GAO: For VA, SDVOSB Set-Asides Trump GSA Schedule Buys

“Veterans First” really means “Veterans First,” even if the VA would prefer to conduct an unrestricted procurement under the General Services Administration’s Federal Supply Schedule rather than conducting market research to see if the procurement can be set-aside for service-disabled veteran-owned small businesses.  So said that GAO in an important bid protest decision for SDVO small businesses, Aldevra, B-405271 (Oct. 11, 2011).

In Aldevra, the VA attempted to purchase certain supplies for a VA Medical center through the GSA Schedule on an unrestricted basis.  Aldevra, a SDVOSB, filed a protest with the GAO, arguing that before using the GSA Schedule, the VA should have conducted market research to determine whether two or more offers would be received from eligible SDVOSBs, and if so, should have set-aside the competition for SDVOSBs.

The GAO agreed and sustained the protest. The GAO noted that under the Veterans Benefits, Health Care and Information Technology Act of 2006, the VA—unique among federal agencies—must prioritize acquisitions from SDVOSBs.  This requirement is codified in the VA’s FAR supplement, or VAAR.  The GAO wrote:

“The provisions of both the VA Act and the VAAR are unequivocal; the VA shall award contracts on the basis of competition restricted to SDVOSBs where there is a reasonable expectation that two or more SDVOSBs will submit offers and award can be made at a fair and reasonable price.  Thus, contrary to the agency’s position, the VA Act requires, without limitation, that the agency conduct its acquisitions using SDVOSB set asides where the necessary conditions are present.”

In this particular case, the VA conceded that two or more SDVOSBs could meet the requirement.  Under these circumstances, the GAO held that the procurement must be set aside for SDVOSBs.

The Aldevra case is an important victory for SDVO small businesses.  The GAO’s holding—namely, that the VA cannot use the GSA Schedule to perform an “end around” on the requirement that veterans get top contracting priority—should result in more VA procurements being set-aside for SDVOSBs.  Here’s hoping that deserving SDVOSBs start seeing some new contracts soon.

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