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Suicide Gunlocks for Veterans Are Not “Printing,” Says Federal Appeals Court

For the first time in judicial history, the U.S. Federal Circuit Court (the “Court”) examined the scope of the Government Publishing Office’s (“GPO”) authority. And the GPO may not like the attention it received–the Court rejected the Government’s expansive interpretation of the “printing mandate” to require executive agencies to procure printing supplies and services through the GPO. (As relevant here, this would include VA opportunities subject to a statutory veteran preference). The Court also indicated, more generally, that applying the “printing mandate” violates the constitutional separation of powers. 

This bid protest decision challenging the VA’s decision to route a procurement for imprinted gunlocks and wallet cards for veterans originated at the Government Accountability Office (“GAO”). The VA had invoked the “printing mandate” of 44 U.S.C. 501 in arguing it had no choice but to hand over the procurement. The mandate states: “[a]ll printing, binding, and blank-book work for Congress, the Executive Office, the Judiciary, other than the Supreme Court of the United States, and every executive department, independent office and establishment of the Government, shall be done at the Government Publishing Office [“GPO”][.]” Because the supplies sought contained elements of printing, the VA argued, the printing mandate applied to require the acquisition to be conducted via the GPO. Then, because it became a GPO procurement, the requirements of the Veterans Benefits Act (“VBA”) at 38 U.S.C. 8127-8128 to set aside the opportunity for veteran firms did not apply. (These only apply to the VA). Veterans4You challenged this as violating the VBA and the Supreme Court Kingdomware mandate that when the VA acquires supplies or services for its use, it must apply the “Rule of Two” to determine if the opportunity should be set aside for veterans.

In a sustained decision, the GAO found that the VA had violated the VBA by routing the opportunity to the GPO with no consideration to its requirements. Because the GAO found in Veterans4You’s favor on the Kingdomware issue, it did not examine the interplay with the printing mandate. Immediately thereafter, the VA turned around to issue another seemingly-identical procurement via the GPO, which Veterans4You again protested, this time to the U.S. Court of Federal Claims (“CoFC”)(19-931c).

Ruling from the bench, Judge Lydia K. Griggsby found against Veterans4You. First, she held that the printing mandate had been properly invoked, as the printing mandate is “broad” and the sources sought fell within the definition of “printing.” Second, although conducting the acquisition via the GPO would result in the Kingdomware mandate not being followed at all (the GPO has no set aside procedures or means to providing veteran credit or preference), she held that the VA had met the requirements of the Veterans Benefits Act. Under one particular section that applies to contracts with other agencies (38 U.S.C. 8127(i)), the VA must request the agency to comply to “the maximum extent feasible.” In the form submitted to the GPO requesting it to conduct the procurement, the VA did include this language.

On appeal to the Court, Veterans4You raised the constitutional issue with the “printing mandate.” It argued this was exacerbated by the “broad-sweeping” ruling of the CoFC, which would enable virtually any supply containing an element of printing to be labeled as “printing” and routed through the GPO. Veterans4You and Kingdomware (which submitted an amicus brief) urged that the Court’s interpretation of the printing mandate must be guided by the doctrine of constitutional avoidance because “invocation of the printing mandate . . . violates constitutional provisions of separation of powers.”

The Court exercised its discretion in hearing the constitutional issue, noting that “executive branch actors have long maintained the position that the printing mandate in 44 U.S.C. § 501 violates the separation of powers between the legislative and executive branches mandated by the Constitution.” After describing this history, the Court found that acquiescence by the executive agency had not occurred, while acknowledging that the FAR Council had been aware of positions of unconstitutionality regarding the printing mandate yet had not revised FAR 8.8 accordingly (FAR 8.8 encompasses the printing mandate).

The Court concluded that the canon of constitutional avoidance counseled it to construe the printing mandate narrowly and to avoid its application to the procurement at issue. In so doing, the Court noted that both Veterans4You and Kingdomware (which submitted a brief as amicus) argued that a narrower reading of the term “printing,” limited to a particular category of printed matter, was both appropriate and supported by the historical context in which the term has been used in the statute. Here, the gunlocks (including the components that involve some element of “printing” in a broad sense, such as the wallet card and the imprinted information on the body of the padlocks) are not “written or graphic published material,” and therefore, the printing mandate was not invoked to require the VA to conduct the acquisition via the GPO.

