Removal of Expired Veteran-Owned Small Businesses from Vendor Information Pages (VIP) Database
November 29, 2012
VA’s Center for Verification and Evaluation (CVE) developed a program designed to help VOSBs compete for VA procurements by retaining expired firms while they applied for re-verification with CVE. The temporary program could only function legally for a period of time, which expired September 30, 2012. Therefore, VA CVE has ended this program and removed expired firms from VA’s Vendor Information Page (VIP) database.
CVE is working with firms that are being removed to ensure its records are correct and to facilitate their submission of a new application if they choose to re-establish themselves on VIP.
In 2012, VA awarded more than $3.7 Billion in procurements under the Veterans First preference program to Veteran-Owned Small Businesses (VOSB) whose ownership and control by Veterans were verified in VA’s VIP database. When technology problems restricted the ability of CVE to process verification applications effectively, VA initiated a program designed to help VOSB compete for VA procurements by retaining expired firms in VIP. This program, allowable on a temporary basis under Federal procurement rules, required the establishment of a temporary “class deviation” from VA Acquisition Regulations that authorized firms to be listed in VIP as “re-verification” and to pursue contracting opportunities while their applications were being processed. The class deviation enabled almost 200 Veteran businesses to compete for and receive awards, while protecting VA from potential fraud or abuse by ensuring that all company awarded a contract had been verified as eligible. Since acquisition regulations only allow temporary class deviations, the program expired by law on September 30, 2012. The CVE is precluded from renewing it due to legal restrictions on “de facto” rule making.
While re-verification status did not allow a firm to receive an award, the firm was eligible to bid on VA solicitations, and if it was pending an award, CVE conducted “fast track” verification, enabling the firm to receive the award.
In June, 2012, VA notified expired firms in VIP about the need to submit new applications. To a further effort to reduce the burden on VOSB retained in VIP, VA also instituted a rule change in June that extended the eligibility period to two years. Unfortunately, a large number of expired firms retained in VIP did not take advantage these efforts to provide them more time to initiate applications and, as a result, VA must remove them from VIP to be compliant with law.
We have completed determinations for all firms who completed applications in response to our June, 2012 notice. The small number of expired firms who initiated incomplete applications are being processed on a priority basis.
Removal of Expired VOSBs from VIP Database
- The VA Veterans First program is a procurement preference program based on P.L. 109-461 that has enabled Veteran Small Businesses obtain preferential access to VA contracts, enabling Veteran Businesses to obtain more than $3.7 Billion in contract awards in 2012 (more than 21% of total procurements).
- In view of the preferential treatment for Veteran-Owned Small Businesses, Congress sought to ensure that only businesses owned and controlled by Veterans would be able to benefit from the program. In response to the requirements established in P.L. 109-461, VA established a Verification Program.
- The Veterans First Verification Program has evolved considerably since its launch in May, 2008 in response to changing legislation, reports from the Government Accountability Office and VA Office of Inspector General, as well as feedback from stakeholders.
- In Fiscal Year (FY) 2012, CVE has made major strides to enable eligible firms to obtain verification of their eligibility. Improvements in the verification process enabled CVE to add more than 1,400 new firms to the VIP in FY2012 and to reduce the average time to obtain an initial determination from more than 120 days in July 2011, to 73 days in October, 2012.
- In April, 2012, VA established a simplified renewal process that greatly reduces the time firms verified under the rules established in response to the passage of Section 104 of P.L. 111-275.
- In May, 2012, a modification to the Verification Case Management System to enable initiation of the Simplified Renewal process resulted in an extended period during which applications could not be processed. To prevent firms who were in the verification process from losing opportunities to participate in Veterans First Program, VA took action to retain them in VIP.
Creation of Class Deviation to retain firms in VIP in “re-verification” status.
- On June 1, 2012, VA established a Class Deviation to VAAR 819.7003 (Eligibility for Service-Disabled Veteran-Owned and Veteran-Owned Small Business Acquisition Program) in order to avoid disadvantaging firms who were applying for re-verification but whose eligibility would expire prior to the Center for Verification and Evaluation (CVE) being able to make a determination.
- The class deviation established a status of “Reverification” for companies previously verified whose eligibility had expired. This allowed them to remain visible in the VIP database and continue to submit proposals for VA Veterans First set-aside contracts. Additionally, if the company was the apparently successful offeror on a Veterans First contract, they became eligible to have their re-verification application processed on a “Fast Track” that resulted in a determination within 21 business days.
- The Fast Track program enabled almost 200 firms to compete for and win VA contracts.
- The class deviation enabled more VOSBs compete for Veterans First awards, while protecting VA from potential fraud or abuse by ensuring that no company would be awarded a Veterans First contract without first passing a comprehensive verification of program eligibility established by VA in response to the passage of Section 104 of Public Law 111-275 in October, 2010.
- Class deviations are only allowed on a temporary basis so as not to circumvent the notice and public comment process for rule making by creating a de facto rule change. The class deviation for 819.7003 was established as a temporary measure to help firms while applying for re-verification, and was scheduled to expire September 30, 2012.
- On June 21, 2012, VA further reduced the burden on Veteran businesses seeking to retain eligibility for Veterans First by extending the eligibility period for verified firms from one year to two years through formal rule making.
- More than 2,200 firms in VIP benefitted from these changes. Unfortunately, many firms did not take advantage of the opportunity to apply for re-verification during the time that they were permitted to be in “re-verification” status.
Class Deviation Expiration
- The Class Deviation expired at the end of fiscal year FY 2012 on September 30, 2012. VA cannot renew the Class Deviation, as doing so would be construed as de facto rule making and avoidance of the Office of Management and Budget process for new or changed regulations.
- Section 104 of Public Law 111-275 requires that all firms listed in VIP must be verified.
- Due to the expiration of the Class Deviation, all expired firms that have been carried in VIP with a “Reverification” status will be removed from VIP.
- We have delayed removal of firms from VIP so that we give an opportunity for firms to notify us if they believe that they are being removed in error. As soon as we are comfortable that we have identified any errors, we will remove expired firms. As before, no expired firm in VIP is eligible to receive an award without being verified.
Action to be taken by firms desiring to apply for verification
- Any firm that previously appeared in VIP with the “Reverification” status may submit a new application for verification at any time.
- No firm will be visible in VIP once its two year eligibility period has expired, regardless of application status.
- Firms that are currently within their two-year eligibility period are encouraged to apply for reverification up to 120 days prior to their expiration.
- All firms applying for reverification are encouraged to make use of VA's Verification Assistance Program prior to submitting their application package in order to better understand the eligibility requirements and to greatly increase the probability of a positive determination.
- Information on the Verification Assistance Program can be found at http://www.va.gov/osdbu/verification/assistance/.