Legal Meets Practical

Any business that wants to do business with the VA in the Veterans First Contracting Program has to be listed in the Center for Verification and Evaluation’s (CVE’s) VetBiz registry. In the years since the CVE’s inception, businesses have had a hard time going – the regulations are difficult to understand (especially in the absence of bright line rules), application examiners have differing levels of understanding, technicalities have caused denials, and wait times (particularly for requests for reconsideration) have been so long that businesses have lost out on valuable contracts.

Recently, however, I gained access to a white paper produced by the CVE, which is scheduled for posting on the CVE’s website in early November. Don’t get me wrong – the CVE has a long way to go – but this is a step in the right direction. I think that some of the improvements identified in the paper are a bit overstated, but it reflects that significant improvements have been made in the last few years:

• Increased Opportunities for Verification – The white paper notes its new pre-determination and pre-decision processes. Thank goodness these have been implemented, as the request for reconsideration process was a “one shot” deal that often resulted in a business having to wait six months to reapply. While I don’t think these processes are without their problems, I’d much rather see businesses going through pre-determinations or pre-decisions rather than requests for reconsideration. The wait times are much shorter, and the ability of a business to “withdraw” means it can immediately reapply.

• Communications With Veterans – The white paper also points out the “great expan[sion]” in communications with veterans. I’ve heard numerous veterans note this improvement, which includes calling businesses prior to verification expiration and after document requests. While some of the information contained in these communications may not be helpful in the event a veteran needs nuanced guidance, it does give veterans direction to seek assistance (such as through counselors or attorneys/consultants).

• Verification Counselor Assistance – This was the one part of the white paper I almost wholly disagreed with. (However, this should be qualified by the fact that I went through the training to become a certified counselor in February of 2013 – hopefully the counselor training has become more rigorous by then). The white paper noted that there are 270 counselors in every state, all of whom are listed on the CVE’s website. These counselors are available for free to veteran businesses seeking verification. While many of these counselors are well-qualified with the best intentions, it should be noted that counselor training involves a one-day course that focused primarily on the process of verification, not the details that prevent businesses from becoming verified. Counselors – to my knowledge – do not receive updates on the process (for example, I wasn’t notified when pre-determination/pre-decision was implemented). Nor are they required to complete continuous education. Thus, while these counselors do want to help veterans, the fact of the matter is there are improvements necessary for them to truly guide veteran business owners through the process.

• Updating the Verification Rules in the Codes of Federal Regulations – The regulations applicable to VetBiz are contained at 38 CFR Part 74. The CVE is in the process of updating and improving these, which would go a long way towards providing much-needed clarification. (For example, the regulations do not address pre-determination and pre-decision). I do wonder when we can actually see these changes take place, as discussions regarding these changes have been underway for a few years now. Accordingly, don’t expect a rule change any time soon.

• Preventing Fraud and Protecting the Veterans Advantage – This is done primarily through increased random site visits. I know of a few companies that have been the subject of these lately, and there doesn’t seem to be rhyme or reason for their selection. This means that a mom-and-pop company might run the gauntlet, spend hours preparing documentation…and then get unlucky six months later. I’m all for audits and measures to detect fraudulent companies, but I’d like more explanation for why certain companies are chosen. Also, the wait times can be unreasonable – I recently saw a request for documentation that followed an on-site visit, and the CVE asked for about a dozen documents (including letters of explanation) to be uploaded in three business days.

Years ago, when the Small Business Administration’s 8(a) BD program was going through its growing pains, it wasn’t exposed to social media – attacks on Twitter, LinkedIn, blogs, etc. The CVE is one of the first certification program to be exposed as such, and everyone knows that people are more likely to complain publicly rather than to praise. Common criticisms include denials based on technicalities/misinterpretation of the regulations, long wait times, and fraudulent companies slipping through the cracks.

But this white paper is at least a step in the right direction. Over the last few years, it has gotten better. I’m still going to blog on the issues – as veterans have the right to know – but being an advocate doesn’t mean that I’m wholly negative. I’m glad to report on the positive too.

This is a democracy! Comment on what you think of this white paper. Have you seen positive changes at the CVE?

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If you’ve been denied verification to the VA’s Veterans First Contracting Program (aka VetBiz), ever wonder who will know it? Well, according to recent guidance issued by the Office of Small Disadvantaged Business Utilization (OSDBU), it turns out this information will be disclosed in a Freedom of Information Act (FOIA) request.

Yesterday, I received an email from the Vendor Information Pages. (Presumably, this went out to all representatives and verified companies, but I’m not so sure about businesses that were denied verification). This email, titled “Update on Requirements for VA to Release Verification Information in Response to FOIA Requests,” included a memorandum that gave the quick and dirty on what information about (or provided by) VetBiz applicants will be released via FOIA requests.

Notably, the guidance stated that as it relates to firms found not eligible for the Veterans First Contracting Program, the following information will be released: the business name, DUNS number, address, business email addresses that do not identify an individual, VOSB or SDVOSB status, bonding level, and number of employees.

Under the letter of the law, any information maintained by the VA as a federal agency may be requested by any person pursuant to a FOIA request. Some exemptions apply, such as restrictions on disclosing commercially sensitive or proprietary information, and technically this information doesn’t seem to fall into an exemption. But from a practical perspective, this feels like disclosure of sensitive information. After all, a VOSB or SDVOSB that is competing for non-VA set-asides doesn’t want its competitors to know it was denied for the Veterans First Contracting Program.

