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I suspect this is quite common, and not just for veteran set aside, but for other small business set asides as well like minority owned and women owned businesses.

When a smaller company gets small business status with the federal government, They can compete for contracts that are set aside just for small businesses without having the big guys for competitors. But the status is only supposed to be a “hand up” to help the company get established; after seven years the special status comes to an end. The small business is supposed to have grown up during that time and be able to compete on its on legs.

When I was still in service one of the companies we used in Texas for computer support was a minority owned Small business coming to the end of its special status. They were so frantic about this that they actually tried to sell themselves to an Alaskan company owned by some Native American woman I think. This of course would’ve been simply a paper arrangement. I believe the contracting officers squelch that particular effort but I’ll bet it still happens in other cases, Particularly in non-DOD departments.