Onsite Examinations of Applicants for Verifcation

Center for Veterans Enterprise

We invite all Veterans to read the Mission Statement from the Center for Veterans Enterprises you would agree that their vision is second to none (Where We Are Going (Our Long-Range View). It is true that a physical (on-site) verification should be executed however we need not to revert to Machiavellian tactics by interpreting the law in such manner that it contradicts the mission that CVE set out to achieve.

Before offering a possible solution it is important to address the objective of the current regulations found in the Code of Federal Regulations, TITLE 38 CHAPTER I, PART 74, and the method currently used.

OBJECTIVE: TO ESTABLISH THE MANAGEMENT CONTROLAND OPERATING STATUS OF THE BUSINESS OF SUBMISSION.

Excerpt from: “THE Code of Federal Regulations, TITLE 38 CHAPTER I, PART 74”

                                § 74.12   What must a concern submit to apply for VetBiz VIP Verification?

“……verification examinations. These forms and attachments will include, but not be limited to, financial statements, Federal personal and business tax returns, payroll records and personal history statements. An applicant must also retain in the application file IRS Form 4506, Request for Copy or Transcript of Tax Form. These materials shall be filed together to maximize efficiency of verification examination visits. Together with the electronic documents, these manual records will provide the CVE verification examiner with sufficient information to establish the management, control and operating status of the business on the date of submission.”

CVE has the right to verify and “establish the management, control and operating status of the business on the date of submission.”

However the scope of documents demanded by CVE in order to establish ownership is way too broad and superfluous in nature and at the expense of the Veteran and Service-Connected Disabled Veteran Small Business owner.

There should be a finite number of documents and a defined and standardized methodology using the right tools, with courtesy and efficiency. Please note that ownership and control eligibility requirements are also defined in the Code of Federal Regulations, TITLE 13 CHAPTER I, PART 125 and that both Title 38 and Title 13 should not be in conflict with each other.

The task that CVE has at hand is challenging and we should be proud of what this office has achieved to date. Many Veterans share a common frustration with the bureaucratic process as a whole whether at the VA Hospitals, a Veterans Service Center or at other government agencies. We ask CVE not to become another source of frustration or another bureaucratic maze and to be in tune with the Veteran small business community.

We encourage CVE to address the following questions and to clearly define:

Ø      How one determines the ownership of a company by an individual?

Ø      How one determines is such individual is a Veteran?

Ø      If a Veteran then; How one determines whether the Veteran has a disability rating or not?

Rather than to blame a political party let’s all share the mission of the Center for Veteran Enterprise: “We will Transform America with Veterans First! through personal touch, compassion, connectivity and competence, because Veterans in Business are Still Serving America!.

We would like to help CVE execute their mission, all of us share the mission, but like any mission its intent can be compromised by its execution. The letter/noticed sent by CVE is a bit harsh and intrusive rather than amicable and inviting, a dramatic shift from its mission. No appointments allowed, vague and demanding as if our participation is not needed and an appointment is not necessary. This attitude in conflict with the CVE mission, in its mission statement CVE and the staff are our friends, in its mission CVE wants to work together in harmony with the Veteran’s community, in its mission CVE would like to assist us and help us succeed: “We want veterans in business to be the best they can be and to perform each and every contract in an outstanding manner.”

The list of documents needed by CVE to establish ownership has to be defined and the current loosely defined method takes away the sense of objectivity or gives the appearance of potential subjective interpretation of what is needed by the staff. This appearance does not reinforce the concern of CVE to restore the pride, hope and dreams of all American’s Veterans: Restore pride, hope and dreams for all of America’s veterans through business ownership, employment opportunities and community partnerships.

The registration and verification demands of our respective State procurement agencies, CVE, CCR, GSA, the various government agencies, large primes and all of those entities that claim to have a diversity program for small businesses leave no time left to actually engage in business and the entire proposition to Veteran Owned Businesses is turning into a nightmare. There is no one business that is registered with all, it has been tried and it is impossible. To this end CVE is the solution that we have all been looking, to have only one database where all parties interested and/or required to engage with a qualified and verified Veteran Owned Small Business, would search. This would finally end the waste of time and money all of us have been subjected to and possibly close the largest the loop-hole scheme responsible for the lack of VOB and SDVOB participation in the public sector as a whole.

 

CVE should definitely meet with each and every Veteran business owner for the purpose of delivering the products they have set out to deliver and during this meeting CVE should have a well defined list of demands that will establish ownership of the business and verify that the owner is indeed a Veteran as well as build a relationship with the Veteran by delivery those products CVE is set to deliver (please see list below).

There are many different ways to check the legitimacy of a business, it is done every day, painlessly and with minimal intrusion, we are confident that CVE will find a way to accomplish “our” mission, while preserving the privacy and all of those rights afforded to the rest of the small business population. Should this level of scrutiny been applied to the large businesses, the financial industry and domestic automobile industry, we could have avoided our current situation. In addition to the verification process we propose a fraud reporting hot line where the Veteran small business community can call and report suspected fraud. Time and time again we run across scams and have no clear reporting channels.

