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Kingdomware doesn’t require recertification for GSA Schedule SDVOSB set-aside orders

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The Supreme Court’s landmark ruling in Kingdomware Technologies, Inc. v. United States does not require SDVOSBs to recertify their eligibility in connection with individual GSA Schedule task orders.

In a recent decision, the SBA Office of Hearings and Appeals held that Kingdomware doesn’t affect the SBA’s SDVOSB eligibility regulation for multiple-award contracts, which specifies that if a company qualifies as an SDVOSB at the time of the initial offer for a multiple-award contract, it ordinarily qualifies as an SDVOSB for all orders issued under the contract.

OHA’s decision in Redhorse Corporation, SBA No. VET-263 (2017) involved a GSA RFQ seeking transition ordering assistance in support of the Network Services Program.  The RFQ contemplated the award of a task order under the GSA Professional Services Schedule.  The order was set aside for SDVOSBs under NAICS code 541611 (Administrative Management and General Consulting Services).  The GSA contracting officer did not request that offerors recertify their SDVOSB eligibility in connection with the order.

After evaluating quotations, the GSA announced that Redhorse Corporation was the apparent awardee.  An unsuccessful competitor subsequently filed a protest challenging Redhorse’s SDVOSB status.  The SBA Director of Government Contracting sustained the protest and found Redhorse to be ineligible for the task order.

Keep reading this article at: http://smallgovcon.com/sbaohadecisions/kingdomware-doesnt-require-recertification-for-gsa-schedule-sdvosb-set-aside-orders

Live reports, tweets, and webinar offered on VA’s Kingdomware Supreme Court case

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On Feb. 22, 2016, the U.S. Supreme Court will be hearing oral arguments in a controversy that deals with whether federal agencies are doing enough to assure that their contracts go to businesses run by veterans, especially service-disabled veterans.

You’ll be able to access live reports, a Twitter feed, and even a free webinar on the Court’s hearing.  More about that in a moment, but first some background and information on why this case is so significant.

Background

The case dates back to November 27, 2012, when the U.S. Court of Federal Claims ruled that the Department of Veterans Affairs (VA) has discretion to procure goods and services from GSA’s Federal Supply Schedule (FSS or simply GSA Schedule) without first considering a set-aside acquisition for service-disabled veteran-owned small businesses (SDVOSBs) or veteran-owned small businesses (VOSBs).

The Court of Federal Claims ruling represented a departure from several U.S. Government Accountability Office (GAO) decisions that stated the VA should comply with the Veterans Benefits, Health Care, and Information Technology Act of 2006 before conducting a GSA Schedule buy.  The 2006 Act created the so-called “Veterans First” contracting program that gives priority to SDVOSBs and VOSBs in the VA’s acquisitions.  Despite GAO’s opinions, the VA instructed its contracting officers to not apply the “Veterans First” principles to GSA Schedule contracting.

A Winding Road to the Supreme Court

The company bringing the challenge, Kingdomware Technologies, Inc., appealed the decision by the Court of Federal Claims.  But the U.S. Court of Appeals for the Federal Circuit held that the purpose of the “Veterans First” rule is to ensure that the VA meets its SDVOSB goals, and that so long as the VA meets its SDVOSB goals, it is free to procure services and supplies from the Federal Supply Schedule without first considering a SDVOSB procurement.  This lead the Kingdomware firm to take its plea to the Supreme Court.

The U.S. Department of Justice urged the Supreme Court to deny review, contending that the Federal Circuit got it right.  The Supreme Court nevertheless granted review.

Then the VA surprised everybody.  It abandoned the argument that the statutory preference for veteran-owned companies applies only if the VA has not met its SDVOSB or VOSB contracting goals.  That position had proven to be successful in its arguments before both the Court of Federal Claims and the Federal Circuit.  The government’s new argument was that the statute’s use of the term “contract” excludes orders under the Federal Supply Schedule or other multiple award vehicles.  This new strategy by government lawyers puzzled Court watchers and federal contracting experts alike.

The mystery of how this case would turn out got more murky.  On Nov. 4, 2015 — just five days before the Supreme Court was scheduled to hear oral arguments in the Kingdomware case — the Court yanked the case from its docket.  The Court directed the parties, not later than Nov. 30, to submit briefs on whether the contracts in question had been fully performed, and if so, whether full performance renders the case moot.

Need another curious twist?   While attorneys for Kingdomware worried that the VA would most certainly take the position that the case is moot, the brief filed by the government took the position that the case is not moot.

In response to the briefs, the Supreme Court announced, just before Christmas, that the Court would hear oral arguments in Kingdomware Technologies v. United States on February 22, 2016.

Anxious To Learn about the Arguments Made to Supreme Court?

Everyone who’s interested is small business set-asides, in general, and to extent to which the VA must prioritize veteran-owned firms in its contracting, specifically, wants to know about the arguments being made to the Supreme Court in this case.

