The bill inserts a new Section 36B into the Small Business Act and directs agencies to treat small businesses owned and controlled by veterans as a discrete procurement category. It authorizes contracting officers to make sole‑source awards and to limit competitions to veteran‑owned small businesses under specified conditions, ties eligibility to the SBA database, and cross‑references those authorities into multiple procurement and small‑business support provisions.
More broadly, the bill requires the SBA to set a governmentwide goal of not less than 5 percent of the total value of all prime contract and subcontract awards each fiscal year for veteran‑owned small businesses, expands reporting categories and the federal scorecard to track those awards, and amends existing mentor‑protégé, best‑in‑class, and subcontracting rules to account for the new veteran‑owned category. Compliance and verification, procurement discretion, and interactions with existing veteran preference programs are the implementation chokepoints to watch.
At a Glance
What It Does
Establishes a new statutory procurement category for small businesses owned and controlled by veterans (Section 36B), authorizes limited sole‑source awards and competitions restricted to that category, and mandates a governmentwide participation goal of at least 5 percent for veteran‑owned small businesses. It also stitches that category into SBA reporting, scorecards, mentor‑protégé reporting, and subcontracting rules.
Who It Affects
Veteran‑owned small businesses seeking federal contracts (they must be listed in the SBA database to qualify); contracting officers and agency small‑business offices who must apply the new authorities and meet the 5% goal; the SBA, which must expand reporting and scorecard metrics; prime contractors subject to subcontracting rules and mentor‑protégé reporting.
Why It Matters
This creates a statutorily recognized procurement pathway and numerical target for veteran‑owned firms that did not previously exist at this scope. For compliance officers and procurement teams it changes how set‑asides, sole‑source justifications, reporting, and scorecard metrics are structured and measured across agencies.
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What This Bill Actually Does
The bill creates Section 36B in the Small Business Act to recognize small businesses owned and controlled by veterans as a distinct procurement category. Section 36B gives contracting officers two practical tools: (1) make noncompetitive, sole‑source awards to veteran‑owned small businesses when the firm is a responsible source, the anticipated award price does not exceed the cap referenced in section 36(c)(2) of the Act, and the award is fair and reasonable; and (2) run competitions restricted to veteran‑owned small businesses when the officer reasonably expects at least two offers and can obtain best value.
The statute ties eligibility to firms and veteran owners listed in the SBA database identified in section 36(f)(1), making registration a prerequisite for using these authorities.
Beyond procurement authorities, the bill amends the governmentwide goal and reporting framework in section 15 of the Act. It inserts a not‑less‑than 5 percent governmentwide goal for veteran‑owned small business participation (applied to the total value of prime and subcontract awards each fiscal year) and forces agencies to report awards to veteran‑owned concerns across multiple procurement pathways — aggregate awards, sole source, veteran‑only competitions, unrestricted competition, awards lost to post‑award purchases, and awards made via methods that previously favored other small‑business categories.
The SBA scorecard must reflect these metrics and report sole‑source and restricted‑competition results for the veteran category.The bill also updates several procurement‑adjacent provisions to operationalize Section 36B: it adds the new category to the duties of business opportunity specialists and commercial market representatives, expands the best‑in‑class addendum to account for veteran‑owned small businesses, folds the category into mentor‑protégé reporting, and adjusts limitations on subcontracting to cover contracts awarded under Section 36B. These cross‑references mean the veteran‑owned classification will appear in solicitation planning, compliance reviews, procurement scorecards, and enforcement of subcontracting rules across the acquisition lifecycle.Practically, agencies will need to: ensure contracting officers and small‑business staff understand when and how to use sole‑source and restricted veteran‑only authorities; verify veteran ownership through the SBA database before award; track awards and dollars to meet the 5% goal; and reconcile how Section 36B interacts with existing veteran programs (for example service‑disabled veteran-owned firms) and subcontracting limits.
The bill does not change the substantive definitions in other preference programs; it adds a parallel procurement pathway with its own eligibility and reporting requirements.
The Five Things You Need to Know
The bill requires a governmentwide participation goal of not less than 5 percent of the total value of all prime contract and subcontract awards each fiscal year for small business concerns owned and controlled by veterans (Section 15(g)).
Section 36B authorizes contracting officers to award noncompetitive (sole‑source) contracts to veteran‑owned small businesses when the firm is a responsible source, the anticipated award price does not exceed the amount referenced in section 36(c)(2) of the Small Business Act, and the award is fair, reasonable, and offers best value.
Section 36B permits competitions restricted to veteran‑owned small businesses when the contracting officer reasonably expects two or more veteran‑owned offerors and can obtain best value — creating a veteran‑only set‑aside pathway distinct from other small‑business programs.
A firm and its veteran owner must be listed in the SBA database described in section 36(f)(1) to be eligible for awards under Section 36B, making registration and database maintenance a gating compliance step.
The bill amends multiple SBA and procurement provisions — including business opportunity specialists, commercial market representatives, best‑in‑class addenda, scorecards, mentor‑protégé reporting, and limitations on subcontracting — so veteran‑owned awards are tracked, reported, and treated in the same acquisition touchpoints as existing small‑business categories.
Section-by-Section Breakdown
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Short title
Provides the Act’s public name: the "Contract Our Veterans Act of 2026." This is administrative only and carries no substantive requirements, but it flags congressional intent to treat veteran‑owned small businesses as a distinct procurement priority.
