Supreme Court rules in fa­vor of Wal­dorf busi­ness

King­domware Tech­nolo­gies chal­lenged VA in ‘rule of two’ con­tract­ing dis­pute

Maryland Independent - - Front Page - By AN­DREW RICHARD­SON arichard­son@somd­

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.”

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