Hidden Government Contracts Veterans Actually Miss
The federal government awarded $28.7 billion in contracts to veteran owned business entities last year, yet 73% of eligible veterans never pursued a single government contract.
SBA resources for veteran-owned businesses.
In addition, that gap exists for one reason: most veterans don’t know these opportunities exist. They build solid businesses. For example, they serve their communities. But they miss billions in set-aside funding that the federal government explicitly reserves for them.
For instance, this post shows you exactly what a veteran owned business needs to claim that money. We’ll walk through five certifications that unlock federal contracts. As a result, we’ll show you the dollar amounts actually available. And we’ll give you the exact steps to move from “I have a business idea” to “I just won my first government contract.”
If you own or plan to own a veteran owned business, this is the most important 15 minutes you’ll spend this month.
Why the Federal Government Reserves Billions for Veteran-Owned Businesses
However, congress created federal contracting set-asides because veteran-owned businesses close at half the rate of typical startups. A veteran owned business maintains a 95% survival rate after five years. Specifically, the national average for all new businesses is 50%.
Furthermore, veterans bring specific strengths to contracting work. They understand compliance systems. Additionally, they deliver on deadlines. They manage budgets like operations budgets, not like accounting exercises. In fact, contracting officers see these patterns immediately.
Notably, the numbers back this up. Veterans are 45% more likely to be self-employed than non-veterans. Importantly, about 6.5% of the entire veteran population owns businesses. That’s roughly 2.2 million veteran-owned businesses across the country.
In fact, veteran-owned businesses represent 5.5% of all U.S. businesses but generate $1.3 trillion in annual revenue. Therefore, that’s disproportionate economic power. The federal government wants to channel more of that power into government work.
Beyond that, so the government created a system. Specific certifications unlock specific contract opportunities. In practice, each certification targets a different veteran population. And each one comes with real money attached.
The 5 Certifications That Unlock Government Contracts for Veterans
Consequently, not all veteran-owned business certifications are equal. Each one opens different doors. Similarly, each one requires different paperwork. And each one connects you to different contract pools.
Here’s what every veteran business owner needs to know about the five that matter most.
1. SBA Veteran-Owned Small Business (VOSB) Certification
In addition, the SBA defines a veteran-owned small business as a business that is at least 51% owned and controlled by one or more veterans. This is the broadest certification available.
For example, to qualify, you need proof of veteran status (DD-214 or VA letter) and documentation that you own 51% or more of the business. The SBA processes this in about 14 days. For instance, you can register through the SBA’s online system at no cost.
As a result, once certified, your business becomes eligible for SBA loan programs with better terms than commercial loans. You also get priority access to SBA contracting resources and mentorship through SCORE, the SBA’s free business mentoring network.
However, VOSB certification alone doesn’t unlock federal contracting set-asides. It’s the foundation. However, you build on top of it with other certifications.
2. Service-Disabled Veteran-Owned Small Business (SDVOSB) Certification
Specifically, this is where the real federal contracting money opens up. An SDVOSB is a business that is at least 51% owned by a veteran with a service-connected disability rating from the VA.
Furthermore, the difference matters enormously. SDVOSB businesses receive a 3% price evaluation preference on federal contracts. Additionally, that means if your bid is within 3% of a non-veteran competitor, you win automatically.
Additionally, the federal government has a goal to award 5% of all prime contracts to service-disabled veteran-owned small businesses annually. In fact, that’s not a suggestion. It’s a mandate. Notably, contracting officers track it. Agencies get scored on it.
Importantly, the SDVOSB certification process through the VA takes 30-60 days. You’ll need your service-connected disability rating letter from the VA and business ownership documentation. Therefore, the VA’s Office of Small and Disadvantaged Business Utilization handles verification at no cost.
Specifically, apply for SBA VOSB certification first (14 days). Beyond that, while that processes, gather your disability rating paperwork and submit to the VA. By the time the VA finishes its review, you’ll already be SBA-certified and ready to register on SAM.gov.
3. HUBZone-Certified Veteran Business Certification
In practice, hUBZone stands for Historically Underutilized Business Zone. If your business operates in a designated HUBZone (economically distressed areas), you qualify for additional set-asides.
Consequently, hUBZone-certified veteran businesses can receive price evaluation preferences up to 10% on federal contracts. That’s higher than the standard SDVOSB preference. Similarly, your office location matters for this certification, not just your ownership.
In addition, you can check if your business location qualifies by entering your zip code on the SBA’s HUBZone map tool. If it qualifies, the SBA processes HUBZone certification in about 20 days. For example, this certification stacks with SDVOSB, so you can claim both.