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VetBiz Program Now Offers True Second Chance

For the first time, the Center for Veterans Enterprises (CVE) will offer veteran business owners a true second chance when it comes to applying to its VetBiz Vendor Information Pages (VIP) Program.

Beginning today, May 1st, the CVE will allow applicants the opportunity to correct minor deficiencies before an initial denial is issued. This opportunity is aimed at companies that would not be verified due to a single point of failure in their applications, such as an impermissible provision in an operating agreement. These companies will receive a preliminary finding before a determination letter of eligibility is issued.  They will then have 48 hours to respond with their intent to correct and resubmit the documents within a specified timeframe.

This is the most recent initiative designed to improve the verification process, following the recent publication on the VetBiz website of a number of new Verification Assistance Briefs. The CVE expects this to greatly reduce the number of its initial denials and subsequent requests for reconsideration. The process will also increase wait times, as it adds an additional step; but for those companies that obtain verification as a result, the wait is worth it.

The overall success rate will also be positively impacted. A second chance before denial will make a huge difference, as many veteran business owners complain of being denied VetBiz verification due to a minor issue they weren’t given the opportunity to correct.

We all know the VetBiz Program is still undergoing growing pains. Hopefully this new second chance will push it closer towards full development.

Did you find this article informative? If so, sign up for my blog on my homepage at http://www.legalmeetspractical.com. Also, my frequently-updated FAQs page on the VetBiz verification process can be accessed here.

 

 

 

The VA Backlog: If There’s an Executive Order, Give It Teeth

Senators are circulating an open letter asking President Obama to help end the Department of Veterans Affairs (VA) claims backlog. This action is staunchly supported by veteran advocate groups, including the Iraq and Afghanistan Veterans of America. The hope is President Obama will issue an executive order similar to the one issued in August of 2012, which directed federal officials to take concrete, specific steps in combatting veteran suicide.

So if this letter works, what kind of executive order can we expect from President Obama? With a disability backlog of over 900,000 claims and wait times for initial decisions exceeding a year, veterans need an executive order with teeth. It needs to lay out an actual plan for how to end the backlog, not just reiterate the same promises the VA has been making for years.

As a veterans lawyer, I commonly encounter the same issues. Not just complaints about the wait times, but complaints about how the claims process works in general. The following is a non-exhaustive list of suggestions for how the VA can stop saying it will improve the backlog, but actually do so:

  • Implement a training program for claims adjustors at Regional Offices. A standardized claim adjudication training program should be implemented in all of the Regional Offices, developed based on common mistakes.
  • Compartmentalize claims. Claims adjustors should always be assigned a certain type of claim. For example, one claims adjustor might always adjudicate PTSD claims, while another claims adjustor focuses on aggravation of leg injuries. By specializing, claims adjustors will be better equipped to deal with the difficult and nuanced issues claims present.
  • Assign accountability for mishandled claims. Sometimes veterans waits nine months for a decision, and the decision is replete with errors. And what can the veteran do? His decision is file-stamped by the director of the Regional Office, not the adjustor who decided the claim. The veteran can only file a Notice of Disagreement, send it off to the Regional Office, and wait some more. This isn’t fair to the veteran, and it isn’t good for the backlog because the veteran’s still in the system. To prevent this, Regional Offices should spot-check individual decisions rendered by claims adjudicators by providing random quality checks.
  • Improve communication. Veterans are often confused by the boilerplate information provided to them, and calling the VA’s 1-800 number generally results in a long wait time and frustration. As a result, if a veteran has a question relating to what he should do to pursue his claim, the question is often not answered clearly. The veteran responds by either doing nothing or submitting information that might not be what the VA needs. The former route hurts just the veteran, but the latter route hurts both the veteran and the VA – the veteran isn’t facilitating his claim, and the VA has more paperwork. The VA must develop better channels of communication – a help line where individuals can explain the different steps of the process to the veteran and more online information. Improving communication will, however, be the biggest challenge, due to the sheer number of veterans.
  • Enhance veteran resources. There are many wonderful resources and associations available to veterans, but these are not enough. Pro bono associations that handle claims are spread thin. The VA must expand resources available to veterans so veterans do not feel that they are alone in this process. VA disability compensation is an entitlement, and it should be treated as such.

