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Set-Asides

SDVOSB Contract Opportunities: Where $28.6 Billion Actually Goes (2026)

Service-Disabled Veteran-Owned Small Business contracts hit $28.6B in FY2025. Here's the agency-by-agency, NAICS-by-NAICS breakdown -- and why 35% of those dollars went sole-source.

Fed-Spend Research Team•February 11, 2026•5 min read

$28.6 Billion. The Veteran Advantage Is Real -- If You Know Where to Look.

The federal government's SDVOSB (Service-Disabled Veteran-Owned Small Business) program is the second-largest set-aside category by dollar volume, behind only general small business. In FY2025, agencies awarded $28.6 billion across approximately 52,000 contract actions to SDVOSB firms.

But the distribution is brutally uneven. A small percentage of SDVOSB firms capture the majority of those dollars. The difference is not capability or service quality -- it is business development discipline and knowing where the money flows.

This is the map.

Which Agencies Award the Most SDVOSB Contracts?

The top 8 agencies account for over 82% of all SDVOSB dollars:

| Agency | FY2025 SDVOSB Awards | % of Total |
|--------|---------------------|-----------|
| Department of Defense | $12.8B | 45% |
| Department of Veterans Affairs | $5.2B | 18% |
| Department of Homeland Security | $2.1B | 7% |
| General Services Administration | $1.8B | 6% |
| Department of Health & Human Services | $1.4B | 5% |
| Department of Energy | $1.1B | 4% |
| Department of Interior | $890M | 3% |
| Department of Agriculture | $680M | 2% |

The VA Advantage

The VA deserves special attention. Unlike other agencies, the VA operates under the Veterans First Contracting Program, which gives SDVOSB (and VOSB) firms priority over all other set-aside types for VA contracts. This is not just a goal -- it is a statutory mandate under 38 U.S.C. 8127.

What this means practically: when a VA contracting officer has a requirement, they must first consider SDVOSB firms before opening it to 8(a), HUBZone, or general small business. If two or more SDVOSB firms can perform the work, the contract must be set aside for SDVOSB competition.

If you are an SDVOSB firm not actively pursuing VA contracts, you are leaving your strongest legal advantage on the table.

Top NAICS Codes for SDVOSB Awards

| NAICS Code | Description | FY2025 SDVOSB Awards | Competition Level |
|------------|-------------|---------------------|-------------------|
| 541512 | Computer Systems Design | $3.9B | Very High |
| 561210 | Facilities Support Services | $2.8B | High |
| 541330 | Engineering Services | $2.4B | High |
| 236220 | Commercial Building Construction | $2.1B | Moderate |
| 561612 | Security Guards | $1.6B | Moderate |
| 541611 | Admin Management Consulting | $1.3B | Very High |
| 541519 | Other Computer Services | $1.1B | High |
| 238220 | Plumbing/HVAC/AC Contractors | $890M | Low |
| 562910 | Remediation Services | $780M | Low |
| 237310 | Highway/Street Construction | $720M | Low |

Where the Smart Money Competes

The pattern from 8(a) data repeats here: IT services (541512) attracts the most competition per dollar. But look at the bottom of the table -- Plumbing/HVAC (238220), Remediation (562910), and Highway Construction (237310) have significantly fewer competing SDVOSB firms relative to award volume.

Construction-related NAICS codes perform disproportionately well in the SDVOSB program. Veteran-owned construction, environmental remediation, and facilities maintenance firms have roughly 4x less competition per dollar than IT services firms.

If you hold SDVOSB certification and a construction or trades-related NAICS, your competitive position is stronger than you think.

The Sole-Source Advantage: $5 Million Threshold

The SDVOSB sole-source threshold is $5 million for both services and manufacturing -- higher than the 8(a) threshold of $4.5M.

FY2025 Sole-Source vs. Competitive Split

  • **~35% of SDVOSB dollars** were sole-sourced ($10B)
  • **~65% were competitive** SDVOSB set-asides ($18.6B)
  • Sole-source average value: **$1.4M**
  • Competitive average value: **$640K**

    • The math is clear: sole-source contracts are worth more than double the average competitive award. And they require zero competition -- just a contracting officer who knows your firm can perform the work.

    How to Position for SDVOSB Sole-Source Awards

  • **Target agencies behind on SDVOSB goals.** When an agency is under its 3% SDVOSB statutory goal heading into Q4 (July-September), contracting officers are motivated to sole-source to SDVOSB firms to close the gap. This creates a predictable annual window.
  • **Build PM relationships, not just CO relationships.** Program Managers define requirements. Contracting Officers execute paperwork. The decision to sole-source happens at the PM level.
  • **Register in VetBiz (VA) and SAM.gov.** VA sole-source awards require VetBiz verification. All federal sole-source awards require active SAM.gov registration. Sounds obvious -- but expired registrations are the #1 reason SDVOSB firms miss sole-source opportunities.
  • **Submit unsolicited capability statements.** Target agencies in your NAICS codes 6-12 months before contract expirations. Include past performance, key personnel, and specific relevance to the agency's mission.

