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Targeted Small Business — a 40% Share of the State’s Small-Business Procurement Goal

A business majority-owned by a service-disabled veteran can certify as a Targeted Small Business. State agencies must then aim to place at least 40% of their targeted small business purchasing with service-disabled veteran-owned firms.

Verified August 22, 2026

What this benefit is

What it's worth: Certification, plus a 40% share of each agency’s targeted small business goal

What a certified business actually wins depends on what it sells and how it bids — the goal creates a pool, not an entitlement.
The statutory goal is stated as a dollar amount that must exceed the previous year’s certified purchases, so the pool is designed to grow rather than to sit at a fixed percentage of total spending.

Who is entitled to it

You served.
You have a service-connected disability.
You are in this state.

Not sure whether that describes you?

Answer a few questions about this benefit specifically — we only ask what this one actually depends on, and we stop as soon as we know.

How to claim it

1Check the four thresholds before applying: the business must be in this state, operated for profit, majority-owned (51% or more), operated and managed by a service-disabled veteran, and under $4 million in gross income averaged over the preceding three fiscal years.
2A service-disabled veteran here is defined by written verification from the federal VA or the Department of Defense of a disability incurred or aggravated in the line of duty — the definition does not name a percentage.
3Certify with the economic development authority first. The procurement goals only reach CERTIFIED businesses, so an uncertified veteran-owned firm gets nothing from this.
4After certifying, register as a vendor so agency bid notices reach you. Agencies must send bid notices to the targeted small business site 48 hours before general issue, which is a real head start if you are watching it.

Form: Targeted Small Business certification application
File with: Iowa Economic Development Authority, which certifies; state agencies then buy under the goal
Documents you will need: va benefit summary letter · dd214
Periodic recertification: Confirmed at intervals rather than annually.

CorrectionThe 40% figure is widely quoted as if agencies must place 40% of their purchasing with service-disabled veteran-owned firms. Read in place, §73.16(2)(d) sets it as a share of the TARGETED SMALL BUSINESS goal — a goal within a goal. It is a real target, and it is a fraction of a fraction of state spending.

Worth knowingCommunity colleges, area education agencies and school districts sit under the same section with their own floor: a targeted small business goal of at least ten percent of anticipated procurement each year. That is a separate buyer worth approaching.

Sources

authority · statuteIowa Code §73.16 — Procurements from small businesses and targeted small businesses, goals (§73.16(2)(d))
operating · published policyIowa Department of Administrative Services — Targeted Small Business Program

This finder provides an informational match, not a government eligibility determination. The responsible agency decides your application.