The Department of Veterans Affairs (the “VA”) issued a Notice of Proposed Rulemaking last week seeking input on ways to clarify and simplify the “veteran-owned small business” (“VOSB”) verification program. The VA has been criticized in recent months for its inefficient verification process, which – in attempting to cull out fraudulent companies from those legitimately owned and controlled by veterans – has resulted in a rejection rate of over 60% of new service-disabled veteran-owned small business (“SDVOSB”) applicants. At the same time, the VA has come under fire from the Government Accountability Office and the VA's Office of Inspector General for the persistence of fraud in the program.
In its Notice of Proposed Rulemaking, the VA states that it wants to “encourage more VOSBs to apply for verification,” while at the same time discouraging fraudulent applicants. To that end, the VA is seeking comments from any interested party regarding amendments to the VOSB regulations. Although any comments related to the improvement of the VOSB regulations and program are invited, the VA specifically seeks comments on the following eight questions: