Examinations of Applicants for Verifcation
for Veterans Enterprise
We invite all Veterans to read
the Mission Statement from the Center for Veterans Enterprises you would agree
that their vision is second to none (Where
We Are Going (Our Long-Range View). It is true that a
physical (on-site) verification should be executed however we need not to
revert to Machiavellian tactics by interpreting the law in such manner that it
contradicts the mission that CVE set out to achieve.
Before offering a possible solution it is important
to address the objective of the current regulations found in the Code of Federal
Regulations, TITLE 38 CHAPTER I, PART 74, and the method currently used.
OBJECTIVE: TO ESTABLISH THE MANAGEMENT CONTROLAND OPERATING
STATUS OF THE BUSINESS OF SUBMISSION.
Excerpt from: “THE Code
of Federal Regulations, TITLE 38 CHAPTER I, PART 74”
§ 74.12 What
must a concern submit to apply for VetBiz VIP Verification?
examinations. These forms and
attachments will include, but not be limited to, financial statements, Federal
personal and business tax returns, payroll records and personal history
statements. An applicant must also retain in the application file IRS Form
4506, Request for Copy or Transcript of Tax Form. These materials shall be
filed together to maximize efficiency of verification examination visits.
Together with the electronic documents, these manual records will provide the
CVE verification examiner with sufficient information to establish the
management, control and operating status of the business on the date of
CVE has the right to verify
and “establish the management, control
and operating status of the business on the date of submission.”
However the scope of
documents demanded by CVE in order to establish ownership is way too broad and
superfluous in nature and at the expense of the Veteran and Service-Connected
Disabled Veteran Small Business owner.
There should be a finite number of documents and a
defined and standardized methodology using the right tools, with courtesy and
efficiency. Please note that ownership and control eligibility requirements are
also defined in the Code of Federal Regulations, TITLE 13 CHAPTER I, PART 125
and that both Title 38 and Title 13 should not be in conflict with each other.
The task that CVE has at hand
is challenging and we should be proud of what this office has achieved to date.
Many Veterans share a common frustration with the bureaucratic process as a
whole whether at the VA Hospitals, a Veterans
or at other government agencies. We ask CVE not to become another source of
frustration or another bureaucratic maze and to be in tune with the Veteran
small business community.
We encourage CVE to address
the following questions and to clearly define:
determines the ownership of a company by an individual?
determines is such individual is a Veteran?
If a Veteran
then; How one determines whether the Veteran has a disability rating or not?
Rather than to blame a
political party let’s all share the mission of the Center for Veteran
Enterprise: “We will Transform America
with Veterans First! through personal touch, compassion, connectivity and
competence, because Veterans in Business are Still Serving America!.
We would like to help CVE execute their mission, all
of us share the mission, but like any mission its intent can be compromised by its
execution. The letter/noticed sent by CVE is a bit harsh and intrusive rather
than amicable and inviting, a dramatic shift from its mission. No appointments
allowed, vague and demanding as if our participation is not needed and an
appointment is not necessary. This attitude in conflict with the CVE mission, in
its mission statement CVE and the staff are our friends, in its mission CVE
wants to work together in harmony with the Veteran’s community, in its mission
CVE would like to assist us and help us succeed: “We want veterans in business
to be the best they can be and to perform each and every contract in an
The list of documents needed by CVE to establish
ownership has to be defined and the current loosely defined method takes away
the sense of objectivity or gives the appearance of potential subjective
interpretation of what is needed by the staff. This appearance does not
reinforce the concern of CVE to restore the pride, hope and dreams of all
American’s Veterans: Restore
pride, hope and dreams for all of America’s veterans through business
ownership, employment opportunities and community partnerships.
The registration and verification demands of our
respective State procurement agencies, CVE, CCR, GSA, the various government
agencies, large primes and all of those entities that claim to have a diversity
program for small businesses leave no time left to actually engage in business and
the entire proposition to Veteran Owned Businesses is turning into a nightmare.
There is no one business that is registered with all, it has been tried and it
is impossible. To this end CVE is the solution that we have all been looking,
to have only one database where all parties interested and/or required to
engage with a qualified and verified Veteran Owned Small Business, would
search. This would finally end the waste of time and money all of us have been
subjected to and possibly close the largest the loop-hole scheme responsible
for the lack of VOB and SDVOB participation in the public sector as a whole.
CVE should definitely meet with each and every Veteran
business owner for the purpose of delivering the products they have set out to
deliver and during this meeting CVE should have a well defined list of demands
that will establish ownership of the business and verify that the owner is
indeed a Veteran as well as build a relationship with the Veteran by delivery
those products CVE is set to deliver (please see list below).
There are many different ways to check the legitimacy
of a business, it is done every day, painlessly and with minimal intrusion, we
are confident that CVE will find a way to accomplish “our” mission, while
preserving the privacy and all of those rights afforded to the rest of the
small business population. Should this level of scrutiny been applied to the
large businesses, the financial industry and domestic automobile industry, we
could have avoided our current situation. In addition to the verification
process we propose a fraud reporting hot line where the Veteran small business
community can call and report suspected fraud. Time and time again we run
across scams and have no clear reporting channels.