And it’s not like these businesses are all pass-throughs or otherwise truly ineligible for the Program. Any business reading this (especially multi-member or owner) knows that the VetBiz verification process is hard. A business can be truly eligible but be denied, but a FOIA request does not disclose the reason for the denial – whether the business was found affiliated with a big company or whether it simply didn’t provide proper paperwork.

In practicality, unless one business is checking up on another, this FOIA policy likely won’t really impact a business. But still. Knowing that your denial can be disclosed is still disconcerting.

Access the new guidance here.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veterans issues at https://legalmeetspractical.com.

If a business wants to do set-aside work with the VA, it must be listed in the Center for Verification and Evaluation’s (CVE) VetBiz registry. This means inputting business information into an online portal, uploading a wide range of documents, and answering probing questions designed to determine whether the business is truly “owned” and “controlled” by a veteran.

Lately, I’ve noticed the process has seemed more messy than usual, and I believe a big part of this comes down to the additional documents the CVE has been requesting. While it appears the CVE is now requesting these documents fairly consistently, the problem is (with one exception) these are not listed in its list of required documents posted on its website:

1099 Information – Before now, the CVE only asked for information about “employees” of a business – those for whom W2s are filed. Now, however, the CVE asks for a “Federal 1099 Report,” which is a summary report of monies paid to 1099 consultants.

There are two problems with requesting this information. The first is it doesn’t tell the CVE anything – the federal form (IRS Form 1096) requested doesn’t break down who was paid what, which means that if the total is more than the amount paid to the veteran, the CVE will come back and request more information.

This is because the CVE asks for this in order to determine that the veteran is the highest paid, which leads to the second problem. The regulation the CVE cites to – 38 CFR 74.4(g) – imposes limits on compensation only on those involved in the management of the business. If the 1099 consultant doesn’t fit that role – and they probably don’t given they’re a 1099 consultant – this information isn’t even relevant to the “highest compensated” requirement.

Certificate of Good Standing – The CVE is now asking for certificates of good standing from the states where a business is registered (either incorporated/organized or registered as a foreign entity). This is also required in 8(a) BD applications, so it’s not like this requirement is particularly onerous. However, because it might take a few weeks to obtain a Certificate of Good Standing from a  state that doesn’t transmit them electronically, a business risks having to withdraw its application if the CVE requests a Certificate and the business can’t obtain it in time.

Rent Checks – This is on the CVE’s list of required documents now, but it’s worth mentioning because it’s new. The CVE now wants the last three rent checks for the business. This is presumably to verify the address where the business is actually operating, as well as to make sure the veteran is signing the checks. However, this information should be clear on the business license; and it’s not unusual for the Comptroller or other employee to sign the checks, leading to the need for additional clarification.

Whether you’re going through verification or reverification, one of the things I’ve always reiterated is the need to be prepared. It is, however, hard to be prepared when you aren’t told everything you need. I hope this blog post saves you some time (and Advils!) as you navigate through the process.

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On October 7th, the U.S. Department of Veterans Affairs (“VA”) announced its intentions to fire four senior officials as part of a crackdown following a nationwide scandal over long wait times for veterans needing medical care, and falsified records covering up the delays.

House cleaning? More like a light dusting. Of the rocking chair in the second guest bedroom. With a dry paper towel.

Let’s take a look at these four individuals who are being used as examples. One, the director of a medical clinic in Georgia, was already halfway out the door, having announced his retirement in September. So his “firing” for all intents and purposes doesn’t even affect him.

Another is Susan Taylor, the former deputy chief procurement officer who is accused of steering VA contracts to a specific company. Taylor had tried to leave the VA for the Department of Energy after a scathing Office of Inspector General report said she acted inappropriately, but the Energy Department has rescinded that offer.

The third is Terry Wolf, the former director of the Pittsburgh VA Healthcare System. She was placed on paid leave in June shortly after reports that Legionnaires’ disease spread through the VA and infected more than 20 veterans.

These remaining three individuals proposed for firing are safe for now. Being “proposed” for firing means an individual goes through a process that was established by recently passed law. This law provides that the VA secretary can decide to fire or demote someone, giving the employee advance notice so they can respond to the charges. After the VA receives the response, if it decides to proceed with the firing, the employee has seven days to appeal that decision to the Merit Systems Protection Board. The Board has 21 days to rule on that decision, and failure of the Board to reach a decision makes the secretary’s decision final.

Most likely, these employees will get the axe given public outcry. But considering these proposed firings come months and months after their behavior, it seems non-sensical to put a process in place to double-check that lying to government officials and engaging in other shenanigans means you shouldn’t be entrusted with protecting our veterans. (It’s true, however, that government employees have a constitutional property right to their jobs, but that’s a whole other issue).

Why does the VA keep doing this to itself? Ask any veteran about what is going on lately with VA medical care and what they think of the VA, and the veteran will either share rage or extreme sadness. So why does the VA keep bringing such criticism upon itself? These three individuals “proposed” for firing have been written up in the media for scandalous behavior that affects the health and welfare of our veterans – how is it that months later they’re being “proposed” for removal?

And only three individuals? It takes many, many problems and people to make a system as broken as the VA, and a thorough house cleaning, complete with termite tents and flea bombs, is what we need here.

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