exclusively for VO or SDVO 

small business concerns, a concern must 

recertify that it qualifies as a VO or 

SDVO small business concern at the 

time it submits its initial offer, which 

includes price, for the particular order 

or Blanket Purchase Agreement. 

However, where the underlying 

Multiple Award Contract has been 

awarded to a pool of concerns for which 

certified VO or SDVO small business 

status is required, if an order or a 

Blanket Purchase Agreement under that 

Multiple Award Contract is set aside 

exclusively for concerns in the certified 

VO or SDVO small business pool, 

concerns need not recertify their status 

as VO or SDVO small business concerns 

(unless a contracting officer requests 

size certifications with respect to a 

specific order or Blanket Purchase 

Agreement). 

(B) VO or SDVO set-aside Multiple 

Award Contracts. For a Multiple Award 

Contract that is specifically set aside for 

a VO or SDVO small business concern, 

if a business concern is a VO or SDVO 

small business concern at the time of 

offer and contract-level recertification 

for the Multiple Award Contract, it is a 

VO or SDVO small business concern for 

each order issued against the contract, 

unless a contracting officer requests 

recertification as a VO or SDVO small 

business concern for a specific order or 

Blanket Purchase Agreement. 

(ii) SBA will determine VO or SDVO 

small business status at the time of 

initial offer (or other formal response to 

a solicitation), which includes price, for 

an order or an Agreement issued against 

a Multiple Award Contract if the 

contracting officer requests a new VO or 

SDVO small business certification for 

the order or Agreement. 

(2) Total set-aside contracts. The VO 

SBC or SDVO SBC must comply with 

the applicable limitations on 

subcontracting provisions (see § 125.6 of 

this chapter) and the nonmanufacturer 

rule (see § 121.406(b) of this chapter), if 

applicable, in the performance of a 

contract totally set aside for VO SBCs or 


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SDVO SBCs. However, the contracting 

officer, in their discretion, may require 

the concern to perform the applicable 

amount of work or comply with the 

nonmanufacturer rule for each order 

awarded under the contract. 

(3) Partial set-aside contracts. For 

orders awarded under a partial set-aside 

contract, the VO SBC or SDVO SBC 

must comply with the applicable 

limitations on subcontracting provisions 

(see § 125.6 of this chapter) and the 

nonmanufacturer rule (see § 121.406(b) 

of this chapter), if applicable, during 

each performance period of the contract 

(e.g., during the base term and then 

during each option period thereafter). 

For orders awarded under the non-setaside portion, the VO SBC or SDVO SBC 

need not comply with any limitations 

on subcontracting or nonmanufacturer 

rule requirements. However, the 

contracting officer, in their discretion, 

may require the concern to perform the 

applicable amount of work or comply 

with the nonmanufacturer rule for each 

order awarded under the contract. 

(4) Orders. The VO SBC or SDVO SBC 

must comply with the applicable 

limitations on subcontracting provisions 

(see § 125.6 of this chapter) and the 

nonmanufacturer rule (see § 121.406(b) 

of this chapter), if applicable, in the 

performance of each individual order 

that has been set aside for VO SBCs or 

SDVO SBCs. 

(5) Reserves. The VO SBC or SDVO 

SBC must comply with the applicable 

limitations on subcontracting provisions 

(see § 125.6 of this chapter) and the 

nonmanufacturer rule (see § 121.406(b) 

of this chapter), if applicable, in the 

performance of an order that is set aside 

for VO SBCs or SDVO SBCs. However, 

the VO SBC or SDVO SBC will not have 

to comply with the limitations on 

subcontracting provisions and the 

nonmanufacturer rule for any order 

issued against the Multiple Award 

Contract if the order is competed 

amongst VO SBCs or SDVO SBCs and 

one or more other-than-small business 

concerns. 

(e) Recertification. (1) A concern that 

qualifies as a VO SBC or SDVO SBC at 

the time of initial offer (or other formal 

response to a solicitation), which 

includes price, including a Multiple 

Award Contract, is considered a VO 

SBC or SDVO SBC throughout the life 

of that contract. This means that if a VO 

SBC or SDVO SBC is qualified at the 

time of initial offer for a Multiple Award 

Contract, then it will be considered a 

VO SBC or SDVO SBC for each order 

issued against the contract, unless a 

contracting officer requests a new VO 

SBC or SDVO SBC eligibility review in 

connection with a specific order. Where 

a concern later fails to qualify as a VO 

SBC or SDVO SBC, the procuring 

agency may exercise options and still 

count the award as an award to a VO 

SBC or SDVO SBC. However, the 

following exceptions apply to this 

paragraph (e)(1): 

(i) Where a contract is novated to 

another business concern, the concern 

that will continue performance on the 

contract must recertify its status as a VO 

SBC or SDVO SBC to the procuring 

agency or inform the procuring agency 

that it does not qualify as a VO SBC or 

SDVO SBC within 30 days of the 

novation approval. If the concern is not 

a VO SBC or SDVO SBC, the agency can 

no longer count the options or orders 

issued pursuant to the contract from 

that point forward towards its VO or 

SDVO goals. 

