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Make it Look Good on Paper: Protecting Your SDVOSB Status Through Airtight Drafting

If you don’t build a strong foundation for it, your house will fall down. The same goes for your business. If you don’t invest in the necessary structure at the outset, you might end up watching it crumble.

For service-disabled veterans starting a small business, it is important to know the checklist of what is necessary to show service-disabled veteran-owned small business (SDVOSB) status. The veteran must always have 51% interest, he must always be the president or CEO (ie, hold the highest position), and he must always exercise managerial authority over his business. If these provisions are not clearly set forth in corporate documents, SDVOSBs leave themselves vulnerable to protests and the loss of their SDVOSB status.

Take Benetech, LLC, for example. There, a family-owned business won a set-aside for constructing a parking garage, and its SDVOSB status was challenged by a disappointed bidder. SBA VET-225 (2011). Benetech, LLC (“Benetech”) was a father and son team, and the father was the service-disabled veteran upon whom certification as an SDVOSB was based.

To participate in the Small Business Administration’s (SBA’s) SDVOSB program, an LLC must be “unconditionally owned” by the service-disabled veteran upon whom certification is based, meaning that the veteran must own 51% of the interest. (13 CFR 125.9). The father unconditionally owned 51% of the LLC, and the son owned 49%. No problems there.

An LLC must also be “unconditionally controlled” by the service-disabled veteran, which means that the veteran must control “the management and daily operations” of the business, and he must also hold the highest position in the company (13 CFR 125.10). This is where Benetech ran into trouble. The father was in fact the president of the Company. However, in the company’s operating agreement, no managing member was named. Also, Benetech had listed the son as chief executive officer (CEO) in its proposal for the awarded contract; and the company’s Articles of Organization gave him enumerated managerial powers and authority.

Based on all of the evidence, both the Small Business Administration (SBA) Acting Director of the Office of Government Contracting (AD/GC) and the SBA Office of Hearings and Appeals agreed with the protestor that Benetech did not meet the control requirements of the SBA’s SDVOSB program. The protest was sustained, and Benetech lost the contract.

In my perspective, the heart of Benetech’s problem was bad drafting. Benetech was ineligible for the SDVOSB program likely only in a paper sense – its corporate documents and other records were not up to snuff under SDVOSB program standards. While the purpose of the SDVOSB program, which is to provide contracting opportunities to service-disabled veteran-owned businesses, may not have been undermined by awarding the contract to Benetech, the decision to sustain the protect was technically correct.

In this example, if better corporate documents had been drafted for the company, and it had been adequately informed of how to demonstrate SDVOSB status, it likely would not have endured legal fees for two levels of administrative decisions and, in the end, lost its set-aside contract. This is a lesson learned for all SDVOSBS: make sure your corporate documents are airtight, or suffer the consequences later. It’s not enough to be an SDVOSB in practice. To play the game, you have to be one on paper, too.

For further reading, the Benetech case may be accessed here.


Lessons of a Three-Year Long Battle: When Giving Up is Not an Option

My father is one of the reasons I chose veterans law as a practice. Several years ago, I became his advocate in his VA disability compensation claim; and yesterday, a decision was rendered. It was granted. Because this particular client is my father, he has given me permission to candidly share his story. It sheds light on two basic elements of successful VA claims: to refuse to give up (within reason), and to know common VA errors.

My father is a veteran of the Vietnam era. He served in Bad Kissingen, Germany at the tail end of the war, and it was a wonder he was drafted. Even as a kid, my father had trouble with his hips and knees – to such an extent that he was exempt from high school physical education. When he was asked to undergo a medical examination prior to officially being drafted, he expected to be immediately dismissed. Instead, he received a cursory glance and was told to board the bus for basic training at Fort Leonardwood, Missouri. Basic training was so difficult for him that he received a waiver from its activities, but he was still somehow found fit to be shipped overseas to Germany. Once there, he assumed the duty of distributing the mail. Sure, that doesn’t sound particularly arduous, but carrying a 70-pound sack up and down steps and around the base isn’t good for someone with bad knees and hips.

