Supreme Court rules in favor of Waldorf business
Kingdomware Technologies challenged VA in ‘rule of two’ contracting dispute
In a landmark case on Thursday, the U.S. Supreme Court unanimously ruled in favor of a Waldorf business, Kingdomware Technologies, who argued the Department of Veterans Affairs failed to set aside certain contracting opportunities for service-disabled, veteran-owned small businesses (SDVOSB) as required by the Veterans Benefits, Health Care and IT Act of 2006. The agency must apply the “rule of two,” the ruling determined, as part of the “Veterans First Contracting Program.”
The VA must give first priority for supplies and services contracts to service-disabled, veteran-owned small businesses before opening the door to unrestricted competition, Kingdomware argued, if two or more SDVOSBs are expected to bid on a contract after the required market research is conducted by the VA.
The case began in 2011 when Kingdomware Technologies filed a protest with the Government Accountability Office (GAO) after the VA acquired emergency notification services through the Federal Supply Schedule in which competition is unrestricted and open. This was done without prior market research to determine if the contract should be set aside for SDVOSB-restricted competition, they asserted.
The GAO reviewed the claim and agreed with Kingdomware, making a non-binding recommendation that the VA should follow this practice.
In 2012, the VA replied that that did not agree with the GAO’s interpretation of the law and would let the courts handle the matter.
The case was brought before the Court of Federal Claims, which ruled in favor of the VA, and then the Court of Appeals for the Federal Circuit, which also rebuked Kingdomware’s protest. The case was finally brought before the Supreme Court.
On Thursday, the Supreme Court ruled unanimously in favor of Kingdomware:
“Our interpretation of §8127(d)’s requirements in this case will govern the Department’s future contracting. On the merits, we hold that §8127 is mandatory, not discretionary,” states the opinion of the Supreme Justices. “Its text requires the Department to apply the Rule of Two to all contracting determinations and to award contracts to veteran-owned small businesses. The Act does not allow the Department to evade the Rule of Two on the ground that it has already met its contracting goals or on the ground that the Department has placed an order through the FSS.”
Though the emergency services notification contract that Kingdomware sought years before has since been completed via FSS, the ruling is now incumbent upon the VA in future contracts — to the benefit of thousands of veteran-owned small business in the U.S.
“With this ruling, the Department of Veteran’s Affairs can continue its mission by setting aside opportunities for those who have served as it fulfills President Lincoln’s promise: ‘To care for him who shall have borne the battle, and for his widow, and his orphan...,’” Kingdomware said in a press release. “This ruling will directly impact the economic standing of thousands of certified service disabled and veteran owned companies and the millions they support.”