The United States Supreme Court has agreed to review a government contracts case concerning set-asides for veteran-owned small businesses. The case is Kindgomware Technologies, Inc. v. U.S., No. 14-916.
In a bid protest filed with the Government Accountability Office. Kingdomware, a service-disabled veteran-owned small business, challenged a Veterans Administration decision to award a Federal Supply Schedule contract for emergency notifications services to a non-VOSB vendor. Kingdomware argued that the Veterans Benefits, Health Care, and Information Technology Act of 2006, 38 USC 8127 et seq., always bars the VA from using the FSS without first invoking the Rule of Two, which provides that the VA “shall award contracts on the basis of competition restricted to [VOSBs] if the contracting officer has a reasonable expectation that two or more [VOSBs] will submit offers and that the award can be made at a fair and reasonable price….”
GAO sustained the protest and recommended the VA resolicit the requirement as a SDVOSB set-aside. However, the VA declined to follow GAO’s recommendation. Kingdomware sought relief from the Court of Federal Claims, which concluded that the VA is not required to consider setting aside Federal Supply Schedule procurements for veteran-owned small businesses or service-disabled VOSBs. Kingdomware then appealed to the Court of Appeals for the Federal Circuit. The Federal Circuit rejected Kingdomware’s argument that §8127(d)’s use of the word “shall” unambiguously prohibits the VA from using the FSS when the Rule of Two may be satisfied. The court concluded the Act is ambiguous and the VA’s interpretation that a Rule of Two analysis is only required when necessary to meet the VA’s VOSB contracting goals is entitled to deference.