[Federal Register Volume 78, Number 92 (Monday, May 13, 2013)]
[Proposed Rules]
[Pages 27882-27883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11326]



38 CFR Part 74

RIN 2900-AO63

VA Veteran-Owned Small Business (VOSB) Verification Guidelines

AGENCY: Department of Veterans Affairs.

ACTION: Advanced notice of proposed rulemaking.


SUMMARY: The Office of Small and Disadvantaged Business Utilization 
(OSDBU) is currently reviewing its regulations governing the Department 
of Veterans Affairs (VA) Veteran-Owned Small Business (VOSB) 
Verification Program. OSDBU intends to improve the regulations to 
provide greater clarity, to streamline the program, and to encourage 
more VOSBs to apply for verification. By issuing this notice of 
proposed rulemaking, OSDBU seeks comments on how best to approach this 
undertaking. Although OSDBU identified specific issues for discussion 
below, it encourages commenters to discuss any issue related to 
improving these specific regulations and the program.

DATES: Comments must be received on or before July 12, 2013.

ADDRESSES: Written comments may be submitted through 
www.Regulations.gov; by mail or hand-delivery to Director, Regulation 
Policy and Management (02REG), Department of Veterans Affairs, 810 
Vermont Ave. NW., Room 1068, Washington, DC 20420; or by fax to (202) 
273-9026. (This is not a toll-free number.) Comments should indicate 
that they are submitted in response to ``RIN 2900-AO63--VA Veteran-
Owned Small Business (VOSB) Verification Guidelines.'' Copies of 
comments received will be available for public inspection in the Office 
of Regulation Policy and Management, Room 1068, between the hours of 
8:00 a.m. and 4:30 p.m., Monday through Friday (except holidays). 
Please call (202) 461-4902 for an appointment. (This is not a toll-free 
number.) In addition, during the comment period, comments may be viewed 
online through the Federal Docket Management System (FDMS) at 

FOR FURTHER INFORMATION CONTACT: Tom Leney, Executive Director, Center 
for Veterans Enterprise (00VE), Department of Veterans Affairs, 810 
Vermont Ave. NW., Washington DC 20420, (202) 461-4300. (This is not a 
toll-free number.)


I. Background

A. The Verification Regulations

    VA first published its regulations governing the VA VOSB 
Verification Program on February 8, 2010 (75 FR 6101), and most 
recently amended them on January 19, 2011 (76 FR 3022). The regulations 
are codified at 38 CFR part 74. These regulations were developed using 
the Small Business Administration's (SBA) regulations governing the 
Government-wide Service-Disabled Veteran-Owned Small Business (SDVOSB) 
program (13 CFR part 125) and the 8(a) Business Development Program (13 
CFR part 124) for guidance generally with respect to Federal small 
business set-aside programs that involve agency verification. VA's 
regulations lay out the criteria for determining a firm's eligibility 
to participate in VA's Veterans First Contracting Program that provides 
set-aside and sole source authority placing SDVOSBs and VOSBs as first 
and second priority in VA acquisitions from commercial sources under 
the Federal Acquisition Regulation (FAR). VA's Veterans First 
Contracting Program does not apply to other Federal agencies.

B. Evaluation of Verification Regulations and Justification for the 

    VA seeks to find an appropriate balance between preventing fraud in 
the Veterans First Contracting Program and providing a process that 
would make it easier for more VOSBs to become verified. The 
Verification Program has been the subject of reports from both the 
Government Accountability Office and VA's Office of Inspector General 
stating that despite VA's Verification Program, fraud still exists in 
the Veterans First Contracting Program. Some stakeholder feedback has 
been that the current regulations at 38 CFR part 74 are too open to 
interpretation and are unnecessarily more rigorous than similar 
certification programs run by SBA.
    In addition to regulatory improvements, VA is also committed to 
making the verification process more efficient and less burdensome and 
creating greater clarity by providing improved training tools. The 
Verification Assistance Program currently consists of four parts aimed 
at helping veterans understand the regulation and how to bring their 
businesses into compliance in order to be eligible for Veterans First 
contracting opportunities. These include Verification Assistance Briefs 
that address the most common causes of eligibility denial and where the 
issues are found; a Verification Self-Assessment Tool that walks the 
veteran through the regulation and how it applies to the required 
documentation; Verification Assistance Partners consisting of veterans 
service organizations and other non-profit organizations to provide 
individual counseling services to veterans; and the Pre-Application 
Workshop that outlines what a veteran needs to know and do to put 
together a successful verification application.

II. Questions for Comment

    VA is considering ways to improve the VA VOSB Verification 
Guidelines. VA has already collected suggestions from a wide range of 
sources for changes to the regulations, and has compiled them into a 
single document. This compilation document and the existing regulations 
can both be found at http://www.vetbiz.gov.
    VA invites comments on the ideas offered in this compilation 
document as well as the following questions:
    1. What could be changed to improve the clarity of the regulations? 
Where might bright lines be drawn to more clearly indicate compliance 
with the regulations and reduce potential for misinterpretation? Where 
might the addition of bright line tests create unintended consequences?
    2. It has been suggested that VA should develop a list that would 
clearly delineate what constitutes ownership and control and what 
constitutes lack of control or ownership. Should a list like this be 
included in the rule, and if so, what should be on the list?
    3. Are there changes to VA's regulations that could be made to 
reduce the economic impact on VOSBs?
    4. Are there changes to VA Form 0877 (application) that could 
streamline the process?
    5. What verification process improvements could help to increase

[[Page 27883]]

efficiency and reduce burden for VOSBs?
    6. What additional training tools or assistance might be offered to 
create more clarity for stakeholders and help them more efficiently and 
effectively navigate the verification regulations?
    7. What documents, records, or other materials could the Office for 
the Center for Veterans Enterprise use to distinguish legitimate VOSBs/
SDVOSBs from businesses that fraudulently seek contracts from the 
    8. Would a special Hotline to report suspected ineligible VOSBs/
SDVOSBs help the Government ensure that contracts are awarded to 
legitimate VOSBs/SDVOSBs?

    Approved: May 7, 2013.
Jose D. Riojas,
Interim Chief of Staff, Department of Veterans Affairs.
[FR Doc. 2013-11326 Filed 5-10-13; 8:45 am]