What the Kingdomware Ruling Means for SDVOSBs

Employment Opportunity for the Disabled - businessman in wheelchair

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Department of Veterans Affairs is required by law to award contracts to service-disabled veteran-owned small businesses when there is a reasonable expectation that two or more such concerns will bid for the contract. This has become known as the “Rule of Two” or “Veterans First.”

Yet there were many large-scale contracts that the VA department didn’t open up to this rule because they were traditionally things that they would not have set aside or acquired on a small business scale.

As Steven Koprince explains at SmallGovCon.com, “Despite the absence of a statutory exception for GSA Schedule orders, the VA has long taken the position that it may order off the GSA Schedule without first applying the VA Act’s Rule of Two.”

After a lengthy court battle that went all the way to the United States Supreme Court, the folks from a company called Kingdomware successfully sued the VA and won; in fact they won unanimously.

This effectively changes the rules of engagement for the VA so that they’re going to have to do a sources sought to determine whether there is a reasonable expectation that SDVOSBs can meet the requirements of the contract, and that there are qualified businesses who can do the job.

Interestingly enough, some things that are in IDIQ contracts may be exempt from this requirement – large IDIQs with both large businesses and SDVOSBs, or other small business types, may allow the VA to procure directly with the large businesses of a task order competitive basis.

But there are still going to be a lot more service-disabled sources sought directed at procurements for small businesses. It may very well be that the outcome will be the same, but we don’t know. What we do know is that SDVOSBs will have access to more work.

Let’s say there is a piece of work that traditionally would have been done full and open (not set-aside for specially certified businesses), or would have been done by an 8(a) or another small business type. Now, for that same piece of business the VA will have to determine whether two or more SDVOSBs will be qualified and will bid. There’s no guarantee, but at least it’s more likely the work could go a service-disabled vet.


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