As a young lawyer living and working in Washington, D.C. I learned about the VA disability compensation claims process. I’d heard Dad’s stories about serving in the Army, and I asked him whether he had considered applying for disability compensation. He relayed that he had completed an application immediately after his service in 1972 and was denied. “Well,” I told him, “You’re going to apply again, because I think you’re entitled.” I believed that he was entitled to service connection for an aggravation of injury – Dad’s knees and hips were made worse by what he was required to do in service.

Because I was ambitious, and because my father’s interests were at stake, I pulled out all the stops in his application. I put together a 23-tabbed binder with the new and material evidence required to reopen his claim. I hunted down old war buddies to take their statements, gathered new medical evidence, and wrote a legal argument. Basically anything that could be done, I did.

So what happened? Eight months later we received a denial. And here was the kicker – the VA treated Dad’s claim as an appeal, not as a reopening. An appeal is when the veteran challenges a VA decision based on the evidence that the VA had at the time of the decision. A reopening is when a veteran presents what is called “new and material” evidence to reopen a claim. I would say that in the materials we submitted, the terms “reopen” and “new and material” were mentioned forty times each (and “appeal” zero times), but somehow the claim was still treated improperly.

I filed a notice of disagreement, and again the VA came back with a denial. This time it took a little longer, and this time the VA stated that Dad’s conditions were “congenital,” meaning that he was born with them, when he clearly wasn’t. It also discounted without justification a medical opinion from a private physician who had opined that Dad’s conditions were “more likely than not” service-connected.

Eventually Dad was afforded a VA medical examination. This took place in May of 2012, and this decision was reached in August. Interestingly, I as the advocate have no idea what that doctor concluded, other than that he must have found service-connection given the decision. I do not know what the doctor concluded because I have not received a copy of the examination report – reports are not automatically sent to veterans or their advocates. But, after all this time, this is a victory, and I must admit that I am far less interested in that report than I would have been if the decision had been another denial.

Dad’s claim, from beginning to end, has taught me a lot about veterans law. More than anything, it has taught me not to give up. The process is confusing and cumbersome, and we could have given up during any of the many roadblocks we encountered. We refused to do so, and Dad now has his compensation. At the same, however, this lesson saddens me, because it illuminates how many veterans do in fact give up. It takes time, legal wherewithal, and resources to fight the VA. Also, many conclude that because the VA has denied them once, that must mean that they are in fact not entitled.

This experience has also taught me how important it is to know what constitutes a VA error. What if we hadn’t known that Dad’s claim should have been treated as a reopening instead of an appeal? Or that Dad’s conditions aren’t congenital? Or that he was entitled to a medical exam? Or what constitutes an “adequate” medical examination under VA standards? All of these issues came up during the pendency of Dad’s claim, and without knowing the answers, the claim could have failed.

At the end of the day, while I’m absolutely thrilled and proud that Dad’s claim was granted, I can’t help but think of the alternative. Most other veterans don’t have an advocate, or know the legal ropes to applying for VA compensation. If Dad had been one of those veterans, he would have either never filed or given up after the first denial. He wouldn’t have known that when it comes to the VA, a “no” is not the end of the road. For many it is just the beginning.


Get Ready for the Next Round: VA Regional Offices Brace for Influx of New Claims

Everyone knows about the extreme backlog faced by the Department of Veterans Affairs (VA) Regional Offices. As I blogged recently, VA statistics show that as of July 2012, nearly 900,000 cases are pending before the VA. While this number is staggering, the backlog could get even worse given the number of troops projected to leave active duty by 2017.

According to the House Committee on Veterans Affairs, as many as one million troops will leave the military by 2017. Currently, with the number of cuts of active-duty troops, over 100,000 veterans are created each year. When these troops withdraw from active service, these veterans seek their entitlements: to medical care, to education under the GI Bill, and, of course, disability compensation for those who became disabled as a result of an in-service injury.

The effect of this is an even greater strain on a system that does not have the design to handle so many disability compensation claims. The VA must create a more efficient system for processing. After all, these are “entitlements” – veterans have a legal right to compensation based on their service to our country. Sometimes claims take so long to process that in the interim, veterans find themselves with foreclosed homes, filing for bankruptcy, or simply (and most commonly) struggling valiantly to make ends meet.