In the end, there are many aspects of the disability claims process the VA can’t help. It can’t help the enormous backlog, the number of military members leaving active duty, and errors that may occur by veterans seeking disability compensation. However, there is much to be done to improve the system, and an executive order with teeth can take a bite out of the backlog.

CVE Revamps VetBiz Website to Increase Verification Success Rates

In an effort to increase the success rates of businesses seeking verification in its VetBiz program, the Center for Veterans Enterprises (CVE) has revamped its website. For the first time, veteran business owners have access to information including: current verification and request for reconsideration (R4R) success rates and wait times; the top ten reasons for verification denials; and nearly a dozen new Verification Assistance Briefs. The idea here is clear: the CVE wants to give veterans the tools to “get it right” the first time.

So what do these tools entail?

VetBiz Statistics. According to the “Average Verification Processing Time” webpage of the VetBiz website, the current success rate for initial verifications is 60%, and the average processing time is 54 days. In contrast, 51% of all R4Rs are granted, with an average processing time of 130 days. This webpage, which is updated periodically when new data is available, may be accessed here.

Reasons for Denial. Below the table of processing times and success rates on the “Average Verification Processing Time,” the CVE published a pie chart. This lists the most common reasons for denial of a VetBiz application, most of which are due to issues with a company’s corporate documents. A whopping 66% of applications are denied because of issues with quorum (voting) and transfer restriction provisions. This is interesting in light of the recent Miles decision rendered by the U.S. Court of Federal Claims – according to both Miles, and the CVE’s Verification Assistance Brief on the subject, a right of first refusal provision is permissible under VA regulations. This means that the VA regulations are less strict than those of the Small Business Administration’s Service Disabled Veteran Owned Small Business Program, which have been interpreted to not permit a right of first refusal provision.

Verification Assistance Briefs. Also accessible are the CVE’s Verification Assistance Briefs, which were drafted by CVE to address and clarify the requirements that most often lead to denial. Of the fifteen Verification Assistance Briefs now posted, some of these topics include: the veteran’s entitlement to receive 51% of the annual distribution; the requirement that ownership be direct; how to show control of a limited liability company; the definition of a “small” business; and the meaning of “full-time control.” These verification assistance briefs may be accessed here.

Will these tools work? Only time will tell. Stay tuned to see. In the interim, if you’re interested in learning more about the verification process, please visit my VetBiz verification FAQs webpage.

Did you find this article informative? If so, sign up for my weekly blog at http://www.legalmeetspractical.com. Remember to click on the link to activate your subscription!

 

 

 

A Harsh SDVOSB Bid Protest Lesson: Know Your Forum

Most service-disabled veteran-owned small business (SDVOSB) owners know they need not be listed in the Department of Veterans Affairs’ (VA’s) VetBiz database in order to compete for non-VA contracts. Rather, they must only meet the Small Business Administration’s (SBA’s) SDVOSB program eligibility requirements.

But what do business owners do when a federal agency makes a mistake? What happens when a federal agency finds an SDVOSB ineligible for a set-aside because it isn’t listed in VetBiz? It is not permitted to do that, and the contractor has a recourse. That recourse, however, must be sought in the appropriate forum. This was illustrated in a recent  decision issued by the Small Business Administration Office of Hearing and Appeals (SBA OHA). 347 Construction Group, SBA No. Vet-232 (February 22, 2013).

In 347, the protestor was notified by the U.S. Department of the Air Force that it was excluded from competition for a solicitation simply because it was not registered in VetBiz. The protest of this decision ultimately made its way to the SBA OHA.

The SBA OHA didn’t disagree with the protestor’s contention that the Air Force acted improperly, citing to the well-established case law that SBA regulations do not require a business to be registered in VetBiz in order to be eligible for the SBA’s SDVOSB program. The problem was the protestor brought this argument in the wrong forum. As noted by the SBA OHA, it will only entertain an SDVOSB status protest directed against a procurement’s apparently successful offeror. In this case, however, 347 was requesting its own eligibility to be reviewed, not that of the awardee.