The good news is you have the opportunity to learn about the Kingdomware case almost as if you are in the courtroom.  Attorney Steven Koprince — who has been active in supporting Procurement Technical Assistance Centers (PTACs like the Georgia Tech Procurement Assistance Center) across the country, as well as the Association of Procurement Technical Assistance Centers (APTAC) — will be attending the hearing and reporting back on what happens.  He will be:

  • Posting his impressions on his blog, SmallGovCon, the afternoon of Monday, Feb. 22.  You can check SmallGovCon.com that day or let him know if you would like him to email the post directly to you.
  • Answering your questions posted on Twitter starting at 10:00 a.m. EST on Tuesday, Feb. 23, for a full hour. You can follow Steven on Twitter @stevenkoprince or use the hashtag #Koprince4Vets.
  • Offering a free webinar to those who are interested in hearing what he learns at the oral arguments.  Steven’s webinar will take place at 12 noon EST on Tuesday, Feb. 23.  You can register for it here.

Kingdomware Koprince

VA’s Kingdomware case set for argument before Supreme Court on Feb. 22nd

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Supreme Court docketThe Supreme Court will decide the Kingdomware SDVOSB/VOSB case on its merits after all.  According to the Supreme Court’s just-released calendar, the Court will hear oral argument in Kingdomware Technologies v. United States on February 22, 2016.

The Supreme Court’s decision is good news for SDVOSBs and VOSBs, which got a bit of a scare when the Supreme Court abruptly yanked the case from its docket in November.  But after Kingdomware and the VA filed briefs agreeing that the case should not be dismissed on a technicality, the Court has decided to move ahead.

Reported by attorney Stcve Koprince at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/its-baaaack-kingdomware-case-set-for-argument-on-february-22-2016/

VA and Kingdomware agree: Supreme Court case isn’t moot

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Supreme CourtThe VA and Kingdomware Technologies Inc. haven’t agreed on much in recent years, but in briefs filed with the Supreme Court on November 20, 2015, they agree on one thing: the pending Kingdomware Supreme Court case is not moot.

VA sealHopefully, the fact that neither party wants the case dismissed on a technicality will help convince the Court to decide Kingdomware on the merits.

As you may recall, shortly before the Supreme Court was to hear oral argument earlier this month, the Court issued an order removing the case from its docket.  The Court asked the parties to submit briefs on whether the contracts in question have been fully performed, and if so, whether full performance renders the case moot.

Well, those briefs are in – and Kingdomware and the United States agree that the case is not moot.

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/va-kingdomware-agree-supreme-court-case-isnt-moot/

Kingdomware shocker: VA abandons goal-setting argument

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In a stunning development in the Kingdomware SDVOSB/VOSB Supreme Court case, the Government has abandoned the argument that the statutory preference for veteran-owned companies applies only if the VA has not met its SDVOSB or VOSB contracting goals.

Supreme CourtAlthough this argument was hotly debated, it was successful both at the Court of Federal Claims and again at the Federal Circuit.  But now, just weeks away from oral arguments, the Government’s Supreme Court brief jettisons the Government’s own previously successful argument in favor of an entirely different rationale for refusing to honor the statutory SDVOSB and VOSB preferences.

The last-minute, wholesale substitution of arguments doesn’t say much for the Government’s confidence in its case. And on the merits, the Government’s new argument is no better than the one it has abruptly abandoned.

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/kingdomware-shocker-va-abandons-goal-setting-argument/

SDVOSBs take it on the chin: Federal Circuit denies Kingdomware appeal

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In a crushing blow to SDVOSBs, the U.S. Court of Appeals for the Federal Circuit has denied the appeal of a lower court decision allowing the VA to procure goods and services using the Federal Supply Schedule without first considering whether SDVOSBs can satisfy the requirement.

Rejecting well-stated objections by a dissenting judge, a two-judge majority held that the purpose of the “Veterans First” rule is to ensure that the VA meets its SDVOSB goals, and that so long as the VA meets its SDVOS goals, it is free to procure services and supplies from the Federal Supply Schedule without first considering a SDVOSB procurement.

The Court’s decision in Kingdomware Technologies, Inc. vs. United States, No. 2013-5042 (2014) is the latest (and possibly last) in a long-running battle between SDVOSBs and the VA over the SDVOSB preferences adopted by Congress as part of the Veterans Benefits, Health Care and Information Technology Act of 2006. Because it has been awhile since the last decision in this battle, I have summarized the relevant history before diving into the particulars of the Federal Circuit’s decision.

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/sdvosbs-take-it-on-the-chin-federal-circuit-denies-kingdomware-appeal/

‘Cascading’ set-asides now authorized at the VA

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In what many will see as VA’s continued assault on its Veterans First Contracting Program post-Kingdomware, the Dept. of Veterans Affairs (VA) recently implemented “Cascading” set-asides.

