Federal 2026-07-16 Field notes · Valentor

Sell to the VA first: where SDVOSB priority is written into statute

Why a new SDVOSB should aim its first federal business development at the Department of Veterans Affairs: the Vets First statute, the 23% vs 5% gap, the certification gate, and how sole-source awards actually happen.

1 · CERTIFIED SDVOSB · STATUTORY PRIORITY 2 · VOSB 3 · 8(A) / HUBZONE 4 · WOSB / OTHER VA VETS FIRST · 38 U.S.C. 8127

Every federal agency carries a 5% SDVOSB prime contracting goal. The VA runs at 23%.

In FY2024 the Department of Veterans Affairs awarded $10.2 billion, about 23% of its prime contract dollars, to service-disabled veteran-owned small businesses and earned an "A" on SBA's scorecard (VA OSDBU, FY2024). The government-wide goal is 5%, raised from 3% by Section 863 of the FY2024 NDAA, which amended 15 U.S.C. 644(g)(1) (CRS IN12313). One agency buys from SDVOSBs at more than four times the rate the rest of the government is asked to hit. If you are a new SDVOSB deciding where to spend your first hundred hours of business development, that arithmetic settles the question.

We are making this argument to ourselves as much as to anyone. Valentor is a Virginia LLC formed in July 2026, SBA SDVOSB certification in progress, and the sequence below is the one we are executing.

Vets First is a statute, not a preference

The VA's priority for veteran-owned firms is 38 U.S.C. 8127-8128, enacted as P.L. 109-461. A new administrator cannot dial it back. The statute requires VA contracting officers to consider certified SDVOSBs first, then VOSBs, ahead of 8(a), HUBZone, WOSB, and every other FAR 19.203 preference (VA Vets First program, vetbiz.va.gov). No other agency has this hierarchy. Everywhere else, SDVOSB set-asides compete for a contracting officer's attention on equal footing with the other socioeconomic programs. At the VA, the statute puts you at the front of the line.

The numbers follow the statute. Government-wide, FY2025 was a record: $32.5 billion to SDVOSBs, over the 5% target (SBA FY25 scorecard, released June 25, 2026). That is a real market, and it grew when the NDAA moved the goal from 3% to 5%. But the density is at the VA, which alone accounted for roughly a third of the government-wide FY2024 SDVOSB dollars. A new firm should fish where the fish are.

Certification is the gate, and it is finally fast

None of this is available to a self-certified firm. Since January 1, 2024, a contracting officer may award an SDVOSB sole-source contract only to a concern designated in SAM as certified by SBA (FAR 19.1406(b); the parallel rule for set-asides is FAR 19.1405(c) with 19.1403(b)). Since December 22, 2024, agencies and prime contractors receive SDVOSB goaling and subcontracting credit only for SBA-certified firms (implementing NDAA FY2024 Section 864; 89 FR 48266). An uncertified veteran-owned firm is invisible in both the prime lane and the subcontract lane.

The good news: the gate is cheap and quick. SAM.gov comes first. Registration is free, takes up to about 10 business days to activate, and renews every 365 days (GSA). Then apply at veterans.certify.sba.gov. VetCert costs nothing, the certification is valid for three years (13 CFR 128.306), and SBA reported average processing of about 12 days as of November 2025, down from 81 days at the end of 2024, after clearing its backlog. Anyone charging you $200-$800 for "SAM registration help" is selling you a free thing; the Federal Service Desk and your local APEX Accelerator do it at no cost.

Sole source starts with a knock

FAR 19.1406, as amended by FAC 2025-06 effective October 1, 2025, allows any federal contracting officer to award a sole-source contract to a certified SDVOSB when the anticipated price, including options, does not exceed $5 million for services (any non-manufacturing NAICS) or $8.5 million for manufacturing, the CO does not reasonably expect offers from two or more capable SDVOSBs, and the price is fair and reasonable.

Read the second condition again, because it tells you how these awards happen. A sole-source award happens when a contracting officer believes only one SDVOSB can do the work. Nobody forms that belief from a SAM.gov posting. They form it from a conversation and a capability statement that matches your skills to a requirement already sitting on their desk. So the work is direct outreach: build a one-page capability statement (core competencies, NAICS codes, UEI and CAGE, certifications, past performance), then put it in front of the VA Office of Small and Disadvantaged Business Utilization and the small-business offices of the two or three other agencies that buy what you sell. OSDBUs exist to connect small firms with program offices. Waiting for a set-aside to appear on SAM is the passive version of this strategy. Sole source is the active version, and under the Vets First hierarchy the VA is the agency most structurally inclined to say yes.

Subcontract while past performance builds

A new firm has no federal past performance, and past performance is what set-aside evaluations score. The bridge is subcontracting. Large primes carry small business subcontracting plans with SDVOSB goals, and since December 22, 2024 they only get credit for those goals from SBA-certified firms. An uncertified sub earns a prime nothing toward its plan; a certified one closes a gap in it. SBA's SubNet directory lists subcontracting opportunities at no cost, and most large primes run supplier registration portals you can enter directly. Two or three subcontracts become the past-performance section of the capability statement you hand the OSDBU a year later.

Be findable before you knock

Your SAM registration generates a profile in SBA's small business search (the Dynamic Small Business Search, migrating to search.certifications.sba.gov). This is where VA contracting officers verify SDVOSB status and where they run market research before setting a requirement aside. Treat the capabilities narrative and keyword fields as advertising copy aimed at one reader: a CO typing search terms. Use the words a solicitation would use, not the words your website uses.

If you are Virginia-based, as we are, stack the state layer: the Department of Veterans Services certifies your service-disabled status, then SBSD adds the SDV designation to your SWaM profile, and eVA opens Commonwealth procurement as a parallel pipeline.

What to do this quarter

  1. Register in SAM.gov and select your NAICS codes. Free, roughly 10 business days.
  2. Apply for VetCert at veterans.certify.sba.gov with your formation documents, operating agreement, and VA rating letter. Free, about 12 days on average.
  3. Complete your DSBS profile with CO-facing keywords the day SAM activates.
  4. Write the one-page capability statement and have an APEX Accelerator critique it at no cost.
  5. Send it to the VA OSDBU first, then to two other agency small-business offices in your NAICS space, and ask each for a capabilities briefing.
  6. Register on SubNet and in three primes' supplier portals the same week.

That is the whole opening move. We filed in July, our certification is in progress, and the capability statement is drafted. The VA door is the first one we intend to knock on.

Valentor, July 16, 2026