GAO Confirms: VA SDVOSB Set-Asides Trump Schedule Buys

If this was a game of high-stakes poker, you might say the GAO has called the VA’s bluff.

Service-disabled veteran-owned small businesses rejoiced after the GAO held, in GAO Protest of Aldevra, B-405271, B-405524 (Oct. 11, 2011) that federal law requires the VA to prioritize SDVOSB procurements over Federal Supply Schedule acquisitions.  But, to the shock and outrage of the SDVOSB community, the VA has refused to follow the GAO’s interpretation of the law.  Now, to mix card-game metaphors, the GAO has doubled down, issuing a second decision confirming its ruling in Aldevra.

In GAO Protest of Kingdomware Technologies, B-405727 (Dec. 19, 2011), the GAO held, once again, that federal law requires the VA to prioritize SDVOSB procurements over FSS acquisitions.

In Kingdomware Technologies, as in Aldevra, the VA decided to procure items using the FSS without first conducting research to determine whether the procurement should be set-aside for service-disabled veteran-owned small businesses.  The GAO held that this violated the law, writing that the Veterans Benefits Health Care and Information Technology Act of 2006 “requires that the agency make a determination whether an acquisition should be set aside for SDVOSB concerns prior to conducting a procurement using FSS procedures.”  The GAO sustained the bid protest, recommending that the VA cancel the solicitation and conduct market research to determine whether the acquisition should be set-aside for SDVOSB firms.

Kingdomware makes it apparent that the GAO is not about to back off its position that “Veterans First” truly does mean “Veterans First,” even if the VA believes it might be more convenient or less expensive to order from non-SDVOSB firms off the Schedule.  Now that its bluff has been called, perhaps the VA will rethink its tone-deaf refusal to follow the GAO’s recommendations.  After all, as a wise man once said, you’ve got to know when to fold ’em.

2 thoughts on “GAO Confirms: VA SDVOSB Set-Asides Trump Schedule Buys

  1. Well…The court ruled in favor of the Department of Veterans Affairs (VA).

    “On November 27, 2012, the U.S. Court of Federal Claims ruled that the VA has discretion to procure goods and services from GSA’s Federal Supply Schedule without first considering a set-aside acquisition for service-disabled veteran-owned small businesses (SDVOSBs) or veteran-owned small businesses (VOSBs).”

    Summary of findings: http://contractingacademy.gatech.edu/2012/12/court-rules-va-can-ignore-set-asides-for-veteran-owned-businesses-on-gsa-schedule-buys/

    Decision: http://contractingacademy.gatech.edu/wp-content/uploads/2012/12/Kingdomware-Technologies-Inc.-v.-United-States.pdf

    I can this scenario playing all across the government for set-aside programs, with federal agencies (and GAO) pointing out during bid protests to this decision that validates the agency’s discretion to choose the acquisition vehicle.

    • Lenise,

      Thank you for weighing in. I was among the first to blog about the court’s decision and have written other posts about it, as well:

      First reaction
      Second post
      GAO follows court’s lead

      I am hopeful that since the judge’s decision was based on a specific statute limited to the VA, the decision will not have any impact on set-aside programs outside of the VA’s SDVOSB and VOSB programs. Of course, only time will tell.

      Best,

      Steve

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