The Court then provided a detailed analysis based on dictionary definitions, statutory analysis, and the historical functions and activities of the GPO in order to narrowly define “printing” as “written or graphic published material.” It also noted that “in view of our determination that the canon of constitutional avoidance compels a nar-row interpretation of the printing mandate, we need not conclude that our construction is the only possible construction. These dictionary definitions support our view that our construction of the statutory term “printing” is reasonable.”

Accordingly, the Court reversed and remanded the CoFC decision, holding that the VA had improperly concluded that the printing mandate was triggered. Based on the administrative record, the Court noted that it “underst[oo]d VA’s decision to route this solicitation through the GPO to have been premised on an understanding on the part of VA, confirmed by GPO, that VA was obligated by the printing mandate to route this solicitation through GPO.” Because the Court reversed the CoFC’s determination that the goods sought under the solicitation fell within the printing mandate, it did not reach the question of whether VA was in compliance with its obligations under § 8127(i). Nor did it analyze any constraints imposed by the VBA if the VA had exercised discretion in procuring through the GPO (versus arguing that the mandate applied).

In this case, what the court didn’t say is almost as interesting as what it did. The Court clearly found issue with a broad interpretation of the “printing mandate,” adopting a more targeted definition in its holding that this particular procurement didn’t fall within it. Executive agencies aren’t required to use the GPO unless the solicitation calls for “written or graphic published materials.” At the same time, the Court didn’t analyze how the constitutional separation of powers issue would be impacted if an executive agency chose to procure a “non-printing” procurement via the GPO because it had some elements of printing. The judges’ questioning of the Government during the oral argument was skeptical that the encroached agency consenting to the violation would fix the separation of powers issue. Also, the Government’s own prior questioning of the printing mandate’s constitutionality hinged not just on the executive agencies being required to hand over the printing work, but that a legislative agency was actually performing it. Regardless of whether the hand-off is consented to or not, the effect is the same with respect to a legislative branch agency conducting a procurement for an executive branch agency.

The Court also didn’t touch on Kingdomware and the limits it imposes on the VA’s ability to route procurements through other agencies. Had the VA said it was exercising its discretion in procuring the gunlocks via the GPO, would it have been permitted to do so considering the impact would be that the GPO has no means to complying with the VBA? That seems contrary to the intent of Congress.

This case may need a sequel. If another “non-printing” procurement comes along where an executive agency chooses to route through the GPO due to minor printing components, a constitutional challenge to that decision may provide further scope and clarification to this decision.

Does this look like “printing” to you?

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**Note – Sarah Reida represented Veterans4You at all stages of this issue/appeal.

Veterans: The VA Must Put YOU First. Hold Them To It.

It seems like every email nowadays refers to “hoping all is well in these uncertain/difficult/strange times.” Small businesses–particularly restaurants–have been devastated by shutdowns. Teleworking is now the norm, not the exception (and we’ve realized most folks are just as productive). Whole companies are going belly-up, with the workforce poured into an already-tight job market. In general, times are tough, and on this day–Veterans Day, where we honor our heroes and acknowledge their sacrifices–I want to remind those veterans competing in the federal marketplace that the VA is required to put you first. When the VA fails to do that, strength in numbers holds them to it.

I’m referring specifically to the Kingdomware mandate, which was born when a Maryland-based small business prevailed at the U.S. Supreme Court in arguing that the Veterans Benefits Act at 38 U.S.C. § 8127 et. seq. (“VBA”) mandates the VA to set aside contracts for veteran-owned small businesses (“VOSB”) when certain requirements are met. These are when a contracting officer has a reasonable expectation that two or more VOSBs will offer and an award can be made at a fair and reasonable price that offers the best value to the government.

This is not a hand-out. This is consistent with the VBA’s purpose of assisting veterans in transitioning to civilian life by requiring the VA–the agency bound to protect them–to “maximize opportunities” for VOSBs, and it only applies when the result will be a contract that is of the “best value” to the VA. The VA isn’t required to award to veterans when the result is overpaying for a shoddier product or service; however, the law does require the VA to do more work in its award process by evaluating whether the opportunity should be set aside for veterans.

