Federal contracting opens new door for veteran-owned small businesses
S. 3964 — Contract Our Veterans Act of 2026 · Filed by Tim Sheehy (R-MT) · 3 cosponsors · Introduced Mar 3, 2026 · Referred to committee
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What it does
This bill amends the Small Business Act to create federal procurement preferences for small businesses owned and controlled by veterans. It establishes a government-wide goal of at least 5% of federal contract spending going to veteran-owned small businesses, allows contracting officers to award contracts to veteran-owned firms without competitive bidding (sole-source contracts) under certain conditions, and permits restricted competition limited to veteran-owned firms. The bill also requires federal agencies to track and report on veteran-owned business participation in procurement.
Why we flagged it
The bill's core mechanism is a procurement preference program—it creates contracting pathways and goals specifically for veteran-owned small businesses, consistent with existing federal small-business contracting policy frameworks.
What the text implies
- Sole-source contracting authority may reduce price competition for contracts awarded to veteran-owned firms, potentially increasing federal procurement costs, though the 'fair and reasonable price' requirement provides a check.
- The 5% government-wide goal is aspirational but not mandatory; agencies may miss targets without penalty, limiting enforceability.
The full analysis lists 4 implications of this text.
Who stands to gain
small businesses owned and controlled by veterans