Authority for sole‑source and veteran‑only competitions
Adds Section 36B to the Small Business Act. The provision has three core elements: a definition cross‑reference for contracting officers; an authorization for sole‑source awards to veteran‑owned small businesses subject to responsibility, price caps (referenced to section 36(c)(2)), and a best‑value finding; and an authorization to restrict competitions to veteran‑owned small businesses when there is a reasonable expectation of two or more offers. It also conditions eligibility on registration in the SBA database under section 36(f)(1), which makes administrative verification central to award decisions. For contracting officers this is a new, statutory justification to bypass full competition in narrowly defined circumstances, but they must document responsibility and value determinations consistent with procurement law.
5% governmentwide target and expanded reporting categories
Amends section 15(g) to insert veteran‑owned small businesses into governmentwide goal language and creates a not‑less‑than 5 percent annual target for prime and subcontract awards. It also expands the reporting categories in 15(h)(2) so agencies must report awards to veteran‑owned firms across multiple award pathways (aggregate, sole‑source, veteran‑only competitions, unrestricted competition, post‑award purchases that change status, and awards made via other restricted methods). Practically, agencies will need new reporting fields and reconciliation processes to populate the SBA’s scorecard and comply with the statutory metric.
Integrating the veteran category into procurement roles and best‑in‑class
Updates procurement operational provisions so that business opportunity specialists, commercial market representatives, consideration of offers under 8(a), and the best‑in‑class addendum formally recognize Section 36B and the veteran‑owned category. This inserts veteran‑owned status into solicitation planning, market‑research responsibilities, and considerations when evaluating set‑aside or sourcing decisions. Contracting shops must update internal guidance, templates, and training to reflect the new statutory hook for veteran‑owned awards.
Scorecards, mentor‑protégé, and subcontracting adjustments
Amends the Office of Small and Disadvantaged Business Utilization cross‑references, requires the SBA scorecard to show counts and dollar values for veteran‑owned awards (including sole‑source awards under Section 36B), expands mentor‑protégé reporting to include veteran‑owned firms, and alters limitations on subcontracting to specify applicability to contracts awarded under Section 36B. These changes create new monitoring and compliance touchpoints: agencies will report results publicly, mentor‑protégé arrangements must account for veteran‑owned firms, and primes and subs will need to track subcontracting ceilings where relevant to preserve small‑business status.
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Explore Veterans in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Small business concerns owned and controlled by veterans — gain a statutory procurement pathway (sole‑source and veteran‑only competitions) and access to a new 5% governmentwide target that should increase contracting opportunities and visibility.
- Veteran entrepreneurs and veteran‑founder firms — benefit from clearer eligibility rules tied to SBA’s database and expanded reporting that can improve pipeline transparency and outreach efforts.
- Small Business Administration and agency small‑business offices — benefit institutionally by getting explicit statutory authority and metrics to prioritize veteran outreach and to justify programmatic support and technical assistance.
Who Bears the Cost
- Federal agencies and contracting offices — must update policies, training, solicitation templates, reporting systems, and scorecard processes to accommodate a new category and the 5% target, which requires staff time and potentially budget for IT/reporting changes.
- Prime contractors and other non‑veteran small businesses — may face increased competition in contracts or subcontracting markets as agencies use veteran‑only competitions and meet numerical goals, and primes must track subcontracting compliance for Section 36B awards.
- SBA and oversight functions — will carry additional verification, monitoring, and reporting burdens (database maintenance, audit trails for sole‑source awards, reconciliation of subcontracting data), potentially without dedicated funding.
Key Issues
The Core Tension
The central dilemma is between targeted economic opportunity for veterans and the procurement system’s twin mandates: obtain best value and preserve open competition. The bill advances veteran‑owned firms by creating statutory authorities and a numeric goal, but doing so increases pressure on contracting officers to balance achieving the 5% target against market realities (price, supplier availability, mission fit). That trade‑off — targeted set‑asides and sole‑source authority versus competitive markets and price discipline — has no technical silver bullet and will hinge on how agencies translate aspirational goals into procurement decisions and safeguards.
The bill creates a new, parallel procurement pathway for veteran‑owned firms but leaves several implementation details unresolved. It ties the sole‑source price cap to section 36(c)(2) without specifying a dollar figure in the new text; agencies and legal counsel will have to map that cross‑reference and reconcile it with other thresholds (for example the simplified acquisition threshold and varying commercial item rules).
The database listing requirement centralizes eligibility verification, which helps prevent misrepresentation but also concentrates risk: delays in listing, database errors, or weak verification protocols could deny eligible firms access or permit ineligible awards.
The 5 percent governmentwide target is explicit, but the bill does not create enforcement mechanisms, carveouts for agency missions where competition is limited, or a transition timetable. That makes the target aspirational unless agencies back it with procurement planning and resources.
Also, Section 36B interacts imperfectly with existing veteran preference programs (such as service‑disabled veteran‑owned small business set‑asides) and other small‑business categories; agencies will need clear guidance to avoid double‑counting, to prevent gaming via post‑award acquisitions that alter firm status, and to reconcile subcontracting‑limit rules with sole‑source awards. Finally, the requirement that awards be "fair and reasonable" and provide "best value" leaves room for subjective judgments, which will be fertile ground for protests and oversight reviews if price or performance outcomes are unfavorable.
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