Here at SmallGovCon, we spend a lot of time studying (and talking about) the various small business federal set-aside programs. As a result, a lot of our focus is dedicated to SBA’s regulations governing these programs—after all, it is the agency that was created by the Small Business Act to issue and implement precisely these regulations. So, it may be tempting for small business federal contractors to focus on those SBA rules and think, so long as they have complied with all the nuances they contain, their business is eligible for these sorts of set-aside contracts.

As one joint venture recently found out the hard way, however, other agencies have their own unique sets of regulations that can impact set-aside contracts as well. One such agency is the Department of Veterans Affairs (VA), which has its own body of rules governing VA procurements—the Veterans Affairs Acquisition Regulation (“VAAR”). One of the programs that the VA implements is the Veterans First Contracting Program (“Vets First”), which interacts quite a bit with SBA’s SDVOSB program. As a result of the overlap, potential offerors on VA contracts set aside for SDVOSBs must ensure they comply with both VA and SDVOSB regulations, and this is where the protester in Potomac Valor Healthcare-2, LLC, B-423195.2 (Aug. 12, 2026) ran into trouble. GAO’s decision in the case sheds some light on the way VA’s specific requirements create additional obligations for SDVOSB joint ventures, and serves as a cautionary tale to other prospective offerors who may find themselves in a similar situation. In short, the protester was SDVOSB compliant and registered in VetCert at the time of offer, but erroneously believed that it did not have to maintain that same level of compliance at the time of award. GAO found that, as the SDVOSB partner of the joint venture was no longer small at the time of award (a fact reflected in VetCert), the JV could not receive the award.