Because the protestor’s bid protest grounds related to the conduct of the procurement (ie, improper exclusion of an offeror), the proper forum was the Government Accountability Office (GAO). The SBA OHA noted several recent similar decisions decided by the GAO, such as a case where the GAO determined a protestor ineligible for a VA contract because it was not listed in VetBiz, and another case where the GAO held that an agency acted improperly by determining a protestor ineligible for the SBA’s SDVOSB program without referring the issue to SBA.

The lesson presented in 347 is clear: knowing why you’re fighting is only the first step. The second step is knowing where your battle is supposed to be!

 

Veterans Appeal to Obama Administration to End VA Backlog

As every veteran knows, the Department of Veterans Affairs (VA) disability compensation backlog has reached alarming numbers. According to a March 2013 report by the Center for Investigative Reporting, there are nearly 900,000 claims pending at the VA. That number is expected to soon top one million.

On March 20, members of the Iraq and Afghanistan Veterans of America presented a petition to White House Chief of Staff Denis McDonough, calling for President Obama to “keep the promise we made to the millions of veterans who have served and sacrificed to defend our nation” by ending the benefit backlog. The petition, which includes support from a bipartisan coalition of members of Congress, now has more than 36,000 signatures.

Other means of action are urged. Rep. Jeff Miller, R-Fla., chairman of the House Veterans’ Affairs Committee, also urges the removal of Allison Hickey, the VA’s under secretary of benefits. Miller is frustrated with Hickey, in part because she cannot project where the backlog will stand in 12 months, yet simultaneously promises that no veterans will be waiting 125 days or more for their benefits by 2015. This promise is also dubious in light of the fact that the current wait time for veterans filing an initial claim  is between 316 and 327 days.

This petition reflects the urgent need for real, substantive action to be taken as it relates to our nation’s veterans. While waiting for their disability compensation to be issued, many veterans face foreclosures or bankruptcy. By the time their claim is granted, they may be homeless or facing serious financial issues that could have been avoided with an expeditious resolution of a claim. Meanwhile, the VA faces absolutely no penalty for taking years to resolve a meritorious claim. If a claim is erroneously denied, even if the error is egregious or the wait time excessive, the VA is not expected to pay any type of penalty or interest for the period of time the veteran was without his benefits.

Interesting, isn’t it? That certainly isn’t the case when the situation is reversed : if a veteran forgets to pay all his taxes owed one year, when the Government eventually discovers the error, he’ll be socked with an additional amount owed.

For years, veteran organizations have loudly and forcefully complained about the backlog. Whether this recent effort will gain traction in the Obama administration is yet to be seen, but the reality is clear – the backlog is creating devastating effects on our veterans.  For more information about the efforts of the Iraq and Afghanistan Veterans of America and to voice your support of their cause, visit their website here.

 

ALERT: Vulnerability in the System for Award Management (SAM) Reported

On Friday, March 15, the General Services Administration (GSA) reported a security vulnerability in the System for Award Management (SAM). For a period of time not specified, registered SAM users with entity administrator rights and delegated entity registration rights had the ability to view any entity’s registration information, including both public and non-public data at all sensitivity levels. This vulnerability was discovered on March 8th, and on March 10th the GSA implemented a software patch to close the exposure. It later sent out a mass email to all SAM registrants.

As noted in the email release, this exposed data contained identifying information, including: names; taxpayer identification numbers (TINs) including Federal Employer Identification Numbers (FEINs) and social security numbers; marketing partner information numbers; and bank account information. The GSA has not, however, specified for how long this information was viewable.

Registrants using their social security numbers instead of a TIN were identified as being at a greater risk for potential identity theft. These registrants include sole proprietorships and solo member limited liability companies. These registrants were advised to monitor their bank accounts, and to immediately contact their financial institutions if they noted any discrepancies. They were also given free access to credit monitoring services.

This security vulnerability is worrying for a number of reasons. Thousands of SAM registrants were affected by the vulnerability, and yet they were not alerted until seven days after it was discovered. Also, while the issue was reported to the GSA on March 8th, it was not resolved for two days. Last, while registered SAM users are aware of the incident, there is no way they can know whether their information was compromised. Rather, they must monitor their credit and banking information to make sure that they do not become victims of identity theft.