(ii) Where a concern that is 

performing a contract acquires, is 

acquired by, or merges with another 

concern and contract novation is not 

required, the concern must, within 30 

days of the transaction becoming final, 

recertify its VO SBC or SDVO SBC 

status to the procuring agency or inform 

the procuring agency that it no longer 

qualifies as a VO SBC or SDVO SBC. If 

the contractor is not a VO SBC or SDVO 

SBC, the agency can no longer count the 

options or orders issued pursuant to the 

contract from that point forward 

towards its VO or SDVO goals. The 

agency and the contractor must 

immediately revise all applicable 

Federal contract databases to reflect the 

new status. 

(iii) Where there has been a VO SBC 

or SDVO SBC status protest on the 

solicitation or contract, see part 134 of 

this chapter for the effect of the status 

determination on the contract award. 

(2) For the purposes of VO SBC or 

SDVO SBC contracts (including 

Multiple Award Contracts) with 

durations of more than five years 

(including options), a contracting officer 

must request that a business concern 

recertify its VO SBC or SDVO SBC 

status no more than 120 calendar days 

prior to the end of the fifth year of the 

contract, and no more than 120 calendar 

days prior to exercising any option. If 

the business is unable to recertify its VO 

or SDVO status, the procuring agency 

may no longer be able to count the 

options or orders issued pursuant to the 

contract, from that point forward, 

towards its VO or SDVO goals. 

(3) A business concern that did not 

certify itself as a VO SBC or SDVO SBC, 

either initially or prior to an option 

being exercised, may recertify itself as a 

VO SBC or SDVO SBC for a subsequent 

option period if it meets the eligibility 

requirements in this part at that time. 

(4) Recertification does not change the 

terms and conditions of the contract. 

The limitations on subcontracting (see 

§ 125.6 of this chapter), 

nonmanufacturer (see § 121.406(b) of 

this chapter), and subcontracting plan 

requirements (see § 125.3(a) of this 

chapter) in effect at the time of contract 

award remain in effect throughout the 

life of the contract. 

(5) Where the contracting officer 

explicitly requires concerns to recertify 

their status in response to a solicitation 

for an order, SBA will determine 

eligibility as of the date the concern 

submits its response to the solicitation 

for the order. 

(6) A concern’s status may be 

determined at the time of a response to 

a solicitation for an Agreement and each 

order issued pursuant to the Agreement. 

(f) Limitations on subcontracting. A 

business concern seeking a VO SBC or 

SDVO SBC requirement must also meet 

the applicable limitations on 

subcontracting requirements as set forth 

in § 125.6 of this chapter for the 

performance of VO SBC or SDVO SBC 

contracts (both sole source and those 

totally set aside for VO SBC or SDVO 

SBC), the performance of the set-aside 

portion of a partial set-aside contract, or 

the performance of orders set-aside for 

VO SBC or SDVO SBC. 

(g) Ostensible subcontractor. Where a 

subcontractor that is not similarly 

situated performs primary and vital 

requirements of a set-aside or sole 

source service contract or order, or 

where a prime contractor is unduly 

reliant on a small business that is not 

similarly situated to perform the setaside or sole source service contract or 

order, the prime contractor is not 

eligible for award of a VO or SDVO 

contract. 

(1) When the subcontractor is small 

for the size standard assigned to the 

procurement, the issue in paragraph (g) 

introductory text may be grounds for a 

VO or SDVO status protest, as described 

in subpart E of this part. When the 

subcontractor is other than small or 

alleged to be other than small for the 

size standard assigned to the 

procurement, the issue in paragraph (a) 

introductory text may be grounds for a 

size protest subject to the ostensible 

subcontractor rule, as described at 

§ 121.103(h)(2) of this chapter. 

(2) SBA will find that a prime VO or 

SDVO contractor is performing the 

primary and vital requirements of a 

contract or order and is not unduly 

reliant on one or more non-similarly 

situated subcontracts where the prime 

contractor can demonstrate that it, 

together with any similarly situated 

entity, will meet the limitations on 


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subcontracting provisions set forth in 

§ 125.6 of this chapter. 

§ 128.402 May a joint venture submit an 

offer on a VO SBC or SDVO SBC 

requirement? 

(a) Certification. For VA contracts, a 

VO SBC or SDVO SBC joint venture 

must be certified to submit an offer on 

a VO SBC or SDVO SBC contract, as set 

forth in 48 CFR part 819. For all other 

SDVO SBC contracts, joint ventures may 

apply for certification. To be eligible for 

inclusion, a joint venture must 

demonstrate that: 

(1) The underlying VO SBC or SDVO 

SBC upon which eligibility is based is 

certified in accordance with this part; 

and 

(2) The joint venture agreement 

complies with the requirements set forth 

in this part. 

(b) General. A VO SBC or SDVO SBC 

may enter into a joint venture agreement 

with one or more other SBCs or its SBAapproved mentor for the purpose of 

performing a VO or SDVO contract if the 

joint venture meets all of the following 

requirements: 

(1) Size of concerns to a VO or SDVO 

SBC joint venture. (i) A joint venture of 

at least one certified VO SBC or SDVO 

SBC and one or more other business 

concerns may submit an offer as a small 

business for a competitive VO SBC or 

SDVO SBC procurement or sale, or be 

awarded a sole source VO or SDVO 

contract, so long as each concern is 

small under the size standard 

corresponding to the NAICS code 

assigned to the procurement or sale. 

