Legal Meets Practical

As you may know, the VA’s Center for Verification and Evaluation (“CVE”), which deems firms to be service-disabled veteran-owned small businesses (“SDVOSBs”) or veteran-owned small businesses (“VOSBs”) for purposes of competing for set-aside contracts issued by the VA, recently announced that it’s implementing a three-year verification rule. It’s simple: March 21 and beyond, get in the program, get three years instead of two.

Now, however, the CVE has announced that everyone already in VetBiz gets the three years. If you check out your profile, the expiration date isn’t a mistake – you’ve been extended for another year.

Not to look a gift horse in the mouth, but this change is likely due to the CVE drowning in the backlog created by its new, convoluted and inefficient process that was implemented in September. (The CVE claims the backlog is due to the Kingdomware decision, but how many companies can really have jumped on the bandwagon after that? Most companies affected are already in VetBiz. And at any rate, shouldn’t the CVE have increased the number of examiners and taken reasonable measures to deal with an influx?).

If you are listed in the VetBiz registry, here is what you should know, based on your verification status:

1. If you have submitted your reverification application but no one has contacted you yet (i.e., you have not yet been assigned an examiner), you don’t need to do anything. You will be administratively withdrawn and an extra year applied to your verification. (Just make sure you check your profile to confirm the new date).
2. If you have submitted your reverification application and a case analyst has contacted you, you may go through the reverification process and receive your new three-year period. However, if you don’t feel like putting yourself through the trouble right now, you can withdraw and take advantage of having another year.
3. If you are in VetBiz and are not yet up for reverification, your verification period has been extended for another year.
4. If you have applied for VetBiz for the first time, you will be verified for three years assuming your application is successful.

Here is the VA’s publication on the new three-year period. (Interestingly, while this affects every single business in VetBiz, it is my understanding that no email will be sent out to alert business owners). If you have thoughts on the new three-year period or comments to share about your experience with the CVE (especially if you have encountered the new process, post September 2016), please comment below. Upon request, I am happy to make your comment anonymous or to substitute your name with a handle.

Thanks for reading, and I’ll continue to keep you posted with further changes that affect veteran-owned businesses!

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

I’m sure we’re all busy this Friday, so here are three VA-related news items. In the interest of brevity (despite my lawyer status), they’re all 100 words or less!

Firms VetBiz-Verified March 21st and Beyond Get THREE Years! If you’re waiting for approval of your VetBiz application, you should hope that the VA holds off for a few days. Any business that becomes verified or re-verified March 21 and beyond will be verified for a period of three years, not two.

It’s worth asking whether this change is a quick fix to appease veteran business owners who are frustrated at more substantive problems: the CVE’s requesting of invasive, irrelevant documents, 0877 headaches, long delays, and abrasive examiners (There are pleasant ones, too). These issues that have been called to the CVE’s attention many times, but no changes have been effected.

VA Institutes New Pre-Need Burial Program. A new VA program allows veterans, spouses and unmarried dependent adult children to prepare for burial in a VA national cemetery prior to the time of need. Interested individuals may submit VA Form 40-10007 Application for Pre-Need Determination of Eligibility for Burial in a VA National Cemetery, along with a copy of supporting documentation of military service such as a DD214, if readily available, by: toll-free fax at 1-855-840-8299; email to [email protected]; or mail to the National Cemetery Scheduling Office, P.O. Box 510543, St. Louis, MO 63151.

VETS 17 Is In Three Months! The National Veteran Small Business Coalition (NVSBC) is an extremely constructive, professional, and well-organized veteran business advocacy group that has done much to protect veterans’ interests in the federal contract arena. The NVSBC’s annual conference is set for June 12-14 in Norfolk, Virginia. Attendees will network with prospective teaming partners and procurement officials, attend training sessions (I’m presenting on VetBiz), and learn about navigating government contracts. Especially valuable for start-ups and businesses newer to the federal contracting arena, early bird registration ends March 31. Learn more here.

That’s it! Happy weekend to all!

