By Tom Aiello
The SBA calls veterans one of the most successful group of business owners in America. So you would expect organizations would be pushing for supplier diversity through veteran owned businesses. But despite the focus on veteran employment through the diversity & inclusion community, there’s very little on supplier diversity around veteran owned businesses.
According to the SBA 1 in 10 businesses are veteran-owned. Veterans are a key part of any supplier diversity program. When companies work with government , the federal government requires that 3% of the total value of all prime contract and subcontract awards go to Service Disabled Veteran Owned Small Businesses (SDVOSBs). In addition, doing business with Veteran Owned Small Businesses (VOSBs) helps with veteran employment as veterans are 30% more likely to hire other veterans.
Just as there are many good reasons to work with veteran-owned businesses, there are also a number of tips that can make doing so more successful.
1. VOSB or SDVOSB?
There are more veteran-owned businesses than service disabled veteran owned businesses, and SDVOSB is a harder-to-find small business classification. It is like finding a minority-owned, woman-owned business. If your aim is pure diversity of suppliers, then include both, but if you have government goals in mind, then you probably at least want to track SDVOSB for reporting purposes.
2. Certification is important
While there are a number of veteran-owned business associations in existence – each with their own vet-owned logo, there is only one government-accepted certification, which is performed by the Veterans Administration (VA). Most states will certify a business if they have their federal certification. Unfortunately, there is some fraud in this veteran-owned space, and requesting certification is the best way to protection your company. I have certified 2 businesses with the VA and while it is lengthy,
it is not difficult. If the veteran-owned business is not certified with the VA,
you should ask “why?”
3. Meeting government quotas
There is an annual federal government-wide goal of no less than 3% of the total value of all prime contract and subcontract awards go to SDVOSBs.
4. Advantage in your contracts
Consider leveraging a veteran-owned business in your contract bid, and in some cases consider the veteran-business as the prime contractor. For example, the VA has special authority for SDVOSB/VOSB set-aside and sole source contracts. Sometimes a veteran owned business can bring you a competitive edge. In either case, bidding with a veteran-owned business can sometimes tip the scales in your favor.
5. Not every veteran business is equal
As in every situation, there are good vendors and bad ones. SDVOSB Certification will not outweigh the need for real-world contract experience. Ask for work examples and references. Once you identify a good veteran-owned business look to grow the amount of sourcing through them and you will gain a trustworthy, loyal business partner.
6. Finding veteran-owned businesses
There are veteran-business associations and even searchable lists with cities, states, and the federal government (if they were certified). Federally, vetbiz.gov is among the best lists. That said, it lacks the ability to download all the thousands of records to aid in your efforts – there are lists of certified veteran businesses available for purchase at a good value as well. For example, MARCH Marketing maintains a current list of all certified VOSBs and SDVOSBs in the USA. Additionally, there are sponsored events such as Elite SDVOSB where companies can connect to veteran-owned businesses in a systematic way.
7. Set a veteran-business goal/create accountability
Even if the goal is internally only, set it to give the organization a goal to achieve. 3-5% are reasonable. Many companies are up to 10-15% goals for veteran-owned business. If you have federal contracts, then these goals have already been established.
8. Get senior-level support
Senior-leadership support for veteran-business is critical. It motivates procurement to include veteran-owned businesses and when they bring them to the table, senior-level support convinces business managers to try these veteran-owned businesses.
9. Educate/ empower your contracting and purchasing departments
Explain your company policy/ goals and why you include veterans in your diversity supplier efforts. Provide them lists of veteran-owned businesses and even provide information through to existing prime contractors to help jump-start the process.
10. Be prepared for some pushback
The most common internal pushback is a lack of veteran-owned businesses, so it is helpful to provide a list of veteran businesses broken out by product or service codes. Often, we see more-established vendors in the diversity space create barriers for veterans. To overcome this, keep the selection criteria objective and transparent.
11. Leverage VOBs throughout your organization
Veteran-owned businesses provide virtually every type of product and service from construction to marketing to media to HR services to name a few. Include veteran-business in all your procurement and you’ll be surprised at the good results you will achieve.
12. Know the rules
Currently, a VOSB/ SDVOSB prime must incur 50% of the cost of contract performance with its own personnel which helps limit small businesses acting as “fronts” for large business primes.
MARCH Marketing provides best-in-class military and veteran expertise to inform strategy, marketing, and services to commercial, government, and non-profit clients. With offices in Chicago, the agency is one of few that provide these type of world-class marketing and consulting services, and the only with deep expertise into the military and veteran audience. When it comes to strategy and communications to military and veterans, MARCH is the agency to call. For more information, visit us at www.marchcorp.com.