By Debbie Gregory.

Vets First, a policy that gives preference to veteran-owned small businesses, has long been circumvented by the Department of Veterans Affairs. This is in direct defiance of orders from Congress, the Government Accountability Office (GAO) and more recently, the U.S. Supreme Court.

The program was created for Veteran-Owned Small Businesses and expanded the Service-Disabled Veteran contracting program for VA procurements. It was designed to ensure that legitimately owned and controlled VOSBs and SDVOSBs are able to compete for VA VOSB and SDVOSB set-aside and are credited by VA’s large prime contractors for subcontract plan achievements.

In Kingdomware Technologies, Inc. v. United States, the court ruled that not only was the VA disregarding VETS First, but in moving forward, the department’s “rule of two” should be used for all VA procurements.

The “rule of two” states a contracting officer of the VA, “shall award contracts on the basis of competition restricted to small business concerns owned and controlled by veterans if the contracting officer has a reasonable expectation that two or more small business concerns owned and controlled by veterans will submit offers and that the award can be made at a fair and reasonable price that offers best value to the United States.”

In order to be in compliance, the VA must:

Revise its acquisition policies and training to ensure better oversight of its contracting activities;
Improve the ability for veteran-owned small businesses to obtain Federal Supply Schedule contracts for the products the VA buys; and
Discontinue its use of contract vehicles that do not contain veteran-owned small businesses.

With more than 7,000 veteran and service-disabled veteran-owned small businesses in the U.S. that have met the Vets First criteria, there is no excuse for the not to award contracts to these businesses.

By Debbie Gregory.

The Supreme Court came down on the side of veteran business owners by finding that the Department of Veterans Affairs (VA) failed to comply with a law aimed at increasing the number of federal contracts awarded to veteran owned small businesses.

The justices sided with Kingdomware Technologies Inc., a service disabled veteran-owned contractor based in Maryland that said it should have been considered to provide services for a VA medical center.

The issue before the Court was whether a federal law which provides that, as long as certain conditions are met, the Department of Veterans Affairs “shall award” contracts to small businesses owned by veterans applies every time the department awards contracts.  The federal government had argued that the rule left some room for discretion, but on June 16^th, the Court rejected that argument.  “Shall,” the Court emphasized, was meant as a command, not an option.

The case dates back to 2012, when the VA awarded a contract for an emergency notification system that would send information to its employees, to a company that was not owned by a veteran. Kingdomware, which is owned by a U.S. Army veteran who was permanently disabled from an injury that he suffered while serving in 1991’s Operation Desert Storm, challenged the award. Kingdomware provides web, software, and technology solutions to enterprise problems.

Federal law requires the agency to use a bidding process if two or more disabled veteran-owned companies can offer service at a fair and reasonable price. But the VA argued the “rule of two” does not apply when it buys goods and services from vendors that already have contracts with the agency under a system called the Federal Supply Schedule.

Justice Clarence Thomas said the rule applies to all contract determinations.

A federal appeals court had said the VA did not have to follow the rule of two if it otherwise met the goal of awarding between 7 percent and 12 percent of all contracts to companies owned by disabled veterans. But Thomas said meeting annual benchmarks does not allow the VA to ignore a mandatory contracting rule

Veteran-owned small businesses see the ruling as a victory that gives them more opportunities to compete for contracts from the VA which, they would say, is exactly what Congress intended.