VA Agrees that Rule of Two Has Priority Over AbilityOne Procurement List

Statute A tells you to solve Problem X one way. Statute B tells you solve Problem X a completely different way. How to reconcile these two conflicting mandates? The Federal Circuit encountered this exact problem in 2018, and in response to its holding, the VA has now issued a class deviation to reflect its decision, confirming that the Rule of Two has priority over the AbilityOne Procurement List.

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Court of Federal Claims Decision Lends Support to VA’s SDVOSB Tiered Evaluation Scheme

In late 2017, we wrote that the VA was considering using tiered evaluations to simultaneously 1) comply with the VA’s statutory Rule of Two (and Kingdomware), and 2) address situations in which SDVOSBs and VOSBs might not offer “fair and reasonable” pricing.

Since then, the VA has instituted the tiered evaluation process for certain solicitations, using one of three approaches:

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GAO: WOSB Set-Asides and Sole Sources are Discretionary, not Mandatory

Historically, Uncle Sam has struggled to meet its WOSB contracting goals. It wasn’t until 2015, in fact, that the government first met its WOSB contracting goal and, since then, has continued to struggle to meet it.

Thankfully, agencies are authorized to use set-asides and sole-source awards to increase WOSB participation. But as a recent GAO decision shows, an agency isn’t required to use either procedure.

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Federal Circuit Affirms SDVOSB Priority Over AbilityOne

Ever since the Supreme Court’s Kingdomware decision was handed down in 2016, an important question has remained: who has priority at the VA for items on the AbilityOne List?

Yesterday, the Federal Circuit Court of Appeals provided the answer. The VA is required to prioritize service-disabled veteran-owned or veteran-owned small businesses when the Rule of Two is met, even when it buys items on the AbilityOne List.

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Small Business Set-Asides Not Required Under NETCENTS-2, Says GAO

The Air Force’s large NETCENTS-2 IDIQ vehicle did not require orders to be set-aside under the small business pool, except for orders valued between the micro-purchase threshold and simplified acquisition threshold.

In a recent decision, the GAO held that although the NETCENTS-2 contract in question says that Contracting Officers “should” perform a “rule of two” small business set-aside analysis for orders valued over the simplified acquisition threshold, it does not require that such an analysis be performed–meaning that Contracting Officers can validly award such orders to large businesses, even if two or more small business NETCENTS-2 holders exist.

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Federal Judge Suggests Congressional “Kill Switch” For Kingdomware SDVOSB Preferences

In a strongly-worded opinion, a federal judge decried a “labyrinth of legal and regulatory hoops and hurdles” imposed on the VA as a result of the famous Kingdomware Supreme Court decision–and suggested that Congress could exercise a “kill switch” to curtail or even eliminate the SDVOSB and VOSB contracting preferences the Supreme Court unanimously affirmed.

While I have no reason to suspect that Kingdomware is in any danger of being overturned or curtailed by Congress, its certainly not great news for SDVOSBs and VOSBs that a federal judge seems to be pushing for that very thing.

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VA SDVOSB Rule of Two: Court Provides Important Guidance for Protesters

A protester contending that the VA violated the “rule of two” by failing to set-aside a solicitation for SDVOSBs must present sufficient facts to indicate that the VA should have had a reasonable expectation of receiving two or more offers from SDVOSBs at fair and reasonable prices.

In a recent decision, the Court of Federal Claims dismissed a rule of two challenge because, according to the Court, the protester only identified one SDVOSB–itself–that was likely to submit an offer at a fair and reasonable price.

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