In conclusion, we agree with the intent of the
verification process and invite CVE to align their actions and the policies
with its mission. We support their commitment to the verification process and
ask that this be accomplished by adhering to the highest standards of compassion,
commitment, excellence, professionalism, integrity, accountability and
There will always be a better way together we can find
the best way.
Elite SDVOB Network, Los Angeles
1. VetBiz.gov web portal
information services offers convenient, two-way communications between
government, corporate and owner communities.
2. VetBiz.gov Vendor Information Pages database
of verified businesses
business and procurement coaching support: This is the core of what we
do. Call us when you have a question. Call us when you want clarification of
what you already know. Call us when you think something is not right. We want
to know what is happening with you as you try to sell your products and
services to the Government or its prime contractors. We want to know what is
happening with you as a government or corporate official trying to support this
program. We especially want to hear from you with improvement ideas!! Veterans,
call us toll-free at 1.866.584.2344, Monday-Friday, 7AM – 5PM Eastern Time.
4. Free delivery of FedBizOpps notices and notices from
VA’s Forecast of Contracting Opportunities, customized to your specifications
n on-site inspection can be made when an award is made
from the VA for example, the CVE representative The smarter method would be to
inspect a company if an award is made hence reducing the burden on both the
Veteran and the government.
Assistance Program Pages database: find specialists who will help your
business in Start-up, Finance, Training, Procurement and Business Development.
Owners’ Toolkit: Keep the legislation, executive order, acquisition
regulations, applicable code of federal regulations citations and other key
files right on your flash drive or laptop. This helps when meeting individuals
who are new or unfamiliar with the program. This product is co-branded with the
General Services Administration.
Business Process maps: As a future or current business owner, you can
face unknowns daily. We’re available to coach you to the next step and we’re
good listeners. We like hearing what is happening with you because other owners
may be looking at similar questions or obstacles. Our business map will help
you figure out when to drive forward, when to slow down and when to turn in
order to reach your destination.
8. Customized market research reports:
If you have money to spend, we want to help you make a decision to spend it
with veteran-owned businesses. We know how busy acquisition teams can be, so
we’ll run the database queries if you want us to do so.
9. Customized awareness briefings and community
outreach programs: next to our call center support, this may be the
second most favorite thing we do. We travel to where you do business, meet
face-to-face, learn what your life is really like and try to offer help. What’s
not to like about that?
10. VetFran: discounted franchising
support through International Franchise Association franchisors; more than
1,000 veterans have taken advantage of this program since 2002.
11. Trending reports: This is really good
stuff. We are fierce in searching for numbers to trend. So far, we’ve published
trend lines for Federal agencies’ SDVOSB achievements since Fiscal Year 2001.
We’re hoping to get similar trend charts done for subcontracting achievements.
We also do other work like monitor the growth of businesses over time. Sometimes,
we scratch our heads and try to make sense of it all. Most of the time, we
simply say “Aha! Look at that!”
12. Awards and Recognition Programs: OK,
forget everything that came before this. We really, really, like the awards
program. We host this each year in June, on or around Flag Day. We honor
Enterprising Veterans who exemplify the motto: Veterans in Business - Still
Serving America! We celebrate the work of the advocates selected as
Champions of Veterans Enterprise. While it may not be a big to-do by other
award program standards, these ceremonies are very special to us.
13. Our Briefing Materials:
We have a great DVD library that explains our program. We have some really
fantastic posters. We make these available at no charge to offices that want to
visually display their support for veterans in business. We have some very
professional Executive brochures and a nice product catalog that offers a lot
of detail on our offerings. In addition, and these, too, are more favorites –
we will customize a Then and Now poster for business owners (give us a photo of
the owner in military uniform and a second photo as the business owner today),
we will put the owner’s name and business name on it for posting at the
company’s headquarters. This also works for contracting teams who make awards
to these owners. Another offering for owners is the 3-minute video clip they
can post to our database.
Code of Federal Regulations, TITLE 38 CHAPTER I, PART 74
§ 74.12 What must a
concern submit to apply for VetBiz VIP Verification?
Each VetBiz VIP Verification applicant must
submit the electronic forms and attachments CVE requires. All electronic forms
are available on the VetBiz.gov Vendor Information Pages database Web pages. At
the time the applicant dispatches the electronic forms, the applicant must also
retain on file at the principal place of business a completed copy of the
electronic forms supplemented by manual records that will be used in
verification examinations. These forms
and attachments will include, but not be limited to, financial statements,
Federal personal and business tax returns, payroll records and personal history
statements. An applicant must also retain in the application file IRS Form 4506,
Request for Copy or Transcript of Tax Form. These materials shall be filed
together to maximize efficiency of verification examination visits. Together
with the electronic documents, these manual records will provide the CVE
verification examiner with sufficient information to establish the management,
control and operating status of the business on the date of submission.
Office of Management and Budget has approved the information collection
provisions in this section under control number 2900–0675)
§ 74.20 What is a
verification examination and what will CVE examine?