The VA recently announced a new plan to divide claims into “lanes” depending on the level of complication of the claim and veteran need. The VA did not describe any other steps to be taken once these claims are added to the designated lane. Nor did it state how including a claim in the incorrect lane would be corrected; how the claims will be processed any differently after being placed in a lane; or the type of training VA claims adjustors will receive in processing claims in this manner.

I suggest that while the idea of categorizing claims is a good one, the categorization should be different. Claims should be categorized based on the type of disability claimed, the type of claim (new, reopened, or appeal), or other relevant factors. Claims adjustors should be assigned to the category of claims for which they have received specific training. For example, claims adjustors who assess claims for post-traumatic stress disorder (PTSD) should receive special training to assess those claims. This would greatly reduce the number of pending claims, because one of the biggest reasons claims stay pending for years is due to VA error.

As always, however, we must acknowledge the sad truth that this is not a system that can support our troops (despite the popularity of that slogan). According to the National Veterans Center for Statistics and Analysis, as of September 2010 there are 22.7 million veterans living in our nation. If every single veteran applied for the disability compensation for which they were entitled, and received it, our nation would take on an enormous burden. But I must ask – by living in a free country, even in light of the still-poor economy, didn’t we all agree to bear this burden?


“Thanks for Your Service, Now Please Move Along:” Communities Oppose Veteran Homeless Shelters

Everyone loves our nation’s veterans and what they symbolize: freedom, courage, and honor. So why have several communities recently opposed the building of veteran homeless shelters in their proximity?

In 2010 the Department of Veterans Affairs (VA) released a five-year plan to eliminate veteran homelessness. Unfortunately, while every single American citizen would profess their interest in ending veteran homelessness, this doesn’t mean that they’ll support the building of a shelter in their neighborhood. As succinctly put by John Driscoll, president and CEO of the National Coalition for Homeless Veterans, the goal of constructing shelters, support centers, and other homeless veteran resources is a ” ‘NIMBY’ problem – a colorful acronym standing for ” ‘not in my backyard,’ the term politicians use for worthwhile projects they’d prefer to go somewhere else.”

Local communities are currently voicing their NIMBY opinion – sure, they’d like to end veteran homelessness, but they’d prefer the problem be taken care of elsewhere. For example, an Auburn, New York neighborhood initially blocked a proposal to convert an 81-year-old mansion into a homeless shelter. And in Gainesville, Georgia, opponents hotly opposed the conversion of a hotel into a veterans homeless shelter.

San Francisco, home to a particularly large number of veterans due to its Navy base for the Pacific Fleet and the Marine Corp Recruit Depot, now experiences similar backlash. The VA has already sunk $30 million into converting a building in San Francisco’s Mission Hills-Old Town section into a 40-bed shelter and treatment center for post-9/11 vets suffering from PTSD (PTSD) and traumatic brain injury (TBI). In response, parents of the children attending Old Town Academy, located near the shelter-in-progress, have threatened to pull their children out of school if the shelter is granted a permit.

These communities aren’t protesting veteran shelters to be heartless. They’re protesting because they worry about how the presence of a homeless shelter might increase the local crime rate, how it might negatively affect local business, and how it might impact their sense of safety and security. Many of the veterans may be being treated for mental health or drug problems, and a community has the right to be cautious.

At the same time, these communities need to acknowledge that this is the cost of being free. Many veterans are homeless because of their experiences in fighting for us abroad. They won’t stand a chance at rising above their situations if they aren’t provided food and shelter, therapy, mental health services, and job counseling. And it has to happen somewhere.

A middle ground must be found between the important interests of combatting veteran homelessness and protecting community safety. Measures should be taken to make these communities feel comfortable about the construction of veteran homeless shelters. The VA needs to educate them on the need for such services for our veterans, as well as causes of their problems such as PTSD and TBI. And the shelters will need to enforce rules restricting loitering, panhandling, and other activities. Local police should be cognizant of the areas around shelters. This would respect communities’ rights while still fulfilling veterans’ needs.

Although the VA has a better chance of capturing a unicorn than eliminating veteran homelessness, concerted efforts could put a dent in the problem. For further reading on what the VA’s five-year plan entails, visit:


Putting a Bandaid on a Bullet Wound: VA Struggles to Reduce Claims Backlog

Any veteran who has applied for disability compensation through the Department of Veterans Affairs (VA) can tell you that the experience isn’t pleasant.  The boilerplate correspondence sent by the VA is hard to decipher, it can take nine months for a Regional Office (RO) to issue an initial decision, and valid claims are often denied the first time around. I am currently working on a claim that has been pending since 2001, in part because the VA waited five years to provide the veteran with the medical examination necessary to resolve his claim and then discounted the opinion when it was favorable to the veteran.