(ii) A joint venture between a prote ́ge ́

firm certified as a VO SBC or SDVO SBC 

and its SBA-approved mentor (see 

§ 125.9 of this chapter) will be deemed 

small provided the prote ́ge ́ qualifies as 

small for the size standard 

corresponding to the NAICS code 

assigned to the VO or SDVO 

procurement or sale. 

(2) Contents of joint venture 

agreement. Every joint venture 

agreement to perform a VO or SDVO 

contract, including those between a 

prote ́ge ́ firm certified as a VO SBC or 

SDVO SBC and its SBA-approved 

mentor authorized by § 125.9 of this 

chapter, must contain a provision: 

(i) Setting forth the purpose of the 

joint venture; 

(ii) Designating a certified VO SBC or 

SDVO SBC as the managing venturer of 

the joint venture and designating a 

named employee of the certified VO 

SBC or SDVO SBC managing venturer as 

the manager with ultimate 

responsibility for performance of the 

contract (the ‘‘Responsible Manager’’); 

(A) The managing venturer is 

responsible for controlling the day-today management and administration of 

the contractual performance of the joint 

venture, but other partners to the joint 

venture may participate in all corporate 

governance activities and decisions of 

the joint venture as is commercially 

customary; 

(B) The individual identified as the 

Responsible Manager of the joint 

venture need not be an employee of the 

certified VO SBC or SDVO SBC at the 

time the joint venture submits an offer, 

but, if he or she is not, there must be 

a signed letter of intent that the 

individual commits to be employed by 

the certified VO SBC or SDVO SBC if 

the joint venture is the successful 

offeror. The individual identified as the 

Responsible Manager cannot be 

employed by the mentor and become an 

employee of the certified VO SBC or 

SDVO SBC for purposes of performance 

under the joint venture; and 

(C) Although the joint venture 

managers responsible for orders issued 

under an indefinite delivery/indefinite 

quantity contract need not be employees 

of the prote ́ge ́, those managers must 

report to and be supervised by the joint 

venture’s Responsible Manager; 

(iii) Stating that with respect to a 

separate legal entity joint venture, the 

certified VO SBC or SDVO SBC must 

own at least 51% of the joint venture 

entity; 

(iv) Stating that the certified VO SBC 

or SDVO SBC must receive profits from 

the joint venture commensurate with 

the work performed by the certified VO 

SBC or SDVO SBC, or a percentage 

agreed to by the parties to the joint 

venture whereby the certified VO SBC 

or SDVO SBC receives profits from the 

joint venture that exceed the percentage 

commensurate with the work performed 

by the certified VO or SDVO SBC; 

(v) Providing for the establishment 

and administration of a special bank 

account in the name of the joint venture. 

This account must require the signature 

or consent of all parties to the joint 

venture for any payments made by the 

joint venture to its members for services 

performed. All payments due the joint 

venture for performance on a VO or 

SDVO contract will be deposited in the 

special account; all expenses incurred 

under the contract will be paid from the 

account as well; 

(vi) Itemizing all major equipment, 

facilities, and other resources to be 

furnished by each party to the joint 

venture, with a detailed schedule of cost 

or value of each, where practical. If a 

contract is indefinite in nature, such as 

an indefinite quantity contract or a 

multiple award contract where the level 

of effort or scope of work is not known, 

the joint venture must provide a general 

description of the anticipated major 

equipment, facilities, and other 

resources to be furnished by each party 

to the joint venture, without a detailed 

schedule of cost or value of each, or in 

the alternative, specify how the parties 

to the joint venture will furnish such 

resources to the joint venture once a 

definite scope of work is made publicly 

available; 

(vii) Specifying the responsibilities of 

the parties with regard to negotiation of 

the contract, source of labor, and 

contract performance, including ways 

that the parties to the joint venture will 

ensure that the joint venture and the 

certified VO or SDVO small business 

partner(s) to the joint venture will meet 

the performance of work requirements 

set forth in paragraph (b)(3) of this 

section, where practical. If a contract is 

indefinite in nature, such as an 

indefinite quantity contract or a 

multiple award contract where the level 

of effort or scope of work is not known, 

the joint venture must provide a general 

description of the anticipated 

responsibilities of the parties with 

regard to negotiation of the contract, 

source of labor, and contract 

performance, not including the ways 

that the parties to the joint venture will 

ensure that the joint venture and the 

certified VO or SDVO small business 

partner(s) to the joint venture will meet 

the performance of work requirements 

set forth in paragraph (d) of this section, 

or in the alternative, specify how the 

parties to the joint venture will define 

such responsibilities once a definite 

scope of work is made publicly 

available; 

(viii) Obligating all parties to the joint 

venture to ensure performance of the 

VO or SDVO contract and to complete 

performance despite the withdrawal of 

any member; 

(ix) Designating that accounting and 

other administrative records relating to 

the joint venture be kept in the office of 

the certified VO SBC or SDVO SBC 

managing venturer, unless approval to 

keep them elsewhere is granted by the 

District Director or his/her designee 

upon written request; 

(x) Requiring that the final original 

records be retained by the certified VO 

SBC or SDVO SBC managing venturer 

upon completion of the VO or SDVO 

contract performed by the joint venture; 

(xi) Stating that quarterly financial 

statements showing cumulative contract 

receipts and expenditures (including 

salaries of the joint venture’s principals) 

must be submitted to SBA not later than 

45 days after each operating quarter of 

the joint venture; and 


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(xii) Stating that a project-end profit 

and loss statement, including a 

statement of final profit distribution, 

must be submitted to SBA no later than 

90 calendar days after completion of the 

contract. 

