SDVOSB certification gives veteran-owned businesses access to billions in set-aside contracts, but the process is rarely straightforward. Applications face significant rejection risks, and success depends less on veteran status itself and more on whether your documents align to show ownership and control. The good news: the SBA cleared its VetCert backlog in late 2025 and reduced processing times to an average of just 12 days, down from the 60 to 90 days that was typical throughout most of 2024 and early 2025.

Why SDVOSB Certification Is More Valuable Than Ever

Major opportunity expansion: The National Defense Authorization Act for FY2024 increased the federal spending goal for SDVOSBs from 3% to 5% of all prime and subcontract dollars. This represents a 67% increase in targeted opportunities, pushing the annual target to over $31 billion.

Real market impact: In FY2023, agencies already exceeded the old 3% goal, reaching 5% and awarding $31.9 billion to SDVOSBs. In FY2024, SDVOSB set-aside awards reached approximately $8.5 billion, with the program ranking as the second most utilized set-aside category behind general small business set-asides. Now that 5% is the official target, agencies face increased pressure to maintain and potentially exceed this level.

Certification is now mandatory: The goal increase coincides with the completion of eliminating self-certification for SDVOSB status. As of December 22, 2024, only SBA VetCert-certified businesses count toward agency goals, making proper certification mandatory rather than optional for federal contracting opportunities.

Agency accountability: Federal agencies that fail to meet the 5% SDVOSB goal must submit corrective action reports to the SBA. This creates institutional pressure to actively seek certified SDVOSB contractors, particularly in agencies that historically underperformed on veteran contracting goals.

What is SDVOSB Certification?

Service-Disabled Veteran-Owned Small Business (SDVOSB) certification is a federal designation that gives qualifying veteran-owned businesses preferential access to contracting opportunities. The SBA VetCert program handles verification, which assumed responsibility from the VA's CVE in January 2023.

Eligibility Requirements

• To qualify for SDVOSB certification, a business must meet the following:
• At least 51% owned by one or more service-disabled veterans
• Ownership must be unconditional, without restrictions on transfer or investor influence
• Day-to-day control and long-term decision-making by the veteran owner
• Disability must be service-connected and verified by VA or DoD (any rating percentage qualifies, must have had active duty)
• Must qualify as a small business under current SBA size standards
• Principal place of business in the United States
• The principal owner must be a U.S. citizen

Ownership Complications to Watch

• Spousal ownership: Community property rules may complicate proof of veteran control.
• Trusts and estates: Only irrevocable trusts where the veteran has control typically qualify.
• Partnerships: SBA scrutinizes how management authority is shared among partners.
• Debt and investors: Loan covenants or investor rights can undermine "unconditional" ownership.

Ownership must be direct, not through another business, including holding companies.

Essential Documents for SDVOSB Certification

Core Documentation:

• Articles of incorporation or organization
• Current operating agreement or bylaws (signed and dated)
• Stock certificates or ownership ledger (if applicable)
• Business licenses and permits
• Professional liability insurance (if applicable)
• Control Documentation (Critical for Approval):
• Board resolutions showing veteran decision-making authority

Documentation Alignment Challenges

Most denials are caused by inconsistencies between documents rather than ineligibility. Reviewers check:

• SAM vs. corporate docs: Business names, ownership percentages, and addresses must match exactly.
• Name variations: Even small differences (nicknames, missing middle initials) can trigger rejections.
• Address conflicts: Business license address must align with SAM.

Need Help With the SDVOSB Process?

SDVOSB certification can be a long and challenging process. If you need help, contact a USFCR Registration and Contracting Specialist at (877) 252-2700.

You can also see how other veteran-owned businesses have succeeded by reviewing our SDVOSB Success Story Case Study.

SBA Review Factors

Business purpose: The company must have a clear commercial mission beyond certification.

Economic dependence: If the veteran owner works full-time elsewhere, SBA may question control.

SBA VetCert Process

The VetCert process includes:

• Active SAM registration with matching business details
• Online application through SBA's portal
• Upload of required documents
• SBA review of ownership and control evidence
• Approval or denial

Appeals Process Reality

• Appeals often take 6+ months.
• Burden of proof shifts: the applicant must prove SBA wrong.
• You cannot pursue SDVOSB set-asides while an appeal is pending.
• Many appeals require legal or professional representation.

