The federal government awarded $32.8 billion to service-disabled veteran-owned small businesses in FY2024, according to the SBA's annual small business scorecard. That number went up $900 million from the year before. Most veteran business owners have never touched a dollar of it.
That's not a knock on veteran entrepreneurs. The federal contracting system is genuinely hard to enter. The paperwork is real. The certification requirements changed in 2024. And the gap between "I'm a veteran" and "I have a government contract" is wider than most people expect.
But $32.8 billion is not a niche opportunity. That's a market. And if you own a veteran-operated business and you're not in this market, you're leaving a structural advantage on the table.
Here's what the system actually looks like and what it takes to compete in it.
Two programs, one threshold difference
The federal contracting system gives veteran-owned businesses two separate tracks.
The first is the VOSB program (Veteran-Owned Small Business). Any business that is at least 51% owned and controlled by one or more veterans qualifies. This gives you access to set-aside contracts specifically through the Department of Veterans Affairs, which is required by law to set aside at least 7% of its contracting budget for certified VOSBs and SDVOSBs.
The second is the SDVOSB program (Service-Disabled Veteran-Owned Small Business). Same ownership requirement, plus the controlling veteran must carry a service-connected disability rating from the VA. This gets you into government-wide set-aside and sole-source contracting across all federal agencies, not just the VA.
The distinction matters because SDVOSB opens far more doors. The government's goal is now 5% of all eligible federal contracting dollars going to SDVOSBs annually, raised from 3% by the FY2024 National Defense Authorization Act. Against a $600-plus billion annual contracting market, 5% is substantial.
Self-certification is dead
This changed in June 2024 and most veteran entrepreneurs don't know about it yet.
Prior to June 6, 2024, SDVOSBs could self-certify their status to compete for set-aside contracts. You filled out a form, attested to your eligibility, and bid on contracts. The SBA eliminated that option. A firm that did not file a VetCert application by December 22, 2024 can no longer self-certify for any federal contracting opportunity.
The only path now is through the Veteran Small Business Certification (VetCert) program administered by the SBA. You apply through MySBA Certifications. You prove ownership, control, and if applicable, service-connected disability status. You get reviewed by an actual SBA analyst.
The backlog that built up when VetCert launched has been cleared. As of late 2025, the SBA reports average processing times of 12 days, down from an 81-day average at the end of 2024. That's a real improvement. But you cannot compete for veteran set-aside contracts without this certification in place.
If you haven't applied, apply first. Everything else is irrelevant until you're in the VetCert database.
The three contract types that matter
Once you're certified, you're competing in a market that operates across three structures.
Sole-source contracts are the most direct. A contracting officer can award a contract to a single certified SDVOSB without a competitive process if they don't expect two or more qualified firms to submit offers. There are caps: $4 million for most contracts and $7 million for manufacturing. These are not small numbers for a lower-middle-market business. A single sole-source award can fund an entire year of operations.
Set-aside contracts restrict competition to eligible businesses: only VOSBs or SDVOSBs may bid. The government posts the opportunity, and only certified firms can bid. This is where most of the $32.8 billion flows. Contracting officers need at least two certified firms to bid to run a competitive set-aside. Your job is to be one of those two firms.
Subcontracting is the fastest entry point for businesses with no prior federal contract performance. Large prime contractors are required to include veteran-owned partners in their proposals to meet agency goals. You get work without winning the prime contract yourself. You build past performance. Past performance is the oxygen of federal contracting. Without it, competitive bids go nowhere.
What actually wins contracts
Certification gets you into the room. It does not win contracts.
The most common reasons certified SDVOSBs lose bids have nothing to do with being a veteran and everything to do with proposal execution. Missing forms. Generic submissions that read like they were copied from a prior bid. Pricing that signals the offeror doesn't understand the scope. Weak or absent past performance documentation.
Federal contracting has a language. Contracting officers read thousands of proposals. Yours has to show three things clearly: you understand exactly what they need, you have done comparable work before (or your team has), and your pricing is credible.
On the past performance gap for new entrants: start with subcontracts. A single subcontract with a prime that performed well is documentation. Use it. Build it into every competitive bid that follows.
