The Supreme Court made an unsurprising ruling that Veterans Affairs must follow a law that says it “shall” follow disabled veteran owned small business rules.
Who would’a thunk it? VA needs to follow laws created by Congress? The word “shall” is not optional like the word “may” in a law? Shocking!
The case, Kingdomware Technologies v US involved a disabled US Army veteran’s company that was competing against a bigger firm with an existing preferential contract at VA. The contract was for emergency notification services.
VA apparently ignored the mandate to award the contract to the veteran owned business, which was in line with their practice to screw disabled veteran owned small businesses for years.
Not surprisingly, VA has long put veteran owned businesses at a disadvantage when they compete against larger companies already providing services through the Federal Supply Schedule. VA erroneously believed it could ignore a congressional mandate to help veteran owned business compete against non-veteran owned businesses to fulfill contract needs.
Did they really believe they could ignore the law, or did they do it because they did not believe they would get caught?
For almost 10 years, VA has knowingly violated the so-called “Rule of Two” when seeking contract bids that was intended to benefit veterans. Under the Veterans Benefits, Health Care, and Information Technology Act of 2006, veteran owned small businesses “shall be” considered when two or more companies are likely to submit reasonable bids for a significant contract.
The Supreme Court provided a summary of the history to that point:
The Veterans Benefits, Health Care, and Information Technology Act of 2006 requires the Secretary of Veterans Affairs to set annual goals for contracting with service-disabled and other veteran-owned small businesses. 38 U. S. C. §8127(a). To help reach those goals, a separate set-aside provision known as the “Rule of Two” provides that a contracting officer “shall award contracts” by restricting competition to veteran-owned small businesses if the officer reasonably expects that at least two such businesses will submit offers and that “the award can be made at a fair and reasonable price that offers best value to the United States.” §8127(d). Two exceptions provide that the contracting officer “may” use noncompetitive and sole-source contracts for contracts below specific dollar amounts. §§8127(b), (c).
In 2012, the Department procured an Emergency Notification Service for four medical centers for a one-year period, with an option to extend the agreement for two more, from a non-veteran-owned business.
The Department did so through the Federal Supply Schedule (FSS), a streamlined method that allows Government agencies to acquire particular goods and services under prenegotiated terms. After the initial year, the Department exercised its option for an additional year, and the agreement ended in 2013.
Petitioner Kingdomware Technologies, Inc., a service-disabled veteran-owned small business, filed a bid protest with the Government Accountability Office (GAO), alleging that the Department procured multiple contracts through the FSS without employing the Rule of Two. The GAO determined that the Department’s actions were unlawful, but when the Department declined to follow the GAO’s nonbinding recommendation, Kingdomware filed suit, seeking declaratory and injunctive relief. The Court of Federal Claims granted summary judgment to the Government, and the Federal Circuit affirmed, holding that the Department was only required to apply the Rule of Two when necessary to satisfy its annual goals.
According to the Court’s decision:
“The surrounding subsections of §8127 [section of the law] confirm that Congress used the word ‘shall’ in §8127(d) as a command… The word ‘shall’ usually connotes a requirement, unlike the word ‘may,’ which implies discretion.”
How on earth can any right-minded American misunderstand the difference between “shall” and “may” in the statute? Or is this an obvious example of how the agency sometimes defrauds veterans of the benefits to which they are entitled?
Previous federal appeals resulted in judges siding with the agency claiming VA was not required to follow the “Rule of Two” so long as it awarded between 7 to 12 percent of all contracts to disabled veteran owned businesses.
Luckily, Clarence Thomas and company fixed their wagon:
“The Act does not allow the Department to evade the Rule of Two on the ground that it has already met its contracting goals or on the ground that the Department has placed an order through the FSS [federal supply schedule].”
How many millions in taxpayer dollars were diverted away from competitive disabled veteran owned small businesses in favor of cronies within mega corporations or shell companies owned by those same firms?
According to Russia Times (RT) on the decision:
The Supreme Court noted that Congress provided two exceptions to the “Rule of Two,” both of which allow the department to use non-competitive and sole-source contracts for contracts below specific dollar thresholds, but ruled that neither of them applied in this case.
It has also rejected the department’s argument that requiring it to apply the “Rule of Two” whenever it buys anything would “hamper mundane purchases like ‘griddles or food slicers.’”
As a side note, I looked for a while to get better coverage of the decision for readers, and out of my more morbid curiosity as to who is covering what.
Would it surprise you to know Russia Times is giving more in-depth coverage of this issue than Military Times, The Hill, and numerous other American based news networks.
How amazing are these times we live in when we get better news coverage from our Cold War enemies about how our country treats our veteran than American news sources?