GAO: “Rule of Two” Market Research Must Examine Capabilities

When conducting market research to determine whether a small business set-aside is appropriate under the “rule of two,” a procuring agency must do more than determine whether multiple small businesses are likely to submit proposals–it must also make reasonable efforts to ascertain whether those small businesses are capable of performing the work.

In a recent bid protest decision, the GAO held that an agency had improperly issued a solicitation as a small business set-aside because the agency’s market research did not reasonably consider whether the identified small businesses were capable of performing the contract requirements.

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Small Business “Rule Of Two” Doesn’t Apply To GSA Schedule

Agencies are not required to investigate the availability of small business offerors when ordering goods and services off the Federal Supply Schedule, even if multiple small business concerns would be able to compete for the contract.

As the GAO recently held in Walker Development & Trading Group, B-411357 (July 8, 2015), the small business preferences found in the Small Business Act do not apply when an agency uses the FSS.

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Will The Supreme Court Put “Veterans First” In The Kingdomware SDVOSB Case?

Is the Department of Veterans Affairs required to prioritize service-disabled veteran-owned small businesses (“SDVOSBs”) when it buys supplies and services?  That, essentially, will be the question before the Supreme Court when it takes up the case of Kingdomware Technologies, Inc. vs. United States.  On June 22, the Supreme Court agreed to hear the case.

The Supreme Court’s decision in Kingdomware will end a long-running battle between the VA and various SDVOSBs, which have accused the VA of creating loopholes to avoid a statutory contracting preference for veterans.  Hopefully, the Court will get it right.  As a matter of policy and law, the underlying decision of the U.S. Court of Appeals for the Federal Circuit is fundamentally flawed.

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Task Orders: Small Business Set-Asides Not Required, Says GAO

When issuing task order solicitations under unrestricted multiple award contracts, procuring agencies are not required to apply the so-called “rule of two” and set aside task orders for small businesses.

In a recent bid protest decision, the GAO–over the objections of the SBA–held that agencies “may,” but need not, set aside task orders under multiple-award contracts.  The GAO’s decision essentially overturns a 2008 decision in which the GAO held that the rule of two does require agencies to set aside task orders.

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Rule Of Two: Small Business’s Notification Of Interest Was Too Late

A small business’s expression of interest in a solicitation came too late to affect the agency’s set-aside decision under the so-called “rule of two,” even though there was no indication that the small business knew about the requirement early enough to affect the set-aside decision.

In a recent bid protest decision, the GAO held that an agency was not required to consider a small business’s expression of interest when that expression of interest occurred after the RFQ was released.  Although the GAO may have been correct as a matter of law, the result is still discouraging, because nothing in the GAO’s decision indicated that the small business knew (or should have known) of the requirement before the agency issued the RFQ.

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SDVOSBs Take It On The Chin: Federal Circuit Denies Kingdomware Appeal

In a crushing blow to SDVOSBs, the U.S. Court of Appeals for the Federal Circuit has denied the appeal of a lower court decision allowing the VA to procure goods and services using the Federal Supply Schedule without first considering whether SDVOSBs can satisfy the requirement.

Rejecting well-stated objections by a dissenting judge, a two-judge majority held that the purpose of the “Veterans First” rule is to ensure that the VA meets its SDVOSB goals, and that so long as the VA meets its SDVOSB goals, it is free to procure services and supplies from the Federal Supply Schedule without first considering a SDVOSB procurement.

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VA SDVOSB Set-Asides Not Required For Prosthetics, Says GAO

The VA is not required to prioritize SDVOSB set-asides when it obtains prosthetic appliances and related services, according to the GAO.

In a recent bid protest decision, the GAO held that a specific statutory exemption allows the VA to procure prosthetic appliances and related services in whatever manner the VA deems best, without regard to the ordinary requirement that the VA prioritize SDVOSB acquisitions.

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