Since Kingdomware, which was a major victory for veterans and flooded the VA’s Center for Verification (“CVE”) with VOSB applications for the “verification” required to participate in VA set-asides, the VA has consistently been challenged on its meeting of the mandate, resulting in a body of case law that has further developed Kingdomware. One such development unfortunately carved out an exception to the veteran preference via legislation effective as of just this summer. This was prompted by the ruling in PDS Consultants, where the plaintiff prevailed at both the U.S. Court of Federal Claims and the Federal Circuit Court of Appeals. The courts affirmed that for the VA, the preference for veteran-owned firms is supreme. This includes any preference for firms covered by the AbilityOne Program (via the Javits-Wagner- O’Day Act, which applies to all agencies versus the VBA, which is unique to the VA. This was a “blanket” determination based on the language of both statutes.

In response to the Federal Circuit’s holding in PDS Consultants, Congress passed the Veterans Affairs Contracting Preference Consistency Act of 2020, which amends the VBA. The Consistency Act prioritizes blind and severely disabled entities by requiring the VA to use AbilityOne non-profit providers, rather than prioritizing VOSBs, when procuring any products or services added to the AbilityOne list prior to December 22, 2006.

In passing the bill, the Senate added an exception (to the exception) to protect some requirements that the VA had already transitioned to VOSBs. If the VA awarded a contract for a covered product or service to a VOSB pursuant to a Rule of Two determination between December 22, 2006 and August 7, 2020, the VA could not transition these requirements back to the AbilityOne program until a new Rule of Two analysis was conducted and the VA determined in writing that there was no reasonable expectation that two or more VOSBs could compete. 

Not even two months after this new law was passed, the VA violated it. Per a very recent ruling by the U.S. Court of Federal Claims (“CoFC”), the VA misinterpreted its scope in transferring a prescription glasses deal to nonprofits that employ the blind. Superior Optical Labs, Inc. v. U.S., No 21-1211C (Oct 21, 2020).  The CoFC granted the protest and the relief requested of a permanent injunction, holding that the VA had erred in failing to hold veterans first as was required.

The big takeaway here is this: since Kingdomware, the veteran preference continues to be chipped away, and we must do what we can to protect it. This can be especially hard due to the time and expense (not to mention quick acting) required to challenge a Kingdomware problem – most VOSBs simply cannot afford it, and one must wonder if the VA is banking on that during certain acquisitions.

Particularly within the veteran community, unity and action, are vital components necessary to ensure that the VA does its job in setting aside opportunities for veterans:

Unity – The federal marketplace is competitive, and it’s even harder when an opportunity isn’t set aside. If the VA is in pre-solicitation stages and it looks like they might not set aside for VOSBs, make sure you’re not the only one who emails the contracting officer to express interest. Remember: it’s the rule of two. Also, don’t be shy about contacting others for help in understanding what the VA is required to do and whether they’re falling short. Once bids are in, any argument you could have made is late because you must protest Kingdomware problems before offers are due.

Action – Organizations such as the NVSBC are wonderful at having members band together to prompt action. Considering joining an organization that suits you, and getting involved. Also, it’s not “bad business” to protest. Many folks fear retaliation, but if a protest is done in a respectful and professional manner, contracting officials in general understand it’s part of business. Last, respond to pre-solicitation notices. If the VA issues a sources sought notice and no VOSB responds, that can make challenging the decision not to set aside the work an uphill battle.

You had each other’s backs in battle and in the uniform, and now (more than ever) is the time to stand together to hold the VA to its mandate. The Kingdomware victory was a huge one, and you are entitled to enforce it.

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Families First Coronavirus Response Act May Ail Businesses

Yesterday marked the effective date of the Families First Coronavirus Response Act (“FFCRA,” or “Act”), which requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. Administered and enforced by the Department of Labor (“DOL”), these provisions will apply through December 31, 2020. Important for small businesses in particular to know, the FFCRA applies new sick leave and other requirements to employers previously exempted due to size.

Now, even small businesses must provide emergency sick leave for those affected by coronavirus – up to eighty hours of sick leave for full-time employees through the end of the year for a “qualifying need.” (Part-time employees are eligible as well, for their typical number of hours during a two-week period). This includes employees who have been found to have coronavirus (or have been advised by a physician that they have the virus or are an exposure risk), employees who are caring for a family member who has been infected and/or may threaten exposure to others, or caring for a child whose school or daycare is closed due to coronavirus precautions.

That third category is huge. This covers a significant percentage of the adult workforce. (In fact, I am writing this post during nap time, as I am now housebound with a one-year-old and three-year-old. The three-year-old in particular does not appreciate this new development).

