Assembly Bill (AB) 323, (Parra, Statutes of 2004) created a new provision of the Military and Veterans Code Section 999.51. This law allows a Nonprofit Veteran Service Agency (NVSA) to be certified as a small business and entitles the entity to small business certification benefits providing certain eligibility requirements are met. Although NVSAs are entitled to benefits as a certified small business, an NVSA is only required to meet the specific NVSA eligibility requirements and are not subject to the additional eligibility requirements established for standard "small business" certification.
NVSA Certification Eligibility Requirements
An NVSA is entitled to small business certification benefits when the entity meets the following specific eligibility requirements. The NVSA must:
- Be a community-based organization,
- Be a nonprofit corporation (under Section 501(c)(3) of the Internal Revenue Code), and
- Provide housing, substance abuse, case management, and employment training services (as its principal purpose) for
- low income veterans,
- disabled veterans, or
- homeless veterans
- and their families.
List of Certified NVSAs
Certified small businesses increase their visibility and expand their business networking opportunities by being automatically listed in the online Certified Firm and Application Status Search.
NVSA Certification Compliance
The NVSA must comply with he following requirements to maintain benefits equivalent to those afforded to certified small businesses:
- Commencing with its first contract or purchase order and continuing thereafter, the NVSA must provide social security, unemployment, and disability benefits for its employees pursuant to the Federal Insurance Contributions Act (FICA) (Title 26, United States Code (USC), Section 3103 et seq.) and the Unemployment Insurance Code (UIC).
- The NVSA cannot commit any unfair labor practices as defined in the National Labor Relations Act, (Title 29, USC, Section 158).
- The NVSA must abide by the fair labor provisions under the following:
- Fair Labor and Standards Act of 1938 (Title 29, USC, Section 201 et seq.)
- Walsh-Healy Public Contract Act (Title 41, USC, Section 35 et seq.), and
- Department of Industrial Relations regulations (California Code of Regulations, Title 8, Section 1 et seq.)
- The NVSA shall employ veterans receiving services from the NVSA for not less than 75% of the person-hours of direct labor required for the production of goods and the for the provision of services performed pursuant to each contract awarded.
"Direct Labor" includes all work required for preparation, processing, and packing of a good, or work directly relating to the performance of a service. It excludes supervision, administration, inspection, and shipping.
A veteran shall be considered an "Employee" when he/she performs "Direct Labor" (as defined) for the NVSA and is either low-income, disabled or homeless.
Working with an NVSA
State and local agencies are encouraged to procure goods and/or services from an NVSA whenever it is both feasible to do so and the location of the NVSA makes the purchase relatively convenient. The goods and/or services must:
- Meet the specifications and the needs of the purchasing agency.
- Be purchased at a fair and reasonable price, as determined by the appropriate State or local agency.
NVSA Certification Process
Any firm that believes it meets the eligibility criteria of MVC 999.50 (that is described here for convenience) shall submit an application to the Department of General Services, Procurement Division, Office of Small Business & DVBE Services (OSDS).
Caution: At the time of certification, applicants will commit that for each and every State or local government contract for which the firm submits a response to a solicitation for goods or services, it will provide the goods or services in compliance with the law regarding the minimum percentage (at least 75%) of direct labor that must be performed by employees of the agency, and that they have maintained compliance with all program requirements. Applicants for NVSA certification sign the application under penalty of perjury and are subject to substantial sanctions and penalties for misrepresentation of their eligibility or for failure to comply with all program requirements throughout the entire term of their certification and the term of any contracts awarded based on their status as an NVSA.
Upon review of the application and supporting documents, the OSDS shall determine whether certification shall be granted. NVSAs that are unable to produce the required support documents prior to being considered for an award shall be identified as being in a "pending" status. Every applicant will be notified of OSDS' decision. Certification may be granted for periods of one to three years in the discretion of OSDS and may be extended upon verification of continued eligibility.
Buyers shall contact the OSDS if the NVSA's status is "pending" and can request an expedited review prior to contract award.
NVSA Paper Application (PDF) / (Word)
The following documents may be required of the NVSA:
- The Federal Form DD 214 that documents the honorable discharge of a service man or woman.
- The Form DE9C that documents the number of employees as reported by the NVSA to the California Employment Development Department.
- The Federal Forms 940 and 941 that document the quarterly payment of unemployment, and social security and disability taxes (respectively) to the Internal Revenue Service.
During the entire period of certification, including the term of any State contract or purchase order, an NVSA must comply with the above requirements.
In the event that the Contract Manager may become aware that a certified NVSA has ceased to comply with any eligibility requirement, the Contract Manager shall immediately notify the OSDS Compliance manager. Upon verification of the noncompliance, sanctions will be imposed.
Failure by the NVSA to comply with any of the statutory requirements at any time during certification or any contract period is grounds for immediate termination of the contract and/or purchase order.
If the potential for contract termination is identified by the state agency, the Office of Small Business and DVBE Services (OSDS) Compliance Manager must immediately be notified. Upon notification from the OSDS, the NVSA will be debarred from state contracting for two years and listed on the OSDS list of Suspended and Debarred Firms.
List of Suspended/Debarred Firms
There are no suspended or debarred NVSAs at this time.
Additional NVSA Considerations
- NVSAs are entitled to the 5% Small Business Preference and higher interest owed on late payments.
- SB/DVBE Advocates will also be responsible to advocate on behalf of NVSAs and promote their use in state contracting as they do for SBs/DVBEs.
- The NVSA can participate in the SB/DVBE Option (as a SB) for goods, services, IT, and public works contracting under Government Code, Sections 14835.5 and 14835.7.
- The NVSA will be included in the online "Certified Firm and Certification Status" search tool.
- The NVSA participation must be reported similar to SB/DVBE participation. Further guidance will be provided on reporting.
Military and Veterans Code, Section 1, Article 7, Section 999.51.
Need Help? Contact Us
Email OSDSHelp@dgs.ca.gov or call (916) 375-4940.