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Kingdomware is Lucky 1%! Supreme Court to Hear Vets Case

“May the odds be forever in your favor.”

So goes the saying from the incredibly popular HUNGER GAMES franchise, rendered darkly amusing by the fact that for those participants in the dystopian society’s annual Hunger Games (i.e., the sacrifice of two youths from each district, save for one actual winner of the “games”), the odds are most, decidedly, not in one’s favor.

The Supreme Court is another place where the odds are not in someone’s favor. Every year, the Supreme Court receives about 10,000 writs of certiori (petitions asking it to hear a case that has been decided by a lower court). Of those, the Supreme Court decides to hear about 80. That means that each case has less than a one percent chance of being heard.

And on June 22, 2015, the Supreme Court decided that Kingdomware will be one of them.

Most veteran business owners have heard of Kingdomware, but here’s the recap:

The Kingdomware saga began with a slew of GAO rulings in 2012 that berated the VA for not following its mandate in the Veterans Benefits, Health Care, and Information Technology Act of 2006 (the “Act”).

The Act provides that before using Federal Supply Schedule (FSS) procedures, a contracting officer must determine whether he has a reasonable expectation that: 1) two or more service-disabled veteran-owned small businesses (SDVOSBs) will submit offers; and 2) the award can be made at a fair and reasonable price. If the answer is “yes,” the award must be set aside for SDVOSBs. (38 U.S.C. 8 127(d)(2006)). The idea is to maximize awards to SDVOSBs, as a purpose of the act is to protect veteran businesses.

Long story short, the VA decided that despite this provision under the Act, it wasn’t required to set aside awards off the FSS for SDVOSBs, awarded to non-SDVOSBs, and got beaten down by the GAO (that’s a legal term). See Kingdomware Technologies, Inc., B-406507 (May 30, 2012); Aldevra, B-406331 (April 20, 2012).

The VA won the next battle, staged at the U.S. Court of Federal Claims (CoFC). In November of 2012, the CoFC ruled that the VA acted reasonably in determining that it need not set aside FSS contracts for SDVOSBs. In finding that the VA had not acted “arbitrarily, capriciously, or contrary to law” (another legal term, only this one’s real), the CoFC held that the VA had reasonably interpreted its own law in finding that it was not mandated to set aside awards to SDVOSBs. This decision was also affirmed in a federal circuit decision issued in June of 2014.

Not happy with this result, two veteran organizations – the American Legion and the National Veteran Small Business Coalition (NVSBC)  – petitioned the Supreme Court. And now, it’s official – they will be heard.

I have to wonder – does timing play a huge role in the Supreme Court’s decision? The granting of cert comes very soon after Jan Frye’s explosive memorandum (reporting billions of dollars awarded by the VA in violation of its own procurement policies/laws), the Phoenix scandal (blatant violation of wait times), and the Denver disaster (VA medical center construction plagued by delays and huge cost overruns). Among other VA scandals.

At any rate, they will be heard! Stay tuned here for updates.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran issues at: http://www.legalmeetspractical.com.

 

3 Responses to “Kingdomware is Lucky 1%! Supreme Court to Hear Vets Case”

  1. Sarah, FAR 8.405-1(d)(3)(ii) provides that an RFQ should be sent to as many contractors as practicable to reasonably ensure that quotes will be received from at least 3 contractors that can fulfill the requirements for quotes that will exceed the simplified acquisition threshold. FAR 8.405-5(d) states that ordering activities should give preference to the items of small business concerns where 2 or more items at the same delivered price will satisfy the requirements. It seems to me that SDVOSB concerns should be actively marketing program managers and contracting Officers to be included in the “Rule of 2” determination so that they have a better chance to maximize their contract awards, although the latter FAR clause above does not guarantee them business. Perhaps I’m wrong.

    Tom

    • Tom, that’s absolutely true that contractors should be on the lookout for opportunities where they can be considered interested, responsible vendors. That’s largely because of the liberal definition of what constitutes “market research” – usually it amounts to COs looking in VetBiz for vendors with the necessary NAICS code in the geographical region where the contract is being performed. That won’t capture everyone. (Also, that illustrates the need for vendors to make sure their VetBiz profile encompasses everything they can do). At the end of the day the COs still have the discretion to not set aside the opportunities (under Kingdomware’s current interpretation), but the aim is to make them not want to do that.

  2. Hopefully they’ll side with common sense and the veteran entrepreneurs!

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