If sick leave pay is invoked, employers must pay employees their normal wages, with one important note: sick-leave pay is capped at $511 per day per employee for the employee’s own health-related absence, and $200 per day when it comes to caring for a family member or child.

Another important element of the Act involves the expansion of the Family and Medical Leave Act (“FMLA”) for employees who need to take longer term leave through the end of the year because of closed schools or daycare. Any employer, even those with fewer than the current FMLA threshold of 50 employees, is subject. The Secretary of Labor can exempt employers with fewer than 50 employees if complying with the law would threaten the viability of the business; however, it is unclear how this exemption would be granted or the standards applied by the DOL.  Employers with fewer than 25 employees are exempt from reinstating an employee if the employee’s position no longer exists following the leave due to operational changes caused by the public health emergency. While the first 10 days of leave are unpaid (though the employee can choose other leave to invoke), the following 10 weeks must be paid at 2/3 of the employee’s rate of pay, with family leave pay capped at $200 per day.

Employers who provide the above leave will be eligible to receive a 100% payroll tax credit for these costs. Employers may deduct up to $200 per day for employees who are taking care of others.  Because this comes from the social security contribution, any amounts in excess of the social security liability will be paid for directly by the Treasury.  The tax credit for family leave is up to $200 per day, not to exceed $10,000.  For the self-employed, these credits will be applied against the self-employment tax.

Still, the short-term effects of these new requirements will hit small businesses, particularly for those performing stalled federal government contracts. Tax credit is great, but those benefits won’t apply for some time. Meanwhile, businesses are bleeding now.

As a business that may be affected by these new developments, it’s important you educate yourself on the FFCRA and what you need to do. While there are numerous resources available on the Internet, and you’ve likely received an email or two on this, you might want to start with the DOL’s press release, which does a good job spelling out the requirements in plain language and also provides facts sheets for both employees and employers. (The DOL press release may be accessed here). Also, if you haven’t already, hold a company meeting on coronavirus issues and applicable rules – do so. By law, your employees must be informed of their rights under the FFCPA, but with all of the information and panic flying around, that fact very well could be under your radar.

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How Some Businesses May Be Smaller Come January

I’m not referring to the implementation of Weight Watchers regimes post-holiday, but the new Final Rule that will effective as of January 6, 2020. From now on, business size under NAICS codes will be calculated by looking at the last five completed years, not three (though businesses may elect to use the latter calculation until January 2022, during a “phase-in” period).

As some of you may know, a rule change has been in the works for a while now. Under this new rule, until January 2022, the SBA will give firms the OPTION to either calculate their size under a given NAICS code by utilizing a five-year, or a three-year, calculation (meaning that the SBA will either look at annual receipts from the last five completed fiscal years, or three years, depending on the firm’s election). After January 2022, a straight five-year rule applies across the board, meaning that a firm will no longer be able to make this election.

During the rule making and comment stage, the SBA noted that the proposed rule would benefit small businesses that have experienced significant growth over the last three years. The idea is that by adding in the lower-revenue years, the average of the five years would still allow a firm to qualify as “small” under its NAICS codes. By allowing a firm to choose between a calculation based on five versus three years, this allows firms a chance to prepare for (and possibly avoid) qualifying as “large,” and in the interim, potentially remain small. There is, of course, the opposite end of the stick – some firms were happy to shed earlier, higher-revenue years that are now back in receipts calculation and affecting a size standard).

You know what this means: do your homework! Considering this goes into effect as of January 6, 2020, get with your CPA or comptroller to figure out which calculation is more advantageous for your business. Also, for those businesses that self-certify as “small” or are VetBiz-verified under specific NAICS codes, take a look at your list and see if any changes are warranted. In particular, the VA’s Center for Verification and Evaluation is going to experience a huge backlog in adding and deleting NAICS codes based on changes due to size, so get on the bandwagon early by submitting a Change Request.

For more information (and detailed commentary, history, and reasoning for these changes), access the Final Rule here. Also, for those traveling to the VA’s National Veterans Small Business Engagement, safe travels! (Also, good luck navigating the hotel – it’s a beautiful labyrinth!)

Bill Puts Vets Second in Government Contracting

As most veteran business owners competing in federal space know, the Kingdomware decision holding the VA to the Rule of Two (having to set aside contracts for vet-owned businesses when certain conditions are met) was supposed to usher in a new, prosperous era for veteran-owned businesses.