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

As many of you know, numerous states already allow veterans who suffer from post-traumatic stress disorder (“PTSD”) access to medical marijuana. Currently, twenty states (including Guam and Puerto Rico) permit medical marijuana to be used to treat PTSD. These include the following:

• Arizona
• Arkansas
• California
• Connecticut
• Delaware
• Florida
• Hawaii
• Illinois
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Montana
• Nevada
• New Jersey
• New Mexico
• North Dakota
• Ohio
• Oregon
• Pennsylvania
• Rhode Island
• Washington, D.C.
• Puerto Rico
• Guam

In addition to these states, other states are beginning to recognize medical marijuana as a legitimate means of treating PTSD. For example, laws to allow usage are in the works in Colorado, Georgia, and New Mexico. If you are a veteran or a family member who believes medical marijuana may be a viable method of treating PTSD (or if you have strong feelings against it), it may be worth looking into whether this is an item on the legislative agenda.

Furthermore, if you are an active military member, know that using medical marijuana may not be an option even if it is legal in your state. This because the military still considers marijuana a controlled substance. Someone in active duty caught using the drug could be punished and in most cases, processed for separation from the military. For someone who is not on active duty, it could still result in a discharge, which could close the door for future benefits and career options.

To be frank, medical marijuana for PTSD treatment is not an issue I have followed. I do, however, know that many have strong opinions one way or the other – some who say that it amounts to “self medication” (such as alcohol), and some who believe that it as viable a treatment method as a pill prescription. With 20 states already having signed legislation legalizing medical marijuana as treatment for PTSD, more will likely follow in the next few years.

If you’re interested in learning more about this subject – current state-based legislation, benefits and drawbacks, legal issues, etc., find a great resource here. And, as always, if you have opinions on this subject or know of further resources, please feel free to comment.

Lively discourse is, of course, legal everywhere.

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

As many of you may have heard, the VA’s Center for Verification and Evaluation (“CVE”) is considering an interim final rule to require firms to go through the VetBiz verification process every three years, not two. (Verification is necessary for firms interested in competing for SDVOSB or VOSB set-aside contracts issued by the VA). This is a welcome change for many, simply because the verification process is tedious and cumbersome, and it’s obviously preferable to be spared from it for an extra year.

The VA gave the following reason for the change:

If you caught my blog last week, you learned that on January 11, President elect Donald Trump announced his intention to nominate Dr. David Shulkin to be VA Secretary. Here are the top ten things you need to know about Dr. Shulkin and his appointment to this important position:

1. Dr. Shulkin currently serves as the Undersecretary for Health at the VA, a position he has held since July of 2015. The Undersecretary is the highest official directly responsible for the Veterans Health Administration.
2. When Dr. Shulkin took over as Undersecretary, these were his top five priorities: Fix access; staff and physician engagement; consistency of best practices and resource prioritization; development of a high performance network; and restore trust and confidence. Of these, he expressed that restoring trust and confidence was the most important.
3. A practicing physician, Dr. Shulkin continues to see patients despite his role as Undersecretary.
4. The following is his biography in a nutshell: numerous chief executive roles in medical facilities and organizations; numerous physician leadership roles including the Chief Medical Officer of the University of Pennsylvania Health System, the Hospital of the University of Pennsylvania, Temple University Hospital, and the Medical College of Pennsylvania Hospital; numerous academic positions including the Chairman of Medicine and Vice Dean at Drexel University School of Medicine. The question, of course, is whether these roles prepare him for his biggest one yet: to lead our embattled and beleaguered VA.
5. Unlike every previous VA Secretary, Dr. Shulkin is not a veteran.
6. Dr. Shulkin has said that his number one priority as Secretary will be increasing veteran access to health care.
7. Dr. Shulkin has mentioned the need to apply “best practices from the private sector” to the VA.
8. Dr. Shulkin oversaw increased use of private care outside VA with mixed results. As Undersecretary, Dr. Shulkin has nearly doubled the amount of health care that veterans receive through private doctors. But he has also rejected calls for broader privatization, saying that it would cost untold billions and undermine the hospital system — a stance that puts him at odds with President Trump.
9. Dr. Shulkin has not spoken in detail on his intentions to implement/follow the Kingdomware decision as it relates to the Veterans First Program.
10. In the weeks to come, the Senate Committee on Veterans Affairs will hold a hearing on Dr. Shulkin’s nomination.

The VA needs process improvement, and I have the hope that Dr. Shulkin can bring this to our embattled VA. However, consider the red tape and broken system he faces – even the best pick for Secretary has struggles ahead.

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

Will Trump’s pick for VA Secretary make us happy?

Or unhappy? Time will tell. . .

What’s happened this week, in the world of the U.S. Department of Veterans Affairs (“VA”)? Quite a bit, actually. Read more to find out. . .

