It’s a strange fact that despite the opportunities in aerospace, veteran-owned small businesses (VOSBs) are winning less than 5% of federal contracting dollars each year. That’s even with set-aside programs built specifically for them. That gap shows there’s a huge amount of money on the table in the aerospace supply chain for military veterans who are ready to turn their skills into a business and land serious business contracts.
Key Takeaways
- Vets are getting less than 5% of federal contracts annually, which is a major gap in aerospace procurement.
- The Department of Defense has a 5% target for prime and subcontracts to go to small disadvantaged businesses (which includes many VOSBs).
- Getting certified as an SDVOSB or VOSB is how you access set-aside contracts, but it takes serious documentation and planning.
- To get subcontracts, you have to network with prime contractors at industry events, especially the ones focused on supplier diversity.
- Veteran-owned firms that focus on a niche, like specialized manufacturing or advanced materials, have a much better shot in this competitive market.
The Underutilized Resource: Veteran Businesses and Federal Contracting
The SBA sets an annual goal telling federal agencies to award at least 3% of all prime contract dollars to service-disabled veteran-owned small businesses (SDVOSBs). But the SBA’s own data shows they often miss the mark. Take fiscal year 2024, when the government awarded only about 4.5% of its total contracting dollars to *all* veteran-owned businesses, which lumps in SDVOSBs with general VOSBs. When you think about the scale of federal spending, particularly inside the Department of Defense (DoD), that small percentage means billions of dollars that veteran entrepreneurs simply aren’t getting.
So why is this gap so persistent? From what I’ve seen, it’s a few things. First, many vet entrepreneurs just don’t know these programs exist. The whole world of federal procurement is a mess of regulations and acronyms that scares people off. Second, even the ones who know about it get bogged down in the certification process for set-asides. Just being veteran-owned isn’t enough. You need the official certification from the Department of Veterans Affairs (VA) or the SBA, a process that requires a mountain of paperwork and can take forever to get approved. That administrative headache stops a lot of good companies cold. And finally, there’s often a disconnect where large aerospace primes need one thing, and smaller VOSBs are trying to sell them something else entirely. Both sides need to do a better job of communicating.
DoD’s Ambitious Goals: A Call to Action for VOSBs
The Department of Defense, which buys more aerospace products than anyone, has its own targets. The DoD aims to give 5% of its prime and subcontracts to small disadvantaged businesses (SDBs). While that’s not just for vets, many VOSBs and especially SDVOSBs fall right into that category. This target, which you can find in the DoD’s annual Small Business Programs reports, is a huge deal for veteran-led companies. The DoD procurement budget is in the hundreds of billions every year. Even a tiny piece of that 5% means real revenue for a company that can handle defense work.
That 5% target from the DoD is a flashing green light. It shows they’re serious about bringing new, agile suppliers into the defense industrial base. For VOSBs, it’s a direct invitation to get in the game. The challenge, though, is figuring out what DoD contractors actually need. They want companies that can meet tough quality standards, get security clearances, and handle very specific technical jobs. A vet-owned machine shop that does precision components or an engineering firm that knows avionics software is going to be way more interesting to them than a generalist. The smart play is to find a prime contractor’s specific problem and sell them the solution, not just spray your capabilities deck all over town.
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The Power of Certification: Unlocking Set-Aside Contracts
You absolutely have to get the right certifications. If you look at the VA’s Office of Small and Disadvantaged Business Utilization (OSDBU) website, you’ll see the verification process for becoming a Service-Disabled Veteran-Owned Small Business (SDVOSB) or Veteran-Owned Small Business (VOSB) involves a deep dive into your company’s ownership and your veteran status. This verification is what lets you bid on federal set-aside contracts, where the government has walled off the competition to only include certified veteran businesses. Without that official stamp, you’re on the outside looking in, even if your company is 100% veteran-owned.
I know a lot of entrepreneurs see the certification paperwork as a nightmare, and they’re not wrong. The list of required documents is long (think articles of incorporation, operating agreements, DD-214s, detailed financials). But thinking of it as just paperwork is a huge mistake. That certification is what gets you in the door. It makes you stand out to federal buyers and prime contractors who have a mandate to work with you. The work you put in upfront gives you access to a bidding pool with way less competition. I’ve watched too many good veteran businesses get frustrated and quit federal contracting because they couldn’t get through the certification maze. You have to be persistent, and don’t be too proud to get help from groups like the SBA’s Veterans Business Outreach Centers (VBOCs).
