How SDVOSB Sole Source Awards Work: A Guide for Contracting Officers

What Is an SDVOSB Sole Source Award?

A sole source award to a Service-Disabled Veteran-Owned Small Business (SDVOSB) is a contract awarded without full and open competition to a firm that is verified and eligible under the SDVOSB program. Rather than posting a competitive solicitation, the contracting officer (CO) may proceed directly to a single qualified SDVOSB when specific statutory conditions are satisfied.

This is not a workaround or a loophole — it is a deliberate policy tool Congress created to advance veteran entrepreneurship in federal procurement.

Two Separate Statutory Pathways

Pathway 1: VAAR 819.7008 — VA Acquisitions

For the Department of Veterans Affairs, the governing authority is the Veterans Affairs Acquisition Regulation (VAAR) Part 819.7008, implementing the Veterans Benefits, Health Care, and Information Technology Act of 2006.

Under VAAR 819.7008, a VA contracting officer may award a sole source contract to a verified SDVOSB when:

The estimated value, including options, does not exceed $5 million — a single flat ceiling under VAAR 819.7008, with no separate manufacturing tier

The SDVOSB is determined to be a responsible source

The requirement is synopsized and the justification required by FAR 6.302-5(c)(2)(ii) is posted under FAR Part 5

The award can be made at a fair and reasonable price that offers best value

The firm is certified in SBA's database (currently certify.sba.gov)

The VA applies a "Rule of Two" under 38 U.S.C. 8127(d): a VA contracting officer restricts competition to veteran-owned small businesses whenever two or more are expected to offer at a fair and reasonable price that offers best value, and VAAR 819.7005 sets SDVOSBs ahead of VOSBs in that order of priority. Sole source is available within this framework.

Pathway 2: FAR 19.1406 — Every Agency Except the VA

For all other federal agencies — including all Department of Defense components and civilian departments outside VA — the applicable authority is FAR 19.1406, which implements the Veterans Benefits Act of 2003 (15 U.S.C. 657f) as SBA applies it at 13 CFR 128.405.

Under FAR 19.1406, a CO may award a sole source contract to an SDVOSB when:

The anticipated award value does not exceed $8.5 million where the acquisition carries a manufacturing NAICS code, or $5 million for all other requirements

The CO does not have a reasonable expectation that offers would be received from two or more SDVOSBs

The requirement is not being performed by, or accepted for, an 8(a) participant

The SDVOSB is determined to be a responsible contractor, and award can be made at a fair and reasonable price

The firm is designated in SAM as an SDVOSB concern certified by SBA (FAR 19.1406(b))

The FAR dollar thresholds are adjusted periodically by Federal Acquisition Circular. COs should confirm the current figures in FAR 19.1406 itself.

The Justification and Approval (J&A) Process

Unlike a full and open competition, a sole source SDVOSB award requires a written justification and approval: FAR 6.302-5(c)(2) applies FAR 6.303 and 6.304 to awards under 15 U.S.C. 657f. The justification documents, among the elements FAR 6.303-2 lists:

Nature of the acquisition — a description of the requirement

Statutory authority — FAR 6.302-5, citing FAR 19.1406 or VAAR 819.7008

Why the authority applies — the facts that satisfy the authority's conditions

Market research findings — including, under FAR 19.1406, why two or more SDVOSB offers are not expected

Fair and reasonable price determination — how the CO established that the price is acceptable (prior contracts, catalog pricing, independent government cost estimates, or price analysis)

Who approves it depends on value. Under FAR 6.304(a), the contracting officer's certification serves as approval up to $900,000; above that and up to $20 million, the competition advocate for the procuring activity approves; higher values go to the head of the procuring activity or the senior procurement executive. The J&A stays in the contract file.

Verifying SDVOSB Eligibility

Before awarding, COs must confirm the firm's eligibility through two checks:

certify.sba.gov — as of January 2023, SBA assumed responsibility for all SDVOSB and VOSB verification from the VA's legacy VIP database. The SBA certification must be active.

SAM.gov — the firm must have an active registration with SDVOSB status reflected. An expired SAM registration, even with valid SBA certification, blocks award.

Do not rely on self-representation alone. Both databases must confirm active status at the time of award.

When Should a CO Use Sole Source?

Sole source is appropriate — and often efficient — when:

The requirement is time-sensitive and competition would cause unacceptable delay

Market research identifies only one qualified SDVOSB capable of performing the work within the required timeframe

The value falls within the statutory threshold and a fair price can be established independently

A prior competitive acquisition identified a single responsive SDVOSB and the follow-on requirement is similar in scope

Sole source is not a mechanism for circumventing competition when two or more SDVOSBs are realistically available. Using it where two or more SDVOSBs are expected to offer fails FAR 19.1406(a)(1) on its own terms.

Key Takeaways for Contracting Officers

SDVOSB sole source authority is a legitimate, efficient procurement tool available at the VA (VAAR 819.7008) and at every agency outside the VA (FAR 19.1406). Used correctly — with verified eligibility, a documented J&A, and a fair price determination — it supports the government's statutory veteran-contracting goals without sacrificing accountability.

Corelon Federal Supplies & Solutions is SBA-verified as an SDVOSB and maintains an active SAM.gov registration. Contracting officers with requirements in IT products, federal supply chain, and related services are encouraged to inquire about sole source eligibility.