SDVOSB and Veteran-Owned Business Contracts: Certification and Set-Asides

An SDVOSB is a service-disabled veteran-owned small business: a small business at least 51% owned and controlled by one or more veterans with a service-connected disability determined by the Department of Veterans Affairs (VA). The Small Business Administration (SBA) certifies SDVOSBs for free through its VetCert program, and certified firms can win set-aside and sole-source contracts at any federal agency. Veteran-owned small businesses (VOSBs) use the same certification, but VOSB set-asides exist only at the VA.

SDVOSB vs. VOSB: what's the difference?

Both statuses come from the same SBA program, called VetCert. SBA took over certification from the VA on January 1, 2023. The difference is who owns the business and where the set-asides are.

A veteran is someone who served on active military duty and was discharged under conditions other than dishonorable. Reservists and National Guard members who were called to federal active duty, or disabled in the line of duty, can also qualify.

A service-disabled veteran is a veteran the VA has on record as having a service-connected disability. SBA doesn't make that call; the VA's determination is what counts. The regulation doesn't name a minimum disability rating. You'll see claims online that a 0% rating is enough, but we couldn't confirm that on an official page, so check with SBA before you rely on it.

SDVOSB certification requirements

The rules for SDVOSB and VOSB status are in 13 CFR Part 128. Your business must meet all of these:

• Small. Under the SBA size standard for at least one NAICS code in your SAM.gov profile. To win a particular set-aside, you must also be small under that solicitation's NAICS code. See who can get government contracts to check your size.
• Owned by qualifying veterans. They unconditionally and directly own at least 51%.
• Controlled by qualifying veterans. They run both the long-term decisions and the day-to-day operations.
• U.S. residents. The qualifying veterans live in the United States.
• In good standing. No active exclusion in SAM.gov, and no unresolved significant federal debts, such as tax liens or loan defaults, unless you're on an approved repayment plan.

What "owned" means

Ownership has to be direct. Shares held through another company, a trust or an employee stock ownership plan (ESOP) don't count. One exception: a revocable living trust where the veterans are the grantors, trustees and beneficiaries.

• Corporations: veterans own 51% of all stock and 51% of each class of voting stock.
• Partnerships and LLCs: veterans own 51% of every class of interest.
• Stock options: options held by non-veterans are treated as if they'd been used, which can push the veterans under 51%.

What "controlled" means

• A qualifying veteran holds the highest officer position, usually President or CEO, and has enough managerial experience. They don't necessarily need the business's technical license.
• That veteran generally works full time in the business during its normal hours.
• Veterans control the board, or are the general partners or managing members.
• Non-veterans generally can't earn more than the top veteran officer unless the pay is commercially reasonable.

Can a spouse or caregiver run an SDVOSB?

Only in one case. If the VA rates the veteran's disability as permanent and total, and the veteran can't manage daily operations, a spouse or permanent caregiver can control the business. The caregiver must be 18 or older, live in the U.S., and be legally designated in writing to manage the veteran's well-being. Appointing one needs a written VA finding of permanent and total disability and the veteran's consent. Each veteran can have only one.

If a service-disabled owner dies, the business can keep its status when the surviving spouse takes over the veteran's ownership. That lasts until the spouse remarries or gives up the ownership, or until 10 years after the death (if the veteran was rated 100% disabled or died of a service-connected disability) or three years (in other cases), whichever comes first.

How to get SDVOSB certification through VetCert

1. Get your SAM.gov registration active. SBA checks your size against the NAICS codes in your SAM.gov profile, and you need an active registration to bid anyway. See how to register on SAM.gov.
2. Check eligibility and gather documents. MySBA Certifications has checklists and pre-application guides listing what to upload. You'll need documents that show veteran ownership and control. If you're already in SBA's 8(a) or WOSB program based on a qualifying veteran, you can reuse that program's documents if nothing material has changed.
3. Apply at MySBA Certifications. SBA says it "does not charge any costs for applying to our programs." The qualifying veteran is responsible for the accuracy of everything you submit.
4. Answer SBA's questions fast. SBA can ask for more documents at any time. If you miss its deadline, SBA can presume the missing information would show you're ineligible, and deny you.
5. Get your decision by email. Certified firms show up in SBA's Small Business Search (SBS), which contracting officers use to verify veteran firms.

How long it takes: the regulation sets no deadline. SBA says processing averaged 30 days when the program began and "skyrocketed to 81 days by the end of 2024." After clearing a backlog of more than 2,700 applications, SBA reported on November 11, 2025 that processing was down to "an average of just 12 days."

If you're denied: you can reapply after 90 calendar days, once you've fixed every reason for the denial, or appeal to SBA's Office of Hearings and Appeals within 45 business days. A denial for lack of proof of veteran or service-disabled status can't be appealed there.

Keeping it: you recertify every three years, within the 90 days before your certification period ends. Tell SBA within 30 days about material changes, such as new owners, a change in control, bankruptcy, or an owner called to active duty.