While this decision has certainly effected a positive change, the reality is that for many veterans, their Kingdomware experience isn’t actually securing a set-aside contract, but fighting with the VA in one way or another about a decision not to set aside an opportunity.

Now, a bill introduced in Congress threatens to obliterate the contracting preference for veterans, as well as overturn a huge post-Kingdomware victory (PDS Consultants), which held that the VA’s obligation to veterans trumps its obligations to the AbilityOne Program. In that case, the U.S. Court of Federal Claims held that because the Veterans Benefits Act takes statutory precedence over the Javits-Wagner O’Day Act, the AbilityOne Program is a mandatory source for the VA only after the VA Rule of Two analysis is performed and the VA does not find two VOSBs that are capable of providing the product or service. (This decision was affirmed on appeal).

On October 29, 2019, Mark Takano, a Representative for California’s 41st Congressional District, introduced a bill that has been characterized by supporters as a “legislative fix for AbilityOne contracts.” Cited as the “Department of Veterans Affairs Contracting Preference Consistency Act,” the bill effectively provides an exception to the “veterans first” mandate when it comes to products/services secured under the AbilityOne Program which were first on the procurement list on or before December 22, 2006 or replace such a product or service. HR 4920.

Obviously, the Congressional representatives supporting this bill are motivated by political reasons. This is illustrated particularly by the “fluff” quote from Representative Virginia Foxx (R-NC) voicing her support of the AbilityOne Program. Remember what happened in the Trump/Clinton election? What matters is who comes out to vote, who voices their opinion. YOU HAVE NO VOICE IF YOU DO NOT USE IT!

As such, if you are a veteran business owner and want to impede the passage of this bill (which could very well affect your ability to secure a contract), contact your Congressman (as for the Veterans Affairs staffer). Urge them to oppose the bill, and show that veteran members of the voting public are watching. Don’t just read this blog and lurk on the Internet to see what happens. Spend the ten minutes you’d idly spend searching for Christmas presents online and make a difference!

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GAO to VA: There’s No Loophole to Avoid Your Obligation to Vets

Yesterday, the Government Accountability Office (GAO) confirmed that the U.S. Department of Veterans’ Affairs (VA) cannot circumvent its statutory mandate to set aside contract work for veteran-owned small businesses by sneaking the opportunity through the Government Publishing Office (GPO). Veterans4You, Inc., B-417340.1, B-417340.2.

That’s the “legal” way of putting what just happened. The narrative way of explaining it is far more interesting, and as the attorney who handled this case, this was one of the most colorful and frustrating issues I’ve handled. As such, I’m taking to my blog, while noting that my client, Veterans4You, Inc. gave me complete liberty in presenting this tale.

First off, does a suicide gunlock for veterans sound like “printing” to you? No? What if the gunlock also includes an imprint of the Veterans Crisis Line Logo? Still no? Okay, just checking.

When Mr. Tim Farrell, the owner of Veterans4You, contacted me in mid-February and explained his issue with a solicitation issued by the GPO, I had trouble following the details because they simply didn’t make sense. The VA was procuring suicide gunlocks for veterans, yet running the contract through the GPO because it claimed that slapping a logo on the gunlocks qualified the procurement as involving “printing.” (Under a “printing mandate,” executive agencies have to obtain things like handbooks, pamphlets and flyers through the GPO. As such, the VA/GPO was/were arguing that the VA had to use the GPO to meet this need. Then, because it was no longer a VA solicitation, Kingdomware didn’t apply).

The opportunity was issued as an Invitation for Bids with a very quick turnaround (approximately a week), and the bids were due the next day at 10:00 AM. I told Tim that if he wanted to protest, we had to do it now, or otherwise we’d lose the opportunity. (If you’re protesting the terms of a solicitation, violation of a federal regulation, or other irregularities in conducting a procurement, you have to do it before bids are due). He said “sure,” noting this wasn’t the first time the VA had used the GPO for questionable “printing” requirements.

One basis of our protest was violation of the Kingdomware mandate, which is that, when a contracting officer has a reasonable expectation that two or more responsible veteran-owned small businesses (or service-disabled veteran-owned) will make an offer, and that the contract can be awarded at a fair and reasonable price that offers the best value to the government, the agency has to set aside the work for these veteran companies. 38 U.S.C. 8127(d). This is also known as the Rule of Two under the Veterans Benefits Act (VBA); this mandate was solidified at the U.S. Supreme Court in 2016 after a long and protracted battle in lower courts and forums.

