Legal Meets Practical

Since I started my legal practice nearly five years ago, I have been faithful in posting a blog on veteran issues every week. Lately, however, I have been a bit inconsistent, and since my followers have been wonderful at offering feedback and comments to the blog, I wanted to explain that I missed a week or two because my debut middle grade (for ages 8-12) novel is being released today. I have been busy with a blog tour, organizing school and library visits, and getting my next book into the hands of my literary agent. For more details on all that, visit my writing website here. Thank you for your patience in waiting for this next post!

And why the reference to monsters? That’s what the book is about (and why it makes sense that it’s a Halloween release):

Monsterville is Jumanji meets Goonies, a fast-paced adventure where board games come alive and winning your life depends on applying monster movie rules of survival. 13-year-old film-obsessed Lissa discovers a shape-shifting monster in her woods and decides to film the greatest horror movie of all time. . . until her little sister is kidnapped to the monster homeland of Down Below and she needs her star’s help to rescue her.

The literary rights to Monsterville are represented by Lauren Galit of the LKG Agency, and the film rights are represented by Pouya Shahbazian of New Leaf Literary (Divergent, The Selection).

Because I’ve missed a few weeks, there are some relevant cases I’d like to share with you. Here they are, in a nutshell and with any links to the cases themselves:

In URS Federal Services, the GAO held that the Navy did not err in assigning a “technically unacceptable” rating to a proposal after an individual identified as “key personnel” resigned. B-413034 et al. (July 25, 2016). The resignation was not the contractor’s fault, but the Navy acted reasonably in downgrading the proposal since technically it affected the quality of the services offered by the contractor.

The lesson from this protest is to protect yourself from this possibility of losing key personnel. Give them an incentive to stay and/or disincentive to leave in their employment agreement. This is keeping in mind that a court won’t make someone continue to work for an employer they want to leave. They can’t be forced to perform, but a strong employee contract can either entice them to stay (such as by giving them incentive payments for supporting that particular contract); or it can compel them to (such as by assigning a monetary penalty if they resign prior to the expiration of a certain period of time or milestone).

In Bryan Concrete & Excavation, Inc., the Civilian Board of Contract Appeals (CBCA) held that an SDVOSB set-aside contract was void and unenforceable because the prime contractor had entered into an illegal “pass-through” arrangement with a non-SDVOSB subcontractor. CBCA 2882 (August 26, 2016). Because the contract was obtained by misrepresenting the concern’s eligibility for the set-aside contract, it was invalid from its inception and the contractor had no recourse against the government when it was later terminated for default.

In Matter of Jamaica Bearings Co., the appellant appealed a Small Business Administration (SBA) area office determination that it was not an eligible SDVOSB for purposes of a set-aside. A disappointed offeror had lodged a status protest, and the awardee had failed to respond to the SBA’s request for information. Consequently, the SBA area office found the awardee ineligible. Here’s the twist: the protest itself was insufficient because it contained non-specific allegations. (See 13 CFR 125.125(b)). As such, the SBA Office of Hearings and Appeals ruled that the status protest should have been dismissed at the outset for lack of specificity, and reversed the SBA area office’s determination that the awardee was ineligible.

In this case, Jamaica Bearings Co. got lucky. Yes, the SBA OHA ruled in its favor in finding that the SBA area office erred in considering the protest; however, the SBA OHA was also very clear that Jamaica Bearings Co. had no business in introducing new evidence on appeal. If the protest had been sufficient, it had missed its window for responding and would have lost out on the award. In fact, this happened to another contractor not too long ago.

Cases often offer lessons, and make sure you stay informed to stay up to date on your rights, obligations, and recourses as it relates to federal contracts.

*Did you find this article interesting? If so, sign up for Sarah Schauerte’s legal blog on veteran business news at: https://legalmeetspractical.com.

A few months ago, the U.S. Supreme Court held that the VA is mandated to set aside certain contracts for veteran-owned small businesses (VOSBs) when “procuring goods and services pursuant to a contracting preference under [Title 38] or any other provision of law.” Known as the “Rule of Two,” this mandatory preference applies if the solicitation’s contracting officer has a reasonable expectation that two or more small business concerns owned and controlled by veterans will submit offers and that the award can be made at a fair and reasonable price that offers the best value to the U.S. (38 U.S.C. § 8127(d)).

Since this ruling, the VOSB community has waited with bated breath to see how the VA would implement this mandate. Not only that, but it has waited to see if the VA would try to find ways around it. According to my contacts in the veteran business community, there have been several solicitations where the VA has failed to set aside the opportunity for VOSBs, or has failed to conduct market research to see if two or more responsible VOSBs would make fair and reasonable offers. These VOSBs that have been affected, however, have been afraid to publicly challenge the VA via a bid protest due to fear of retaliation.

One VOSB, however, is boldly going where no one else will.

