December 10, 2019

Duckworth, Cornyn Introduce Bill to Support Small Businesses Owned by Spouses of Deceased Veterans

Bill Allows Spouses of Deceased Veterans with Certain Service-Connected Disabilities or Deaths to Retain Contract Preference


WASHINGTON – U.S. Senators Tammy Duckworth (D-IL) and John Cornyn (R-TX) today introduced the Service-Disabled Veterans Small Business Act, which would allow the spouses of deceased veterans who owned small businesses to retain their contract preference status regardless of the degree of disability the servicemember experienced.

“We created the Service-Disabled Veteran-Owned Small Business program to help give Veterans priority in the VA procurement marketplace so those who served our nation can more easily start and grow small businesses to support their families,” said Sen. Duckworth. “In the unfortunate event one of those families loses the loved one who earned this benefit, those families shouldn’t also lose the ability to continue running those small businesses. That’s one reason why I’m proud to cosponsor this bipartisan legislation with Senator Cornyn.”

“Veterans and their families have been at the heart of thousands of small businesses across Texas,” said Sen. Cornyn. “This legislation would support veterans’ spouses and help ensure that the death of a veteran doesn’t mean the end of their small business.”


This bill amends the Small Business Act to clarify that surviving spouses of veterans who died with a 100 percent disability rating can maintain their Service-Disabled Veteran-Owned Small Businesses (SDVOSB) status for up to ten years. It also clarifies that surviving spouses of veterans who died with less than a 100 percent disability rating can maintain their SDVOSB status until one of the following instances occurs: three years pass after the veteran’s death, the spouse remarries, or the surviving spouse relinquishes ownership of the small business.

The Veterans Affairs Department and other federal agencies offer contracting set-asides and other preferences to service-disabled veteran-owned small businesses. Spouses who assume ownership of deceased veterans’ businesses can retain their contract preference status if the veteran had a service-connected disability rated as 100 percent disabling or that caused their death.

Section 501 of the Jeff Miller and Richard Blumenthal Veterans Health Care and Benefits Improvement Act of 2016 (Public Law 114-315) extended as many as three years of eligibility for contract preferences at the VA to spouses of deceased veterans whose service-connected disability was not 100 percent disabling.

The 2016 law did not expand eligibility for other federal agencies’ contract preferences, which is overseen by the Small Business Administration. A provision in the fiscal 2017 National Defense Authorization Act (Public Law 114-328) directed the VA and SBA to harmonize their programs, which unintentionally nullified the three-year expansion from the 2016 law, according to a report on H.R. 499 from the House Small Business Committee.

Under the bill, the SBA would allow service-disabled veteran-owned businesses to retain their status for three years after a veteran’s death if their disability wasn’t rated 100 percent disabling. The eligibility would expire if the surviving spouse remarries or sells the business.

If the veteran’s disability was 100 percent disabling or caused their death, the business’ status would be retained for 10 years.  The measure’s effective date would be when the VA and SBA issued regulations to implement the requirements of the fiscal 2017 NDAA. The agencies finalized rules on spousal eligibility in September 2018, and they went into effect on Oct. 1, 2018.