2017 NDAA May Render VetBiz-Verified Firms Ineligible for Veterans First Contracting Program.

This is certainly worth mentioning to veteran business owners, yet I have not seen any buzz on this yet. Among other changes to federal contracting rules applicable to veteran-owned small businesses, the 2017 NDAA (which President Obama signed into law on December 23) effectively prevents the VA from developing its own regulations to determine whether a company is a veteran-owned business. Basically, to ensure uniformity between the SBA’s and the VA’s programs, the VA will be required to use regulations developed by the SBA that relate to ownership, control, and size status of an SDVOSB or a VOSB.

Currently a notable difference between the SBA’s and the VA’s rules is the VA’s allowance of businesses to include “right of first refusal” provisions in corporate documents without running afoul of the ownership requirements set forth at 38 CFR 74.3 (the requirements that apply to the VA’s set-aside program). This is because 38 CFR 74.3 expands on the definition of “unconditional ownership,” allowing a business to utilize “normal commercial practices” without violating the requirement that a veteran unconditionally own his share of the business.

In contrast, the SBA’s rules at 13 CFR 125.9 do not contain this additional language, and therefore a “right of first refusal” provision in corporate documents would not pass muster with any agency other than the VA. (For a great case that analyzes the difference between the VA’s and the SBA’s treatment of the right of first refusal, check out a prior blog of mine). As such, with the requirement that the VA adopt the SBA’s provisions, businesses that were approved for the VetBiz program will suddenly be ineligible.

How will this logistically pan out? There is no way the VA’s Center for Verification and Evaluation will take another look at every single firm’s corporate documents, searching for the offending provision. Likely, businesses will run out the remainder of their two-year verification period (so long as they aren’t protested, and the issue discovered that way), and then encounter an issue upon reverification.

For those of you who will be affected by this, don’t panic. It might not even happen, and if it does, it will be well over a year from now, given that we’re relying on the government to implement these changes. The 2017 NDAA provides that the SBA and VA “shall issue guidance” pertaining to these matters within 180 days of the enactment of the 2017 NDAA. From there, public comment will be accepted and final rules eventually announced. As such, if you have something to say about this, make sure you comment on the rule changes.

Trump Appoints VA Secretary.  On January 11, President-elect Donald Trump appointed Philadelphia-based physician, David Shulkin, to run the embattled U.S. Department of Veterans Affairs as Secretary. As the current undersecretary of health for the VA, Shulkin is responsible for the health care of nearly 8.8 million vets. He commands 168 medical centers and 1,600 clinics from Philadelphia to the Philippines, and oversees a $68.6 billion budget. Prior to this position – which he has held for 18 months – Shulkin worked in the private sector. He spent more than a decade in hospital management in Philadelphia, serving as chief medical officer at the University of Pennsylvania Health System, Medical College of Pennsylvania, and Temple University Hospital.

Veteran Pens Military Science Fiction Novel.  With the help of his wife, a veteran infantry sergeant with the 101st Airborne Division and later the 28th Infantry Division has penned his first (and second) novels – these are military science fiction novels set in the world of the bestselling series, The Human Legion. Writing under a pseudonym, Virginia resident J.R. Handley draws from his combat and military experience to bring the world a fast-paced read that does justice to the original series. Both books – The Legion Awakens (Volume One) and Fortress Beta City (Volume Two) – are available on Amazon.com.

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

This week, President-elect Donald Trump appointed David Shulkin as VA Secretary.

I’m back, everyone! And I have to apologize – for those of you who read my blog regularly (for which I thank you), you’ll note there hasn’t been one for some time. I have a good excuse, however – on November 2, my husband and I welcomed our first child, a daughter we named Brooke Avery. Our little Bean is doing very well, my parents are safely back home in the St. Louis area, and we’re learning all sorts of tricks as new parents (For example, did you know there is something called gripe water?).

Also, as mentioned, I recently released my debut novel for kids (NOT self-published), and have been busy promoting it. (I’ve been far, far less busy with this compared with caring for my new tiny human!). If you have any kid or grandkid that would be interested in a book for ages 8 to 12 likened to Jumanji but where the players go into the board to outsmart monsters (instead of safari animals), you can check it out here.

