As we discussed in a recent post, the Supreme Court’s decision in Kingdomware Technologies, Inc. v. United States left a number of questions unanswered regarding the implementation of set-aside requirements for veteran-owned small businesses under Federal Supply Schedule (“FSS”) contracts.  The decision has already had repercussions outside the set-aside context, with the Court of Appeals for the Federal Circuit recently applying Kingdomware’s reasoning in Coast Professional, Inc. v United States to confirm bid protest jurisdiction under the Tucker Act for orders placed under FSS contracts.

Congressional testimony subsequent to Kingdomware also now confirms that a number of agencies are considering whether the Supreme Court’s decision has broader implications for other small business programs.  Specifically, the U.S. Small Business Administration (“SBA”) has publically recognized that the Supreme Court’s reasoning may extend beyond a relatively narrow statute governing U.S. Department of Veterans Affairs (“VA”) set asides and require significant changes to long-standing principles established under the Small Business Act.  As result, the VA’s and the SBA’s interests may no longer be aligned as the agencies attempt to reconcile currently differing implementations of related set-aside programs.

Continue Reading SBA Considers Potential Consequences of Kingdomware Technologies

On November 6, 2015, the Department of Veterans Affairs (“VA”) issued a proposed rule (the “Proposed Rule”) to clarify the byzantine verification process for veteran-owned small businesses (“VOSB”) and veteran-owned service-disabled veteran-owned small businesses (“SDVOSB”)1 who want to participate in the VA’s Veterans First Contracting Program.  VA Veteran-Owned Small Business Verification Guidelines, Proposed Rule, 80 Fed. Reg. 68,795 (to be codified at 38 C.F.R. Part 74). The Proposed Rule revises a 2013 advanced notice of proposed rulemaking and considers 39 public comments received in response to the prior notice.  Comments on the latest proposed rule are due on or before January 5, 2016.

Under the Veterans First Contracting Program, the VA offers set-asides and sole source opportunities to certified VOSB and SDVOSB firms.  Unfortunately, the program has struggled to gain a foothold in the government procurement landscape because its VA-administered regulations are confusing and the set-aside opportunities are limited to VA procurements.  At the same time, the Government Accountability Office and the VA’s Office of the Inspector General have targeted the program for pervasive fraud, and stakeholders have criticized the verification program as unnecessarily rigorous when compared against other socio-economic programs administered by the Small Business Administration (“SBA”).

As a result, through its Proposed Rule, the VA “seeks to find an appropriate balance between preventing fraud . . . and providing a process that would make it easier for more VOSBs to become verified.”  The VA attempts to strike this balance by significantly amending the VOSB ownership regulations to make them easier to understand, and bringing many of the requirements in line with SBA interpretations of similar requirements under similar programs.

Continue Reading VA Proposes to Make VOSB Verification Easier Under the Veterans First Contracting Program

Those of us who write about the Affordable Care Act seldom have the chance to use the phrase “overwhelming bipartisan support.”  The Hire More Heroes Act of 2015 provides a welcome opportunity to do so.  The Act, designed to encourage small businesses to hire veterans, has received bipartisan and bicameral support in Congress.  If it becomes law – a prospect that looks increasingly likely – it will complement the administration’s recent push to encourage government contractors to employ more veterans.  Although the Hire More Heroes Act would offer valuable benefits to businesses, this post flags a few unpleasant surprises that could arise in its implementation.  
Continue Reading An Apple a Day (From the VA) Keeps the Tax Man Away