In reaction to the June 16, 2016 U.S. Supreme Court reversal of a lower court decision on the Veteran-Owned Small Business (VOSB) contracting program at the Department of Veterans Affairs (Kingdomware Technologies, Inc. v. United States), the VA has issued guidance to its acquisition team to ensure that procurements for VOSBs and Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) are set-aside whenever a contracting officer has a reasonable expectation, based on market research, that two or more eligible firms are likely to submit competitive offers at a fair and reasonable price.
In the past, the VA had not implemented this rule, known as the “Rule of Two,” for orders placed against GSA and VA Schedule contracts. The Supreme Court ruled that no exemption from the Rule of Two exists for such orders. The Court also found that VOSB and SDVOSB set-asides should continue to be made even if and when the VA meets its goals for awards to VOSBs and SDVOSBs.
In announcing the new guidance, the VA’s Office of Acquisition and Logistics said that “additional policy and guidance will be provided via a Procurement Policy Memorandum and Class Deviation to be issued at a later date.”
Highlights of the interim guidance issued by the VA on June 22 include:
- The VA’s Contracting Officers are to include a requirement in all solicitations that for evaluation purposes, only VA verified SDVOSBs or VOSBs in the VA’s VIP database at the time of contract award will be considered for award. Non-VIP verified firms will be considered non-responsive and ineligible for award.
- VA Contracting Officers are instructed to conduct and review the market research to ensure compliance with the Rule of Two, whether or not an initial decision was made to set-aside the acquisition to SDVOSBs or VOSBs.
- For VA contracting requirements currently in the solicitation/evaluation phase, a review of the original market research is to be accomplished to confirm whether or not the Rule of Two was appropriately considered and whether offers are likely to be received from two or more qualified, capable and verified SDVOSBs or VOSBs at a fair and reasonable price. If the review results in a finding that there are two or more SDVOSBs or VOSBs, an amendment is to be be issued canceling the solicitation.
- Where a notice to proceed has not yet been issued, VA Contracting Officers are directed to coordinate with the Head of the Contracting Activity, the Office of General Counsel and the Office of Small and Disadvantaged Business Utilization and “be prepared to proceed with issuing the notice to proceed if issued within 30 days of this guidance.”
Details on these changes can be found at: http://www.va.gov/oal/business/pps/flash16-16.asp