Today – June 16, 2016 – the U.S. Supreme Court ruled in favor of the interests of Veteran-Owned Small Businesses (VOSBs) and Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) who challenged the practice of the Veterans Administration (VA) to not apply the veteran business preference to orders placed against GSA Schedule contracts.
According to government contract legal expert Steven Koprince, “The Supreme Court’s decision in Kingdomware Technologies, Inc. v. United States, No. 14-916 (2016) means that the VA will be required to truly put ‘Veterans First’ in all of its procurement actions – which is what Kingdomware, and many veterans’ advocates, have fought for all along.”
The issues involved in the Kingdomware case date back to 2006 when Congress first required the VA to restrict contract competitions to veteran-owned small businesses as long as there were at least two qualified VOSBs available to perform the work. This is known as the “Rule of Two.” In practice, the VA determined that this rule did not apply to orders the agency placed through GSA Schedules. The Government Accountability Office (GAO) decided that the VA’s practices violated the law, but the VA refused to make any changes in its GSA Schedule purchasing. Finally, in 2011, a SDVOSB company by the name of Kingdomware Technologies took the VA to court, but the U.S. Court of Federal Claims ruled against the GAO and in the VA’s favor. Kingdomware appealed, but lost at the U.S. Court of Appeals in 2014. One year ago, the U.S. Supreme Court agreed to hear Kingdomware’s case.
It’s been a long path to travel, but VOSBs and SDVOSBs can celebrate the unanimous decision handed down by the Supreme Court on June 16th. The Court’s directive to the VA is clear – the written decision states that the Rule of Two “is mandatory, not discretionary.” The Court goes on to state that the law in this case “unambiguously requires the Department [the VA] to use the ‘Rule of Two’ before applying other procedures.”
Koprince sums up the impact of the Supreme Court’s decision this way: “I expect that the Kingdomware decision will prove a major boon to SDVOSBs and VOSBs, ultimately resulting in billions of extra dollars flowing to veteran-owned companies. The long battle is over – and SDVOSBs and VOSBs have won.”
Read the text of the Supreme Court decision here: http://www.supremecourt.gov/opinions/15pdf/14-916_6j37.pdf
Read Steven Koprince’s detailed analysis of the decision here: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/victory-sdvosbs-win-in-kingdomware-supreme-court-decision/
Read earlier articles about this case here:
- VA’s Kingdomware case set for argument before Supreme Court on Feb. 22nd – http://gtpac.org/?p=10627
- VA and Kingdomware agree: Supreme Court case isn’t moot – http://gtpac.org/?p=10459
- Another shocker in veteran-owned business Supreme Court case: Oral argument suspended – http://gtpac.org/?p=10359
- Kingdomware shocker: VA abandons goal-setting argument – http://gtpac.org/?p=10220
- SDVOSBs take it on the chin: Federal Circuit denies Kingdomware appeal – http://gtpac.org/?p=8021
- Court rules VA can ignore set-asides for veteran-owned businesses on GSA Schedule buys – http://gtpac.org/?p=5978