In conclusion, we agree with the intent of the verification process and invite CVE to align their actions and the policies with its mission. We support their commitment to the verification process and ask that this be accomplished by adhering to the highest standards of compassion, commitment, excellence, professionalism, integrity, accountability and stewardship.

There will always be a better way together we can find the best way.

Respectfully,

Frank Mancini, President
Elite SDVOB Network, Los Angeles Chapter

Our Products

http://www.vetbiz.gov/about/products.htm

1. VetBiz.gov web portal information services offers convenient, two-way communications between government, corporate and owner communities.

2. VetBiz.gov Vendor Information Pages database of verified businesses

3. Toll-free business and procurement coaching support: This is the core of what we do. Call us when you have a question. Call us when you want clarification of what you already know. Call us when you think something is not right. We want to know what is happening with you as you try to sell your products and services to the Government or its prime contractors. We want to know what is happening with you as a government or corporate official trying to support this program. We especially want to hear from you with improvement ideas!! Veterans, call us toll-free at 1.866.584.2344, Monday-Friday, 7AM – 5PM Eastern Time.

4. Free delivery of FedBizOpps notices and notices from VA’s Forecast of Contracting Opportunities, customized to your specifications

n on-site inspection can be made when an award is made from the VA for example, the CVE representative The smarter method would be to inspect a company if an award is made hence reducing the burden on both the Veteran and the government.

5. VetBiz.gov Assistance Program Pages database: find specialists who will help your business in Start-up, Finance, Training, Procurement and Business Development.

6. Business Owners’ Toolkit: Keep the legislation, executive order, acquisition regulations, applicable code of federal regulations citations and other key files right on your flash drive or laptop. This helps when meeting individuals who are new or unfamiliar with the program. This product is co-branded with the General Services Administration.

7. Customized Business Process maps: As a future or current business owner, you can face unknowns daily. We’re available to coach you to the next step and we’re good listeners. We like hearing what is happening with you because other owners may be looking at similar questions or obstacles. Our business map will help you figure out when to drive forward, when to slow down and when to turn in order to reach your destination.

8. Customized market research reports: If you have money to spend, we want to help you make a decision to spend it with veteran-owned businesses. We know how busy acquisition teams can be, so we’ll run the database queries if you want us to do so.

9. Customized awareness briefings and community outreach programs: next to our call center support, this may be the second most favorite thing we do. We travel to where you do business, meet face-to-face, learn what your life is really like and try to offer help. What’s not to like about that?

10. VetFran: discounted franchising support through International Franchise Association franchisors; more than 1,000 veterans have taken advantage of this program since 2002.

11. Trending reports: This is really good stuff. We are fierce in searching for numbers to trend. So far, we’ve published trend lines for Federal agencies’ SDVOSB achievements since Fiscal Year 2001. We’re hoping to get similar trend charts done for subcontracting achievements. We also do other work like monitor the growth of businesses over time. Sometimes, we scratch our heads and try to make sense of it all. Most of the time, we simply say “Aha! Look at that!”

12. Awards and Recognition Programs: OK, forget everything that came before this. We really, really, like the awards program. We host this each year in June, on or around Flag Day. We honor Enterprising Veterans who exemplify the motto: Veterans in Business - Still Serving America! We celebrate the work of the advocates selected as Champions of Veterans Enterprise. While it may not be a big to-do by other award program standards, these ceremonies are very special to us.

13. Our Briefing Materials: We have a great DVD library that explains our program. We have some really fantastic posters. We make these available at no charge to offices that want to visually display their support for veterans in business. We have some very professional Executive brochures and a nice product catalog that offers a lot of detail on our offerings. In addition, and these, too, are more favorites – we will customize a Then and Now poster for business owners (give us a photo of the owner in military uniform and a second photo as the business owner today), we will put the owner’s name and business name on it for posting at the company’s headquarters. This also works for contracting teams who make awards to these owners. Another offering for owners is the 3-minute video clip they can post to our database.

Code of Federal Regulations, TITLE 38 CHAPTER I, PART 74

§ 74.12   What must a concern submit to apply for VetBiz VIP Verification?

Each VetBiz VIP Verification applicant must submit the electronic forms and attachments CVE requires. All electronic forms are available on the VetBiz.gov Vendor Information Pages database Web pages. At the time the applicant dispatches the electronic forms, the applicant must also retain on file at the principal place of business a completed copy of the electronic forms supplemented by manual records that will be used in verification examinations. These forms and attachments will include, but not be limited to, financial statements, Federal personal and business tax returns, payroll records and personal history statements. An applicant must also retain in the application file IRS Form 4506, Request for Copy or Transcript of Tax Form. These materials shall be filed together to maximize efficiency of verification examination visits. Together with the electronic documents, these manual records will provide the CVE verification examiner with sufficient information to establish the management, control and operating status of the business on the date of submission.

