In the Wake of the Kingdomware Ruling, A Thorny Question Remains

Why Does the VA Need a Court to Enforce the Department’s Mandate?

Perseverance has paid off for Kingdomware Technologies, Inc. Despite enormous challenge and expense–not to mention unfavorable rulings by lower courts–the service-disabled veteran-owned small business (SDVOSB) took its case to the Supreme Court of the United States and won.

The court victory opens lucrative opportunities for any veteran-owned small business (VOSB) that seeks contract awards from the Veterans Administration (VA). We owe congratulations and a debt of gratitude to Kingdomware.

Unfortunately, the legal saga leaves a bitter and disappointing question unanswered:
Why did the VA fight so hard against its role as champion of support for SD/VOSBs?

2006 Veterans Benefits

The “Rule of Two” Prevails:

The 2006 Veterans Benefits, Health Care, and Information Technology Act establishes a “Rule of Two” for VA contracting. The rule directs the VA to award contracts to SD/VOSBs if:

  1. At least two SD/VOSBs will bid on the contract.
  2. The contract award can be made at “a fair and reasonable price that offers best value to the United States.”
  • The VA asserted that the Rule of Two applies only until the department has met its SD/VOSB contracting goals. After that, exceptions can apply, including awards made under the General Services Administration Federal Supply Schedule (FSS) system.
  • In 2012, Kingdomware–a Maryland-based provider of web, software, mobile, and other technology solutions–challenged a VA award made under the FSS system to a non-SD/VOSB. Kingdomware asserted that the Rule of Two applies to all contracts, including FSS awards, whether or not the VA has met its annual veteran contracting goal.
  • The General Accounting Office sided with Kingdomware. Two lower courts ruled in favor of the VA. Along the way, Kingdomware garnered the support of a who’s who list of veteran’s groups, numerous law firms and VOSBs, and 43 U.S. senators and representatives.
  • A unanimous Supreme Court ruled 8-0 that VA must apply the Rule of Two to all contracts, including those under the FSS system, whether or not the VA has met its SD/VOSB contracting goals.

The good news: A determined small business stood up for vets against great odds and prevailed to open greater federal market access for SD/VOSBs.

The sad news: The VA needed a court order to honor its mandate to promote the well being of America’s vets, who will now be watching closely to assure the department carries through.