Service-Disabled Veteran-Owned Small Business (SDVOSB)

A Service-Disabled Veteran-Owned Small Business (SDVOSB) is a small business at least 51% owned and controlled by one or more veterans with a service-connected disability, certified by the Small Business Administration. SDVOSB-certified firms are eligible for federal set-aside competitions, sole source awards below established thresholds, and count toward the government's 5% statutory goal for SDVOSB prime contracting.

What is an SDVOSB?

The Veterans Benefits, Health Care, and Information Technology Act of 2006 and FAR Subpart 19.14 established the SDVOSB contracting program. Effective January 1, 2023, the SBA took over SDVOSB (and VOSB) certification from the Department of Veterans Affairs, creating a single certification portal. To qualify, a firm must: (1) meet the SBA small business size standard for its primary NAICS code; (2) be at least 51% unconditionally and directly owned by one or more service-disabled veterans; and (3) have day-to-day management and long-term decision-making controlled by a service-disabled veteran or, in cases of permanent and severe disability, by a spouse or permanent caregiver.

In USAspending data, SDVOSB set-aside awards carry the type-of-set-aside codes "SDVOSBC" (competitive) and "SDVOSBS" (sole source). The government sets a 5% annual prime contracting goal for SDVOSBs. Agencies that fall short of this goal are more likely to actively seek SDVOSB firms for upcoming requirements, making goal-tracking a useful pipeline intelligence tool.

The sole source threshold for SDVOSB awards is $4.5M for non-manufacturing requirements and $7.5M for manufacturing, mirroring the 8(a) sole source structure. At the VA specifically, the Veterans First contracting program requires that contracting officers prioritize SDVOSB and VOSB firms before considering other socioeconomic categories or full and open competition.

Why SDVOSB Matters for Government Contractors

SDVOSB certification unlocks two competitive advantages beyond general small business status: a dedicated pool of set-aside solicitations with a narrower competitive field, and the sole source pathway below $4.5M that allows direct negotiation with agencies rather than competing in open solicitations. The Department of Veterans Affairs represents the single largest buyer of SDVOSB services in the federal government, making VA contract pursuit a high-priority strategy for certified firms. Monitoring agency-level SDVOSB goal attainment through USAspending data reveals which buyers are most actively seeking certified partners.

Example

A technology firm owned 51% by a service-disabled Army veteran receives SBA SDVOSB certification. The firm wins a $3.9M sole source IT modernization contract at a regional VA medical center after a meeting arranged through the VA's Office of Small and Disadvantaged Business Utilization. The contracting officer documents capability verification in the file without publishing a full solicitation.

Frequently Asked Questions

Who certifies SDVOSB firms after the 2023 change?

As of January 1, 2023, the SBA is the sole certifying authority for both SDVOSB and VOSB status for all federal agencies. Firms previously certified by the VA's Center for Verification and Evaluation (CVE) had a transition period to apply through the SBA portal. New applicants must apply directly to SBA. The VA's Veterans First Contracting Program still exists but now relies on SBA certification data.

What is the difference between SDVOSB and VOSB?

Both designations require veteran ownership and control, but SDVOSB requires that the veteran have a service-connected disability rated by the VA or DoD. VOSB (Veteran-Owned Small Business) requires only honorable service without a disability requirement. SDVOSBs are eligible for all SDVOSB set-asides; VOSBs are eligible for VOSB set-asides, which are primarily used at the VA under its Veterans First program.

Can an SDVOSB also pursue 8(a) or HUBZone set-asides?

Yes. A firm can hold simultaneous SBA certifications if it independently meets the requirements of each program. An SDVOSB that is also 8(a)-certified or HUBZone-certified can compete in set-asides under any applicable designation. Multiple certifications increase bid-eligible solicitation volume and make the firm more attractive to primes building subcontracting teams to meet multiple socioeconomic goals.

Is the service-connected disability rating threshold specified?

The FAR and SBA regulations do not specify a minimum disability rating percentage. Even a 0% service-connected disability determination from the VA or DoD qualifies an individual as a service-disabled veteran for SDVOSB purposes, provided the determination is official. The SBA requires documentation of the disability determination as part of the certification application.