VA SDVOSB “Rule of Two”: Contracting Officer’s Price Reasonableness Determination Need Not Defer to FSS

The VA’s “rule of two” for service-disabled veteran-owned small businesses provides a powerful contracting preference. Thanks to the rule of two, the VA awarded 23.39% of prime contracting dollars to SDVOSBs in Fiscal Year 2019, compared to 4.39% governmentwide.

But the rule of two has its limits. Importantly, before issuing an SDVOSB set-aside, the Contracting Officer must have a reasonable belief that “the award can be made at a fair and reasonable price that offers best value to the United States.” And, as a powerful federal court recently held, the fact that an SDVOSB’s prices have been accepted by the GSA under the Federal Supply Schedule program does not require the VA to accept those prices as fair and reasonable in a rule of two analysis.

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2020 Rewind: The Year’s Biggest Government Contracting News Affecting Small Businesses

Let’s face it: most people won’t look back on 2020 with anything remotely approaching nostalgia.  Here at Koprince Law LLC, we are eager to turn the page and move on with 2021, too. 

But small businesses shouldn’t forget 2020 completely.  The year brought many important developments, including major changes to some key government contracting rules that our readers should remember.  So here, in a nutshell, are the most important 2020 government contracting changes and legal developments for small businesses. 

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Congress Approves Government-wide SDVOSB Certification Requirement; Transfers CVE to SBA

The House and Senate have agreed to eliminate service-disabled veteran-owned small business self-certification and adopt a government-wide SDVOSB certification requirement, while transferring control of the certification process from the VA to the SBA.

The Conference Report on the 2021 National Defense Authorization Act would require government-wide SDVOSB certification (eventually) and transfer control of the the Center for Verification and Evaluation from the VA to the SBA. Assuming the President signs the bill into law (which, unlike the typical NDAA, remains to seen), SDVOSB self-certification–which is still the law for non-VA contracts–is on its way out.

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OHA: CVE Appeals Go Directly to Us, Not CVE

OHA recently confirmed it lacked jurisdiction over a CVE appeal mistakenly filed with CVE, not OHA, by the deadline. You might be thinking: “Oh come on, the CVE appeal was filed with CVE on time!” But OHA’s strict timeliness rules make no exception for any such mistakes in the CVE appeal process. In fact, OHA disclaims the authority to even consider a late appeal, regardless of whether or not it was timely (but improperly) filed with CVE itself.

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VA CVE Applications: Average Processing Time is 34 Days

In some circles, the VA CVE application process for SDVOSB/VOSB certification has a reputation as being very cumbersome and time-consuming. But while applying for verification isn’t exactly fun, it doesn’t take an extraordinarily long time for most new applicants to be verified. In fact, according to the VA’s Office of Small and Disadvantaged Business Utilization, the average processing time is a mere 34 days.

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OHA: Multiple Service-Disabled Veterans Control Company, Despite Internal Dispute

Control over a Service-Disabled Veteran-Owned Small Business can be held by multiple service-disabled veterans. Having control reside in multiple individuals can make things a little more complicated, though. SBA Office of Hearings and Appeals recently examined a situation where multiple service-disabled veterans shared control of a company, but did not have a united front when responding to information requests concerning a company’s eligibility.

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SDVOSB vs. AbilityOne: VA Violated Rule of Two Again, Court Says

A federal court has ruled that the VA violated the SDVOSB Rule of Two, as well as a more recent statute, by moving SDVOSB set-aside requirements to the AbilityOne program.

If you think you heard this before, you’re not going crazy or living your own personal Groundhog Day. The court’s ruling is just the latest in a long-running debate about how the VA should balance the SDVOSB and AbilityOne contracting preferences.

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