VA Procurement: $31.8 Billion for Small Businesses in 2026

There’s a surprising amount of misinformation surrounding VA procurement, often discouraging small businesses from pursuing valuable federal opportunities. Many myths persist, painting a picture of impenetrable bureaucracy and insurmountable hurdles, when the reality offers significant small business growth potential within the federal marketplace.

Myth 1: The VA marketplace is too competitive for small businesses to win contracts.

The idea that the VA marketplace is an exclusive club for large corporations is a common and damaging misconception. In truth, the VA is one of the most small business-friendly federal agencies. According to the Department of Veterans Affairs’ Office of Small and Disadvantaged Business Utilization (OSDBU), the VA awarded over $31.8 billion in prime contracts to small businesses in fiscal year 2023, representing 45.4% of its total contract spending. This figure alone should disabuse anyone of the notion that small businesses are merely token participants. Plus, the VA consistently exceeds its small business contracting goals. For instance, in 2023, the VA exceeded its 15% goal for Service-Disabled Veteran-Owned Small Business (SDVOSB) prime contract dollars, awarding an impressive 29.5% to these firms. This isn’t just about meeting quotas. It reflects a deliberate strategy by the VA to prioritize and integrate veteran-owned businesses into its supply chain. The Veterans Benefits Administration (VBA) and the Veterans Health Administration (VHA) actively seek out small businesses for a vast array of services and products, from medical supplies and IT solutions to facilities maintenance and professional consulting. The sheer volume of contracts and the consistent overachievement of small business goals prove that this market is not just accessible, but actively encourages small business participation.

Myth 2: Only veteran-owned businesses can succeed in VA procurement.

While it’s true that the VA places a strong emphasis on veteran-owned businesses, particularly SDVOSBs, it’s incorrect to assume that non-veteran small businesses are shut out. The VA has specific contracting goals for various small business categories beyond veteran-owned firms. These include Small Disadvantaged Businesses (SDBs), Women-Owned Small Businesses (WOSBs), and Historically Underutilized Business Zone (HUBZone) businesses. In fiscal year 2023, the VA awarded 12.2% of its prime contract dollars to SDBs, 6.2% to WOSBs, and 2.5% to HUBZone businesses, often exceeding the federal government-wide goals for these categories. This layered approach to small business contracting means that a diverse range of small businesses can find opportunities. For example, a woman-owned IT consulting firm specializing in cybersecurity could pursue contracts with the VA, even if it is not veteran-owned. The key is to understand the specific set-aside programs and to ensure your business is properly certified with the Small Business Administration (SBA) and registered in the System for Award Management (SAM) at sam.gov. While an SDVOSB certification offers a distinct advantage, it is far from the only path to success in the VA marketplace. Many successful small businesses I’ve seen in federal contracting don’t fall into the veteran-owned category, but they excel by clearly defining their niche and proactively seeking out relevant solicitations.

VA Home Loan Options

Veteran homeowners. Want to lower your monthly payments?

See if a VA Cash Out Loan or VA Home Loan can put cash in your pocket or help you buy with $0 down. A specialist will review your options, free.

• VA Cash Out Loan: use up to 100% of your home’s equity
• VA Home Loan: buy a home with $0 down payment
• No cost, no obligation eligibility check

Join 100,000+ Veterans

Check my VA loan options

Full name Phone Email Check My VA Loan Options →

No obligation  ·  2 minutes  ·  100% confidential

Myth 3: The VA only buys highly specialized or military-specific products and services.

This myth limits the perceived scope of VA procurement, leading many small businesses to believe their offerings aren’t suitable. The reality is the VA’s needs are incredibly broad, reflecting its mission to provide complete healthcare and benefits to veterans. Beyond medical equipment and veteran-specific services, the VA requires everything a large, complex organization needs to operate. This includes, but isn’t limited to, administrative support, construction and renovation services, information technology infrastructure, food services, temporary staffing, legal counsel, and even landscaping. Consider the needs of a large hospital system, then multiply that across hundreds of facilities nationwide, from major medical centers like the Atlanta VA Medical Center in Decatur, Georgia, to smaller community-based outpatient clinics. These facilities need consistent supplies of office furniture, cleaning products, network security solutions, and transportation services. A general contractor might find opportunities in facility upgrades, while a software development firm could bid on contracts for patient management systems. The VA even procures marketing and communication services. The range is truly vast, and businesses should thoroughly research the VA’s publicly available procurement forecasts, often found on agency websites or through platforms like beta.sam.gov, to identify specific upcoming needs that align with their capabilities.