Here, though, I wondered how the GAO (the forum where we were protesting) would address this argument, considering that this was not a “VA” procurement. It had been issued by the GPO. There are plenty of cases out there that say that Kingdomware and this “Rule of Two” does not apply to a non-VA procurement.

However, this effectively was a VA procurement. The VA was acquiring the supplies. And they were suicide gunlocks for veterans, work which the VA incomprehensibly wanted to take away from veteran business owners.

After our protest was filed, I thought the VA (through the GPO) would take corrective action. Again, suicide gunlocks for veterans.

It didn’t. We went through several rounds of briefing, during which I argued that even though Kingdowmare applies only to VA procurements, this was in fact a VA procurement and the VA shouldn’t have run the work through the GPO in the first place because a suicide gunlock that happens to have a logo is a far cry from “printing.” (And what next? If the VA is allowed to call a gunlock “printing” just because it bears a logo, imagine what else it can squeeze through the GPO).

Yesterday, or June 3, the GAO confirmed that the VA cannot use other agencies to circumvent its mandate to set aside work for veteran-owned small businesses. The decision, which addressed only the Kingdomware issue, found that even if the VA is using another agency to acquire services or supplies, it must adhere to the Rule of Two (which will trump other statutes or provisions). Accordingly, even if the printing mandate did apply and this was a GPO procurement, Kingdomware still applied.

Also, under 38 U.S.C. 8127(i) (another part of the VBA), if the VA enters into an agreement to obtain services via another governmental entity, it is required to include “a requirement that the entity will comply to the maximum extent feasible, with the [Rule of Two] to the maximum extent possible in acquiring such goods or services].” There was no evidence in the record that the VA did anything of the sort.

The decision did not address whether this requirement should have even gone through the GPO as “printing work,” noting that because Veterans4You won on the Kingdomware issue, this analysis was not necessary. Because the GPO is subject (or not subject) to certain requirements, this therefore leaves the door open for the VA to continue to procure items dubiously labeled as “printwork” through the GPO for reasons other than circumventing Kingdomware.

As a veteran attorney and advocate, this case baffled me. The VA not only has a statutory duty to award to veteran-owned businesses, but this is the Department of Veterans Affairs. It should want to provide work to capable veteran business owners, and especially given the procurement at issue, it makes no sense that it took such strenuous efforts to avoid following its mandate. (And it didn’t even have to do it! It just had to do the work to see if the Rule of Two applied! If it couldn’t make the award at a fair and reasonable price, it wouldn’t have to set the contract aside for veterans). Every day, I expected a notice that the VA would take corrective action and comply with Kingdomware, and it never came.

And then, the decision did. So now, it is publicly affirmed that the VA cannot use the GPO (or another agency) to avoid the Rule of Two by taking a procurement out of its own hands. Another veteran victory in the Kingdomware war.

Access the full decision HERE.

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Government Trash to Build Veteran Futures

Earlier this month, the U.S. Senate unanimously passed bipartisan legislation to help expand economic opportunity for veteran entrepreneurs. The Veterans Small Business Enhancement Act, which is now on its way to the House of Representatives, would allow veteran small business owners to acquire equipment and property that the federal government no longer has a use for by adding veterans to the list of eligible recipients for federal surplus property, which already includes women and minority small business owners as well as veterans service organizations.

“When our Veterans return home from their service, they deserve our full support as they transition back into civilian life, and that includes supporting their efforts to build and manage a small business,” said Senator Tammy Duckworth (D-IL), who co-sponsored the bill. “Our nation should be doing much more to help our Veterans and I’m pleased the committee passed our bipartisan bill to help them expand their business operations, reduce costs, and create jobs across Illinois and around the country. I’ll be working with Senators Kennedy and Durbin, as well as other members on both sides of the aisle, to send this legislation to the President’s desk.”

The General Services Administration has overseen distribution of federal surplus property for 15 years in partnership with the Small Business Administration and State Agencies for Surplus Property (SASP). When there is no federal need for excess property, SASPs disburse the property to eligible recipients who otherwise may have been unable to acquire it. Not surprisingly, this legislation is supported by the Veterans of Foreign Wars, the National Association of State Agencies for Surplus Property  and the American Legion.

This one seems like a win-win. The government should want to help veteran-owned small businesses to the greatest extent practicable, and the property that is the subject of the bill is surplus. Waste not, want not.