(3) Performance of work. (i) For any 

VO or SDVO contract, including those 

between a prote ́ge ́ and a mentor 

authorized by § 125.9 of this chapter, 

the joint venture must perform the 

applicable percentage of work required 

by § 125.6 of this chapter. 

(ii) The certified VO SBC or SDVO 

SBC partner(s) to the joint venture must 

perform at least 40% of the work 

performed by the joint venture. 

(A) The work performed by the 

certified VO SBC or SDVO SBC 

partner(s) to a joint venture must be 

more than administrative or ministerial 

functions so that they gain substantive 

experience. 

(B) The amount of work done by the 

partners will be aggregated and the work 

done by the certified VO SBC or, in the 

case of an SDVO SBC, SDVO SBC 

partner(s) must be at least 40% of the 

total done by all partners. In 

determining the amount of work done 

by a non-VO SBC or, in the case of an 

SDVO SBC, SDVO SBC partner, all work 

done by the non-VO SBC or, in the case 

of an SDVO SBC, SDVO SBC partner 

and any of its affiliates at any 

subcontracting tier will be counted. 

(4) Certification of compliance. Prior 

to the performance of any VO or SDVO 

contract as a joint venture, the certified 

VO SBC or SDVO SBC partner to the 

joint venture must submit a written 

certification to the contracting officer 

and SBA, signed by an authorized 

official of each partner to the joint 

venture, stating as follows: 

(i) The parties have entered into a 

joint venture agreement that fully 

complies with paragraph (b)(2) of this 

section; 

(ii) The parties will perform the 

contract in compliance with the joint 

venture agreement and with the 

performance of work requirements set 

forth in paragraph (b)(3) of this section. 

(5) Capabilities, past performance, 

and experience. When evaluating the 

capabilities, past performance, 

experience, business systems, and 

certifications of an entity submitting an 

offer for a VO or SDVO contract as a 

joint venture established pursuant to 

this section, a procuring activity must 

consider work done and qualifications 

held individually by each partner to the 

joint venture as well as any work done 

by the joint venture itself previously. A 

procuring activity may not require the 

certified VO SBC or SDVO SBC to 

individually meet the same evaluation 

or responsibility criteria as that required 

of other offerors generally. The partners 

to the joint venture in the aggregate 

must demonstrate the past performance, 

experience, business systems, and 

certifications necessary to perform the 

contract. 

(6) Contract execution. The procuring 

activity will execute a VO or SDVO 

contract in the name of the joint venture 

entity or the certified VO SBC or SDVO 

SBC, but in either case will identify the 

award as one to a VO or SDVO joint 

venture or a VO or SDVO mentorprote ́ge ́ joint venture, as appropriate. 

(7) Inspection of records. The joint 

venture partners must allow SBA’s 

authorized representatives, including 

representatives authorized by the SBA 

Inspector General, during normal 

business hours, access to its files to 

inspect and copy all records and 

documents relating to the joint venture. 

(8) Performance of work reports. A 

certified VO SBC or SDVO SBC partner 

to a joint venture must describe how it 

is meeting or has met the applicable 

performance of work requirements for 

each VO or SDVO contract it performs 

as a joint venture. 

(i) The certified VO SBC or SDVO 

SBC partner to the joint venture must 

annually submit a report to the relevant 

contracting officer and to SBA, signed 

by an authorized official of each partner 

to the joint venture, explaining how and 

certifying that the performance of work 

requirements are being met. 

(ii) At the completion of every VO or 

SDVO contract awarded to a joint 

venture, the certified VO SBC or SDVO 

SBC partner to the joint venture must 

submit a report to the relevant 

contracting officer and to SBA, signed 

by an authorized official of each partner 

to the joint venture, explaining how and 

certifying that the performance of work 

requirements were met for the contract, 

and further certifying that the contract 

was performed in accordance with the 

provisions of the joint venture 

agreement that are required under 

paragraph (b)(2) of this section. 

(iii) Any person with information 

concerning a joint venture’s compliance 

with the performance of work 

requirements may report that 

information to SBA and/or the SBA 

Office of Inspector General. 

(9) Basis for suspension or debarment. 

The Government may consider the 

following as a ground for suspension or 

debarment as a willful violation of a 

regulatory provision or requirement 

applicable to a public agreement or 

transaction: 

(i) Failure to enter a joint venture 

agreement that complies with paragraph 

(b)(2) of this section; 

(ii) Failure to perform a contract in 

accordance with the joint venture 

agreement or performance of work 

requirements in paragraph (b)(3) of this 

section; or 

(iii) Failure to submit the certification 

required by paragraph (b)(4) of this 

section or comply with paragraph (b)(7) 

of this section. 

(10) Limitation on offers from joint 

venture partners. A VO SBC or SDVO 

SBC cannot be a joint venture partner on 

more than one joint venture that 

submits an offer for a specific contract 

set aside or reserved for VO SBCs or 

SDVO SBCs. 