Strategic Value of SDVOSB Status

Contracting Advantages:

• Access to SDVOSB set-aside contracts
• Sole-source awards up to $8.5 million for manufacturing requirements and $5 million for all other requirements
• Price evaluation preferences in some full-and-open competitions
• Strong subcontracting demand from large primes

Market Positioning:

• Creates competitive protection that other businesses cannot replicate
• Provides access to agency contracting vehicles reserved for SDVOSBs
• Preferred teaming relationships with major contractors
• Enhances credibility with contracting officers

Interaction with Other Certifications

SDVOSB can be stacked with 8(a), HUBZone, or WOSB for broader opportunity access. Agencies with overlapping goals may prioritize firms with multiple designations. The September 2025 FAR Part 19 overhaul also eliminated the 8(a) limitation on contracting officers' ability to sole source to an SDVOSB, making it easier to transition follow-on contracts from 8(a) to SDVOSB set-asides without SBA approval.

Strategic Alternatives: State-Level Certifications

State veteran-owned certifications run separate from SBA's VetCert. They won't get you federal set-aside status, but they can be a smart way to build past performance and revenue early on. As of early 2025, 14 states have some manner of program for government set-aside contracts reserved for VOSB or SDVOSB businesses: Arkansas, California, Florida, Illinois, Indiana, New York, Maryland, Massachusetts, Michigan, Minnesota, Virginia, Oregon, Washington, and Wisconsin.

Advantages:

• Shorter history requirements (6 to 12 months)
• Faster processing times
• Access to state and local set-asides

Limitations:

• States often require residency
• Contract values are typically lower than federal opportunities
• Maintaining state and federal certifications adds a compliance burden
• Success in state contracting does not guarantee federal approval

Current Market Intelligence (January 2026)

Processing times dramatically improved: In November 2025, the SBA announced it cleared the VetCert program backlog and restored full staffing and funding. Processing now averages just 12 days, down from 81 days at the end of 2024.

Six-month certification extensions: The SBA extended eligibility periods for existing VOSB and SDVOSB certifications by six months. Firms can recertify within 90 calendar days prior to their new expiration date.

CMMC requirements: Cybersecurity Maturity Model Certification requirements are creating unprecedented demand for cybersecurity-capable SDVOSBs in defense contracting.

Post-COVID supply chain resilience: Domestic sourcing rules continue to favor veteran-led firms with secure supply chains.

Agency-specific trends: VA leads in SDVOSB awards, followed by DoD. Civilian agencies remain inconsistent in meeting goals.

Regional dynamics: Washington, D.C., and San Diego are oversaturated, while Huntsville, Colorado Springs, and San Antonio show high demand with lighter competition.

What's Next?

Approach SDVOSB certification as part of a three-year contracting strategy. Use the application period to build relationships, attend industry days, and develop capabilities. The dramatically faster processing times mean you can move from application to certified status much quicker than in previous years, so there's no better time to get started.

Get Help with Your SDVOSB Certification

If you're ready to move forward but want expert guidance, our team can review your documents, identify alignment issues, and help prepare your application. This prevents costly delays and positions your business for set-aside eligibility.

USFCR has helped over 300,000 businesses position for federal contracting success, and our clients have won over $1.5 billion in federal contracts.

Speak to a USFCR Registration and Contracting Specialist: (877) 252-2700

👉 Learn more about SDVOSB Certification Support

FAQ

How long does SDVOSB certification take?

Currently, most applications take 60–90 days, depending on the SBA backlog. Incomplete files can extend reviews well beyond that.

Do I need two years of revenue to qualify? 

No. A Service-Disabled Veteran-Owned business can apply for the VETCert on the first day of operations.

Can I appeal if I get denied?

Yes, but appeals take months, and you cannot pursue set-asides while waiting. The burden of proof is higher at appeal.

Can I pursue contracts while waiting on certification?

Yes, you can compete in the open market, but SDVOSB set-asides only apply after certification approval.

What are the biggest risks after approval?

You must maintain compliance. Status can be protested, SBA can require reverification, and joint ventures or investor deals can jeopardize eligibility.

View full FAQ page

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