Veteran Firms Wait Four Months for Appeal of Contract Preference

Veteran-owned businesses rejected from a U.S. agency contracting program are waiting more than four months for a response to their appeals.

Lawmakers and veterans’ advocates have criticized the Department of Veterans Affairs initiative in the past year, saying it hasn’t helped the small businesses win work as Congress had intended.

While the agency has sped up processing for first-time applications, it took an average of 128 days for small firms that got final decisions last month on their appeals, Tom Leney, director of the VA’s Office of Small and Disadvantaged Business Utilization, said in prepared congressional testimony.

“We still have a challenge in reducing the time for achieving final determinations in response to requests for reconsideration,” Leney said in written testimony submitted in advance of a joint hearing of two House subcommittees today.

Without completing the verification process, owners can’t win VA work reserved for veteran-owned businesses. Thousands of small businesses have been rejected by the agency since it stepped up efforts in 2011 to prevent ineligible companies from getting work under the preferential bidding program.

The lengthy review process has resulted in millions-of-dollars in lost contracts for some firms and has forced some veterans to fire workers as they wait for approval, according to written testimony from Davy Leghorn, the Washington-based assistant director of the American Legion’s economic division.

A 2010 law requires the VA to do more to ensure veterans are in control of a company. The stricter process followed reports of fraud in the program, including cases where veterans were “fronting,” or claiming to manage companies run by other people.

-- Editors: Stephanie Stoughton, Daniel Enoch

Before it's here, it's on the Bloomberg Terminal.