Over the past few weeks there have been two significant developments that may impact both the U.S. Department of Defense's (DoD) and the U.S. Department of Veterans Affairs' (the "VA") Service-Disabled Veteran-Owned Small Business (SDVOSB) verification process and procedures. Together, these developments may significantly impact SDVOSB verification processes and contract procedures.

First, on February 29, 2012, the DoD Office of Inspector General issued a report regarding DoD's use of the SDVOSB set-aside program, finding that the DoD had awarded over $340 million in funds set aside for the SDVOSB program to potentially ineligible contractors. In the report, the Inspector General recommends that the DoD rectify its' failure to confirm the accuracy of contractors' SDVOSB status representations by establishing policies and procedures to actively verify contractor status. Second, on March 6, 2012, the U.S. District Court for the District of Columbia issued a decision in what appears to be the first court challenge of a VA SDVOSB VetBiz verification denial. VetBiz is the VA's online veterans business registry, which provides information on the application process for VA's SDVOSB and Veteran-Owned Small Businesses (VOSBs) verification program and includes a list of VA verified SDVOSBs and VOSBs. In order to receive contracts with the VA as an SDVOSB or VOSB, the contractor must be VA-verified. In the decision, the court remanded the denial of the plaintiff's request for reconsideration regarding its VA VetBiz verification, holding that the VA failed to provide a satisfactory explanation for the denial.