SDVOSB Contract Opportunities: Where $28.6 Billion Actually Goes

“FEDSPEND”

“Service-Disabled Veteran-Owned Small Business contracts hit $28.6B in FY2025. Here’s the agency-by-agency, NAICS-by-NAICS breakdown — and why 35% of those dollars went sole-source.“

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“$28.6 Billion. The Veteran Advantage Is Real — If You Know Where to Look.

The federal government’s SDVOSB (Service-Disabled Veteran-Owned Small Business) program is the second-largest set-aside category by dollar volume, behind only general small business. In FY2025, agencies awarded $28.6 billion across approximately 52,000 contract actions to SDVOSB firms.

But the distribution is brutally uneven. A small percentage of SDVOSB firms capture the majority of those dollars. The difference is not capability or service quality — it is business development discipline and knowing where the money flows.

Which Agencies Award the Most SDVOSB Contracts?

The top 8 agencies account for over 82% of all SDVOSB dollars:

| Agency | FY2025 SDVOSB Awards | % of Total |

| Department of Defense | $12.8B | 45% |

| Department of Veterans Affairs | $5.2B | 18% |

| Department of Homeland Security | $2.1B | 7% |

| General Services Administration | $1.8B | 6% |

| Department of Health & Human Services | $1.4B | 5% |

| Department of Energy | $1.1B | 4% |

| Department of Interior | $890M | 3% |

| Department of Agriculture | $680M | 2% |

The VA Advantage

The VA deserves special attention. Unlike other agencies, the VA operates under the Veterans First Contracting Program, which gives SDVOSB (and VOSB) firms priority over all other set-aside types for VA contracts. This is not just a goal — it is a statutory mandate under 38 U.S.C. 8127.

What this means practically: when a VA contracting officer has a requirement, they must first consider SDVOSB firms before opening it to 8(a), HUBZone, or general small business. If two or more SDVOSB firms can perform the work, the contract must be set aside for SDVOSB competition.

If you are an SDVOSB firm not actively pursuing VA contracts, you are leaving your strongest legal advantage on the table.

Top NAICS Codes for SDVOSB Awards

| NAICS Code | Description | FY2025 SDVOSB Awards | Competition Level |

| 541512 | Computer Systems Design | $3.9B | Very High |

| 561210 | Facilities Support Services | $2.8B | High |

| 541330 | Engineering Services | $2.4B | High |

| 236220 | Commercial Building Construction | $2.1B | Moderate |

| 561612 | Security Guards | $1.6B | Moderate |

| 541611 | Admin Management Consulting | $1.3B | Very High |

| 541519 | Other Computer Services | $1.1B | High |

| 238220 | Plumbing/HVAC/AC Contractors | $890M | Low |

| 562910 | Remediation Services | $780M | Low |

| 237310 | Highway/Street Construction | $720M | Low |

Where the Smart Money Competes

The pattern from 8(a) data repeats here: IT services (541512) attracts the most competition per dollar. But look at the bottom of the table — Plumbing/HVAC (238220), Remediation (562910), and Highway Construction (237310) have significantly fewer competing SDVOSB firms relative to award volume.

Construction-related NAICS codes perform disproportionately well in the SDVOSB program. Veteran-owned construction, environmental remediation, and facilities maintenance firms have roughly 4x less competition per dollar than IT services firms.

If you hold SDVOSB certification and a construction or trades-related NAICS, your competitive position is stronger than you think.

The Sole-Source Advantage: $5 Million Threshold

The SDVOSB sole-source threshold is $5 million for both services and manufacturing — higher than the 8(a) threshold of $4.5M.

FY2025 Sole-Source vs. Competitive Split

~35% of SDVOSB dollars were sole-sourced ($10B)~65% were competitive SDVOSB set-asides ($18.6B)Sole-source average value: $1.4MCompetitive average value: $640K

The math is clear: sole-source contracts are worth more than double the average competitive award. And they require zero competition — just a contracting officer who knows your firm can perform the work.

