Legal Meets Practical

Valentine’s Day marked a sweet victory for Pennsylvania company Miles Construction, LLC (“Miles”), when the United States Court of Federal Claims (“CoFC”) reinstated Miles’ service-disabled veteran-owned small business (“SDVOSB”) verified status in the Department of Veterans’ Affairs (“VA’s”) Vendor Information Pages. (CoFC No. 12-597C, February 14, 2013).

In this case, Miles had been verified as an SDVOSB by the VA’s Center for Veterans Enterprise (“CVE”). Its status was protested when it was awarded a VA contract for storm sewer repairs. The second low bidder alleged that Miles and a non-SDVOSB had common ownership and control, thus rendering Miles ineligible for SDVOSB status (due to affiliation issues). Interestingly, while the OSDBU rejected the basis of the protest, it sustained it on other grounds: unlawful transfer restrictions. Miles’ corporate documents contained a right of first refusal transfer restriction.

In finding that the right of first refusal provision was permitted under the VA regulations governing the Veterans First Contracting Program, the CoFC noted that “it is presently executory, is a standard provision used in normal commercial dealings, and does not burden the veteran’s ownership interest until he or she chooses to sell some of his or her stake.”

While this is certainly a triumph for Miles in this instance, the end result is confusion: as the CoFC noted in its decision, the operative VA rule (38 CFR Part 74.3)  is materially different from the text in the operative Small Business Administration rule (13 CFR Part 125.9). This means that if this contract had not been awarded as a set-aside under the Veterans First Contracting Program, the protest may have been sustained due to the right of first refusal provision. Because of the differences in the regulations, Miles may be an eligible SDVOSB for VA procurements, but not for solicitations issued by other federal agencies.

As many veteran businesses are aware, the ultimate goal is for the CVE’s verification process to apply government-wide. As a recent Government Accountability Office report pointed out, the system is still undergoing growing pains. This decision illustrates one such growing pain: working to ensure that the regulations governing eligibility are uniform across all federal agencies.

For further reading, access the Miles decision here.  Also, if you found this article informative, please sign up for my weekly blog on veterans issues. Remember to click the link sent to your email to activate your subscription!

On February 12, 2013, Thomas Leney, the Executive Director for Small and Veteran Business Programs at the U.S. Department of Veterans Affairs, made a special appearance at the monthly VET-Force meeting held in Washington, D.C. For over an hour, veteran business owners and advocates had the opportunity to listen to Mr. Leney’s discussion of the VA’s VetBiz Vendor Information Pages (“VIP”) Verification Program (the “VA VetBiz Verification Program”), as well as ask questions. The following illustrates a few highlights of this discussion:

• Processing Times – According to Mr. Leney, the average processing time for an initial verification request is 57 days. The average processing time for a request for reconsideration is 147 days. These statistics are a bit different from, but in the same general timeframe, as those included in a table that was very recently posted on the VetBiz website (58 days and 131 days, respectively). This table also includes current statistics relating to the VetBiz process, including statistics on the percentage of successful verification applications and requests for reconsideration. Access the VetBiz table of “Average Verification Processing Time(s)” here.

• Verification Counseling Program – Along with reading the Verification Assistance Briefs and taking the Verification Self-Assessment Tool, the Center for Veterans Enterprises (CVE) highly recommends that veteran business owners take advantage of the Verification Counseling Program. As Mr. Leney noted, 85% of businesses that used the Verification Counseling Program were successful in achieving verification (compared with an average 59% success rate for applications processed during FY 2013).

• Alignment with Small Business Administration (SBA) Regulations – Mr. Leney stressed that the regulations for the VetBiz are aligned with the regulations for the service-disabled veteran-owned small business (SDVOSB) program set forth in the SBA regulations. However, as a VetForce member pointed out, if we assume that this is true, the unusually high denial rate for the VetBiz Program demonstrates that the issues preventing successful verification may exist in the evaluation phase.

• Transparency – Mr. Leney relayed that in the interest of government transparency, the CVE plans to publish its Standard Operating Procedure (SOP) of its VA VetBiz Verification Program on the VetBiz website.

• Government-Wide Verification Program – As of now, the VA VetBiz Verification Program applies only to VA contracts, meaning that a business need not be verified in VetBiz to compete for SDVOSB set-aside contracts issued by other federal agencies. As Mr. Leney noted, the intention is to move towards a Government-wide verification program. As illustrated in the recent GAO report on the VetBiz Program, however, issues with devising long-term solutions and other flaws in the still-developing Program prevent that from occurring any time soon. This GAO report is available here.

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Also, for further reading on the VA VetBiz Verification Program (including helpful resources and links), visit my frequently-updated VetBiz FAQs page here.

It used to be that when a veteran started the disability compensation claim process, he was forced to simply deal with the delay. Now, with the Department of Veterans Affairs’ (VA’s) new Fully Developed Claims (FDC) Program, a veteran has a genuine opportunity to truly expedite his claim.

The FDC Program is exactly what it sounds like – if a veteran can give the VA a fully developed application, including relevant medical evidence, he will be placed in a priority channel for review of his claim. In order to meet the criteria for an FDC claim, the veteran must do three things: 1) submit his claim on the VA Form 21-256EZ; 2) simultaneously submit with his claim any relevant private medical treatment records and/or identify the medical records that may be available at federal facilities; and 3) if applicable, report for any medical examinations scheduled by the VA.

Sounds great, doesn’t it? After all, no one likes standing in line, especially if it’s a very long one! But before you take advantage of the FDC Program, be careful:

• First, make sure that you have all information necessary to render your claim appropriate for the FDC Program. If the VA finds that other records are necessary to decide your claim, it will pull your claim from the FDC Program queue and put it in the Standard Claims Process (ie, the very long line).

• Second, obtain all information you require from private care providers. In the Standard Claims Process, the VA will make efforts to obtain records from private providers. This is not done in the FDC Program. This does not mean that the VA will not obtain and/or consider them; it simply means that it will  pluck your claim from the FDC queue so the records may be obtained.

• Third, make sure that you have thought of everything you would like to include. One advantage of having to wait so long for an initial decision in the Standard Claims Process is that if in the interim, a veteran thinks of more evidence he would like to add, he has the opportunity to do so within one year of the VA’s receipt of the claim. In contrast, while you may submit additional evidence for a claim in the FDC Program queue, the penalty is that your claim will be removed from the FDC Program queue and put in the Standard Claims Process.

If you know how to take advantage of it, the FDC Program can be your ticket to having your disability compensation claim resolved as quickly as possible by the VA. However, before you pursue this as an option, do your research. Make sure you truly understand how the Program works and have gathered all of the possibly relevant information that the VA will need to decide your claim. If not, the VA will put you right back in the place you were looking to avoid…the very long line.

For more information on the FDC Program, visit the VA’s website at: http://benefits.va.gov/transformation/fastclaims/. A copy of the FDC Program application is available at: http://www.vba.va.gov/pubs/forms/VBA-21-526EZ-ARE.pdf.

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