Subcontracting Opportunities: The Unsung Hero of Aerospace Procurement
Don’t just chase the big prime contracts. A huge amount of federal money actually flows through subcontracts. Federal Acquisition Regulation (FAR) Part 19.7 forces large prime contractors like Lockheed Martin or Boeing to create subcontracting plans that include goals for using small businesses, including VOSBs. This means their procurement teams are actively looking for smaller partners for specific parts, services, or R&D work.
For a lot of VOSBs, this is the most realistic way to break into aerospace. Going after the prime contractors themselves can be a much better entry point than trying to bid directly with federal agencies. You need to show up at industry events like the National Veteran Small Business Coalition’s annual conference or the supplier diversity days that the big aerospace firms host. This is about building relationships and showing what you can do. For example, a VOSB that specializes in advanced composites could find a direct subcontracting opportunity with an aircraft manufacturer that needs to source lighter materials for a new plane. Do your homework on the prime’s current projects and figure out how your business solves one of their problems. Don’t sit back and wait for them to discover you.
Dispelling the Myth: It’s Not Just About Price
Too many small business owners, vets included, think winning an aerospace contract is all about being the cheapest. That’s a huge mistake. Yes, cost matters, especially in government work, but in aerospace, it’s rarely the most important thing. This focus on cost makes smaller firms sell themselves short, ignoring the value of their specific skills or better ideas. In the real world, things like reliability, quality control, technical skill, and proving you meet standards (like AS9100 for aerospace quality) are often more important than a slightly lower price.
My experience with both government buyers and private aerospace companies is that a supplier’s ability to deliver a high-quality, compliant product on time, every time, is what they care about most. A single part failing on an airplane can lead to disaster, so reliability is everything. So, a veteran-owned business that can prove it has a solid quality management system, a history of on-time delivery, and real technical expertise, maybe in additive manufacturing or cybersecurity for flight systems, will beat a cheaper but less proven competitor. As a veteran, your background in discipline and mission-critical thinking is a perfect fit for this environment. Show them your value isn’t just a number on a bid sheet. Talk about your precision, your process, and your commitment to getting it right. That’s how you win in this industry.
The bottom line is that the aerospace supply chain has real opportunities for VOSBs that are often missed. By learning the contracting game, getting your certifications, and strategically going after subcontracting work, veteran entrepreneurs can land valuable aerospace procurement contracts and bring their skills to an important industry. For more examples of where vets are making a difference, see how Veterans Drive 2026 Petroleum Tech Innovation. Also, getting a handle on the VA Budget 2026: What Changes for Veterans? can give you a sense of where federal money is going. Finally, for anyone thinking about making the leap, the fact that 70% of Veterans Seek New Careers by 2026 shows just how strong the entrepreneurial drive is in the military community.
What is the primary benefit of SDVOSB certification for aerospace procurement?
The main benefit of a Service-Disabled Veteran-Owned Small Business (SDVOSB) certification is that it makes you eligible to bid on federal set-aside contracts. On these contracts, the government limits the competition to only include other certified SDVOSBs, which dramatically improves your odds of winning business contracts in aerospace.
How can veteran-owned businesses identify subcontracting opportunities with prime aerospace contractors?
You find subcontracting work by going to industry conferences, showing up at supplier diversity events held by primes, registering on their supplier portals, and networking directly with their procurement teams. The SBA’s Subcontracting Directory is another good place to look.
What specific quality certifications are often required for aerospace supply chain participation?
To be taken seriously in the aerospace supply chain, you’ll often need certifications like AS9100 (for aerospace-specific quality management), ISO 9001 (for general quality), and NADCAP (National Aerospace and Defense Contractors Accreditation Program) if you do special processes like welding or heat treating. They prove you can meet their strict quality demands.
Are there government resources specifically for veteran entrepreneurs seeking aerospace contracts?
Yes, there are several free resources. The Department of Veterans Affairs’ Office of Small and Disadvantaged Business Utilization (OSDBU), the Small Business Administration’s Veterans Business Outreach Centers (VBOCs), and local Procurement Technical Assistance Centers (PTACs) all provide help with working through government contracting for the aerospace supply chain.
What common mistakes do veteran-owned businesses make when pursuing aerospace procurement?
The most common mistakes are not getting the SDVOSB/VOSB certification, not doing the homework to understand what prime contractors really need, not having a strong quality control system in place, and failing to network. Another frequent error is competing only on price instead of demonstrating higher value.