On August 25, PDS Consultants, Inc. (PDS), an SDVOSB headquartered in New Jersey, filed a complaint with the U.S. Court of Federal Claims (CoFC)(Case No. 16-1063C). PDS seeks review of the VA’s continued ordering of certain vision-related products from Winston-Salem Industries for the Blind (Winston-Salem) for certain Veterans Integrated Service Networks (VISNs), despite not first conducting the required Rule of Two analysis. PDS also seeks review of the recent VA Policy Memorandum that authorizes orders from Winston-Salem without first conducting a Rule of Two analysis. Further, it asks for injunctive relief ordering the VA to adhere to its guidelines and the direction from the CoFC in Angelica Textile Services, Inc. v. United States, 95 Fed. Cl. 208 (2010)(requiring that Veteran Benefits Act and related VA procedures be given priority over the Javits-Wagner-O’Day Act).

This is an important case for VOSBs across the board because it should confirm the VA’s obligation to follow the Rule of Two, as well as the preference for the Veterans First Act over the Javits-Wagner-O’Day Act. It may also provide some much-anticipated guidance on the VA’s requirement to conduct market research pursuant to the Rule of Two, as well as further elaborate on the policy memorandum the VA issued this summer to implement Kingdomware.

HOWEVER, just because there’s a lawsuit, that doesn’t mean the court will issue a substantive decision. At this point, the CoFC has issued a scheduling order indicating that a decision won’t come for several months. There is the chance that the VA will take corrective action in the interim. If this happens, the parties may settle and the case be dismissed – resulting in the CoFC not issuing the public smackdown (to use a legal term) of the VA that many veteran business owners want.

At any rate, this is the case the veteran business community has been waiting for since Kingdomware. Stay tuned. . .

A copy of the Complaint filed in the CoFC may be accessed here. Also, the VA’s policy memorandum implementing Kingdomware is here.

Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran issues at: https://legalmeetspractical.com.

PDS’s case before the CoFC continues the fight to ensure the VA puts VOSBs first in contracting preferences.

We know there’s a lot of veteran-related fraud out there – scams playing the “it’s for veterans!” card, folks who defraud the veterans disability compensation system, shell companies set up to take advantage veteran status on federal contracts, etc. etc. But this one might take the cake.

I warn you: if you are a veteran who cares about your blood pressure, you might not want to read further.

A few months ago, CNN outed Mr.Thomas Burch, Jr. for running National Vietnam Veterans Foundation (the “Foundation”), one of the worst-rated veteran charities in the country. The now-defunct organization was located in Washington, D.C., and was bashed by CNN for donating only $122,000 to veterans of its $8.6 million raised in 2014. That’s around two percent.

In that CNN report, the watchdog group Charity Navigator gave the Foundation zero out of four stars. According to its public tax returns, called 990s, the Foundation took in $29 million over a four-year period but nearly all of it went to telemarketers and fundraisers. In one year, the charity also paid a parking garage bill of nearly $8,000.

Maybe this went to keep Mr. Burch’s Rolls Royce safe. This car has been photographed multiple times during the media scrutiny – a beauty of a vintage vehicle with the customized license plate, “My Rolls.”

Yesterday, CNN announced that the organization has shut down. This was confirmed by an interview with its vice-president; also, the website has been removed from the Internet.

Even though it’s horrible to think of someone running an extremely profitable veterans organization that did not actually give back to veterans, for me, the kicker is how it wasn’t shut down sooner. Because – wait for it – Mr. Burch was/is also a VA attorney!

For years, Burch managed to hold concurrent employment as the highest officer in a non-profit organization for veterans, as well as a senior employee at the VA. (He is the leading Freedom of Information Act (FOIA) attorney for the VA Office of General Counsel. He is also the Deputy Director of Homeland Security and Operations at VA). In public statements, the VA claims it was not aware of Burch’s involvement with the Foundation, but did no one with the VA have access to the Internet? Surely any Google search, LinkedIn update, Facebook post, etc., would have clued anyone in.

Obviously, this implicates conflict of interest rules. By executive order of the President, an officer or employee who is appointed by the President to a full-time, non-career position in the executive branch (such as the VA) may not receive any outside earned income during that appointment. Other higher-level officials in the executive branch – that is, non-career officials who are compensated at the rate above a GS-15, are limited in their outside earned income opportunities by other provisions of the Ethics Reform Act of 1989.29. Such officials may not have outside income which exceeds 15% of the official salary earned by a level II on the Executive Schedule.

Regardless of the category Burch fits into, according to information published by CNN, he earned $65,000 in 2014 as the head of National Vietnam Veterans Foundation, while also earning $127,000 at the VA. This is well over the 15% cap provided by the Ethics Reform Act (applied to the lower-rate category). Other conflict of interest rules likely apply as well – those put in place to ensure that an individual is able to carry out the ethical and fiduciary duties of his tax-paid position.

An internal investigation, conducted by the agency’s Office of Inspector General (“OIG”), is still in progress; and for now, Mr. Burch remains on the VA’s payroll as a staff attorney.

CNN has noted that attempts to reach Burch for comment both by phone and email were unsuccessful. At one point, when a reporter attempted to speak with him at his home, he sped off in his Rolls Royce.

I’d like a Rolls Royce, too, but I’d prefer to earn it by other means.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veterans issues at: https://legalmeetspractical.com.