The Government Accountability Office said earlier this month that it will no longer hear protests from veteran-owned small businesses who claim the Department of Veterans Affairs is violating the law, capping off more than a year of wrangling.
Veteran-owned small businesses have been filing protests with the GAO in connection with a piece of 2006 legislation that says the VA must give preference to veteran-owned firms when its market research shows that favoring these businesses would result in multiple competitors and a fair price.
Though the GAO upheld a protest filed on these grounds in late 2011, the VA rejected the GAO’s recommendation and maintained its original award, according to the GAO. The agency has argued that the law does not prevent it from opting to use existing federal supply schedules — rather than opening a new competition, according to court documents.
Now, the Court of Federal Claims has made its own ruling in support of the VA, denying the claims of plaintiff Kingdomware Technologies, a service-disabled, veteran-owned small business based in Waldorf.
In a late November decision, the court said it disagrees with the GAO’s interpretation of the 2006 legislation, specifically as it pertained to an emergency notification service contract.
The court “finds that VA’s decision not to set aside the ... contract at issue was not arbitrary, capricious, or contrary to law,” the decision said.
In light of this ruling, the GAO announced on Dec. 13 that it will no longer hear protests argued on this basis.
“There’s no possibility of meaningful relief given the events that have transpired, and therefore we’re not going to consider these cases,” said Ralph White, managing associate general counsel for procurement law at the GAO.
Kingdomware Technologies could not be reached for comment.
Veteran-owned business advocates, however, are concerned that the court ruling and subsequent GAO decision could put small companies at a disadvantage as the contracting environment becomes increasingly competitive.
Greg McConnell, president of the Kilda Group, a service-disabled, veteran-owned government services company in Annapolis, said the latest development has him questioning whether Kilda should expand into more commercial work.
“We aren’t asking for something that’s crazy,” he said of the preference for veteran-owned businesses. “It’s really not a level playing field in federal acquisitions.”
Steven J. Koprince, a partner with Lawrence, Kan.-based Petefish, Immel, Heeb & Hird who spent many years as a government contracts lawyer locally, said the GAO and federal court decisions mark a real setback for veteran-owned small businesses.
“The VA does the best job of all the federal agencies, in terms of [service disabled, veteran-owned small business] contracting,” he said. But “I think that there’s no way around the fact that there are going to be service-disabled, veteran-owned small businesses that — had the court ruled the other way — they would have gotten contracts that now they won’t get.”
The VA declined to comment for this article, noting that it considers the matter still to be in litigation given that there is time remaining in the appeal period.