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Purchasing preferences for veteran-owned businesses on the rise

Deltek Sr. Analyst Kyle Ridley reports.

As the unemployment rate for Iraq- and Afghanistan-era veterans continues to climb, more states and localities are establishing purchasing preferences for veteran-owned businesses (VOBs). Current-war veteran unemployment is more than four percentage points higher than the national average of 8.5 percent. According to the Bureau of Labor Statistics, 13.1 percent (248,000) of current-war veterans were without a job as of December 2011. This figure is up from November’s 12.1 percent, and sharp rise from 2007 (6.1 percent), 2009 (10.2 percent), and 2010 (11.5 percent).

Results of the 2007 Survey of Business Owners (SBO), as part of the U.S. Census Bureau, show that 9 percent of businesses were owned by U.S. military veterans. These 2.4 million businesses employed approximately 5.8 million people and accounted for 4.1 percent of all business receipts nationwide, totaling $1.2 trillion. California, Texas and Florida reported having the most veteran-owned businesses across the states, and Los Angeles County, Calif., had more VOBs than any other county (62,667). Additionally, survey figures reported 32.5 percent, or one-third, of VOBs fell under the professional, scientific, technical services and construction fields.
Eleven states currently have legislation in place that gives some sort of preference to VOBs or service-disabled veteran-owned businesses (SDVOBs) in state procurement, according the National Veteran-Owned Business Association. These states include:
  • Alaska
  • Louisiana
  • Michigan
  • Minnesota
  • Missouri
  • Nevada
  • New Jersey
  • Oregon
  • Washington
  • West Virginia
  • Wisconsin
Furthermore, four states have laws that set aside at least 3 percent of spending for SDVOBs and VOBs: Arkansas, California, Illinois and Maryland.
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