Who knew that agreeing to do business with the federal government included consent to be exposed to identity theft?

SAM users can access the GSA’s System for Award Management Security Vulnerability FAQ webpage here. If you would like additional background or have questions, the FAQ webpage provides a contact number that is in service from 8:00 AM to 8:00 PM beginning March 18.

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Dodging a Bullet, Getting Shrapnel: How Sequestration Affects the VA

As individuals working for or dealing with the Department of Veterans Affairs (VA) know, the VA is exempt from the sequestration that took effect on March 1 of this year. This does not mean, however, that the VA does not feel the effects of sequestration. A hit to the Department of Defense (DoD) results in collateral damage to the VA and the veterans it supports.

What is sequestration? 

“Sequestration” is a process of automatic, largely across-the-board spending reductions under which budgetary resources are permanently canceled to enforce certain budget policy goals. It was included as an enforcement tool in the Budget Control Act of 2011 (BCA). It can also occur under the Statutory Pay-As-You-Go Act of 2010.

On March 1, 2013, sequestration occurred because a Joint Select Committee on Deficit Reduction failed to develop legislation to reduce the deficit by at least $1.2 trillion. Under the BCA, Congress was supposed to adopt this legislation by January 12, 2013. Because it did not, this triggered a series of automatic spending reductions. This included sequestration of mandatory spending for fiscal year (FY) 2013 through FY 2021, a one-year sequestration of discretionary spending for FY 2013, and lower discretionary spending limits for FY 2014 through FY 2021.

What departments and programs are exempt? 

Since sequestration occurred, the exemptions and special rules of Sections 255 and 256 of the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, as amended in 1985) apply. Most exempt programs are mandatory, and include Social Security and Medicaid; refundable tax credits to individuals; and low-income programs such as the Children’s Health Insurance Program, Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and Supplemental Security Income. Some discretionary programs also are exempt, including all programs administered by the VA.

A look at VA exemptions 

Under the letter of the law, the VA and its medical care programs are exempt from sequestration. This was not, however, initially clear, which resulted in concern within the VA and veteran community. Section 255 of the BBEDCA specifically excludes from sequestration all programs administered by the VA, which includes veterans’ medical care. This conflicts with Section 256(e) of the BBEDCA, which allows a maximum 2% reduction in budget authority for VA medical care for any fiscal year. To clarify the issue, on April 23, 2012, the Office of Management and Budget (OMB) issued a letter stating that “all programs administered by the VA, including Veterans’ Medicare Care, are exempt from sequestration under Section 255(b).” (Access the letter here).

The Collateral Effects on Veterans 

Despite the exemption from sequestration, both the VA and the veterans it serves will feel the effects of sequestration. This is due to the fact that support received from other agencies will lessen due to the resource strain within these agencies. This applies to the DoD in particular, which works in collaboration with the VA to meet many objectives. (About 800,000 civilian defense employees face one-day-a-week furloughs and a 20 percent dent to their paychecks, which are set to start next month). Programs operated by the VA in conjunction with other agencies will also be affected.

In addition to the direct impact on VA departments and programs, veterans will also see a reduction in services or resources due to a ripple effect from the DoD. This includes the following:

  • The Department of Labor’s VETS job-training program –  This was being revamped and has been touted by the Obama administration as a key weapon in reducing high unemployment among post- 9/11 era veterans, and it is subject to cuts.
  • Department of Labor’s employment and transition assistance programs – Acting Labor Secretary Seth Harris said last month that about 55,000 veterans and 44,000 service members would not receive employment and other transition assistance to help them find civilian jobs because of sequestration. Labor officials now say the exact number s are unknown but will amount to “tens of thousands.” In addition cuts to the Jobs for Veterans state grants program will mean an estimated 33,000 fewer veterans will be served.
  • Homeless veteran programs – A program using Housing and Urban Development (HUD) vouchers that is credited with reducing the number of homeless veterans by 17 percent since 2009 may be harmed. According to Sandra Henriquez, the assistant secretary for public housing, while the vouchers are exempt, administrative funding is being cut, which HUD fears will have a “serious effect” on the number of local housing authorities willing to accept the vouchers because they would have to make up the deficit.
  • Mental Health Counselor Availability – The number of DoD mental health counselors assisting service members returning from combat zones with issues such as post-traumatic stress disorder may be cut, Gen. Raymond Odierno, the Army chief of staff, told Congress last month.

