Veteran-Owned Small Businesses: Planning and Data System for VA's Verification Program Need Improvement

What GAO Found

In summary, the two key findings from GAO's January 2013 report are:

• VA has instituted a number of significant changes to its verification processes to improve and address program weaknesses but continues to face challenges in its efforts to establish a stable and efficient program to verify firms on a timely and consistent basis. These challenges are directly related to shortcomings in strategic planning and data systems for the verification program. Specifically, we noted that the plan lacked performance measures to assess whether the desired outcomes were being achieved and had a short-term focus not typically associated with a strategic plan. Additionally, we found that VA’s data system did not collect important data and had limited reporting and workflow management capabilities.

• Expanding VA’s verification program to support the government-wide SDVOSB contracting program would require VA to improve its verification process and address a number of operational and policy issues.

To improve the management and oversight of VA’s SDVOSB and VOSB verification program, GAO's January 2013 report made two recommendations addressing strategic planning and data system needs. VA concurred with the two recommendations and stated that it had actions under way that would address them.

Why GAO Did This Study

This testimony discusses the Department of Veterans Affairs' (VA) efforts to verify the eligibility of veteran-owned small businesses (VOSB), including service-disabled veteran-owned small businesses (SDVOSB), to receive contracting preferences under VA's Veterans First Contracting program. During fiscal year 2012, VA awarded $3.8 billion in contracts to SDVOSBs and VOSBs, which underscores the importance of ensuring the eligibility of those firms to receive contracting preferences. This testimony is based on GAO's January 2013 report on VA's verification program. During the period covered by GAO's study--February 2012 to January 2013--VA was introducing significant changes to its verification procedures and operations. As a result, GAO determined that evaluating VA's compliance with its past procedures would be of limited value and that testing the effectiveness of verification procedures that were still evolving would be premature. GAO focused instead on issues related to planning for and designing the verification program and on changes in the program's management and operations.

This testimony addresses the (1) progress that VA has made in ensuring that its program verifies the eligibility of SDVOSBs and VOSBs on a timely and consistent basis, and (2) key operational and policy issues that VA will have to address if its verification program is expanded to support the government-wide SDVOSB contracting program. That program, which is administered by the Small Business Administration (SBA), authorizes other federal agencies to award set-aside or sole-source contracts up to certain dollar thresholds to firms that self-certify as SDVOSBs.

For more information, contact William B. Shear at (202) 512-8678 or shearw@gao.gov.