Veterans businesses set to receive $5 billion

A leading tracker of government contracting dollars estimates that a new vehicle for businesses owned by service-disabled veterans will direct $5 billion towards those companies over the next 10 years.

The Veterans Technology Services Governmentwide Acquisition Contract, known as VETS GWAC, will enable those businesses owned by service-disabled veterans to make technology services contracts available to government agencies. President Bush signed an executive order last October that requires agencies to implement a strategy to help them reach the governmentwide 3 percent goal for contract awards to service-disabled veteran owned businesses. Currently, agencies fall well under that goal.

That will likely soon change, said Brian Haney, director of research operations at INPUT, a Reston, Va.-based market research and consulting firm. He estimated that through the GWAC as well as other contracts, businesses owned by service-disabled veterans will receive $3 billion annually by 2009. He said the total information technology market in that year will be $70.7 billion.

The impact of the GWAC will be particularly significant because there is a relatively small group of companies that are eligible. "Typically, larger vendors play a part in the bids," he said. As a whole, he said, companies that are owned by service-disabled veterans tend to be smaller companies.

Veterans groups have long charged that the government does not purchase enough from them. Defense, the largest government purchaser of goods and services, awards about $514 million a year to service-disabled veterans, or about 0.3 percent of total contracting dollars.

Some veterans expressed doubt that the GWAC would be successful. "Are they going to do an education campaign to make sure that contracting people understand this vehicle and what it's for? I haven't seen too much of that yet," said Dave Stack, director of corporate development and communications at CDO Technologies Inc., a veteran-owned company in Dayton, Ohio.

As a 20-year-plus veteran of the Air Force, Stack also said he thought the vehicle should include all veterans, and not just service-disabled ones.

Over the last year and a half, veteran-owned business groups and their allies have been advocating for more contracting dollars. Haney said growing national pride in veterans as a result of the wars in Afghanistan and Iraq, as well as growing Defense budgets and strong lobbying groups, led to the governmentwide goals and the GWAC for service-disabled veterans.

Haney said he would expect to see more joint ventures and subcontracts between businesses owned by service-disabled veterans and other businesses interested in the GWAC, as well as mergers and acquisitions that are structured in a way such that service-disabled veterans retain majority ownership.

"Any time something like this goes into effect, people who are excluded will feel limited. There are plenty of other opportunities to grow," said Haney.

Stack said that he was teaming up with a business owned by a service-disabled veteran, and that his firm would be a subcontractor on a GWAC proposal.

Proposals for the GWAC are due June 30.