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Set Aside Authority
Public Law 106-50 enacted in 1999 established a 3 percent government-wide goal for procurement from service disabled veteran owned small businesses. To date, all Federal agencies fall far short of reaching this procurement goal with many agencies not even approaching 1 percent. As a result, Public Law 108-183, the Veterans Benefit Act of 2003, was enacted on December 16, 2003 containing provisions to achieve these goals. This law provides Federal contracting officers the discretionary authority to award sole source contracts, limited to contracts of up to $5 million for manufacturing and $3 million for non-manufacturing, to small business concerns (SBCs) owned and controlled by service disabled veterans. Upon passage of this law, congressional language intended that that the determination of service connection be made by the Secretary of Veterans Affairs. The Congressional Committee also urged the Small Business Administration and the Office of Federal Procurement Policy to expeditiously and transparently implement this legislation, perform outreach, and provide the necessary resources to improve results with respect to SBCs owned and operated by service-disabled veterans.
So while the federal government awarded $250 billion in contracts last year, up 7% from 2001, the value of contracts awarded to disabled-vet businesses tumbled by 46%, to $298 million, according to the federal government's Office of Federal Procurement Policy. That was only about 0.13% of the total and averaged about $43,000 for each of the 7,000 vet-owned businesses that benefited.
The federal agencies one might expect to push hardest to hit the 3% goal have done the least. Last year, the Department of Defense awarded only 0.11% of its contracts to businesses owned by disabled vets, and the White House's percentage was zero.
In November, Congress passed another law giving federal contracting officials the power to set aside some contracts for bidding only by companies owned by disabled veterans and to award certain contracts of up to $5 million to such companies without competitive bidding. While the new law doesn't require federal agencies to take such actions, some observers believe it provides an important tool for reaching the 3% goal.
Complete detail is available in Public Law, Section 308.