If you’re a veteran looking into government contracting, you’ve probably seen two acronyms come up over and over. SDVOSB and VOSB. They sound similar, and both involve veteran-owned businesses. But they’re not the same thing, and the difference has a direct impact on how much money your business can make.
Here’s what each one means, how they differ, and which one you should pursue.
What Is a VOSB?
VOSB stands for Veteran-Owned Small Business. It means the business is at least 51% owned and controlled by one or more veterans. The veteran must also hold the highest officer position in the company and manage the day-to-day operations.
Any veteran who has served in the U.S. military and received an honorable discharge can qualify for VOSB status. There is no disability rating requirement.
VOSB status gives you access to certain networking opportunities and recognition as a veteran-owned company. Some federal agencies and prime contractors prefer working with veteran-owned businesses, and VOSB status helps you stand out in those situations.
What Is an SDVOSB?
SDVOSB stands for Service-Disabled Veteran-Owned Small Business. It has all the same requirements as a VOSB, plus one additional qualification. The veteran owner must have a service-connected disability rating from the VA.
Any disability percentage qualifies. Whether your rating is 10% or 100%, you’re eligible for SDVOSB status.
This is the designation that opens the door to the real money in government contracting.
The Key Difference: Set-Aside Contracts
The biggest difference between SDVOSB and VOSB is access to set-aside contracts.
The federal government is required to award a percentage of all contracts to small businesses, and a portion of that is specifically set aside for SDVOSBs. In fiscal year 2023, the government’s goal was to award 3% of all eligible federal contracting dollars to SDVOSBs. That translates to billions of dollars in contracts reserved for service-disabled veteran-owned businesses.
VOSB status does not give you access to these set-asides. Only SDVOSBs can compete for SDVOSB set-aside contracts.
This is the critical distinction. With SDVOSB status, you’re competing in a smaller pool against fewer businesses for contracts that are reserved specifically for you. With VOSB status alone, you’re competing in the open market alongside every other business.
How to Get VOSB Status
VOSB status is a self-certification. You declare that your business meets the ownership and control requirements, and you check the appropriate box when you register on SAM.gov.
There is no formal verification process for VOSB status through the SBA. However, if you want official recognition, you can apply through the SBA’s VetCert program. While VetCert verification is optional for VOSBs, having it adds credibility and can make prime contractors and agencies more confident in your status.
How to Get SDVOSB Status
SDVOSB verification is done through the SBA’s VetCert program. This replaced the old VA verification process (CVE) in January 2023.
To get verified, you need to submit an application through the VetCert portal that includes documentation proving your veteran status and service-connected disability rating, your business ownership and control structure, and your company’s organizational documents.
The SBA reviews your application, verifies your disability rating with the VA, and confirms that your business meets the ownership and control requirements. Processing typically takes 30 to 90 days.
Once verified, your SDVOSB status is valid for three years before you need to recertify.
For a complete walkthrough of the SDVOSB process and how to start winning contracts, read our full guide on SDVOSB government contracting.
Do You Need Both?
If you qualify for SDVOSB, you don’t need a separate VOSB certification. SDVOSB status automatically includes VOSB status. Every SDVOSB is also a VOSB, but not every VOSB is an SDVOSB.
If you’re a veteran without a service-connected disability rating, VOSB is your only option. It still carries value in terms of recognition and networking, but it won’t give you access to set-aside contracts.
If you have a disability rating of any percentage and you’re not pursuing SDVOSB status, you’re leaving money on the table.
Which Contracts Can Each Status Access?
SDVOSB can compete for:
- SDVOSB set-aside contracts (exclusive to SDVOSBs)
- VOSB set-aside contracts (primarily at the VA)
- Small business set-aside contracts
- Full and open competition contracts
- Sole-source contracts up to $5 million
VOSB can compete for:
- VOSB set-aside contracts (primarily at the VA)
- Small business set-aside contracts
- Full and open competition contracts
The sole-source authority is a major advantage for SDVOSBs. A contracting officer can award a contract up to $5 million directly to an SDVOSB without competition if certain conditions are met. That’s a contract handed to you without having to outbid anyone.
The VA Specifically Prioritizes Both
The Department of Veterans Affairs has its own set-aside program called the Veterans First Contracting Program. Under this program, the VA is required to give preference to SDVOSBs and VOSBs before opening contracts to other small businesses or the general market.
The priority order at the VA goes like this: SDVOSBs first, then VOSBs, then other small businesses, then full and open competition. If you’re selling services to the VA, both certifications carry significant weight.
Real Numbers: Why This Matters
The federal government spends over $600 billion annually on contracts. The 3% SDVOSB goal means roughly $18 billion is targeted for service-disabled veteran-owned businesses each year.
Compare that to the number of verified SDVOSBs competing for those dollars. The pool is much smaller than most people realize. Many veterans don’t know this benefit exists, and many who do know about it never complete the registration and verification process.
That’s the opportunity. Less competition for a reserved pool of contracts worth billions.
Steps to Get Started
Whether you’re pursuing VOSB or SDVOSB status, the process starts in the same place.
Step 1: Form your business entity (LLC, S-Corp, etc.) and get an EIN from the IRS.
Step 2: Register on SAM.gov. This is required for both VOSB and SDVOSB.
Step 3: If you have a service-connected disability rating, apply for SDVOSB verification through the SBA’s VetCert program.
Step 4: Build your capability statement and start identifying contract opportunities.
Step 5: Connect with prime contractors who need SDVOSB subcontractors to meet their small business goals.
For more on starting a business as a veteran with minimal startup capital, read our guide on how veterans can start a business with little to no money.
The Bottom Line
If you have a service-connected disability rating, get your SDVOSB verification. The set-aside contracts, sole-source authority, and reduced competition make it one of the most valuable business benefits available to veterans. The process takes some paperwork and patience, but the payoff is access to billions in federal contracts that most business owners can’t touch.
If you don’t have a disability rating, VOSB status still has value, especially if you’re doing business with the VA. But the real advantage in government contracting belongs to SDVOSBs.
Either way, it starts with getting registered. Read our step-by-step guide on how to register on SAM.gov and get your business in the system.
For a complete overview of every financial move veterans should make, start with The Ultimate Veteran Financial Checklist.