In this blog, we previously recounted some highlights from the Department of Veterans Affairs’ (VA) Verification Training on June 7, 2012, at the Women’s Memorial at Arlington National Cemetery, This was an informative event hosted by WAVE — Women As Veteran Entrepreneurs.
The training was aimed at helping veteran business owners who are either engaged in or considering applying for the VetBiz verification process administered by the Center for Veteran Enterprise (CVE). This certification is required for Veteran and Service Disabled Veteran Owned Small Businesses (VOSB and SDVOSB) that wish to contract with the VA.
Here are some more highlights of the day. The second speaker was an attorney from the VA’s Office of General Counsel who spoke about some of the common pitfalls encountered by veteran-owned businesses applying for certification. We previously noted that the business model required for CVE verification is refined, and that there are a number of ways, not always obvious, in which a business can fail to meet the requirements of the model.
A good example is CVE’s approach to transfers among immediate family members. If ownership of the business has been transferred to a veteran by an immediate family member within the last two years, CVE’s policies require an affirmative showing that the veteran-transferee has the requisite skills and experience to effectively run the business. Essentially, even if the veteran has majority ownership and executive control of the company, CVE will make further inquiries into the owner’s qualifications.
Therefore, if a veteran seeking certification recently acquired ownership in a business from an immediate family member, the veteran should take care to fully and contemporaneously document his or her role in the business, and should take steps through professional training, participation in industry associations, or other avenues of education to fill any gaps in knowledge or experience that he or she may have.
Another extremely common pitfall for businesses seeking VetBiz certification relates to the “full-time” requirement: VetBiz regulations require that one or more veterans dedicate “full-time” hours to the business. “Full-time” is not defined, and for the most part, this determination is made on a case-by-case basis. However, there is one firm rule. A veteran business owner and executive who is employed somewhere in addition to the management of the business seeking certification, must submit a written explanation regarding this outside employment to explain how and why it does not interfere with the management of the VOSB or EDVOSB business.
Our experience suggests that most start-up business owners do in fact wear several hats and take on multiple responsibilities. This written explanation is a crucial part of the VetBiz application process and should be thoughtfully crafted.
In general, the speaker from the OGC made it clear that even when written explanations are not required per se, they are permitted and even encouraged, because they help CVE understand your application. The speaker explained that if you want CVE to take away a certain message from an application document (such as a resume, operating agreement, etc.) explain the document in a written attachment. Helping CVE achieve an accurate and complete picture of your business is a strong first step in the VetBiz certification process.