(The Office of Management and Budget has approved the information collection provisions in this section under control number 2900–0675)

§ 74.20   What is a verification examination and what will CVE examine?

(a) General . A verification examination is an investigation by CVE officials, which verifies the accuracy of any statement or information provided as part of the VetBiz VIP Verification application process. Thus, examiners may verify that the concern currently meets the eligibility requirements, and that it met such requirements at the time of its application or its most recent size recertification. An examination may be conducted on a random basis, or upon receipt of specific and credible information alleging that a participant no longer meets eligibility requirements.

(b) Scope of examination . CVE may conduct the examination, or parts of the program examination, at one or all of the participant's offices. CVE will determine the location of the examination. Examiners may review any information related to the concern's eligibility requirements including, but not limited to, documentation related to the legal structure, ownership and control of the concern. As a minimum, examiners shall review all documents supporting the application, as described in §74.12. These include: financial statements; Federal personal and business tax returns; personal history statements; and Request for Copy or Transcript of Tax Form (IRS Form 4506) for up to 3 years. Other documents, which may be reviewed include (if applicable): Articles of Incorporation/Organization; corporate by-laws or operating agreements; organizational, annual and board/member meeting records; stock ledgers and certificates; State-issued Certificates of Good Standing; contract, lease and loan agreements; payroll records; bank account signature cards; and licenses.

Code of Federal Regulations, TITLE 13 CHAPTER I, PART 125

http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title13/13cfr125_main_02.tpl

§ 125.9   Who does SBA consider to own an SDVO SBC?

A concern must be at least 51% unconditionally and directly owned by one or more service-disabled veterans. More specifically:

(a) Ownership must be direct. Ownership by one or more service disabled veterans must be direct ownership. A concern owned principally by another business entity that is in turn owned and controlled by one or more service-disabled veterans does not meet this requirement. Ownership by a trust, such as a living trust, may be treated as the functional equivalent of ownership by service-disabled veterans where the trust is revocable, and service-disabled veterans are the grantors, trustees, and the current beneficiaries of the trust.

(b) Ownership of a partnership. In the case of a concern which is a partnership, at least 51% of every class of partnership interest must be unconditionally owned by one or more service-disabled veterans. The ownership must be reflected in the concern's partnership agreement.

(c) Ownership of a limited liability company. In the case of a concern which is a limited liability company, at least 51% of each class of member interest must be unconditionally owned by one or more service-disabled veterans.

(d) Ownership of a corporation. In the case of a concern which is a corporation, at least 51% of the aggregate of all stock outstanding and at least 51% of each class of voting stock outstanding must be unconditionally owned by one or more service-disabled veterans.

(e) Stock options' effect on ownership. In determining unconditional ownership, SBA will disregard any unexercised stock options or similar agreements held by service-disabled veterans. However, any unexercised stock options or similar agreements (including rights to convert non-voting stock or debentures into voting stock) held by non-service-disabled veterans sill be treated as exercised, except for any ownership interests which are held by investment companies licensed under the Small Business Investment Act of 1958.

(f) Change of ownership. A concern may change its ownership or business structure so long as one or more service-disabled veterans own and control it after the change.

§ 125.10   Who does SBA consider to control an SDVO SBC?

(a) General. To be an eligible SDVO SBC, the management and daily business operations of the concern must be controlled by one or more service-disabled veterans (or in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran). Control by one or more service-disabled veterans means that both the long-term decisions making and the day-to-day management and administration of the business operations must be conducted by one or more service-disabled veterans (or in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran).

(b) Managerial position and experience. A service-disabled veteran (or in the case of a service-disabled veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran) must hold the highest officer position in the concern (usually President or Chief Executive Officer) and must have managerial experience of the extent and complexity needed to run the concern. The service-disabled veteran manager (or in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran) need not have the technical expertise or possess the required license to be found to control the concern if the service-disabled veteran can demonstrate that he or she has ultimate managerial and supervisory control over those who possess the required licenses or technical expertise.

(c) Control over a partnership. In the case of a partnership, one or more service-disabled veterans (or in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran) must serve as general partners, with control over all partnership decisions.

(d) Control over a limited liability company. In the case of a limited liability company, one or more service-disabled veterans (or in the case of a veteran with permanent or severe disability, the spouse or permanent caregiver of such veteran) must serve as managing members, with control over all decisions of the limited liability company.

(e) Control over a corporation. One or more service-disabled veterans (or in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran) must control the Board of Directors of the concern. Service-disabled veterans are considered to control the Board of Directors when either:

(1) One of more service-disabled veterans own at least 51% of all voting stock of the concern, are on the Board of Directors and have the percentage of voting stock necessary to overcome any super majority voting requirements; or

(2) Service-disabled veterans comprise the majority of voting directors through actual numbers or, where permitted by state law, through weighted voting.