SDVOSB Subcontracting Requirements

The federal government has a statutory goal of awarding 3% of all federal prime contracting and subcontracting dollars to Service-Disabled Veteran-Owned Small Businesses (SDVOSBs). This goal is established under the Small Business Act and tracked by the SBA.

For prime contractors, meeting SDVOSB subcontracting goals is not optional on contracts that require a subcontracting plan. Primes must include specific dollar and percentage goals for SDVOSB participation and report their achievement through Individual Subcontracting Reports (ISRs) submitted to the Electronic Subcontracting Reporting System (eSRS).

Per FAC 2025-06, subcontracting plans are required on federal contracts exceeding $900,000 for general contracts or $2,000,000 for construction contracts. These thresholds were updated from the previous $750,000 / $1,500,000 levels.

The subcontracting plan must include goals for small business, small disadvantaged business, women-owned small business, HUBZone small business, veteran-owned small business, and service-disabled veteran-owned small business categories.

AEY Inc. is a certified SDVOSB (UEI: EDF4ASNYXVS5, CAGE: 9XUS2) registered on SAM.gov with 87 NAICS codes. When a prime contractor sources construction materials through AEY, every dollar counts toward their SDVOSB subcontracting goal.

Material supply is the easiest way for construction primes to meet SDVOSB goals. Unlike subcontracting trade work, material purchases do not require coordination of on-site labor, scheduling, or trade-specific licensing. One purchase order to AEY generates SDVOSB credit immediately.