By Jim Sechrist and Hardy Stone
What’s wrong with the CVE Verification program? There are 5,458 registered as verified SDVOSB firms. There are 1,716 registered as verified veteran firms in VETBiz.
Two weeks ago we published an article concerning contract awards to SDVOSB firms for VA’s National Cemetery Agency. We found that more than $20 million was awarded to firms suspected of misrepresenting themselves as SDVOSB. The suspected companies, however, had been verified by CVE.
What are a few of the shortcomings of the CVE’s verification program? There are easy ways to determine if a firm is a REAL SDVOSB business.
#1 Check out the minority owners; quite often the minority owners are owners of another firm, usually a non-veteran owned large business. These could be “Rent-A-Vet” or a “pass through” company (see 13 CFR 121.103.);
#2 Check the SAM file for the firm — quite often the names and phone numbers will show if the firm is SDVOSB controlled;
#3 Google the address on the VETBiz vendor page;
#4 Compare the addresses on the VETBiz page with the SAM file. Check the SBA profile for email addresses, phone numbers and corporate officers. The VA recently awarded a contract to a verified firm. The SBA profile shows the email address of totally different firm. This company has bilked the VA (the American taxpayer) for $2.5 million from bona fide SDVOSB firms.
#5 VETBiz, often cites verified firms– with the same veteran owner—twice. However, different business names appear in VETBiz;
#6 One firm has been successfully protested twice. While the first status protest was being reviewed, CVE was evaluating the same company for eligibility in the ‘Veteran’s First’ program! Shortly after the VA determined that the firm was not controlled by a veteran, a third protest was filed — CVE had conducted a site visit and determined that the veteran was now in control after purchasing a portion of the firm and now using his/her SDVOSB status! Ten months later, this firm was interviewed by a Washington newspaper. The headline: “Stimulus Funds Federal Minority Business that “served the Middleman.” In that article, the veteran owner admitted what he was doing with his minority partner, and that $13.5 million was awarded through six VA stimulus contracts. These contracts were reserved for SDVOSB firms. The firm has won more than $69 million in contract awards from VA.
Now I ask you: why is CVE improperly managing the verification program? Is this the consensus of the Veteran Small Business community? Would SDVOSBs be better served if the Small Business Administration (SBA) took charge of the certification/verification program? And what about reviewing status protests filed against firms alleged to be misrepresenting themselves as SDVOSB firms? Could CVE get that right? Or should we hand that over to SBA?