VA Contracting Is About To Get Loud
The money’s moving into IT, care, and construction. Know the VA quirks first.
SDVOSBs Get First Dibs at VA. But…The Surge Is Too Big for Them Alone.
The Veterans Affairs spending surge is real, it’s concentrated in a few categories, and SDVOSBs get first priority — but the volume is too large for them to absorb alone.
We’ll Cover
Core Intel Report — The VA surge, the categories driving it, and the quirks that trip up first-time bidders
Week in Numbers — Where the FY2026 dollars are actually moving
The Edge: Veterans First & the Rule of Two — How to play it whether or not you’re a veteran
Competitive Advantage Monitor — The certification window that just got faster
Opportunity Alerts — The three categories to track now
Signal vs. Noise — What’s real demand and what’s hype
The Play of the Week — Your VA positioning moves, by lane
Bottom Line Up Front
VA’s FY2026 budget runs around $441 billion across all funds, with $134.6 billion in discretionary operations — and the House advanced a $453 billion VA appropriation, the first FY2026 funding bill to reach that marker. The growth is concentrated in electronic health records, community care, and facilities. Veteran-owned firms get statutory first priority at VA, but the surge is too big for them to fill alone — which means certified veterans, non-veteran small businesses, and subcontractors all have a lane. The move is to know which category fits you and which VA-specific rules will trip you if you don’t.
Week in Numbers
$3.5B — VA’s FY2026 request for Electronic Health Record Modernization, up 164% from 2025, funding 13 site deployments in 2026. This is the loudest line in the budget.
$48B — Community care funding, rising about 26% from $38 billion as VA sends more veterans to outside providers. Care delivered by contractors, not VA staff.
$4.8B — VA’s FY2026 Non-Recurring Maintenance program — the largest single-year facilities investment in its history. Construction and trades, nationwide.
$10.2B / 23.63% — VA prime dollars to 2,300-plus SDVOSBs in FY2024 — roughly 4.6 times the governmentwide rate. No agency favors veteran firms more. But that still leaves most VA dollars open.
Core Intel Report
VA is about to be one of the busiest buyers in government, and the noise is concentrated in three places.
Electronic health records. The EHRM rollout, stalled for two years, is restarting with a 164% funding jump and 13 deployments scheduled in 2026. That pulls in IT, workflow re-engineering, training, data migration, interoperability, and cybersecurity work.
Community care. Funding for care delivered by outside providers is climbing about 26% toward $48 billion. That’s healthcare delivery, networks, and staffing — performed by contractors, not the VA.
Facilities. A record $4.8 billion in non-recurring maintenance is funding pharmacies, EHR facility prep, roofing, electrical, boilers, and elevators across the system, awarded quarter by quarter.
Now the part that confuses first-timers — and it’s the single most important rule at VA.
The Veterans First hierarchy. By law (38 U.S.C. 8127–8128, implemented in VAAR Subpart 819.70), a VA contracting officer must consider SDVOSBs first, then other veteran-owned small businesses, before any other set-aside and before full-and-open competition. The “Rule of Two” — if the CO reasonably expects two or more verified SDVOSBs to bid at a fair price, the work must be set aside — was held mandatory by a unanimous Supreme Court in Kingdomware (2016), even on Federal Supply Schedule orders. This isn’t a goal. It’s a statutory sequence enforceable by protest.
So why aren’t SDVOSBs the only ones who win? Because the surge is bigger than their capacity, and the rule has exits:
When the Rule of Two fails — fewer than two capable SDVOSBs — the CO drops to VOSBs, then other small business set-asides, then full-and-open. Non-veteran firms win the work veterans can’t fill.
The biggest categories — EHR/IT, community care networks, large facilities programs — often exceed what the SDVOSB pool can absorb, so much of it competes broadly.
VA’s big vehicles (like the $60.7B T4NG2) run through primes who need subcontractors — a direct lane for firms of every type.
The VA quirks that trip up first-time bidders:
VetCert is mandatory and SBA-run now. Certification moved from VA to SBA on January 1, 2023, and self-certification ended December 22, 2024 — veteran status alone qualifies you for nothing.
The limitations-on-subcontracting certification must be signed and returned with your offer, or the offer is rejected outright.
VA runs on FedRAMP-aligned cloud, a VA authorization to operate, NIST 800-53, HIPAA, and Section 508 — not CMMC. Firms arriving from the DoD world get this backwards.
The Rule of Two applies even when VA uses a Schedule — meeting goals or using FSS doesn’t excuse the CO from veteran set-asides first.
What This Signals Next (analysis):
Timing: EHRM and facilities money moves on rolling, quarterly award cycles in FY2026 — there’s no single window to wait for. Position now.
Competitive: Non-veteran firms should target the categories where SDVOSB competition is thin, or subcontract to VA primes. Veteran firms should certify and bid the set-asides built for them.
Strategic: This is the Velocity Framework idea at agency scale — get registered, certified, and positioned before the RFP, because a VA past-performance record is the credential that compounds.
The Edge: Veterans First & the Rule of Two
The same rule is an advantage for veterans and a map for everyone else. Here’s how to play it from either seat.
If you’re a veteran: VetCert is the non-negotiable gate — there’s no self-certification for VA set-asides. Only VetCert-listed firms count toward the Rule of Two. Get certified, register your NAICS, and target VA directly, where veteran firms already win over 23% of prime dollars. SDVOSB sole-source awards up to about $4.5 million for services are also on the table.
If you’re not a veteran: Bid the categories where the Rule of Two fails for lack of
