For the first time in ten years, VA has increased its socioeconomic procurement preference program goals for Service-Disabled Veteran-Owned Small Business (SDVOSB) and Veteran-Owned Small Business (VOSB). They can hardly be considered ‘aggressive.’
Since Fiscal Year 2010, VA has flatlined its SDVOSB and VOSB goals at 10% and 12% respectively, despite significantly exceeding these goals each year.
Sometime between March 1, 2019, and April 9, 2019, six months into Fiscal Year 2019, VA’s Office of Small and Disadvantaged Business Utilization (OSDBU) updated its website to show its Fiscal Year 2019 small business and socioeconomic procurement preference program category goals.
The single page unsigned and undated document posted to the website, titled “Department of Veterans Affairs Small Business Program Goals for FY 2019” states “VA goals for the percentage of contracts awarded to small businesses are aggressive and aimed to maximize the use of the various Small Business Programs, as practical.” The document does not appear to have been issued in the form of a goaling memorandum from the Secretary of Veterans Affairs, as has been past tradition, reiterating the Secretary’s and VA’s commitment to maximizing the use of small businesses, especially SDVOSBs and VOSBs. The goaling memorandum also served as formal notification to VA personnel the Secretary’s goals. Title 38 of the United States Code Section 8127 requires the Secretary of Veterans Affairs to annually establish goals for SDVOSBs and VOSBs.
VA has unique contracting authorities under Public Law 109-461, the Veterans Benefits, Healthcare and Information Technology Act of 2006. The entrepreneurial provisions of the Act were effective June 20, 2007 and implemented as VA’s Veterans First Contracting Program. VA’s authorities are unprecedented and requires SDVOSBs and VOSBs be considered first and second, respectively, in all competitive procurements. On June 16, 2016, the U.S. Supreme Court established the “VA Rule of Two” when deciding the matter of Kingdomware Technologies vs. United States.
While VA’s new OSDBU leadership is to be commended for finally addressing the flatlined goals, the new goals of 15% for SDVOSBs and 17% for VOSBs, can hardly be considered ‘aggressive.’ Both goals still fall far below VA’s current accomplishment. Merriam-Webster Dictionary defines goal as “the end toward which effort is directed.” Can it really be VA’s ‘goal’ to do less business with SDVOSBs and VOSBs, or is this just VA’s way of establishing unrealistically low goals so it or its officials never have to account for failing to meet these goals?
Why is the new ‘aggressive’ goal important? The dollar amount difference between VA’s new goals, and what it actually accomplishes, shows VA can spend significantly less with SDVOSBs and VOSBs annually, and still meet its ‘goal.’ For example, in Fiscal Year 2018, VA posted SDVOSB and VOSB accomplishments of 21.28% and 22.23% against a total reported VA spend of $27.091 Billion. Under VA’s new ‘aggressive’ goals for SDVOSBs and VOSBs, VA could spend $1.417 Billion less with VOSBs and $1.7 Billion less with SDVOSBs and still make its ‘aggressive’ goals. Keep in mind, Federal departments and agencies may count spending in multiple categories if a company has multiple socioeconomic procurement preference program categories. For example, a SDVOSB is also counted as a VOSB, as SDVOSB is a subset of the VOSB category. The majority of VA’s VOSB accomplishments results from its spend with SDVOSBs.
VA is clearly the leader in Federal contracting with SDVOSBs and VOSBs. But the question still exists, why does VA establish ‘goals’ which are below its accomplishments? An ‘aggressive’ goal would be to exceed the previous year’s goal, not to spend less with SDVOSBs and VOSBs. Realistically, ‘aggressive’ goals would be north of the 20-percentile range? Perhaps VA is laying the ground work for reduced accomplishments as it implements changes to the Med/Surg Prime Vendor Program and uses cascading set-asides.
VA’s new OSDBU leadership assumed control of an organization in need of much attention, after years of lack-luster leadership and advocacy. Although the increased goals are a step in the right direction, sadly it seems like the new leadership team is taking a page from the old leadership team’s book and failings. This is not ‘aggressive’ goaling—it is safe goaling to ensure the goals are met so no one is ever accountable or heaven forbid loses their performance awards and bonuses.
 Source: Federal Procurement Data System—Next Generation. Standard Goaling Report Date of Extract: March 1, 2019