§ 128.403 What requirements are not 

available for VO or SDVO contracts? 

For VA procurements, a contracting 

officer may award a VO or SDVO 

contract as set forth in the VAAR. For 

non-VA SDVO contracts, a contracting 

activity may not make a requirement 

available for a SDVO contract if: 

(a) The contracting activity otherwise 

would fulfill that requirement through 

award to Federal Prison Industries, Inc. 

under 18 U.S.C. 4124 or 4125, or to 

Javits-Wagner-O’Day Act participating 

non-profit agencies for the blind and 

severely disabled, under 41 U.S.C. 8501 

et seq., as amended; or 

(b) An 8(a) Participant currently is 

performing that requirement or SBA has 

accepted that requirement for 

performance under the authority of the 

section 8(a) program, unless SBA has 

consented to release of the requirement 

from the section 8(a) program. 

§ 128.404 When may a contracting officer 

set aside a procurement for VO SBCs or 

SDVO SBCs? 

(a) VA procurements. For VA 

procurements, a contracting officer may 

set aside a contract for a VO SBC or 

SDVO SBC as set forth in the VAAR. For 

non-VA procurements, the contracting 

officer first must review a requirement 

to determine whether it is excluded 

from SDVO contracting pursuant to 

§ 128.403. 

(b) Contracting among small business 

programs—(1) Acquisitions valued at or 

below the simplified acquisition 

threshold. For VA procurements, a 

contracting officer may award at or 

below the simplified acquisition 

threshold as set forth in the VAAR. For 

non-VA procurements, the contracting 

officer shall set aside any acquisition 

with an anticipated dollar value 

exceeding the micro-purchase threshold 

but not exceeding the simplified 

acquisition threshold (defined in the 

FAR at 48 CFR 2.101) for small business 

concerns, regardless of the place of 

performance, when there is a reasonable 


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expectation that offers will be obtained 

from at least two small business 

concerns that are competitive in terms 

of quality and delivery and award will 

be made at fair market prices. The 

requirement in this paragraph (b)(1) 

does not preclude a contracting officer 

from making an award to a small 

business under the 8(a) BD, Historically 

Underutilized Business Zone 

(HUBZone), SDVO SBC, or WOSB 

Programs. 

(2) Acquisitions valued above the 

simplified acquisition threshold. (i) For 

VA procurements, a contracting officer 

may award above the simplified 

acquisition threshold as set forth in the 

VAAR. For non-VA procurements, the 

contracting officer shall set aside any 

acquisition with an anticipated dollar 

value exceeding the simplified 

acquisition threshold (defined in the 

FAR at 48 CFR 2.101) for small business 

concerns, regardless of the place of 

performance, when there is a reasonable 

expectation that offers will be obtained 

from at least two small business 

concerns that are competitive in terms 

of quality and delivery and award will 

be made at fair market prices. However, 

after conducting market research, the 

contracting officer shall first consider a 

set-aside or sole source award (if the 

sole source award is permitted by 

statute or regulation) under the 8(a) BD, 

HUBZone, SDVO SBC, or WOSB 

programs before setting aside the 

requirement as a small business setaside. There is no order of precedence 

among the 8(a) BD, HUBZone, SDVO 

SBC, or WOSB programs. The 

contracting officer must document the 

contract file with the rationale used to 

support the specific set-aside, including 

the type and extent of market research 

conducted. In addition, the contracting 

officer must document the contract file 

showing that the apparent successful 

offeror’s certifications in the System for 

Award Management (SAM) (or any 

successor system) and associated 

representations were reviewed. 

(ii) SBA believes that progress in 

fulfilling the various small business 

goals, as well as other factors such as 

the results of market research, 

programmatic needs specific to the 

procuring agency, anticipated award 

price, and the acquisition history, will 

be considered in making a decision as 

to which program to use for the 

acquisition. 

(c) SDVO SBC set-asides. If the 

contracting officer decides to set aside 

the requirement for competition 

restricted to SDVO SBCs, the 

contracting officer must: 

(1) Have a reasonable expectation that 

at least two responsible SDVO SBCs will 

submit offers; and 

(2) Determine that the award can be 

made at fair market price. 

(d) Prohibition on combined setasides. A procuring activity cannot 

restrict an SDVO SBC competition (for 

either a contract or order) to require 

certifications other than SDVO SBC 

certification (i.e., a competition cannot 

be limited only to business concerns 

that are both SDVO SBC and 8(a), SDVO 

SBC and HUBZone, or SDVO SBC and 

WOSB). 

§ 128.405 When may a contracting officer 

award sole source contracts to VO SBCs 

and SDVO SBCs? 

For VA procurements, a contracting 

officer may award a sole source contract 

to a VO SBC or SDVO SBC as set forth 

in the VAAR. A contracting officer may 

award a sole source contract to an SDVO 

SBC for non-VA procurements only 

when the contracting officer determines 

that: 

(a) None of the provisions of § 128.403 

or § 128.404 apply; 

(b) The anticipated award price of the 

contract, including options, will not 

exceed: 

(1) $7,000,000 for a contract assigned 

a manufacturing NAICS code; or 

(2) $4,000,000 for all other contracts; 

(c) A SDVO SBC is a responsible 

contractor able to perform the contract; 

and 

(d) Contract award can be made at a 

fair and reasonable price. 

