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.

The GAO’s decision in Charlie Mike Prosthetics; Half Milers Rule, LLC, B-409389, B-409389.2 (Mar. 10, 2014), involved a VA solicitation for artificial limbs, orthotic appliances, and related services.  The VA issued the solicitation as a small business set-aside.

Two companies filed pre-award bid protests with the GAO.  The protesters contended that the solicitation should have been set-aside for SDVOSBs pursuant to the Veterans Benefits, Health Care and Information Technology Act of 2006, which generally requires the VA to prioritize SDVOSB acquisitions.

The VA responded that a specific statute, 38 U.S.C. § 8123, exempts prosthetics from the ordinary VA SDVOSB set-aside rules.  The statute in question states:

The Secretary may procure prosthetic appliances and necessary services required in the fitting, supplying, and training and use of prosthetic appliances by purchase, manufacture, contract, or in such other manner as the Secretary may determine to be proper, without regard to any other provision of law.

The GAO held that 38 U.S.C. § 8123 does, in fact, exempt prosthetics from the SDVOSB set-aside requirement.  “We agree with the VA that 38 U.S.C. § 8123 allows the agency to procure prosthetic appliances and services without considering whether to set aside the procurements for SDVOSBs,” the GAO wrote.  The GAO denied the bid protests.

The VA’s “Veterans First” contracting rule ordinarily requires the VA to prioritize acquisitions from SDVOSBs.  However, as the Aldevra and Kingdomware cases demonstrated, there are important exceptions to that general rule.  The exception at issue in Charlie Mike Prosthetics does not broadly affect contractors in the same way as Aldevra and Kingdomware, but it does demonstrate that when it comes to the acquisition of prosthetics and related services, the VA is not required to prioritize SDVOSB acquisitions.

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