VA CVE Improperly Disqualified SDVOSB, Says Federal Court

SDVOSBs—and basic fairness and common sense—were big winners in a recent decision issued by the U.S. Court of Federal Claims.

In its decision, the Court held that the VA’s Center for Verification and Evaluation violated the law when it disqualified a SDVOSB, without giving the SDVOSB the opportunity to contest the reasons for the disqualification. In an opinion reminiscent of last year’s landmark Miles Construction case, the Court then held that the CVE’s substantive reasons for the disqualification were arbitrary and unreasonable.
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Contractor Misrepresented VOSB Status For $152 Million Lease, Says VA OIG

The VA failed to verify the accuracy of a contractor’s representation that it was a veteran-owned small business, according to a new report issued by the VA’s Office of Inspector General.

According to the VA OIG, the VA failed to verify the claim of Westar Development Company, LLC to be a VOSB–and “[t]he evidence does not support a finding that Westar is or ever has been a Veteran-Owned Small Business.”   The VA’s failure to verify Westar’s VOSB status is just one of many serious flaws identified by the VA OIG in its audit of the award of a major VA lease to Westar.

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GAO: SDVOSB Improperly Downgraded For Not Identifying Its Subcontractors

A SDVOSB was improperly downgraded for not identifying its subcontractors in its proposal, according to a recent GAO bid protest decision.

In Coburn Contractors, LLC, B-408279.2 (Sept. 30, 2013), the GAO held that the VA improperly applied an unstated evaluation criterion by requiring that the protester identify its subcontractors, because according to the solicitation, a subcontractor list was only required at the task order level.

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VA SDVOSB Protests: New Rule Allows Appeals

The VA SDVOSB protest process has been criticized by some (including a certain Kansas-based government contracts attorney) for failing to offer a right of appeal.  Under the VA’s rules, if a protested company was found to be ineligible as a SDVOSB, its only option was to sue the VA in federal court–an expensive and time-consuming proposition.

Until now.

Today, the VA published an interim final rule, under which a protested SDVOSB has the right to an appeal within the VA.  The new system isn’t perfect, but it’s a step in the right direction.

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Limitations on Subcontracting and GAO Bid Protests

GAO bid protests regarding a competitor’s compliance with the applicable limitation on subcontracting can be difficult to win.

As the GAO held in a recent bid protest decision, unless the competitor’s proposal “on its face” should have led the procuring agency to recognize that the limitation on subcontracting would be violated, the agency is free to assume that the offeror intends to comply.  Of course, as was the case in the recent decision, it doesn’t hurt the protested company to specifically state that it will comply with the limitation on subcontracting.

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VA CVE: SDVOSBs Must Remove “Large” NAICS Codes From VetBiz Within 30 Days

The VA CVE has instructed verified SDVOSBs to remove so-called “large NAICS codes” from their VetBiz Vendor Information Pages profiles within 30 days–or else.

According to a recent email from the VA CVE (which was kindly shared with me), SDVOSBs must remove any NAICS codes for which they do not qualify as a small business.  Failing to remove these “large NAICS codes” may result in potentially harsh penalties, including debarment.

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Bill Introduced To Transfer SDVOSB Verification To SBA

Today, Congressman Mike Coffman introduced the Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2013.

The bill would standardize the requirements for SDVOSB eligibility, eliminating the current differences between the SBA’s and VA’s regulations.  In addition, the bill would transfer responsibility for verifying SDVOSB status to the SBA (the VA would retain authority for determining whether an individual is a service-disabled veteran).

Hardy Stone’s website, VetLikeMe, has a more detailed summary of the bill.  I will be closely tracking this legislation and will post updates if and when it moves forward.