§ 128.406 Are there VO or SDVO 

contracting opportunities at or below the 

simplified acquisition threshold? 

For VA procurements, a contracting 

officer may award at or below the 

simplified acquisition threshold as set 

forth in 48 CFR part 819 of the VAAR. 

If the non-VA SDVO requirement is at 

or below the simplified acquisition 

threshold, the contracting officer may 

set aside the requirement for 

consideration among SDVO SBCs using 

simplified acquisition procedures or 

may award a sole source contact to an 

SDVO SBC. 

§ 128.407 May SBA appeal a contracting 

officer’s decision not to make a 

procurement available for award as an 

SDVO contract? 

The SBA Administrator may appeal a 

contracting officer’s decision not to 

make a particular requirement available 

for award as an SDVO sole source or a 

SDVO set-aside contract at or above the 

simplified acquisition threshold. 

§ 128.408 What is the process for such an 

appeal? 

(a) Notice of appeal. When the 

contracting officer rejects a 

recommendation by SBA’s Procurement 

Center Representative to make a 

requirement available for award as an 

SDVO contract, the contracting officer 

must notify the Procurement Center 

Representative as soon as practicable. If 

the SBA Administrator intends to 

appeal the decision, SBA must notify 

the contracting officer no later than five 

business days after receiving notice of 

the contracting officer’s decision. 

(b) Suspension of action. Upon receipt 

of notice of SBA’s intent to appeal, the 

contracting officer must suspend further 

action regarding the procurement until 

the Secretary of the department or head 

of the agency issues a written decision 

on the appeal, unless the Secretary of 

the department or head of the agency 

makes a written determination that 

urgent and compelling circumstances 

which significantly affect the interests 

of the United States compel award of 

the contract. 

(c) Deadline for appeal. Within 15 

business days of SBA’s notification to 

the contracting officer, SBA must file its 

formal appeal with the Secretary of the 

department or head of the agency, or the 

appeal will be deemed withdrawn. 

(d) Decision. The Secretary of the 

department or head of the agency must 

specify in writing the reasons for a 

denial of an appeal brought under this 

section. 

Subpart E—Protests Concerning VO 

SBCs and SDVO SBCs 

§ 128.500 What are the requirements for 

filing a VO SBC and SDVO SBC status 

protest? 

(a) If an interested party challenges 

the inclusion in the database of a VO 

SBC or SDVO SBC based on the status 

of the concern as a small business 

concern or the ownership or control of 

the concern, the challenge shall be 

heard by the Office of Hearings and 

Appeals of the Small Business 

Administration in accordance with part 

134 of this chapter. The decision of the 

Office of Hearings and Appeals shall be 

considered final agency action. 

(b) The protest procedures described 

in part 134 of this chapter are separate 

from those governing size protests and 

appeals. All protests relating to whether 

an eligible VO SBC or SDVO SBC is a 

‘‘small’’ business for purposes of any 

Federal program are subject to part 121 

of this chapter and must be filed in 

accordance with that part. If a protester 

protests both the size of the VO SBC or 

SDVO SBC and whether the concern 


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Federal Register / Vol. 87, No. 128 / Wednesday, July 6, 2022 / Proposed Rules 40163 

meets the VO SBC or SDVO SBC 

requirements set forth in § 128.200, SBA 

will process each protest concurrently 

under the procedures set forth in parts 

121 and 134 of this chapter. SBA does 

not review issues concerning the 

administration of a VO or SDVO 

contract. 

Subpart F—Penalties and Retention of 

Records 

§ 128.600 What are the requirements for 

representing VO SBC or SDVO SBC status, 

and what are the penalties for 

misrepresentation? 

(a) Presumption of loss based on the 

total amount expended. In every 

contract, subcontract, cooperative 

agreement, cooperative research and 

development agreement, or grant which 

is set aside, reserved, or otherwise 

classified as intended for award to VO 

SBCs or SDVO SBCs, there shall be a 

presumption of loss to the United States 

based on the total amount expended on 

the contract, subcontract, cooperative 

agreement, cooperative research and 

development agreement, or grant 

whenever it is established that a 

business concern other than a VO SBC 

or SDVO SBC willfully sought and 

received the award by 

misrepresentation. 

(b) Deemed certifications. The 

following actions shall be deemed 

affirmative, willful, and intentional 

certifications of VO SBC or SDVO SBC 

status: 

(1) Submission of a bid, proposal, 

application or offer for a Federal grant, 

contract, subcontract, cooperative 

agreement, or cooperative research and 

development agreement reserved, set 

aside, or otherwise classified as 

intended for award to VO SBCs or 

SDVO SBCs. 

(2) Submission of a bid, proposal, 

application or offer for a Federal grant, 

contract, subcontract, cooperative 

agreement or cooperative research and 

development agreement which in any 

way encourages a Federal agency to 

classify the bid or proposal, if awarded, 

as an award to a VO SBC or SDVO SBC. 

(3) Registration on any Federal 

electronic database for the purpose of 

being considered for award of a Federal 

grant, contract, subcontract, cooperative 

agreement, or cooperative research and 

development agreement, as a VO SBC or 

SDVO SBC. 