Track the progress of the bill here. (When/if it passes, I will pass on that information as well).

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Gray Bricks on Veterans Day

Most people choose their jobs for a reason. Some may fall into an opportunity (or default into a position), but in general, there’s some motivation to why someone has a chosen field. (And I certainly hope so, because if not, where’s the passion?). For me, mine is in large part my dad, and on Veterans Day I thought it appropriate to tell the story.

My father is a veteran of the U.S. Army. He was drafted in the Vietnam era, and served 18 months in Bad Kissingen, Germany, where he lugged the mail bag around the base camp, destroying his knees (further). It’s a part of his life in which he takes a lot of pride. (It’s also the part of his life that gave me my first experience in veteran disability claims, as the first one I handled was my father’s).

When Dad came back from Germany, he dabbled in real estate development (owning and operating two apartment buildings he took over from my grandfather) before building a convenience store from the ground up. I still remember going with him to pick out the color of bricks for the exterior, how proud he was. Over gray bricks.

Without getting too personal, when Dad owned his store, certain issues alerted me (even as a kid) to how important it is to have professionals help you who know what they’re doing. Dad didn’t have that on the law side, and it was a problem.

He didn’t know it would be a problem. He figured a lawyer was a lawyer, and that was it. And that’s not true. We have different areas of speciality, and if you don’t know how to do something, you shouldn’t do it.

After I graduated law school and started working in the Washington, D.C. area, I found myself thinking about Dad, and how I wanted to help small businesses owned by veterans like him. How important it was to be able to do that well.

Now, some time later, I’m proud that I exclusively work with small businesses, almost all of them owned by veterans. I love watching their businesses grow, and I love knowing that I’m a part of it. On this Veterans Day, I’m appreciative that Legal Meets Practical lets me do that.

I remember the gray bricks. They built more than a convenience store in Illinois.

 

Big Ticket News Items for Veteran-Owned Businesses

For anyone following this blog, you know there hasn’t been a post in a while, and I apologize for that. Our family welcomed its fourth member this September, and, silly me, I thought I could keep the blog going with two kids under two in addition to a busy law practice. But I’m back, and expect to see weekly updates as usual!

Here are two big ticket items I flagged in my absence. Both of these may affect you as a veteran small business owner, especially if you hold a schedule contract with the VA:

Are You Still An “SDVOSB?”

If you are a service-disabled veteran-owned small business (“SDVOSB”) competing in the federal marketplace, you have self-certified in Sam.gov as an SDVOSB, and you may have also undergone the VA’s official certification (“verification”) process to be included in its VetBiz registry. (The former certification renders you eligible for SDVOSB set-aside work for all agencies but the VA, and the latter certification renders you eligible for SDVOSB set-aside work for the VA). For years, the VA and the SBA have been collaborating on establishing a uniform set of rules applicable to both programs, and this finally went into effect as of October 1. Also, the VA has implemented regulations amending its process for verifying firms, providing for appellate review of its verification decisions, and adopting the SBA’s new rules on eligibility.

Here’s the rub for firms already taking advantage of SDVOSB status, particularly those in the VetBiz registry: the rules have changed. It is possible for a firm to be verified, but for a rule change to put that verification status in jeopardy (i.e., new eligibility specifications may require tweaks to the business in order to protect SDVOSB status). It is also possible that these rule changes positively affect SDVOSBs, such as by allowing flexibilities that did not exist before. (For instance, the rule changes allow for “first right of refusal” in transfer provisions across the board, when this was previously only permitted by the VA’s regulations). These changes can be taken advantage of by amending corporate documents, if one so desires.

Take a look at these eligibility changes. Do they affect you? 

Huge Win for VOSBs is Also Huge Defeat

I have covered the Kingdomware decision and its implications in at least four blogs, so I’m not going to beat a dead horse by going over it yet again. In short, in 2016 the Supreme Court affirmed that the VA must set aside FSS contracts for VOSBs/SDVOSBs when certain conditions are met. Recently, however, a federal judge criticized the Kingdomware mandate, hinting that Congress can (and should) correct the law due to the strain it places on the VA.

In Electa-Med Corp. v. U.S., COFC No. 18-927C (2018), a contractor protested the VA’s choice to outsource the selection of certain medical supplies to prime vendors participating in the Medical-Surgical Prime Vendor Next Generation (“MSPV”), requesting an injunction to stop the VA from doing so. In response, the VA cited difficulty in finding items necessary to support its healthcare network while also complying with Kingdomware.