SDVOSB set-aside contracts at any agency

Any federal agency can reserve a contract for SDVOSBs. Outside the VA, it's the contracting officer's choice: they "may" restrict competition to SDVOSBs when they reasonably expect offers from two or more of them and an award at a fair market price. The FAR overhaul text most agencies now use (19.106-2) says that expectation is based on market research. Agencies can also choose another program instead: the codified FAR says "there is no order of precedence" among the 8(a), HUBZone, SDVOSB and WOSB programs.

SDVOSB sole-source awards

An agency can also award a contract to one certified SDVOSB without a competition. Under the codified FAR (19.1406), all of these must be true:

• The contracting officer doesn't expect offers from two or more SDVOSBs.
• The price, including options, won't exceed $5 million, or $8.5 million for manufacturing.
• The work isn't already in the 8(a) program.
• The SDVOSB is a responsible contractor, and the price is fair and reasonable.

The FAR overhaul text (19.106-3) uses the same dollar limits. They rose from $4 million and $7 million on October 1, 2025.

Limits on subcontracting

On an SDVOSB contract of any size, you have to do a real share of the work. You generally can't pay more than 50% of what the government pays you to subcontractors that aren't "similarly situated" on services or supplies (not counting materials). The limit is 85% for general construction and 75% for special trade construction. A similarly situated subcontractor has the same SDVOSB status and is small under the subcontract's NAICS code, so money paid to it doesn't count against you.

The 5% SDVOSB goal

The government-wide goal is at least 5% of prime contract and subcontract dollars. It rose from 3% in the National Defense Authorization Act for fiscal year 2024 (FY2024). In FY2025, SDVOSBs won $32.5 billion in prime contracts, or 5.01%, just over the goal. There's no government-wide VOSB goal.

Because the goal counts subcontract dollars too, large prime contractors have a reason to find SDVOSB partners. A 2024 SBA rule also ended self-certification for goaling credit, so certification is what gets a firm counted.

The VA's Veterans First program

At the VA, veteran set-asides aren't optional. Under the Veterans First law (38 U.S.C. 8127), the VA "shall" restrict competition to veteran-owned small businesses when it expects two or more to offer at "a fair and reasonable price that offers best value." That's a mandatory rule of two. The VA's order of priority is:

1. SDVOSBs
2. VOSBs
3. 8(a) and HUBZone firms
4. Other small businesses

The VA can also award directly to a veteran-owned small business below the simplified acquisition threshold ($350,000), and use sole-source awards above it up to $5 million. Some items on the federal AbilityOne list take priority over all of this.

The key court case is Kingdomware Technologies v. United States, decided unanimously by the Supreme Court on June 16, 2016. It held that the VA must apply this rule of two before using competitive procedures, including orders from the Federal Supply Schedule. It's a big reason the VA sets aside so much. In FY2024, the VA reported $10.2 billion, or 23% of its prime contract dollars, went to SDVOSBs, against its own 15% goal.

VOSB status only helps at the VA: SBA's rule says "VOSB contracts are exclusively VA procurements." Either status needs SBA certification to win VA set-asides.

How to find SDVOSB contracts

On September 26, 2026, FedReady's search of SAM.gov data showed 322 open SDVOSB set-asides plus 10 SDVOSB sole-source notices, 332 in total. The VA posted 163 and DoD 158. There were also 5 open VOSB set-asides, all at the VA. These industries had the most SDVOSB notices:

A few ways to find more of them:

• Filter by set-aside. Search SAM.gov Contract Opportunities for SDVOSB set-asides, or use FedReady's free search, updated daily from SAM.gov data. See how to find government contracts for search tips.
• Answer VA and DoD market research. A VA sources sought notice may say the work could be set aside for SDVOSBs, VOSBs or small businesses "BASED ON THE RESPONSES." Your answer can help create a set-aside. See how to respond to sources sought notices.
• Keep your profile complete. Your SAM.gov data feeds SBA's Small Business Search, where contracting officers look up certified veteran firms.
• Look at SDVOSB pools on large contracts. GSA's VETS 2 IT contract is for SDVOSBs (orders through February 22, 2028). Polaris has an SDVOSB pool, and OASIS+ has a separate SDVOSB contract. See IDIQ contracts explained.

Where veteran business owners can get help

• Veterans Business Outreach Centers (VBOCs): SBA lists 31 organizations serving as VBOCs. They offer workshops, training, counseling and mentorship, including the Boots to Business and B2B Reboot programs. Find yours on SBA's VBOC page.
• APEX Accelerators: no-cost help with registration, certification and bidding. A counselor can review your ownership and control setup with you before you apply.
• VA's Office of Small and Disadvantaged Business Utilization (OSDBU): business readiness training and direct access programs for veteran-owned firms.

You don't need a paid consultant to get certified. If you want one, that's your choice, but the application itself costs nothing.

Next steps

SDVOSB status can sit alongside other programs, so check which other set-asides you qualify for. If you're not sure you're small, read who can get government contracts. Then set up your searches with how to find government contracts.

This guide is general information, not legal or financial advice. Rules and thresholds change, so confirm details on SAM.gov and the official agency sites linked above before you act. FedReady is an independent company and is not affiliated with any government agency.