In response to heavy criticism, the VA has announced a plan to improve processing of disability compensation claims. Despite the plan’s ambition, the question is whether anything can repair a truly broken and overburdened system. As of July 2012, nearly 900,000 cases are pending before the VA. Of these, 558,000 are “backlogged,” meaning that they have been on file for more than 125 days without an initial decision. These numbers don’t even truly reflect the number of veterans who have been waiting to receive their disability compensation, as the “backlogged” cases do not include cases where a notice of disagreement (NOD) has been filed after an initial denial and the veteran is waiting for the next step.

With the number of cases pending both before the ROs and the BVA, what improvement can we expect from the VA’s plan? The following captures the main elements of the plan, along with my assessment of each element’s practical effect:

  • Adopt a new electronic claims processing system VA wide. In theory, this could make the process much easier for veterans and claims adjusters alike, as there is a reason why postal mail is referred to as “snail mail.” However, for this to work, the electronic system needs to be user friendly, and it is questionable whether the VA is capable of designing such a system. Also, one must consider that many of our veterans coming back from Iraq and Afghanistan suffer from conditions such as post-traumatic stress disorder (PTSD) and traumatic brain injury (TBI), and they have difficulty concentrating on computer screens. Also, older veterans may be unaccustomed to using such a system and will have to rely on family members.
  • Establish an “express” lane for uncomplicated claims with one or two health conditions, and for “fully-developed” claims claims that include all evidence and supporting documentation. The issue here is how the VA will determine that claims fit into one of these two categories. This not only creates another step in the process, but it essentially provides that claims will not be assessed on a “first come, first served” basis.
  • Establish a “special operations” lane to handle claims requiring extra attention because the wounds or illness are particularly serious, or the veteran is homeless or suffering a financial hardship. In my experience, it is extremely rare for the VA to expedite a claim. My question here is what standards the VA will develop to determine whether a claim falls into this category. It will surely be very fact-specific.
  • Establish a “core” lane for veterans seeking compensation for more than two medical conditions and clearly needing more evidence-gathering to process. Roughly 60% of claims fall into this category. If the claims adjustors assigned to this lane are able to clearly communicate to veteran claimants about additional steps or evidence needed, this could potentially save time.

What matters here is whether this plan will have practical effect. There must be more to this – the claims adjustors need to be trained appropriately depending on the lane to which they are assigned. The single act of dividing claims into categories has no practical value. And if an electronic system is developed, it needs to be user friendly. An electronic system is not be helpful if most veterans cannot access or understand it.

From my experience, the step most desperately needed is training of VA officials involved in the claims process – both in properly assessing claims and in communicating clearly with veteran claimants. Also, the different VA departments and offices need to better communicate with one another. I have had multiple experiences where two different departments within the VA gave conflicting information.

As a practicing veterans law attorney, I truly hope that the VA disability compensation system improves. In modern context, the system is pushed to the breaking point. Devising a plan for better handling the volume of claims, as the VA has done, is the first step towards that end. And after the first step will come another.



Two is Better than One: VA Implements Bi-Annual Reverification Requirement for Veteran-Owned Businesses

On July 27, 2012, the Department of Veterans Affairs (VA) issued an interim final rule reducing the burden of reverification under its VetBiz Vendor Information Pages (VIP) Verification Program (the Program). This rule provides that service-disabled veteran-owned small businesses (SDVOSBs) and veteran-owned small businesses (VOSBs) that have already verified their veteran-owned and veteran-controlled status must re-verify once every two years, compared with the prior annual requirement.

VA officials have observed from administering the Program since 2010 that an annual examination is not necessary to adequately maintain the integrity of the program. The VA conducts a thorough examination of personal and company documentation to verify ownership and control by a veteran, including reviewing the corporate documents, federal personal and business tax returns, personal history statements, and occasionally administering an on-site investigation or interview.