In his opinion, Judge Bruggink of the CoFC ruled that under the law, the veteran plaintiffs were right on the merits. Not only had the VA violated the Kingdomware mandate, but also the Competition in Contracting Act (due to its failure to follow required procedures in issuing a Class Justification and Approval). However, Judge Bruggink declined to enter an injunction to prohibit the VA from its chosen practice, citing the public interest in ensuring high quality healthcare to veterans. He also stated:

The bevy of protests filed in this court and at the GAO since the Supreme Court’s decision in Kingdomware are evidence enough that these requirements are strict and difficult to follow in the mean and no doubt doubly so when the law requires that they be applied without fail or exception.  And yet the law remains. Only Congress has the kill switch.

This case is a huge blow because although the veteran plaintiffs won, they lost in a big way: even though Kingdomware was not followed, no corrective action was mandated because the court did not want to stand in the way of the VA’s ability to provide quality healthcare to veterans. While obviously there is a strong public interest in this concern, the issue this presents is that in the future, the VA may violate Kingdomware, and by the time the case/protest is decided, the court or GAO may decline to intervene due to similar public interest reasons. In other words, the protestor will win on the merits, but get nothing from it.

Since the Kindomware ruling in 2016, the VA has cited difficulty in complying with its mandate: having to resolicit contracts for failure to find two responsible SDVOSB offerors, the strain of performing market research to determine who will bid, and issues in implementing processes to comply (such as tiered evaluation). Meanwhile, the VOSB community continues to fight to hold the VA to the law.

After a Supreme Court victory, you would think the VOSB community would have the chance to rest. Who knew the battle was just beginning?

That’s it for now! See you next week!

*Did you find this article informative? If so, sign up for Sarah Schauerte’s weekly blog for veteran business owners at: https://legalmeetspractical.com. Remember to click the link sent to your email to activate your subscription!

Class Action Option Empowers Vets Against VA

A recent federal court ruling opens up the possibility for veterans to bring class action lawsuits against the U.S. Department of Veterans’ Affairs. This means that, when certain conditions are met, veterans need not go it alone when contesting the denial (or handling) of their disability benefits claims.

“This is a watershed decision, and its importance should not be diminished merely because the court declined to certify this proposed class,” Chief Judge Robert Davis wrote in the opinion. “On the contrary, the court’s decision will shape our jurisprudence for years to come and, I hope, bring about positive change for our nation’s veterans.”

In Monk, Jr., Et. Al., v. Robert L. Wilkie, the Court of Appeals for Veterans Claims (CAVC) reviewed a motion for class certification made on behalf of veterans with medical and financial hardship. (No. 15-1280). The petition alleged that the VA’s delay in adjudicating disability compensation benefits constituted a violation of the right to due process under the Fifth Amendment, and sought an order from the CAVC directing the VA to decide appeals within one year after a Notice of Disagreement is filed.

In order to certify the class under the applicable Federal Rule of Civil Procedure (Rule 23), the court needed to find that four requirements were met:

  • Commonality – That there were questions of law or fact common to the class.
  • Adequacy – That the representative parties would fairly and adequately protect the interests of the class.
  • Numerosity – That the class was so numerous that joinder of all members was impracticable.
  • Typicality – That the claims or defenses of the representative parties were typical of the claims or defenses of the class.

(Note that these four requirements spell out “CAN’T.” If each isn’t met, you can’t certify).

In this case, the CAVC rejected the petitioners’ argument that commonality was satisfied because all the class members have suffered the same injury – delay – due to the VA’s broken appeals system. The CAVC examined whether the delay in all the appeals was “unreasonable,” finding that certain factors stood in the way of finding such unreasonableness across the board (for example, some veterans experienced delays due to the VA’s duty to provide hearings, which slows the process). There was not a specific practice or policy resulting in delay set forth by the petitioners, which prevented them from meeting the commonality requirement. Accordingly, the CAVC denied the motion for certification (and did not proceed to address the other three requirements).

This case, while disappointing for the petitioners, is extremely important for veteran claimants going forward. It not only raises the possibility of class certification, but it provides a framework for those who may be contemplating pursuing similar relief. As we know, thousands of veterans are suffering the same issues across the board, and this case raises the possibility of them seeking relief as a united front.

And there’s power in numbers.

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

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