How to Position for SDVOSB Sole-Source Awards

Target agencies behind on SDVOSB goals. When an agency is under its 3% SDVOSB statutory goal heading into Q4 (July-September), contracting officers are motivated to sole-source to SDVOSB firms to close the gap. This creates a predictable annual window.

Build PM relationships, not just CO relationships. Program Managers define requirements. Contracting Officers execute paperwork. The decision to sole-source happens at the PM level.

Register in VetBiz (VA) and SAM.gov. VA sole-source awards require VetBiz verification. All federal sole-source awards require active SAM.gov registration. Sounds obvious — but expired registrations are the #1 reason SDVOSB firms miss sole-source opportunities.

Submit unsolicited capability statements. Target agencies in your NAICS codes 6-12 months before contract expirations. Include past performance, key personnel, and specific relevance to the agency’s mission.

VA vs. DoD: Different Strategies Required

VA Strategy (Veterans First Program)

*SDVOSB firms get statutory priority over all other set-aside types

*VA must set aside for SDVOSB competition if two or more SDVOSB firms can perform

*VetBiz certification required (separate from SAM.gov SDVOSB self-certification)High concentration in healthcare IT (541512), facilities management (561210), and medical staffing

*Attend VA OSDBU National Veterans Small Business Engagement events

DoD Strategy (Standard SDVOSB Set-Aside)

*DoD follows standard FAR set-aside rules (no Veterans First priority)

*SDVOSB competes alongside 8(a), HUBZone, and general small business for set-aside goals

*Massive volume in engineering (541330), IT services (541512), and construction (236220)

*Security clearances dramatically narrow the competitive field — cleared SDVOSB firms have a significant advantage

*Pursue IDIQ vehicles: OASIS SB, STARS III, Alliant 3 SB

Recompete Opportunities: The Predictable Pipeline

Approximately 32% of FY2025 SDVOSB awards were recompetitions of expiring contracts. These are not surprises — they are predictable events with known timelines.

What recompete tracking gives you:

Contract expiration dates — know exactly when an incumbent’s period of performance endsCurrent contract value — understand the budget envelope before you bidIncumbent identity — research their past performance to identify vulnerabilitiesHistorical set-aside type — if it was SDVOSB last time, it is likely SDVOSB again

The Timeline Advantage

Most SDVOSB firms discover recompete opportunities when the solicitation posts on SAM.gov. By then, the incumbent has been positioning for months. The firms winning recompetes:

Identified the opportunity 12-18 months before solicitation

Submitted capability statements to the contracting office

Met with the Program Manager to understand evolving requirementsTeamed with complementary firms to strengthen their proposal

Fed-Spend tracks 85,000+ recompete opportunities with automated alerts when contracts in your NAICS codes approach expiration. 

The SBA Certification Change: What SDVOSB Firms Must Know

As of January 2023, SDVOSB certification transferred from VA’s VetBiz to SBA’s VetCert program. Key changes:All SDVOSB firms must now be certified through SBA (not just VA contractors)Self-certification is no longer sufficient for most contract opportunitiesSBA VetCert uses the same portal as 8(a) and HUBZone certificationsProcessing time: approximately 90 daysRe-certification required annually

If you are relying on self-certification alone, you may be ineligible for an increasing number of SDVOSB set-asides. Check your certification status at vetcert.sba.gov.

5 Mistakes That Cost SDVOSB Firms Contracts

Mistake 1: Ignoring the VA

The Veterans First program is the strongest legal advantage any set-aside category has. SDVOSB firms that skip VA contracting are leaving their best card unplayed.

Mistake 2: Competing Only in IT

NAICS 541512 has the highest award volume but also the highest competition density. Firms in construction, environmental, facilities, and trades NAICS codes face dramatically less competition per dollar.

Mistake 3: Letting Certifications Lapse

Expired SAM.gov registration, expired VetCert, expired GSA Schedule — any of these kills your eligibility. Set calendar reminders 90 days before every expiration.