The VA also notes that implementing a longer eligibility period is consistent with other Federal set-aside programs – for example, Historically Underutilized Business Zone (HUBZone) concerns re-certify every three years; and a program term of nine years applies to the Small Business Administration’s (SBA’s) 8(a) Business Development Program.

The effective date of the rule is July 27, 2012. Comments must be received by the VA on or before August 27, 2012. For a full copy of the rule, visit its entry in the Federal Register at:

Coaching Into Care: VA Launches Call Center for Veteran Family Members

As families of veterans suffering from mental disorders know, the possibility of seeking health services can be a sensitive topic.  Spouses and family members who have not served in war struggle to connect with veterans’ plights and to say the right words to make the veteran take a step forward.

The Department of Veterans Affairs (VA) is taking action to help these family members better communicate. It has launched Coaching Into Care, a call center for veteran family members. The call service is free and the number of calls unlimited. The coaching is provided by licensed clinical social workers and psychologists. They provide coaching services that help the caller figure out how to motivate their veteran loved one to seek mental health services in their community.

Coaching Into Care can help veteran family members or spouses as follows:

  • Understand how the veteran can enroll for VA care – Coaching Into Care’s telephone responders understand the procedures, what documents a veteran needs needs and what to do with them, as well as other VA resources that might be beneficial.
  • Approach the veteran about getting help – The team at Coaching Into Care can assist veteran family members or spouses learn how to approach the topic of help, as well as formulate ideas about what to do and say to help the veteran take the next step.
  • Encourage a veteran who is enrolled in care to attend appointments – The team at Coaching Into Care will work with veteran family members and spouses to help the veteran accept the benefit of keeping scheduled appointments.
For many veterans suffering from mental disorders such as post-traumatic stress disorder and traumatic brain injury,  the persons most capable of facilitating their recovery live under their own roof. They are closest to the veteran, know them best, and care the most. Coaching Into Care can assist these individuals in using their relationship with a veteran loved one to prompt him or her to seek necessary help.
Coaching Into Care may be contacted via phone at (888) 823-7458, Monday through Friday, from 8:00 Am to 8:00 PM ET. For more information, visit Coaching Into Care’s website at:
The following is a list of additional resources for veteran family members:
  • Battlemind – A website that officers informational tools and guidance to the different stages that service members and their families face (
  • Operation Comfort – A national network of mental health professionals and agencies that provide their services free of charge to the family members of those who served in the Middle East (
  • Military Spouse Career Center – A website that provides job search support for military spouses and addresses the unique challenges they face (


It’s Official! Second Free Legal Clinic for Veterans to Take Place on September 15

I am pleased to announce that I am spearheading a second one-day free legal clinic for veterans in Virginia Beach. The clinic will be held on September 15th at the Old Dominion University Higher Education Center and sponsored by the university’s Student Veterans Association. The clinic goal is to assist as many area veterans as possible in understanding and applying for their federal benefits.

As a lawyer, I am grateful for this opportunity to assist our veterans. Applying for benefits through the Department of Veterans Affairs (VA) can be burdensome, frustrating and confusing. It can also take an extremely long time – with the current number of pending claims hovering at one million, it is now taking regional offices upwards to nine months to render an initial decision. I can’t fix the problems with the VA, but at least I can help veterans understand the process better and minimize mistakes that can delay receipt of benefits.

The set-up of this clinic is similar to the previous one that took place on April 14th. That previous clinic was intended as a one-time affair, but we decided to hold another event. Turnout was incredible, veterans followed up with thanks and a request for a second clinic, and the participating attorneys were enthusiastic about a repeat performance.

Veterans who attend the free legal clinic will receive an individual consultation with a veterans lawyer, view a helpful power point presentation, and receive a packet of benefits information. More information about the clinic is available at the clinic website: Also, the prior clinic was covered by the VETERANS LAW JOURNAL, which can be accessed at:

If you have any questions about the clinic or would like to receive an electronic or hard copy of the clinic materials, feel free to reach out to me at


Process Improvement for the VA’s VetBiz VIP Verification Program?

For the last few years, service-disabled veteran-owned small businesses (SDVOSBs) have struggled with the challenges of verifying their eligibility for the VA’s SDVOSB set-aside program through the VetBiz VIP Verification Program (VetBiz). Now, for those SDVOSBs that have already run the gauntlet of verifying their status, the process may have gotten easier.