(a) General . A verification
examination is an investigation by CVE officials, which verifies the accuracy
of any statement or information provided as part of the VetBiz VIP Verification
application process. Thus, examiners may verify that the concern currently
meets the eligibility requirements, and that it met such requirements at the
time of its application or its most recent size recertification. An examination
may be conducted on a random basis, or upon receipt of specific and credible
information alleging that a participant no longer meets eligibility
(b) Scope of examination . CVE may
conduct the examination, or parts of the program examination, at one or all of
the participant's offices. CVE will determine the location of the examination.
Examiners may review any information related to the concern's eligibility
requirements including, but not limited to, documentation related to the legal
structure, ownership and control of the concern. As a minimum, examiners shall
review all documents supporting the application, as described in §74.12. These
include: financial statements; Federal personal and business tax returns;
personal history statements; and Request for Copy or Transcript of Tax Form
(IRS Form 4506) for up to 3 years. Other documents, which may be reviewed
include (if applicable): Articles of Incorporation/Organization; corporate
by-laws or operating agreements; organizational, annual and board/member meeting
records; stock ledgers and certificates; State-issued Certificates of Good
Standing; contract, lease and loan agreements; payroll records; bank account
signature cards; and licenses.
Code of Federal Regulations,
TITLE 13 CHAPTER I, PART 125
§ 125.9 Who does SBA
consider to own an SDVO SBC?
A concern must be at least 51%
unconditionally and directly owned by one or more service-disabled veterans.
(a) 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. Ownership
by a trust, such as a living trust, may be treated as the functional equivalent
of ownership by service-disabled veterans where the trust is revocable, and
service-disabled veterans are the grantors, trustees, and the current
beneficiaries of the trust.
(b) Ownership of a partnership. In the
case of a concern which is a partnership, at least 51% of every class of
partnership interest must be unconditionally owned by one or more
service-disabled veterans. The ownership must be reflected in the concern's
(c) Ownership of a limited liability
company. In the case of a concern which is a limited liability company, at
least 51% of each class of member interest must be unconditionally owned by one
or more service-disabled veterans.
(d) Ownership of a corporation. In the
case of a concern which is a corporation, at least 51% of the aggregate of all
stock outstanding and at least 51% of each class of voting stock outstanding
must be unconditionally owned by one or more service-disabled veterans.
(e) Stock options' effect on ownership. In
determining unconditional ownership, SBA will disregard any unexercised stock
options or similar agreements held by service-disabled veterans. However, any
unexercised stock options or similar agreements (including rights to convert
non-voting stock or debentures into voting stock) held by non-service-disabled
veterans sill be treated as exercised, except for any ownership interests which
are held by investment companies licensed under the Small Business Investment
Act of 1958.
(f) Change of ownership. A concern may
change its ownership or business structure so long as one or more
service-disabled veterans own and control it after the change.
§ 125.10 Who does SBA
consider to control an SDVO SBC?
(a) General. To be an eligible SDVO
SBC, the management and daily business operations of the concern must be
controlled by one or more service-disabled veterans (or in the case of a
veteran with permanent and severe disability, the spouse or permanent caregiver
of such veteran). Control by one or more service-disabled veterans means that
both the long-term decisions making and the day-to-day management and
administration of the business operations must be conducted by one or more
service-disabled veterans (or in the case of a veteran with permanent and
severe disability, the spouse or permanent caregiver of such veteran).
(b) Managerial position and experience. A
service-disabled veteran (or in the case of a service-disabled veteran with
permanent and severe disability, the spouse or permanent caregiver of such
veteran) must hold the highest officer position in the concern (usually
President or Chief Executive Officer) and must have managerial experience of
the extent and complexity needed to run the concern. The service-disabled
veteran manager (or in the case of a veteran with permanent and severe disability,
the spouse or permanent caregiver of such veteran) need not have the technical
expertise or possess the required license to be found to control the concern if
the service-disabled veteran can demonstrate that he or she has ultimate
managerial and supervisory control over those who possess the required licenses
or technical expertise.
(c) Control over a partnership. In the
case of a partnership, one or more service-disabled veterans (or in the case of
a veteran with permanent and severe disability, the spouse or permanent
caregiver of such veteran) must serve as general partners, with control over
all partnership decisions.
(d) Control over a limited liability
company. In the case of a limited liability company, one or more
service-disabled veterans (or in the case of a veteran with permanent or severe
disability, the spouse or permanent caregiver of such veteran) must serve as
managing members, with control over all decisions of the limited liability
(e) Control over a corporation. One or
more service-disabled veterans (or in the case of a veteran with permanent and
severe disability, the spouse or permanent caregiver of such veteran) must
control the Board of Directors of the concern. Service-disabled veterans are
considered to control the Board of Directors when either:
(1) One of more service-disabled veterans own
at least 51% of all voting stock of the concern, are on the Board of Directors
and have the percentage of voting stock necessary to overcome any super
majority voting requirements; or
(2) Service-disabled veterans comprise the majority of
voting directors through actual numbers or, where permitted by state law,
through weighted voting.