New York became the first state in the nation to establish a six-percent goal for participation in state contracts for service-disabled veteran-owned small businesses when Governor Andrew Cuomo signed into law the Service Disabled Veteran-Owned Business Act last week. Similar to the federal government’s procurement program for Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBC), New York’s law is designed to promote small businesses – in New York defined as companies with 300 employees or less – that are majority-owned and independently operated by a service-disabled veteran. Notably, the legislation doubles the federal government’s three-percent goal for awarding contracts to veteran-owned small businesses. However, the most recent data from the U.S. Small Business Administration’s Fiscal Year 2012 Goaling Report reflects that at the federal level, the three-percent goal was just barely achieved at 3.0324 percent.
The Act creates the Division of Service Disabled Veterans’ Business Development within the New York Office of General Services to oversee the program and certify eligible businesses. It calls for the new office to “develop a comprehensive statewide plan and operational guidelines to promote service-disabled veteran-owned business enterprises and to assist them in obtaining opportunities to participate in the procurement of goods and services by the state.” Rules and regulations detailing how the six-percent goal will be achieved are due out within 90 days from May 12. But, the legislation specifies in advance that the rules will provide for a set-aside of certain procurements by state agencies as one means of promoting the participation goal.
The state has set up a website where service-disabled veteran-owned businesses can find information on eligibility and request an application for certification. Businesses that are already verified under the federal SDVOSBC program will be eligible for an expedited application process.
Nearly 900,000 veterans call New York home, seventy-two percent of whom served during a period of conflict. Governor Cuomo touted the Service Disabled Veteran-Owned Business Act as setting “an ambitious and aggressive goal to make businesses owned by disabled veterans a more active part of state contracting” and indicated that New York was leading the way for other states to create similar programs.
We will continue to monitor how New York implements its six-percent participation goal for service-disabled veteran-owned small businesses and whether it has an impact on the broader landscape of state procurement law.