Mistake 4: Waiting for SAM.gov Postings

By the time a solicitation is posted, the positioning phase is over. The winners identified the opportunity months earlier through recompete tracking and agency engagement.

Mistake 5: Going It Alone on Large Contracts

Mentor-protege agreements and joint ventures allow SDVOSB firms to pursue contracts above their individual capability. The SBA’s All Small Mentor-Protege Program and the VA’s Mentor-Protege Program both allow SDVOSB joint ventures to maintain SDVOSB status for set-aside eligibility.

FAQ: SDVOSB Contract Opportunities

How much does the federal government spend with SDVOSB firms?

In FY2025, federal agencies awarded approximately $28.6 billion to SDVOSB firms across ~52,000 contract actions. The statutory goal is 3% of all federal contracting dollars.

What is the SDVOSB sole-source threshold?

$5 million for both services and manufacturing contracts. Below this threshold, a contracting officer can award directly to an SDVOSB firm without competition, provided the price is determined to be fair and reasonable.

Do I need SBA certification to bid on SDVOSB contracts?

Yes. As of January 2023, SBA VetCert certification is required. Self-certification is being phased out. Apply at vetcert.sba.gov. Processing takes approximately 90 days.

What is the difference between SDVOSB and VOSB?

SDVOSB requires the owner to have a service-connected disability rated by the VA. VOSB requires only veteran status. SDVOSB firms receive sole-source and set-aside preferences that VOSB firms do not. Under the VA’s Veterans First program, SDVOSB firms receive priority over VOSB firms.

Can I search SDVOSB contract opportunities for free?

Yes. SAM.gov lists active solicitations filterable by SDVOSB set-aside type. USAspending.gov shows historical SDVOSB awards. Fed-Spend offers a free tier with 10 searches per month across all set-aside types and full contract data.”

SDVOSB Contract Opportunities: Where $28.6 Billion Actually Goes

Your Capability Statement For Small Business Government Contracting

“SMALLTOFEDS” By Ken Larson

“Focused and direct, your CAPE must be informative, concise and a snapshot of the very best you can offer.”

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“Federal government contracting is all about relationship development.  Marketing to influential agency personnel, industry partners, prospective team members, employees, associate contractors and others who can help you requires a hard hitting synopsis of what your firm brings to the table.

Place into a capability statement (CAPE) the specific information others need to know for a sound decision about your company qualifications. This information includes such items as a D&B Number, government registration numbers, North American Industrial Classification System (NAICS) codes and the like. These items are elected or determined when you register your company for government contracting.

KEEP IT SHORT

An electronic capability statement (CAPE) for government contracts should be short and hard-hitting. It should be 1 -2 pages and should highlight the salient points of products and offerings, personnel and qualifications.

Below are examples of two good capability statements in the public domain.  The first is a services company, the second example is for a company selling off-the-shelf products.

CLICK ON IMAGES OR DOWNLOAD TO ENLARGE 

CLICK ON IMAGES OR DOWNLOAD TO ENLARGE

MAKE IT PROMOTIONAL

A good CAPE  will be a promotional brochure that on paper and through the electronic media advertises who you are, what you do and why the government or prime contractors should buy from you. Major elements of your capability statement, in addition to your small business designation and certifications, are as follows: 

(1) Company overview

(2) Supplies and services description couched utilizing your marketing ideas and strategy.

(3) Past performance of your enterprise or your personal background and qualifications 

(experience, education, etc.).

(4) Facilities or capabilities overview (How you perform your service couched in a manner that will appeal to your target market).

(5) Explanation of the positive results the client should expect.

(6) Points of contact and ways to contact you for meetings, placing an order and contracting your services. 

INCLUDE GRAPHICS

The document itself should be created with graphics, photos, themes and sales pitches. A picture of your product and your personnel adds dynamics. 

