SBA Announces Doubling Veteran Contracting Target to 10% for FY 2027, but Questions Remain

On November 9, 2026, the Small Business Administration (SBA) announced new fiscal year (FY) 2027 contracting goals emphasizing veteran-owned small businesses (VOSBs) and service-disabled veteran-owned small businesses (SDVOSBs). 

The announcement builds on SBA’s stated efforts to prioritize contracting certifications for SDVOSBs and notes that SBA approved more than 18,000 contracting certifications for veteran-owned small businesses in FY 2026.  The announcement describes a doubling of the agency-level prime contracting and subcontracting goal from 5% to 10% in a new combined “Veteran-Owned and Service-Disabled Veteran-Owned Small Businesses (SDVOSB)” category.  

Significant questions remain following the announcement. 

First, although the announcement states that the Small Business Act “requires the federal government to establish annual contracting goals,” authority to establish those goals is reserved for “the President” under 15 U.S.C. § 644(g)(1)(A).  It remains to be seen whether the President will issue an executive order raising small business goals and including the new eligibility for VOSBs consistent with the announcement. 

Second, the announcement appears to create a single goal encompassing both VOSBs and SDVOSBs.  This, too, potentially conflicts with the Small Business Act, which establishes a government-wide goal of at least 5% for SDVOSB participation in prime contract and subcontract awards but does not identify or otherwise establish a VOSB goal.   

Finally, it is unclear how contracting officers will be able to direct opportunities to VOSBs.  Under 13 C.F.R. § 128.400(a), “VOSB contracts are exclusively VA procurements.”  Therefore, although SDVOSB set-aside and sole-source opportunities are available across the federal government, VOSB-specific opportunities are currently available only through the Department of Veterans Affairs (VA). 

With the recent upheavals to the SBA’s 8(a) program requirements, contractors should anticipate a continued shift to more SDVOSB set-asides as 8(a) eligibility pools decline, but it remains to be seen how agencies will be able to increase procurement opportunities for VOSBs without additional statutory and regulatory changes.  Crowell attorneys will be closely monitoring the developments resulting from this announcement