On December 16, 2003, the Veterans Benefits Act of 2003 (Public Law 108-183downloadpdf) was passed by Congress. Section 308 of the Act (Public Law 108-183) established a procurement program for Service-Disabled Veteran-Owned Small Businesses (SDVOSBs). This procurement program provides that federal contracting officers may restrict competition to SDVOSBs and award a sole source or set-aside contract where certain criteria are met.  Federal government requires that agencies set aside 5% of their contract dollars for small businesses certified as service disabled. 
What are the requirements to be an SDVOSB:
In order to be considered for these SDVSOB set aside program, you and your business must meet the following criteria:

  • The Service Disabled Veteran (SDV) must have a service-connected disability that has been determined by the Department of Veterans Affairs or Department of Defense
  • The SDVOSB must be small under the North American Industry Classification System (NAICS) code assigned to the procurement
  • The SDV must unconditionally own 51% of the SDVOSB
  • The SDVO must control the management and daily operations of the SDVOSB
  • The SDV must hold the highest officer position in the SDVOSB
  • The management and daily business operations of the concern must be controlled by one or more service-disabled veterans.
    • Control by one or more 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 service-disabled veterans
    • The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a service-disabled veterans or, in the case of a service-disabled veteran with permanent and severe disability, the spouse of permanent caregiver of such veteran
  • Service-disabled veteran means a veteran with a disability that is service-connected.
  • Ownership must be direct. Ownership by one or more service disabled veterans must be direct ownership.
  • A concern owned principally by another business entity that is in turn owned and controlled by one or more service-disabled veterans does not meet this requirement.