DISTRIBUTION

Your capability statement should be distributed on paper to your target market as a brochure, emailed as an attachment and linked into related industry web sites or partner marketing to get the word out about your product or service. Your CAPE targets contracting officers and prime contractor buyers who are seeking to fulfill their small business buying goals. It is a way to get you in the door and speak to, or correspond with, the management and technical personnel who are the decision makers in sourcing small business buys. 

SUMMARY

A good quality CAPE is the spearhead of your marketing campaign and your visual image;  focused and direct, it must be informative, concise and a snapshot of the very best you can offer.”

https://www.smalltofeds.com/2011/05/your-capability-statement-cape-for.html

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Industry Must Explain Commercial Best Practices To Government Agencies

“WASHINGTON TECHNOLOGY“ By Ross Wilkers

“Assuming government leaders know what those practices are and how they work is not a good idea, according to the General Services Administration’s chief acquisition officer.“

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“Multiple cycles are running at once in the Trump administration’s push for structural changes in how the federal government buys $1 trillion in goods and services each year.

One cycle involves a rewrite of the Federal Acquisition Regulation, the rules of the road that govern the purchasing. A second cycle focuses on shifting those buys more toward what is commercially-available and away from the custom-made route that dominates much of government acquisition.

A third cycle centers around how the government buys what it needs, especially on the technology front, and in particular the contracting mechanisms used to do so. Outcome-based or fixed-price contracting is high on the discussion agendas everywhere across public sector, and a focus for new leadership at the General Services Administration.

So if the government wants to move in the outcome-based direction that many at agencies and contractors have long wanted to go in, what does that mean for the GovCon industry and how does it alter the way tech services are priced?

At the Professional Services Council’s Federal Acquisition Conference on Thursday, GSA’s chief acquisition officer Larry Allen recommended companies both “promote those commercial best practices” and to not “assume that people in government know what they are.”

“Some will, some will not, but I think the general direction that we want to go in is getting away from government-unique pricing constructs,” said Allen, who also serves as GSA’s associate administrator for government-wide policy. “A large part of that is going to be looking at how we use cost-plus contracting and where we use cost-plus contracting.”

Wholesale changes in how those practices inform the structures of government contracts is likely to be a multi-year effort as FAR reforms and the movement to more commercial-like purchasing work their way through the system.

By the same token, elements of fixed-price contracting are being added as line items into larger programs as a way of introducing both the contractor and customer to that method.

Whereas cost-plus contracting means the risk is shared on both sides of the arrangements, outcome-based or fixed-price methods put substantially all of that risk onto the contractor. But the potential reward is higher based on savings achieved, which could mean higher profits for the contractor as opposed to cost-plus.

Carving out pieces of contracts and making them fixed-price is a method Leidos uses with its customers as a way to get both sides more familiar with the concept, Leidos’ chief growth officer Jason Albanese told us in an interview for our 2025 Top 100 ranking release.

During a June 4 earnings call, Science Applications International Corp.’s chief executive Toni Townes-Whitley told investors that some contracts could be better positioned for a fixed-price structure like enterprise IT.

Allen did caution PSC conference attendees that even if the idea is to bring down the overall use of cost-plus contracting, “it probably will not be eliminated” in its entirety.

The end result of how GovCon pricing structures change seems likely to be a hybrid of how commercial industries operate and the unique fabric of government buying, but Allen recommended companies make the connection between both worlds in talking with customers.

“I would try to emphasize, particularly to the senior leaders in our agency and other agencies, how these mirror your standard commercial practices,” Allen said. “The government isn’t going to be able to get there entirely, but we would like to move closer to those, and this is a particularly receptive audience to that theme.”

The onus is on industry to explain commercial best practices

ABOUT THE AUTHOR:

Ross Wilkers covers the business of government contracting, companies and trends that shape the market. He joined WT in 2017 and works with Editor-in-Chief Nick Wakeman to host and produce our WT 360 podcast that features discussions with the market’s leading executives and voices. Ross is a native of Northern Virginia and is an alumnus of George Mason University.

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