On Dec. 16, 2024, the Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) adopted, as final, without change, an interim rule amending the Federal Acquisition Regulation (FAR) to implement regulatory changes made by the Small Business Administration (SBA) in its final rules published on Nov.29, 2022, at 87 FR 73400 and at 88 FR 42592 on July 3, 2023, to implement Section 862 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021. This final rule also partially implements Section 863 of the NDAA for FY 2022, as implemented by the SBA in its final rule published on April 27, 2023, at 88 FR 26164.

The final rule impacts small business concerns seeking sole-source or set-aside awards under the Service Disabled Veteran Owned Small Businesses (SDVOSB) Program. As of Jan. 1, 2024, to be eligible for these types of awards, an SDVOSB (1) had to be certified as an SDVOSB concern by the SBA, or (2) had to have represented itself as an SDVOSB concern in the System for Award Management (SAM) and have submitted a complete application for certification to the SBA. To minimize the impact of this requirement, the SBA granted a one-year extension of verifications of eligibility that were made previously by the Department of Veterans Affairs (VA) under the VIP Verification Program and provided a one-year grace period for those concerns that represented their status as an SDVOSB in SAM.

The FAR Council believes any cost associated with compliance with this rule will be de minimis as the SDVOSB eligibility documentation requirements currently exist under the VA’s VIP Verification Program, and concerns are already responsible for maintaining accurate representations in SAM. Additionally, the initial application, program examination, and recertification requirement will remain the same under the SBA’s management of the program as they were under the VA VIP Verification Program. The SBA anticipates that the application process should only take a concern around one hour to complete.

The final rule amends the following FAR provisions: 52.212-3, Offeror Representations and Certifications – Commercial Products and Commercial Services; 52.212-5, Contract Terms and Conditions Required To Implement Statutes or Executive Orders – Commercial Products and Commercial Services; 52.213-4, Terms and Conditions – Simplified Acquisitions (Other Than Commercial Products and Commercial Services); 52.219-1, Small Business Program Representations; 52.219-8, Utilization of Small Business Concerns; 52.219-27, Notice of Set-Aside for, or Sole-Source Award to, Service-Disabled Veteran-Owned Small Business (SDVOSB) Concerns Eligible Under the SDVOSB Program; 52.219-28, Post-Award Small Business Program Rerepresentation; and 52.244-6, Subcontracts for Commercial Products and Commercial Services.

The FAR Council’s objective in amending these FAR provisions was to implement the SBA’s governmentwide certification program for SDVOSB concerns, update SDVOSB protest procedures, and require an SDVOSB concern determined ineligible by the SBA to update its status in SAM within two days of the determination.

Although these requirements for an SDVOSB sole-source or set-aside award have been in place since Jan. 1, 2024, the changes to the FAR to reflect these changes did not go into effect until Dec. 16, 2024.