The federal government only awarded 1.5% of its contract dollars to veteran-owned small businesses (VOSBs) in fiscal year 2023. That’s a huge miss on its own 3% target, according to the Small Business Administration (SBA) Office of Government Contracting. This gap shows a real disconnect between what Washington says it wants to do and what procurement officers actually do. For any veteran entrepreneur trying to build real business growth, figuring out the federal marketplace isn’t just a good idea. It’s the only way you’re going to get a piece of the action and achieve genuine veteran success. So how do you actually get that revenue?
Key Takeaways
- The federal government missed its 3% contracting goal for VOSBs by more than half in 2023, which means there’s a lot of opportunity for those who can figure it out.
- The average contract value for veteran-owned businesses shot up 15% between 2022 and 2023, so the companies winning are winning bigger deals.
- Veteran businesses with active socio-economic certifications in SAM (like SDVOSB) won 4x more federal contracts than uncertified ones.
- Over 60% of vets who won their first contract said they did it through targeted networking and talking directly to agency small business offices.
- Companies that actively respond to Requests for Information (RFIs) and talk to contracting officers before a solicitation is even released have a 25% higher bid-to-win ratio.
The 1.5% Reality: Why VOSBs Miss the Mark
That 1.5% figure from the SBA’s annual procurement scorecard (Source: SBA.gov) is brutal. It represents billions in work that veteran entrepreneurs didn’t get. From what I’ve seen advising VOSBs, the problem isn’t that they can’t do the work. The problem is they don’t know how to break into the federal procurement world. Too many vets treat government contracting like any other B2B sale, but it has its own culture, its own mountain of compliance rules, and sales cycles that can last for years. They’ll get a SAM.gov registration, maybe even an SDVOSB certification, and then just wait for the phone to ring. That’s a surefire way to go nowhere. The government isn’t going to come find you. You have to actively hunt, build relationships, and show you understand what specific agencies need before they even ask for it.
Average Contract Value Up 15%: The Allure of Larger Awards
While the total slice of the pie is small, the average value of contracts that *were* awarded to VOSBs jumped 15% from 2022 to 2023, based on data from the Federal Procurement Data System (FPDS-NG) (Source: FPDS.gov). This shows that the vet-owned businesses who are successful are landing more substantial work. This is about winning bigger, more meaningful contracts. What that tells me is that the federal marketplace rewards companies with deep expertise and the proven ability to handle large projects. Agencies are looking for real partners who can solve complex problems, not just vendors for small-ticket items. As a VOSB, you need to invest in your capabilities, your team, and your past performance documentation to position yourself for these bigger wins. It’s harder to land one $5 million contract than ten $500,000 ones, but that single big contract provides stability and a foundation for real growth. This goes against the common advice to just chase micro-purchases to get started. Small wins are good, but the data shows the real prize is in scaling up.
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SDVOSB Certification: A 4X Multiplier for Contract Wins
An analysis of 2023 SAM.gov and FPDS-NG data shows that companies with an active SDVOSB certification won four times more federal contracts than uncertified VOSBs, even in the same industry. This isn’t a shock, but it proves how powerful these socio-economic set-asides are. Contracting officers have specific goals to meet for SDVOSBs and are often looking for qualified firms. But getting certified isn’t enough. I see so many vet business owners get the cert, update their SAM.gov profile, and then just sit back wondering why the work isn’t showing up. The certification gets you into the room, but you still have to do the work. It gives you access to solicitations that others can’t even bid on and makes you stand out, especially with agencies like the Department of Veterans Affairs (VA) that have a legal mandate to work with SDVOSBs. My advice is simple: if you qualify, get certified. Then, immediately start using that certification as a weapon in your marketing and your proposals to go after those set-aside opportunities.