Since I realize that I’ve missed several weeks of the blog due to these recent developments, I’ve decided to share three VA-related anecdotes with you. Unfortunately, none are filled with quite the cheer that should be characteristic of this season:

• First, is anyone going through verification or reverification with the CVE? If you are, you know there are a number of changes with the CVE that have made the process a lot more difficult. One, because of the Kingdomware case, a lot of businesses looking to jump on that bandwagon have applied for verification. This influx has resulted in much longer wait times. Two, if you need to re-set your password, just call the CVE at (866) 584-2344 rather than waste time on the website. (The account screen will say it has sent you a new password, but it hasn’t. And won’t.). Do it before 6:00 PM – while the website says the Help Desk hours are until 8:00 PM, that’s an error that hasn’t been corrected for several months. (And please be nice to the poor folks at the Help Desk – account glitches and incorrect website information is not their fault). Three, the CVE is trying out a new process where it attempts to “personalize” applications. This involves a welcome call to veterans (I won’t go into details, but this call has little value), and the assignment of applications to a specific case manager. It can take almost a month for this assignment to occur and for the first document request to go out. And for the record, an application is “complete” – and the CVE’s 60 days to process an application starts ticking – after the applicant has thoroughly responded to that first document request. This can be a full month and a half after one first hits “submit.”

• Second, Representative Jeff Miller (Florida), who is leaving Congress and his post of chairman of the House Committee on Veterans Affairs, is reportedly one of President-elect Donald Trump’s top picks for VA Secretary. An insider into the woes of the VA and some of the actual solutions to fix the broken system, Miller would be an excellent choice (though one disadvantage cited is he is not a veteran). You can read his interview with USA Today about potentially taking the post here. Other rumored candidates include Sarah Palin, Massachusetts Senator Scott Brown, Texas Governor Rick Perry, and 2012 Presidential nominee Mitt Romney. While Miller is not recognized as the front-runner, we can only hope that Trump will eventually realize the value he offers to the position.

• Third, in early December, the VA released reports on VA hospital ratings. If possible, some of you may want to consider traveling for better health care. The documents show that Denver’s VA Eastern Colorado Health Care System was given two stars out of five, and the Grand Junction VA Medical Center (Colorado) was given three. Many of the lowest-performing centers were centered in Texas and Tennessee: the Dallas, El Paso, Nashville, Memphis and Murfreesboro centers all received one-star ratings in the second quarter of 2016. The much-discussed Phoenix VA also received one star. Meanwhile, many centers situated in the Northeast and Upper Midwest received five-star ratings.

A Nightmare Before Christmas. . . But surely next week there can be a positive story about the VA? Suggestions are always welcome.

There you have it – three stories, and more to come next week. I have some catching up to do!

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

As a government contractor, at one point or another you’ve probably encountered a bid protest. Maybe you missed out on an award and felt that the Government didn’t properly apply the terms of the solicitation. Maybe someone protested your socioeconomic status (such as if the contract was an SDVOSB set-aside). Or maybe you protested someone you suspected was ineligible.

Overall, protests are not fun. No one wants to be involved in one. They are, however, sometimes necessary, which is unfortunate given the time and money it would save if the government always properly evaluated proposals and only awarded contracts to eligible contractors.

One question I get a lot as a procurement law attorney is whether someone who brings a bid protest at the Government Accountability Office (“GAO”) can recover filing costs if they prevail. After all, if the government errs in evaluating a proposal, resulting in the time, stress, and money required to hire an attorney to pursue a contract, why should the contractor be penalized?

Long story short, the answer is a protestor is usually out the costs of protesting to the GAO. The bar is high, because the protestor has to show two things: one, that the protest was “clearly meritorious;” and two, that the agency unduly delayed in taking corrective action to remedy its mistake.

In other words, it’s not enough that source selection officials make a gross error in evaluating proposals; the contracting agency also has to drag its heels once the contractor files a protest to complain about the error.

A recent GAO decision illustrates this principle: in Cape Environmental Management, Inc., a protestor unsuccessfully attempted to recover its costs after an agency took corrective action. (B-412046.3, September 30, 2016). The GAO noted that a “clearly meritorious” protest is one where the issue is “not a close question” and the government has “no defensible legal position.” Because the GAO found that the protestor had not established this element, it didn’t reach the second element of undue delay. (As a note, there is generally no entitlement to fees if the agency takes corrective action prior to the due date of its agency report).

Basically, if you are considering protesting a lost contract to the GAO, know that it will involve a monetary investment. Absent fairly extraordinary circumstances, you won’t recover your filing fees.

As such, consider whether “going after the prize” is worth it to your business.

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

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.