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How to Choose an SDVOSB IT Partner for Government Technology Projects

By MYJEN Consulting ·

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Selecting an SDVOSB IT contractor requires more than confirming a service-disabled veteran-owned designation. Agencies and prime contractors should verify federal certification, understand the workshare rules, and establish clear roles.

What an SDVOSB IT Contractor Partnership Means

A federal SDVOSB set-aside limits competition to eligible service-disabled veteran-owned small businesses. Under FAR 19.1405, a contracting officer may set aside an acquisition exceeding the micro-purchase threshold when market research supports a reasonable expectation that at least two eligible SDVOSBs will submit offers and the award can be made at a fair market price. The contracting officer must consider an SDVOSB set-aside before an SDVOSB sole-source award. (FAR 19.1405.)

The section numbers cited in this article are from the formal FAR as issued in FAC 2026-01; agencies using FAR overhaul deviations may number these provisions differently, for example SDVOSB set-aside content at 19.106 and subcontracting plans at 19.109, so readers should confirm which version their agency applies.

For an agency, the set-aside does not waive the need to assess the requirement, competition, price, and the offeror’s eligibility. For a prime contractor, an SDVOSB may participate as a subcontractor or through an appropriate teaming arrangement. A subcontracting relationship does not, by itself, make the prime eligible to compete as an SDVOSB. FAR directs the contracting officer to verify that the offeror is designated in SAM.gov as an SBA-certified SDVOSB, subject to a limited transition provision for firms that applied by December 31, 2023. (FAR 19.1405.)

The SBA’s government-wide SDVOSB program is distinct from the VA’s agency-specific Vets First program; SBA states that certified SDVOSBs may compete for federal set-aside and sole-source contracts government-wide, and certified VOSBs may also compete for certain VA Vets First opportunities. (SBA Veteran Contracting Assistance Programs.) State and local procurement programs are separate considerations; federal certification should not be assumed to satisfy their requirements.

Verify SBA VetCert Certification and SAM.gov Information

SBA’s Veteran Small Business Certification program, known as VetCert, is the federal certification path. SBA reports that the certification function transferred from VA to SBA effective January 1, 2023. SBA’s published eligibility criteria include VA veteran identification, size under the applicable NAICS standards, and at least 51% ownership and control by eligible veterans. For SDVOSB certification, the qualifying owners must be service-disabled veterans. (SBA Veteran Contracting Assistance Programs.)

A practical verification process includes:

  1. Search SBA’s VetCert portal. SBA Certifications supports searches for certified VOSBs and SDVOSBs.
  2. Confirm the entity’s federal registration information. SAM.gov provides entity registration and entity information search, and is where an entity obtains a Unique Entity ID. (SAM.gov Entity Information.)
  3. Confirm the designation required for the specific procurement. FAR 19.1405 directs contracting officers to verify the offeror’s SBA-certified SDVOSB designation in SAM.gov; it also includes a limited transition category for firms that applied by December 31, 2023, not a general current self-certification route. (FAR 19.1405.)
  4. Check that records remain aligned: legal entity name, Unique Entity ID, registration status, and relevant NAICS information.

How FAR 52.219-14 and 13 CFR 125.6 Affect Teaming

FAR 52.219-14 applies to specified small-business set-asides, SDVOSB sole-source contracts, certain orders, and other listed awards, and it shapes how work can be divided between a prime and its partners. (FAR 52.219-14.)

For services other than construction, the prime generally may not pay more than 50% of the amount paid by the government for contract performance to subcontractors that are not similarly situated entities. A similarly situated entity must have the same small-business program status relevant to the award and be small under the NAICS code assigned to its subcontract. Under 13 CFR 125.6, amounts paid to a similarly situated subcontractor for work it performs with its own employees do not count against the prime’s limit, while work the subcontractor further subcontracts does count toward the prime’s limit. (FAR 52.219-14 and 13 CFR 125.6.)

The assigned NAICS code determines which limitation applies to a mixed contract, and the relevant limitation applies to the corresponding portion of the award. FAR also treats work performed by an independent contractor as a subcontract. (FAR 52.219-14 and 13 CFR 125.6.)

Under 13 CFR 125.6, the limitations generally do not apply to a small-business set-aside contract valued above the micro-purchase threshold but at or below the simplified acquisition threshold, or to subcontracts themselves, except where a prime relies on a similarly situated entity to meet the limitation. Different percentages apply to supply and construction contracts. (13 CFR 125.6.)

Under 13 CFR 125.6, violations are subject to penalties under 15 U.S.C. 645(d), with the fine treated as the greater of $500,000 or the amount spent beyond permitted subcontracting levels. (13 CFR 125.6.)

Before agreeing to a workshare, the parties should map proposed tasks, labor, subcontract layers, and the applicable NAICS code.

What Large Prime Contractors Should Know About Small Business Subcontracting Plans

The limitations on subcontracting described above apply to set-aside and certain other SDVOSB prime contracts. A separate set of rules applies to large prime contractors competing for unrestricted work: the small business subcontracting plan.

Under FAR 19.702, in negotiated acquisitions expected to exceed $900,000 ($2 million for construction) that offer subcontracting possibilities, the apparently successful offeror must submit an acceptable subcontracting plan, and failure to negotiate one within the prescribed time limit makes the offeror ineligible for award. Subcontracting plans are not required from small business concerns. (FAR 19.702.)

The clause at FAR 52.219-9 requires the plan to include separate goals, expressed in total dollars subcontracted and as a percentage of total planned subcontracting dollars, for small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone, small disadvantaged business, and women-owned small business concerns. The plan is incorporated into the resulting contract. (FAR 52.219-9.)

This framework matters to both sides of a teaming arrangement. For the SDVOSB partner, the subcontracting plan must set separate goals for subcontracting to service-disabled veteran-owned small businesses, and subcontract awards to SDVOSBs are reported against those goals. For the prime, failure to make a good faith effort to comply with a subcontracting plan is a material breach of the contract under FAR 19.702(c), and FAR 19.705-7 states that 15 U.S.C. 637(d)(4)(F) directs that liquidated damages shall be paid by the contractor, with calculations and procedures under the clause at FAR 52.219-16. These plan goals operate separately from the limitations on subcontracting that apply on set-aside contracts.

Questions to Ask When Evaluating a Partner

A focused evaluation helps confirm whether a proposed arrangement is properly documented and workable. Consider asking:

  • Certification: Can the firm be found in SBA’s VetCert search, and is its federal registration information current?
  • Scope fit: Which specific IT tasks or technical roles will the firm perform?
  • NAICS and size: Which NAICS code applies to the work, and does the firm meet the relevant size standard?
  • Workshare: What portion of the contract will the SDVOSB perform, and how will the team document that work?
  • Subcontracting chain: Will any proposed subcontractor or similarly situated entity further subcontract work?
  • Delivery and agreement terms: Who will manage schedules, dependencies, and reporting, and are scope, responsibilities, staffing assumptions, and changes to the arrangement documented?
  • Joint venture structure: If a joint venture is under consideration, have the applicable SBA and FAR requirements for it been reviewed?

The answers should support a shared understanding of responsibilities; for a procurement or teaming structure with legal or compliance implications, the parties should consult qualified contracting or legal professionals.

MYJEN Consulting LLC is an SBA-certified Service-Disabled Veteran-Owned Small Business. Visit myjenconsulting.com or call 301-558-4700.

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Sources

Regulatory references last reviewed October 24, 2026.

This article is general information and is not legal advice.

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