    • VA vs. DoD: Different Strategies Required

    VA Strategy (Veterans First Program)

  • SDVOSB firms get **statutory priority** over all other set-aside types
  • VA must set aside for SDVOSB competition if two or more SDVOSB firms can perform
  • **VetBiz certification required** (separate from SAM.gov SDVOSB self-certification)
  • High concentration in healthcare IT (541512), facilities management (561210), and medical staffing
  • Attend VA OSDBU National Veterans Small Business Engagement events

    • DoD Strategy (Standard SDVOSB Set-Aside)

  • DoD follows standard FAR set-aside rules (no Veterans First priority)
  • SDVOSB competes alongside 8(a), HUBZone, and general small business for set-aside goals
  • Massive volume in engineering (541330), IT services (541512), and construction (236220)
  • Security clearances dramatically narrow the competitive field -- cleared SDVOSB firms have a significant advantage
  • Pursue IDIQ vehicles: OASIS SB, STARS III, Alliant 3 SB

    • Recompete Opportunities: The Predictable Pipeline

    Approximately 32% of FY2025 SDVOSB awards were recompetitions of expiring contracts. These are not surprises -- they are predictable events with known timelines.

    What recompete tracking gives you:

  • **Contract expiration dates** -- know exactly when an incumbent's period of performance ends
  • **Current contract value** -- understand the budget envelope before you bid
  • **Incumbent identity** -- research their past performance to identify vulnerabilities
  • **Historical set-aside type** -- if it was SDVOSB last time, it is likely SDVOSB again

    • The Timeline Advantage

    Most SDVOSB firms discover recompete opportunities when the solicitation posts on SAM.gov. By then, the incumbent has been positioning for months. The firms winning recompetes:

  • Identified the opportunity **12-18 months** before solicitation
  • Submitted capability statements to the contracting office
  • Met with the Program Manager to understand evolving requirements
  • Teamed with complementary firms to strengthen their proposal

    • Fed-Spend tracks 85,000+ recompete opportunities with automated alerts when contracts in your NAICS codes approach expiration. [Track SDVOSB recompetes →](/recompete)

    The SBA Certification Change: What SDVOSB Firms Must Know

    As of January 2023, SDVOSB certification transferred from VA's VetBiz to SBA's VetCert program. Key changes:

  • **All SDVOSB firms** must now be certified through SBA (not just VA contractors)
  • Self-certification is **no longer sufficient** for most contract opportunities
  • SBA VetCert uses the same portal as 8(a) and HUBZone certifications
  • Processing time: approximately 90 days
  • Re-certification required annually

    • If you are relying on self-certification alone, you may be ineligible for an increasing number of SDVOSB set-asides. Check your certification status at vetcert.sba.gov.

    5 Mistakes That Cost SDVOSB Firms Contracts

    Mistake 1: Ignoring the VA

    The Veterans First program is the strongest legal advantage any set-aside category has. SDVOSB firms that skip VA contracting are leaving their best card unplayed.

    Mistake 2: Competing Only in IT

    NAICS 541512 has the highest award volume but also the highest competition density. Firms in construction, environmental, facilities, and trades NAICS codes face dramatically less competition per dollar.

    Mistake 3: Letting Certifications Lapse

    Expired SAM.gov registration, expired VetCert, expired GSA Schedule -- any of these kills your eligibility. Set calendar reminders 90 days before every expiration.

    Mistake 4: Waiting for SAM.gov Postings

    By the time a solicitation is posted, the positioning phase is over. The winners identified the opportunity months earlier through recompete tracking and agency engagement.

    Mistake 5: Going It Alone on Large Contracts

    Mentor-protege agreements and joint ventures allow SDVOSB firms to pursue contracts above their individual capability. The SBA's All Small Mentor-Protege Program and the VA's Mentor-Protege Program both allow SDVOSB joint ventures to maintain SDVOSB status for set-aside eligibility.

    FAQ: SDVOSB Contract Opportunities

    How much does the federal government spend with SDVOSB firms?

    In FY2025, federal agencies awarded approximately $28.6 billion to SDVOSB firms across ~52,000 contract actions. The statutory goal is 3% of all federal contracting dollars.

    What is the SDVOSB sole-source threshold?

    $5 million for both services and manufacturing contracts. Below this threshold, a contracting officer can award directly to an SDVOSB firm without competition, provided the price is determined to be fair and reasonable.

    Do I need SBA certification to bid on SDVOSB contracts?

    Yes. As of January 2023, SBA VetCert certification is required. Self-certification is being phased out. Apply at vetcert.sba.gov. Processing takes approximately 90 days.

    What is the difference between SDVOSB and VOSB?

    SDVOSB requires the owner to have a service-connected disability rated by the VA. VOSB requires only veteran status. SDVOSB firms receive sole-source and set-aside preferences that VOSB firms do not. Under the VA's Veterans First program, SDVOSB firms receive priority over VOSB firms.

    Can I search SDVOSB contract opportunities for free?

    Yes. SAM.gov lists active solicitations filterable by SDVOSB set-aside type. USAspending.gov shows historical SDVOSB awards. Fed-Spend offers a free tier with 10 searches per month across all set-aside types and full contract data.

    Start tracking SDVOSB opportunities now. [Search SDVOSB contracts on Fed-Spend →](/search)

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