We all know why VetBiz exists. VetBiz is a response to years of complaints and GAO reports that ineligible contractors were benefiting from the SDVOSB program. One highly-publicized report detailed how millions of set-aside contract dollars were awarded to SDVOSBs used as pass-throughs, or to contractors ineligible under program requirements (see

VetBiz acts as a check on ineligible contractors by requiring SDVOSBs to submit their business documents to an online repository and to undergo an eligibility examination. If approved as an eligible SDVOSB, the Center for Veterans Enterprise (CVE) will issue the SDVOSB an approval letter verifying status that is good for one year. The business will also be listed in an online database, the VA Vendor Information Pages, which is necessary in order to bid on VA set-asides.

Sounds great, doesn’t it? In theory, it is – it allows the VA to track eligible contractors for set-asides, as well as identify ineligible contractors that may be abusing the system.

In reality, it could be great. It just needs a few tweaks to make sure that the process of verifying online does not inspire hair-pulling and throwing one’s computer across the room.

On June 6th the CVE announced implementation of a new system that may accomplish this: its Verification Case Management System (VCMS). The self-stated goals of VCMS are to “streamline the eligibility and verification process, simplify business owners’ ability to track their companies’ progress, improve case management, and minimize evaluation processing time.” (see VetBiz press release: As of the date of the press release, 275 SDVOSBs that previously verified were eligible to use the VCMS process. This is a simpler procedure for verifying one’s status, available to those companies that have already proven themselves as eligible for the SDVOSB program. After all, to make them go through the same tedious process all over again is not only unnecessary, but it wastes VA resources.

This move represents a step in the right direction for the VA.  If SDVOSBs are willing to experience the trials and headache of the initial verification – to submit the paperwork, tolerate an onsite visit, and answer potentially invasive questions – the process won’t be nearly as difficult when reverification rolls around. And if this system does in fact act as a check on ineligible contractors to make sure that awards truly go to SDVOSBs, isn’t it worth it?


Mandatory Set-Asides for SDVOSBs: VA Loses Another Protest

The Department of Veterans Affairs (VA) recently lost yet another protest on the grounds that it should have set aside an award for service-disabled veteran-owned small businesses (SDVOSBs).

This decision is the latest in a slew of GAO rulings berating the VA for not following its mandate in the Veterans Benefits, Health Care, and Information Technology Act of 2006 (the “Act”). The Act, which recognizes that agencies, particularly the VA, fail to meet set-aside goals for SDVOSBs, provides that before using Federal Supply Schedule (FSS) procedures, a contracting officer must determine whether he has a reasonable expectation that two or more SDVOSBs will submit offers, and if the award can be made at a fair and reasonable price. If so, the award must be set aside for SDVOSBs. (38 U.S.C. 8127(d)(2006)).

In this case, the VA had ordered off the FSS for employee emergency notification services. Even though its own market research concluded that at least 20 SDVOSBs held FSS contracts for the acquired services, it did not set the award aside for SDVOSBs and ultimately awarded the contract to a non-SDVOSB. Kingdomware Technologies, Inc., B-406507 (May 30, 2012). Earlier, in a similar protest, the GAO sustained a pre-award protest when the VA failed to conduct market research to determine whether a solicitation issued off the FSS should have been set aside for SDVOSBs. Aldevra, B-406331 (April 20, 2012).

These decisions are ironic if you think about why the VA implemented its VetBiz VIP Verification Program.  The VA has been using its VetBiz VIP Verification Program to crack down on ineligible contractors and more easily identify contractors it can target for set asides. The VetBiz VIP Verification Program is designed to meet the VA’s specific goal of increasing awards to eligible veteran-owned businesses, yet it is undermining its own goals by failing to conduct mandatory set asides.

The practical takeaway from these recent decisions is that SDVOSBs and VOSBs need to be on the alert for awards that should be conducted as set-asides. Note that in Kingdowmware, only one of twenty eligible contractors protested a solicitation that should have been for SDVOSBs. The VA is required to give contracting preferences to SDVOSBs and VOSBs, but if contractors fail to catch mistakes like the ones made in Kingdomware and Aldevra, they’ll miss out on awards.

The Kingdomware decision may be accessed at: Aldevra is available at:


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