Should VA's company database go governmentwide?

The Veterans Affairs Department should have the authority to expand governmentwide the eligibility verification process for firms seeking to be a service-disabled veteran-owned small businesses, despite some lingering problems with the process, a Government Accountability Office official said Aug. 2.

The small-business status is part of a governmentwide program that allows for special contract set-asides. The program provides federal contracting opportunities to veterans who were disabled while in service.

The Small Business Administration manages the program on a governmentwide basis, while VA maintains a database of veterans’ businesses. VA officials have worked to improve their process of review for more scrutiny with higher standards.

With that resource, other agencies could use VA’s database of approved companies, Richard Hillman, managing director of forensic audits and investigative service at GAO, told a panel of House members.

Hillman and several other VA officials testified Aug. 2 before a joint hearing of the Veterans Affairs Committee’s Economic Opportunity and its Oversight and Investigations subcommittees.

The governmentwide version of the service-disabled veteran contracting program relies on an honor-system-like system. Companies certify themselves as meeting the program’s criteria. VA has the only program within the government dedicated to verifying firms’ eligibility.

While the databases are there, such as VA’s VetBiz, Hillman said it has its cracks. VA is still vulnerable to fraud and abuse in its program for service-disabled veteran-owned small businesses.

In a report released Aug. 1, GAO said VA officials can patch up those cracks by immediately starting to verify the companies already in the VetBiz database under the stricter procedures laid out in law. They should also establish ways to maintain the accuracy of the status of all firms listed in VetBiz, including which verification process they have undergone.

VA officials said they have completed an inventory of companies in the system and established procedures to maintain the status of all companies. The department has also verified companies in its vendor information pages, although, officials said, they didn’t review companies that were verified prior to October 2010. That’s when the Veterans Small Business Verification Act was enacted with new stricter rules for certifying potential vendors. However, officials said the VA would put companies through the new process when they have to verify their businesses again.