Myth 4: The contracting process is too complex and bureaucratic for small businesses to navigate.

The reputation of federal contracting for being overly complex often deters small businesses before they even begin. While it’s true that federal procurement involves specific regulations and processes, describing it as insurmountable bureaucracy is misleading. The VA, like other federal agencies, has made significant efforts to simplify access for small businesses. A primary example is the existence of the Veteran Small Business Certification Program (VetCert), managed by the SBA, which simplifies the certification process for VOSBs and SDVOSBs. This program, accessible via veterans.certify.sba.gov, replaced the previous VA-specific verification system, making it easier for veteran-owned firms to qualify for set-aside contracts across the entire federal government, not just the VA. Beyond certification, numerous resources exist to guide small businesses. The Procurement Technical Assistance Centers (PTACs), now rebranded as APEX Accelerators, offer free or low-cost assistance to businesses seeking government contracts. These centers provide invaluable help with registration, understanding solicitations, proposal writing, and working through regulations. The VA’s OSDBU also hosts various outreach events, webinars, and provides direct assistance to small businesses. The initial learning curve can be steep, yes, but claiming it’s an unnavigable labyrinth ignores the extensive support structures in place. Success often comes down to diligence and using these available resources, rather than inherent complexity.

Myth 5: It takes too long to get paid by the federal government, making it impractical for small businesses.

Delayed payments are a common concern for small businesses, and the fear of slow federal payments can be a significant deterrent. However, federal agencies, including the VA, are subject to the Prompt Payment Act (31 U.S.C. § 3901 et seq.), which mandates timely payments to contractors. This act generally requires agencies to pay invoices within 30 days of receiving a proper invoice or the goods/services, whichever is later. If payments are delayed beyond this period, agencies are often required to pay interest penalties. While issues can arise, particularly if invoices are incomplete or incorrect, the system is designed to facilitate prompt payment. Small businesses can also explore options like invoice factoring or government contract financing to manage cash flow while awaiting federal payments. Many financial institutions specialize in this area, understanding the unique payment cycles of government contracts. My experience suggests that while the process requires careful attention to detail in invoicing, the VA generally adheres to the Prompt Payment Act. Any significant delays are often due to administrative errors on the contractor’s side, such as submitting an invoice to the wrong department or failing to include required documentation. Proper contract administration, from submitting accurate invoices to tracking payment statuses, significantly mitigates payment delays.

Myth 6: Small businesses can’t compete with larger, more experienced contractors.

The belief that small businesses can’t go head-to-head with established, larger contractors is another common misconception. This overlooks the fundamental purpose of small business set-asides and the VA’s commitment to fostering a diverse supplier base. Set-asides are specifically designed to level the playing field, reserving certain contracts exclusively for small businesses, or even specific categories like SDVOSBs. When a contract is set aside, larger businesses are ineligible to bid, removing them from the competition entirely. Beyond set-asides, small businesses often possess unique advantages: agility, specialized expertise in niche areas, and a personalized approach that larger firms sometimes struggle to replicate. Many small businesses excel in specific areas, offering highly focused solutions that resonate with agency needs. The VA frequently seeks innovative solutions, and small businesses are often at the forefront of new technologies or methodologies. Building a strong track record on smaller contracts can also pave the way for larger opportunities. It’s not about being bigger, it’s about being better suited for a specific need, and the VA actively seeks those specific solutions from small businesses. The VA marketplace offers significant, often untapped, potential for small businesses. By understanding the real opportunities and using available resources, businesses can effectively navigate the system and secure valuable federal contracts.