(c) Signature requirement. Each offer, 

proposal, bid, or application for a 

Federal contract, subcontract, or grant 

shall contain a certification concerning 

the VO SBC or, in the case of an SDVO 

SBC, SDVO SBC status of a business 

concern seeking the Federal contract, 

subcontract, or grant. An authorized 

official must sign the certification on the 

same page containing the SDVO SBC 

status claimed by the concern. 

(d) Limitation of liability. Paragraphs 

(a) through (c) of this section may be 

determined not to apply in the case of 

unintentional errors, technical 

malfunctions, and other similar 

situations that demonstrate that a 

misrepresentation of VO SBC or SDVO 

SBC status was not affirmative, 

intentional, willful, or actionable under 

the False Claims Act, 31 U.S.C. 3729, et 

seq. A prime contractor acting in good 

faith should not be held liable for 

misrepresentations made by its 

subcontractors regarding the 

subcontractors’ VO SBC or SDVO SBC 

status. Relevant factors to consider in 

making this determination may include 

the firm’s internal management 

procedures governing VO SBC or SDVO 

SBC status representations or 

certifications, the clarity or ambiguity of 

the representation or certification 

requirement, and the efforts made to 

correct an incorrect or invalid 

representation or certification in a 

timely manner. An individual or firm 

may not be held liable where 

Government personnel have erroneously 

identified a concern as a VO SBC or 

SDVO SBC without any representation 

or certification having been made by the 

concern and where such identification 

is made without the knowledge of the 

individual or firm. 

(e) Penalties for misrepresentation— 

(1) Suspension or debarment. The SBA 

suspension and debarment official or 

the agency suspension and debarment 

official may suspend or debar a person 

or concern for misrepresenting a firm’s 

status as a VO SBC or SDVO SBC 

pursuant to the procedures set forth in 

48 CFR part 9, subpart 9.4. 

(2) Civil penalties. Persons or 

concerns are subject to severe penalties 

under the False Claims Act, 31 U.S.C. 

3729–3733, the Program Fraud Civil 

Remedies Act, 31 U.S.C. 3801–3812, 

and any other applicable laws or 

regulations, including part 142 of this 

chapter. 

(3) Criminal penalties. Persons or 

concerns are subject to severe criminal 

penalties for knowingly misrepresenting 

the VO or SDVO SBC status of a concern 

in connection with procurement 

programs pursuant to section 16(d) of 

the Small Business Act, 15 U.S.C. 

645(d), as amended, 18 U.S.C. 1001, 18 

U.S.C. 287, and any other applicable 

laws. Persons or concerns are subject to 

criminal penalties for knowingly 

making false statements or 

misrepresentations to SBA for the 

purpose of influencing any actions of 

SBA pursuant to section 16(a) of the 

Small Business Act, 15 U.S.C. 645(a), as 

amended, including failure to correct 

‘‘continuing representations’’ that are no 

longer true. 

§ 128.601 What must a concern do in order 

to be identified as a SDVO SBC in any 

Federal procurement databases? 

(a) In order to be identified as an 

SDVO SBC in the System for Award 

Management (SAM) database (or any 

successor thereto), a concern must 

certify its SDVO SBC status in 

connection with specific eligibility 

requirements at least annually. 

(b) If a firm identified as a VO SBC or 

SDVO SBC in SAM fails to certify its 

status within one year of a status 

certification, the firm will not be listed 

as a VO SBC or SDVO SBC in SAM, 

unless and until the firm recertifies its 

VO SBC or SDVO SBC status. 

Subpart G—Surplus Personal Property 

for Veteran-Owned Small Business 

Programs 

§ 128.700 How does a small business 

concern owned and controlled by veterans 

obtain Federal surplus personal property? 

(a) General. (1) Pursuant to 15 U.S.C. 

657b(g), eligible small business 

concerns owned and controlled by 

veterans may receive surplus Federal 

Government property from State 

Agencies for Surplus Property (SASPs). 

The procedures set forth in 41 CFR part 

102–37 and this section will be used to 

transfer surplus personal property to 

such concerns. 

(2) The surplus personal property 

which may be transferred to SASPs for 

further transfer to eligible small 

business concerns owned and 

controlled by veterans includes all 

surplus personal property which has 

become available for donation pursuant 

to 41 CFR 102–37.30. 

(b) Eligibility to receive Federal 

surplus personal property. To be eligible 

to receive Federal surplus personal 

property, on the date of transfer a 

concern must: 

(1) Be a small business concern 

owned and controlled by veterans, that 

has been certified by SBA under this 

part; 

(2) Not be debarred, suspended, or 

declared ineligible under title 2 or title 

48 of the CFR; and 

(3) Be engaged or expect to be engaged 

in business activities making the item 

useful to it. 

(c) Use of acquired surplus personal 

property. (1) Eligible concerns may 

acquire Federal surplus personal 

property from the SASP in the state(s) 

where the concern is located and 


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operates, provided the concern 

represents and agrees in writing: 

(i) As to what the intended use of the 

surplus personal property is to be; 

(ii) That it will use the surplus 

personal property to be acquired in the 

normal conduct of its business activities 

or be liable for the fair rental value from 

the date of its receipt; 

(iii) That it will not sell or transfer the 

surplus personal property to be acquired 

to any party other than the Federal 

Government as required by General 

Services Administration (GSA) and 

SASP requirements and guidelines; 

(iv) That, at its own expense, it will 

return the surplus personal property to 

a SASP if directed to do so by SBA, 

including where the concern has not 

used the property as intended within 

one year of receipt; 

(v) That, should it breach its 

agreement not to sell or transfer the 

surplus personal property, it will be 

liable to the Federal Government for the 

established fair market value or the sale 

price, whichever is greater, of the 

property sold or transferred; and 

(vi) That it will give GSA and the 

SASP access to inspect the surplus 

personal property and all records 

pertaining to it. 