The VA refers to these set-asides as “Tiered Evaluations,” noting they are also known as “Cascading” set-asides.

The VA issued Acquisition Policy Flash (No. 18-15), transmitting Procurement Policy Memorandum (PPM) No. 2018-04, dated and effective February 8, 2018.

The VA issued the PPM in response to requests from VA contracting officers requesting guidance and procedures for the use of tiered evaluations within a single synopsized solicitation when applying the “VA Rule of Two.”

Keep reading this article at: http://vetlikeme.org/its-official-cascading-set-asides-are-now-authorized-at-the-department-of-veterans-affairs/

Another big win for vets: SDVOSBs trump AbilityOne at VA, court rules

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The VA cannot buy products or services using the AbilityOne List without first applying the “rule of two” and determining whether qualified SDVOSBs and VOSBs are available to bid.

The May 30, 2017 decision of the U.S. Court of Federal Claims in PDS Consultants, Inc. v. United States, No. 16-1063C (2017) resolves – in favor of veteran-owned businesses – an important question that has been lingering since Kingdomware was decided nearly one year ago.  The Court’s decision in PDS Consultants makes clear that at VA, SDVOSBs and VOSBs trump AbilityOne.

The Court’s decision involved an apparent conflict between two statutes: the Javits-Wagner-O’Day Act, or JWOD, and the Veterans Benefits, Health Care, and Information Technology Act of 2006, or VBA.

As SmallGovCon readers know, the VBA states that (with very limited exceptions), the VA must procure goods and services from SDVOSBs and VOSBs when the Contracting Officer has a reasonable expectation of receiving offers from two or more qualified veteran-owned companies at fair market prices.  Last year, the Supreme Court unanimously confirmed, in Kingdomware, that the statutory rule of two broadly applies.

The JWOD predates the VBA.  It provides that government agencies, including the VA, must purpose certain products and services from designated non-profits that employ blind and otherwise severely disabled people.  The products and services subject to the JWOD’s requirements appear on a list known as the “AbilityOne List.”  An entity called the “AbilityOne Commission” is responsible for placing goods and services on the AbilityOne list.

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/another-big-win-for-vets-sdvosbs-trump-abilityone-at-va-court-rules/

VA class deviation restricts SDVOSB nonmanufacturers

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The VA has adopted a Class Deviation to the VAAR, severely restricting the ability of VA Contracting Officers to request waivers of the nonmanufacturer rule–and, even more troubling, suggesting that Contracting Officers need not apply the statutory SDVOSB and VOSB preferences even when the SBA has already granted a class waiver.

You may be wondering “does the VA’s Class Deviation comply with Kingdomware?”  Good question.

Before diving into the details of the Class Deviation, let’s step back for a second to review why this is so important.

Under the SBA’s regulations, when any contract is set-aside for small businesses (including SDVOSBs and VOSBs) under a manufacturing NAICS code, there are two ways that the prime contractor can satisfy the requirements of the limitations on subcontracting.  As one option, the prime contractor can agree to pay no more than 50% of the amount paid by the government to it to firms that are not similarly situated.  In other words, the prime can do most or all of the manufacturing itself (or work with similarly situated small businesses).  Alternatively, the prime can sell the products of another business, so long as the prime qualifies as a nonmanufacturer.

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/va-class-deviation-restricts-sdvosb-nonmanufacturers/#more-7207

SBA and GSA, OFPP not seeing eye-to-eye on ‘rule of two’ application

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SBA logoA major dispute is brewing in the small business community. Just four months after the Supreme Court’s June 16, 2016 unanimous decision on the Kingdomware case, the Small Business Administration (SBA) is taking a stand on the “rule of two” that is stressing out industry and agencies alike.

As a quick reminder, the nation’s highest court ruled in the Kingdomware case that the Veterans Affairs Department (VA) must continue to apply the “rule of two” for veteran-owned small businesses even if the agency surpassed its annual prime contracting goal. The “rule of two” states if an agency can find two or more qualified small businesses during market research of a contract under the Simplified Acquisition Threshold (SAT) — between $3,500 and $150,000 — it must set aside the solicitation.

Now the SBA is expanding that Supreme Court ruling to apply to all task and delivery orders under SAT if the request for proposals comes under the General Services Administration’s Schedules.

Keep reading this article at: http://federalnewsradio.com/reporters-notebook-jason-miller/2016/12/sba-gsa-ofpp-not-seeing-eye-eye-rule-two-application/

Here is a copy of the SBA’s memo telling its PCRs that the should apply small business preferences to all task orders and all delivery orders because they are considered contracts pursuant to the Kingdomware decision: http://www.wifcon.com/dgc_memo.pdf

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