GAO Confirms: AbilityOne Trumps SDVOSB for VA Set-Asides

The VA has been on the receiving end of a number of GAO bid protest decisions, the most recent issued just a few weeks ago, holding that the VA is acting illegally by ordering off the Federal Supply Schedule without first determining whether the procurement at issue can be set-aside for service-disabled veteran owned small businesses.  But the GAO’s recommendations, and the outrage from the veteran community (which, in my opinion, is very well-deserved), have not stopped the VA from pushing ahead with its “FSS First” acquisition strategy.

Now, the VA has pushed SDVOSBs even further toward the back of the line.  The VA has determined that the Javits-Wagner-O’Day, or JWOD Act, which calls for agencies to make certain purchases from nonprofits listed by the Committee for Purchase for People who are Blind or Severely Disabled (also known as the “AbilityOne” program), trumps SDVOSB set-asides for items on the Committee’s list.

And this time, the VA agrees with the GAO.

The GAO’s recent bid protest decision in Pierce First Medical; Alternative Contracting Enterprises, LLC–Reconsideration, B-406291.3, B-406291.4 (June 13, 2012), involved the protester’s request that the GAO reconsider its earlier ruling in Alternative Contracting Enterprises, LLC; Pierce First Medical, B-406265 et al. (Mar. 26, 2012).

The original Pierce First Medical case involved a VA procurement for medical exam and surgical gloves.  Without considering a SDVOSB set-aside, the VA purchased the gloves from an AbilityOne non-profit.

Pierce and ACE filed a GAO bid protest, alleging primarily that the VA had violated the Veterans Benefits, Health Care, and Information Technology Act of 2006 by failing to consider a SDVOSB set-aside before procuring the surgical gloves through the AbilityOne program.  If this sounds familiar, it is because the argument Pierce and ACE made was very similar to the argument made by Aldevra and others in successful challenges to the VA’s failure to put “Veterans First” when it comes to the Federal Supply Schedule.

This time, however, the GAO sided with the VA.  The GAO noted that unlike in the case of the Federal Supply Schedule, the JWOD Act requires agencies to procure items on the Committee’s list from an AbilityOne organization, unless certain exceptions (which were not present in this case), exist.  The GAO noted that the 2006 VA Act never discussed how the VA Act was supposed to interact with the JWOD Act.  Congress did not provide any guidance as to which one was supposed to control in the event of a conflict.

Given this, the GAO held that “the VA’s decision to give the AbilityOne program contracting priority for items already on the procurement list was not unreasonable in light of the statute’s silence regarding this issue.”  The GAO denied the protest and upheld the VA’s decision.

The protesters filed a request for reconsideration with the GAO, urging the GAO to re-examine its decision.  The GAO did so, but found no errors in its ruling, and upheld the original decision.  In the reconsideration decision, the GAO noted again that unlike in the Aldevra cases, the JWOD Act sets forth a contracting priority of its own, requiring purchases from AbilityOne non-profits.  The GAO wrote that the VA had properly harmonized the two statutes so that the AbilityOne program would receive preference for items on the Committee’s list, whereas SDVOSBs would receive preference for items not on the list.  The GAO denied the request for reconsideration.

The two Pierce First Medical decisions raise an interesting question: could the VA, if it wanted, validly interpret the 2006 VA Act as providing a preference for SDVOSBs over the AbilityOne program?  And if so, why did it not do so?

The AbilityOne program, of course, fulfills important socioeconomic objectives designed to assist some of the nation’s most vulnerable citizens, and the VA might defend its decision on that basis.  However, for service-disabled veterans still reeling from the VA’s ongoing insistence on going forward with FSS procurements without considering SDVOSB set-asides, the two Pierce First Medical decisions may be seen as additional evidence that within the VA, “Veterans First” means anything but.

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