Time will show how sequestration affects the VA and the veterans it serves. For now, however, one point is clear: the VA may have dodged a bullet, but it will suffer from the collateral damage caused by cuts to the DoD and other agencies.

Valentine’s Day Victory Creates Confusion in Analyzing SDVOSB Status

Valentine’s Day marked a sweet victory for Pennsylvania company Miles Construction, LLC (“Miles”), when the United States Court of Federal Claims (“CoFC”) reinstated Miles’ service-disabled veteran-owned small business (“SDVOSB”) verified status in the Department of Veterans’ Affairs (“VA’s”) Vendor Information Pages. (CoFC No. 12-597C, February 14, 2013).

In this case, Miles had been verified as an SDVOSB by the VA’s Center for Veterans Enterprise (“CVE”). Its status was protested when it was awarded a VA contract for storm sewer repairs. The second low bidder alleged that Miles and a non-SDVOSB had common ownership and control, thus rendering Miles ineligible for SDVOSB status (due to affiliation issues). Interestingly, while the OSDBU rejected the basis of the protest, it sustained it on other grounds: unlawful transfer restrictions. Miles’ corporate documents contained a right of first refusal transfer restriction.

In finding that the right of first refusal provision was permitted under the VA regulations governing the Veterans First Contracting Program, the CoFC noted that “it is presently executory, is a standard provision used in normal commercial dealings, and does not burden the veteran’s ownership interest until he or she chooses to sell some of his or her stake.”

While this is certainly a triumph for Miles in this instance, the end result is confusion: as the CoFC noted in its decision, the operative VA rule (38 CFR Part 74.3)  is materially different from the text in the operative Small Business Administration rule (13 CFR Part 125.9). This means that if this contract had not been awarded as a set-aside under the Veterans First Contracting Program, the protest may have been sustained due to the right of first refusal provision. Because of the differences in the regulations, Miles may be an eligible SDVOSB for VA procurements, but not for solicitations issued by other federal agencies.

As many veteran businesses are aware, the ultimate goal is for the CVE’s verification process to apply government-wide. As a recent Government Accountability Office report pointed out, the system is still undergoing growing pains. This decision illustrates one such growing pain: working to ensure that the regulations governing eligibility are uniform across all federal agencies.

For further reading, access the Miles decision here.  Also, if you found this article informative, please sign up for my weekly blog on veterans issues. Remember to click the link sent to your email to activate your subscription!

 

 

 

 

 

Thomas Leney Dishes on VetBiz Program at Monthly VET-Force Meeting

On February 12, 2013, Thomas Leney, the Executive Director for Small and Veteran Business Programs at the U.S. Department of Veterans Affairs, made a special appearance at the monthly VET-Force meeting held in Washington, D.C. For over an hour, veteran business owners and advocates had the opportunity to listen to Mr. Leney’s discussion of the VA’s VetBiz Vendor Information Pages (“VIP”) Verification Program (the “VA VetBiz Verification Program”), as well as ask questions. The following illustrates a few highlights of this discussion:

