Legal Meets Practical

by Sarah Schauerte

This is what happens when the Center for Verification and Evaluation (“CVE”) messes with a contractor that also happens to be a lawyer.

On October 11, 2013, federal contractor A1 Procurement, LLC (“A1”) sued the United States Government, the Department of Veterans’ Affairs (“VA”), the CVE, supervisors of 8127 Debarment Committee, and various individuals working for the VA and the CVE for a host of claims including violation of the Federal Torts Claims Act, violation of A1’s Fifth Amendment Due Process rights, and violation of the Administrative Procedure Act.

I am not familiar with this contractor, and only time will tell whether these claims will stand. Regardless of this, the facts alleged are worth repeating.

According to the complaint filed in the Eastern District of New York (the “Complaint”), A1 was verified in the CVE’s Vendor Information Pages (VIP) as a service-disabled veteran-owned small business (SDVOSB) in 2010. In 2011, owner Derrick Storms criticized a CVE employee for not removing ineligible contractors from the VIP database. That same year, A1 was removed from the VIP database because the CVE had found that based on his resume submitted, Derrick Storms, the service-disabled veteran, did not control the business.

And what did this resume say? Surely that Mr. Storms worked for another company for a considerable period of time each week, preventing him from operating his business on a full-time basis. Right?

Hardly. The resume submitted, which according to the Complaint was the basis for removing A1 from the VIP database, stated that Mr. Storms was also President of Homeless Veterans of America and the Managing Partner of Storms and Associates, P.A. In reality, Mr. Storms spent about four hours per month working for the former company – work which entailed volunteering at a soup kitchen for homeless veterans. As it relates to the latter business, this was a one-man law firm where Mr. Storms worked about seventeen hours over the course of a few years. All hours worked were to provide legal services to A1 and were not compensated.

A1 promptly requested reconsideration (“R4R”). A1 clarified the amount of time devoted to Mr. Storm’s endeavors and provided tax returns to show that he, indeed, did not receive compensation for his involvement in Homeless Veterans of America and Storms and Associates, P.A. According to the Complaint, the CVE first denied having received the request, then miraculously located it when pressure was applied by Mr. Storm’s local Senator’s office.

Guess how long it took CVE to respond to the R4R? According to the Complaint, two years.

In the interim period, A1 wanted to compete for contracts. After all, its owners had to eat. In November of 2011, it competed for a certain VA contract and represented itself as an SDVOSB. The VA reacted by – and this is a very condensed version of the sequence of events – debarring A1 for five years for misrepresenting its status as an SDVOSB.

In reading the Complaint, the actions on CVE’s behalf are stunning. However, when one takes a close look at the time sequence, we see that A1 filed its R4R in August of 2011, and it bid on a VA contract only three months later and represented itself as an “SDVOSB.” I expect that the CVE’s explanation will be that at this time, it was taking a considerably long period of time to process R4Rs, and A1’s R4R was delayed because of its action of “misrepresenting” itself as an SDVOSB when bidding for a VA contract. (At this time, the VA’s Answer to the Complaint is not yet available).

Even so, think about how unnecessary this all is. If A1 was denied inclusion in the VIP database solely because of a few extra items included on Mr. Storm’s resume, and this was the catalyst to this business being debarred, losing millions of dollars in federal contracts, and the federal government being sued, how can that be justified? At what point will the CVE realize that there needs to be objective criteria to determine whether a veteran can devote “full-time” to his business? It is nonsensical that involvement in two additional activities requiring a very minimal amount of time would call into question a veteran’s ability to control his business, and result in the type of lawsuit (and grief) we see here today.

In the months to come, I’ll be following this case. There is much to learn here, and I hope the lesson isn’t wasted.

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