(2) A concern receiving surplus 

personal property pursuant to this 

section assumes all liability associated 

with or stemming from the use of the 

property, and all costs associated with 

the use and maintenance of the 

property. 

(d) Costs. Concerns acquiring surplus 

personal property from a SASP may be 

required to pay a service fee to the SASP 

in accordance with 41 CFR 102–37.280. 

In no instance will any SASP charge a 

concern more for any service than their 

established fees charged to other 

transferees. 

(e) Title. Upon execution of the SASP 

distribution document, the firm 

receiving the property has only 

conditional title to the property during 

the applicable period of restriction. Full 

title to the property will vest in the 

recipient concern only after the 

recipient concern has met all of the 

requirements of this part and the 

requirements of GSA and the SASP that 

it received the property from. 

Isabella Casillas Guzman, 

Administrator. 

[FR Doc. 2022–13563 Filed 7–5–22; 8:45 am] 

BILLING CODE 8026–09–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2022–0808; Project 

Identifier MCAI–2022–00100–R] 

RIN 2120–AA64 

Airworthiness Directives; Airbus 

Helicopters 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: The FAA proposes to adopt a 

new airworthiness directive (AD) for 

certain Airbus Helicopters Model 

AS332C, AS332C1, AS332L, AS332L1 

and AS332L2 helicopters. This 

proposed AD was prompted by reports 

of a crack in the front upper hoist 

attachment fitting. This proposed AD 

would require inspecting each affected 

hoist attachment fitting (fitting) and 

depending on the results, removing any 

cracked fitting from service and 

reporting information. This proposed 

AD also prohibits installing an affected 

fitting unless the required actions are 

accomplished, as specified in a 

European Union Aviation Safety Agency 

(EASA) AD, which is proposed for 

incorporation by reference (IBR). The 

FAA is proposing this AD to address the 

unsafe condition on these products. 

DATES: The FAA must receive comments 

on this proposed AD by August 22, 

2022. 

ADDRESSES: You may send comments, 

using the procedures found in 14 CFR 

11.43 and 11.45, by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

https://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: (202) 493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue SE, 

Washington, DC 20590. 

• Hand Delivery: Deliver to Mail 

address above between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. 

For EASA material that is proposed 

for IBR in this NPRM, contact EASA, 

Konrad-Adenauer-Ufer 3, 50668 

Cologne, Germany; telephone +49 221 

8999 000; email ADs@easa.europa.eu; 

internet www.easa.europa.eu. You may 

find the EASA material on the EASA 

website at https://ad.easa.europa.eu. 

For Airbus Helicopters service 

information identified in this NPRM, 

contact Airbus Helicopters, 2701 North 

Forum Drive, Grand Prairie, TX 75052; 

telephone (972) 641–0000 or (800) 232– 

0323; fax (972) 641–3775; or at https:// 

www.airbus.com/helicopters/services/ 

technical-support.html. You may view 

this material at the FAA, Office of the 

Regional Counsel, Southwest Region, 

10101 Hillwood Pkwy., Room 6N–321, 

Fort Worth, TX 76177. For information 

on the availability of this material at the 

FAA, call (817) 222–5110. The EASA 

material is also available at https://

www.regulations.gov by searching for 

and locating Docket No. FAA–2022– 

0808. 

Examining the AD Docket 

You may examine the AD docket at 

https://www.regulations.gov by 

searching for and locating Docket No. 

FAA–2022–0808; or in person at Docket 

Operations between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. The AD docket contains this 

NPRM, the EASA AD, any comments 

received, and other information. The 

street address for Docket Operations is 

listed above. 

FOR FURTHER INFORMATION CONTACT: 

Kristin Bradley, COS Program Manager, 

COS Program Management Section, 

Operational Safety Branch, FAA, 10101 

Hillwood Pkwy., Fort Worth, TX 76177; 

telephone (817) 222–5110; email 

kristin.bradley@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

The FAA invites you to send any 

written relevant data, views, or 

arguments about this proposal. Send 

your comments to an address listed 

under ADDRESSES. Include ‘‘Docket No. 

FAA–2022–0808; Project Identifier 

MCAI–2022–00100–R’’ at the beginning 

of your comments. The most helpful 

comments reference a specific portion of 

the proposal, explain the reason for any 

recommended change, and include 

supporting data. The FAA will consider 

all comments received by the closing 

date and may amend this proposal 

because of those comments. 

Except for Confidential Business 

Information (CBI) as described in the 

following paragraph, and other 

information as described in 14 CFR 

11.35, the FAA will post all comments 

received, without change, to https://

www.regulations.gov, including any 

personal information you provide. The 

agency will also post a report 

summarizing each substantive verbal 

contact received about this NPRM. 

Confidential Business Information 

CBI is commercial or financial 

information that is both customarily and 


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