  • Processing Times – According to Mr. Leney, the average processing time for an initial verification request is 57 days. The average processing time for a request for reconsideration is 147 days. These statistics are a bit different from, but in the same general timeframe, as those included in a table that was very recently posted on the VetBiz website (58 days and 131 days, respectively). This table also includes current statistics relating to the VetBiz process, including statistics on the percentage of successful verification applications and requests for reconsideration. Access the VetBiz table of “Average Verification Processing Time(s)” here.
  • Verification Counseling Program – Along with reading the Verification Assistance Briefs and taking the Verification Self-Assessment Tool, the Center for Veterans Enterprises (CVE) highly recommends that veteran business owners take advantage of the Verification Counseling Program. As Mr. Leney noted, 85% of businesses that used the Verification Counseling Program were successful in achieving verification (compared with an average 59% success rate for applications processed during FY 2013).
  • Alignment with Small Business Administration (SBA) Regulations – Mr. Leney stressed that the regulations for the VetBiz are aligned with the regulations for the service-disabled veteran-owned small business (SDVOSB) program set forth in the SBA regulations. However, as a VetForce member pointed out, if we assume that this is true, the unusually high denial rate for the VetBiz Program demonstrates that the issues preventing successful verification may exist in the evaluation phase.
  • Transparency – Mr. Leney relayed that in the interest of government transparency, the CVE plans to publish its Standard Operating Procedure (SOP) of its VA VetBiz Verification Program on the VetBiz website.
  • Government-Wide Verification Program – As of now, the VA VetBiz Verification Program applies only to VA contracts, meaning that a business need not be verified in VetBiz to compete for SDVOSB set-aside contracts issued by other federal agencies. As Mr. Leney noted, the intention is to move towards a Government-wide verification program. As illustrated in the recent GAO report on the VetBiz Program, however, issues with devising long-term solutions and other flaws in the still-developing Program prevent that from occurring any time soon. This GAO report is available here.

Did you find this article informative? If so, sign up for my weekly newsletter addressing issues and news pertinent to veteran business owners here (left on page). Remember to click on the link sent to your email to activate your subscription!

Also, for further reading on the VA VetBiz Verification Program (including helpful resources and links), visit my frequently-updated VetBiz FAQs page here.

 

Expediting Your VA Claim: The New Fully Developed Claims Program

It used to be that when a veteran started the disability compensation claim process, he was forced to simply deal with the delay. Now, with the Department of Veterans Affairs’ (VA’s) new Fully Developed Claims (FDC) Program, a veteran has a genuine opportunity to truly expedite his claim.

The FDC Program is exactly what it sounds like – if a veteran can give the VA a fully developed application, including relevant medical evidence, he will be placed in a priority channel for review of his claim. In order to meet the criteria for an FDC claim, the veteran must do three things: 1) submit his claim on the VA Form 21-256EZ; 2) simultaneously submit with his claim any relevant private medical treatment records and/or identify the medical records that may be available at federal facilities; and 3) if applicable, report for any medical examinations scheduled by the VA.

Sounds great, doesn’t it? After all, no one likes standing in line, especially if it’s a very long one! But before you take advantage of the FDC Program, be careful:

  • First, make sure that you have all information necessary to render your claim appropriate for the FDC Program. If the VA finds that other records are necessary to decide your claim, it will pull your claim from the FDC Program queue and put it in the Standard Claims Process (ie, the very long line).
  • Second, obtain all information you require from private care providers. In the Standard Claims Process, the VA will make efforts to obtain records from private providers. This is not done in the FDC Program. This does not mean that the VA will not obtain and/or consider them; it simply means that it will  pluck your claim from the FDC queue so the records may be obtained.
  • Third, make sure that you have thought of everything you would like to include. One advantage of having to wait so long for an initial decision in the Standard Claims Process is that if in the interim, a veteran thinks of more evidence he would like to add, he has the opportunity to do so within one year of the VA’s receipt of the claim. In contrast, while you may submit additional evidence for a claim in the FDC Program queue, the penalty is that your claim will be removed from the FDC Program queue and put in the Standard Claims Process.

If you know how to take advantage of it, the FDC Program can be your ticket to having your disability compensation claim resolved as quickly as possible by the VA. However, before you pursue this as an option, do your research. Make sure you truly understand how the Program works and have gathered all of the possibly relevant information that the VA will need to decide your claim. If not, the VA will put you right back in the place you were looking to avoid…the very long line.

For more information on the FDC Program, visit the VA’s website at: http://benefits.va.gov/transformation/fastclaims/. A copy of the FDC Program application is available at: http://www.vba.va.gov/pubs/forms/VBA-21-526EZ-ARE.pdf.

Did you find this article informative? If so, sign up for my weekly blog on veterans issues and updates at: http://www.legalmeetspractical.com (left of page). Make sure to click the link sent to your email to activate your subscription!

 

 

 

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