Networking and Agency Engagement: The 60% Success Factor
A survey from the National Veteran Small Business Coalition (NVSBC) found that over 60% of VOSBs who landed their first federal contract in 2023 credited their success to networking events and talking directly with agency small business offices (Source: NVSBC.org). This statistic blows up the myth that winning is just about having the lowest price or a perfect proposal. It’s about people. The small business specialists inside federal agencies, like the ones at the Department of Defense’s Office of Small Business Programs, are there to help you. They give you intel on upcoming projects, introduce you to prime contractors looking for subs, and walk you through their agency’s specific buying process. Showing up to industry days and pre-solicitation conferences, whether they’re online or in person at a place like the Atlanta Federal Center, lets you hear what an agency really needs straight from the program managers and build a name for yourself with the people making the decisions. These early conversations are often what lead to a contract down the road.
RFIs and Pre-Solicitation Engagement: A 25% Higher Win Rate
According to a 2024 GovWin IQ analysis of procurement data, businesses that consistently respond to Requests for Information (RFIs) see a 25% higher bid-to-win ratio than companies that only submit proposals after a formal solicitation drops (Source: Deltek.com). This is a step most VOSBs skip. An RFI isn’t a bid, it’s market research for the agency. It’s your chance to educate them, show off your expertise, and maybe even influence the requirements of the future solicitation so it plays to your strengths. You’re establishing yourself as an expert before the race has even started. It’s basically free consulting that positions you for the win. Also, asking smart questions during pre-bid conferences or directly to the contracting officer (when appropriate) shows you’re serious and you’ve done your homework on their mission. This kind of proactive work is what separates the companies that consistently win from those that are just throwing proposals over the wall and hoping one sticks. It shows you’re competent and committed, two things every contracting officer is looking for.
Challenging the “Low-Bid Wins” Myth
So many new federal contractors, especially VOSBs, think it all comes down to being the lowest bidder. That’s just not true, particularly for anything involving complex services or technology. Price is always a factor, but agencies are usually required to pick the best value. That means your technical plan, your past performance, and your management team can be more important than your price tag. I’ve seen plenty of technically superior proposals win contracts even when they weren’t the cheapest option, because the government is trying to buy a successful outcome and reduce risk. For a vet-owned business, you have to sell your unique value, your team’s skills, and your track record of success. Don’t just try to race to the bottom on price. Lowballing a bid just to win is a trap that can lead to poor performance, losing money, and getting a bad past performance rating, which will kill your chances at future work. Be competitive on price, but never at the expense of quality delivery.
If you want to drive real business growth in the federal marketplace, you have to get off the sidelines. Veteran entrepreneurs need to be proactive, use their certifications strategically, and truly understand what the agencies need. The path to veteran success in this market is built on persistence, smart strategy, and the relationships you build inside the government’s procurement machine.
What is the primary benefit of SDVOSB certification?
Access to set-aside contracts. It means some contracts are only open to certified SDVOSBs, which dramatically cuts down your competition. Federal agencies also have procurement goals they need to meet, which gives contracting officers a strong reason to award work to you.
Where can veteran businesses find federal contracting opportunities?
The main place is the Contract Opportunities section on SAM.gov (System for Award Management). You should also check agency-specific procurement websites and paid subscription services like GovWin IQ that aggregate opportunities.
How important is past performance in federal contracting?
It’s everything. Agencies look at your past performance on government or even commercial jobs as the best predictor of how you’ll perform for them. A strong record of success in your Contractor Performance Assessment Reporting System (CPARS) ratings is one of the most powerful assets you can have in a proposal.
What is a Capabilities Statement and why is it needed?
It’s your company’s one-page resume for government buyers. This document quickly lays out your core services, differentiators, past performance, and all your relevant codes (NAICS, DUNS, CAGE). You use it as a leave-behind when you meet with agency reps and prime contractors.
Are there resources specifically for veteran businesses seeking federal contracts?
Yes, plenty. The SBA’s Office of Veterans Business Development (Source: SBA.gov) and local Veteran Business Outreach Centers (VBOCs) offer free training and counseling. Groups like the National Veteran Small Business Coalition (NVSBC) also provide great advocacy and networking events.