Registration in SAM.gov (System for Award Management) is separate from VetCert and also required. SAM.gov is the federal contractor database. Your profile there is how agencies find you. Keep it current. Expired SAM registrations have disqualified otherwise-competitive bids.
The sectors where veteran operators win
Federal contracting is not sector-neutral. Certain industries produce a disproportionate share of veteran contract wins. Information technology, professional services, construction, logistics, and security services top the list.
The reason is alignment. Military experience translates directly into these domains. A veteran-run security firm brings operational discipline that civilian competitors can't replicate from a sales pitch. A veteran-led logistics company has managed supply chains under conditions most civilian operators have never encountered. This is not a soft advantage. Government buyers notice it.
If your business operates in one of these sectors and you're not pursuing federal contracts, the gap between your current revenue and your potential revenue deserves serious examination.
The training programs that move the needle
The Veteran Institute for Procurement (VIP) runs three training tracks through the National Center for VIP: START (entry into the federal marketplace), GROW (increasing contract win rates for existing federal contractors), and INTERNATIONAL (global expansion). These are not webinars. They are structured programs with measurable outcomes.
VIP GROW graduates have reportedly increased their revenue by 40% within the first year of completing the program and 80% within two years. For a company already holding some federal contracts, that is a return that justifies the time investment.
Veterans Business Outreach Centers (VBOCs) offer free consulting for veteran entrepreneurs at various stages of federal contracting readiness. Procurement Technical Assistance Centers (PTACs) provide proposal review, market research support, and agency introduction services. Both are underutilized by most veteran business owners.
The GSA Schedule as infrastructure
A GSA Schedule is a pre-negotiated contract with the General Services Administration that allows federal agencies to purchase your products or services without running a full competitive procurement. Think of it as a pre-approved vendor agreement.
Getting on a GSA Schedule takes time. Six to twelve months is realistic for the application and review process. But once awarded, it dramatically lowers the friction of selling to federal buyers. Agencies can purchase directly. You don't compete on every individual contract. Your prices are already negotiated and publicly posted.
For veteran-owned businesses with products or service lines that translate into federal use, a GSA Schedule is infrastructure. It changes the posture from reactive bidding to inbound purchasing.
What PGC sees in veteran operators who succeed in this market
The veteran business owners who succeed in government contracting share a pattern that mirrors good business operation generally. They treat the bid process the way a good operator treats a customer proposal: specific, documented, and built around the buyer's actual problem. They don't assume the contracting officer knows their reputation. They prove it on paper.
They also build capacity before they need it. A contract win can arrive faster than a business can staff for it. The veteran operators who hold and grow federal contracts tend to have their team, processes, and systems in place before the contract award, not after.
The certifications and set-asides are a structural advantage, not a guarantee. The $32.8 billion goes to veteran-owned businesses that do the work of competing for it.
If you're a veteran operator thinking about selling your business, federal contract backlog is one of the most compelling value drivers an acquirer evaluates. A recurring revenue stream from government contracts, with certified SDVOSB status attached, is a different conversation than a purely commercial book of business. Exit planning for veteran-owned businesses starts with understanding what your certification is worth to a buyer.
The action list
If you're a veteran and you own a business, here is the order of operations.
First, apply for VetCert. The application is at veterans.certify.sba.gov. Processing is currently running about 12 days. Do this before anything else.
Second, register or update your SAM.gov profile. This is separate from VetCert. Both are required. An expired SAM registration disqualifies bids.
Third, identify two to three federal agencies whose mission and spending patterns match your capabilities. Use SAM.gov to search for active solicitations in your NAICS codes. Look at awarded contracts in your sector to understand what winning proposals look like.
Fourth, pursue subcontract relationships before prime contracts if you don't have past performance yet. Contact prime contractors in your sector who hold active federal contracts. Offer your SDVOSB certification as a teaming credential. They need you to meet their goals; you need them to build your track record.
Fifth, look at VIP training programs. The investment is time. The return on that time is documented.
$32.8 billion is the number from last year. The goal for next year is higher. The question is whether your business is positioned to compete for any part of it.
