The Department of Veterans Affairs (VA) recently lost yet another protest on the grounds that it should have set aside an award for service-disabled veteran-owned small businesses (SDVOSBs).
This decision is the latest in a slew of GAO rulings berating the VA for not following its mandate in the Veterans Benefits, Health Care, and Information Technology Act of 2006 (the “Act”). The Act, which recognizes that agencies, particularly the VA, fail to meet set-aside goals for SDVOSBs, provides that before using Federal Supply Schedule (FSS) procedures, a contracting officer must determine whether he has a reasonable expectation that two or more SDVOSBs will submit offers, and if the award can be made at a fair and reasonable price. If so, the award must be set aside for SDVOSBs. (38 U.S.C. 8127(d)(2006)).
In this case, the VA had ordered off the FSS for employee emergency notification services. Even though its own market research concluded that at least 20 SDVOSBs held FSS contracts for the acquired services, it did not set the award aside for SDVOSBs and ultimately awarded the contract to a non-SDVOSB. Kingdomware Technologies, Inc., B-406507 (May 30, 2012). Earlier, in a similar protest, the GAO sustained a pre-award protest when the VA failed to conduct market research to determine whether a solicitation issued off the FSS should have been set aside for SDVOSBs. Aldevra, B-406331 (April 20, 2012).
These decisions are ironic if you think about why the VA implemented its VetBiz VIP Verification Program. The VA has been using its VetBiz VIP Verification Program to crack down on ineligible contractors and more easily identify contractors it can target for set asides. The VetBiz VIP Verification Program is designed to meet the VA’s specific goal of increasing awards to eligible veteran-owned businesses, yet it is undermining its own goals by failing to conduct mandatory set asides.
The practical takeaway from these recent decisions is that SDVOSBs and VOSBs need to be on the alert for awards that should be conducted as set-asides. Note that in Kingdowmware, only one of twenty eligible contractors protested a solicitation that should have been for SDVOSBs. The VA is required to give contracting preferences to SDVOSBs and VOSBs, but if contractors fail to catch mistakes like the ones made in Kingdomware and Aldevra, they’ll miss out on awards.
The Kingdomware decision may be accessed at: http://www.gao.gov/assets/600/591245.pdf. Aldevra is available at: http://www.gao.gov/assets/600/590299.pdf.
