The Contract Our Veterans Act of 2026 establishes new federal contracting goals, reporting requirements, and procurement preferences to increase opportunities for veteran-owned small businesses.
Randall "Randy" Fine
Representative
FL-6
The Contract Our Veterans Act of 2026 strengthens federal support for veteran-owned small businesses by streamlining sole-source and restricted-competition contracting processes. The bill establishes a government-wide goal of awarding at least 5% of federal contract dollars to these businesses and mandates rigorous annual reporting to ensure transparency. Additionally, it integrates veteran-owned firms into key procurement programs, scorecards, and mentorship initiatives to increase their participation in the federal marketplace.
New Federal Rule Sets 5% Veteran-Owned Business Goal: Sole-Source Contracts and Stricter Reporting Start in 2026
The Contract Our Veterans Act of 2026 is a major push to get more federal dollars into the hands of veteran entrepreneurs. The bill sets a hard target for the government: at least 5% of all prime and subcontract awards must go to small businesses owned and controlled by veterans. To hit that number, the bill gives government contracting officers the power to skip the usual bidding wars and award 'sole-source' contracts directly to veteran-owned firms, provided the price is fair and the business is properly registered. It also mandates 'restricted competition,' meaning if at least two veteran-owned shops can do the work, the agency has to limit the bidding to just them.
Opening the Federal Playbook
This isn't just about setting a goal and hoping for the best; it’s about changing how the government shops. The bill integrates veteran-owned businesses into the 'Best in Class' contract vehicles—essentially the VIP list of federal vendors. For a veteran running a small cybersecurity firm or a construction crew, this means they no longer have to fight against global conglomerates for every single project. Instead, Business Opportunity Specialists will be legally required to advocate for them, and their status will be tracked on a public 'scorecard' that shows exactly how many sole-source and restricted contracts each agency is handing out. It turns veteran status from a 'nice to have' into a specific metric that agency heads have to report on annually.
Keeping It Local and Honest
One of the smartest parts of this bill is how it handles the 'pass-through' problem. We’ve all seen cases where a small firm wins a contract and then just hires a giant corporation to do all the work. Under Section 4, a veteran-owned prime contractor must perform at least 50% of the contract cost with their own employees (or employees of other veteran-owned small businesses). This ensures that the 5% goal actually builds veteran wealth and creates jobs within the community rather than just acting as a front for big industry. If you’re a veteran running a HVAC business, this rule protects you from being squeezed out by 'shell' companies that don't actually employ veterans.
The Competitive Landscape
While this is a massive win for veterans, it does tighten the screws elsewhere. Large prime contractors will find themselves under more pressure to find veteran-owned subcontractors to meet the new 5% threshold. Additionally, other small businesses that aren't veteran-owned might see fewer 'open' small business set-asides as more contracts are funneled into the new restricted veteran category. However, the bill is very clear about the paperwork: to get these perks, both the business and the veteran owner must be verified in a specific federal database. There’s no 'faking it' here; the reporting requirements are granular, tracking everything from contracts won in open competition to businesses that were sold after winning an award.