Department of Veterans Affairs MUST use Rule of Two for Orders Placed Under FSS/GSA Schedules

In the case of veteran-owned business,  Kingdomware Technologies, Inc. v. United States, the Supreme Court ruled on June 16, 2016 that the “Rule of Two” contracting procedures in 38 U.S.C. 8127(d) also applies to Department of Veterans Affairs (VA) orders placed under the Federal Supply Schedule (aka GSA Schedule).

The “Rule of Two” provides that “a contracting officer of the Department shall award contracts on the basis of competition restricted to small business concerns owned and controlled by veterans if the 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 best value to the United States.” 38 U.S.C. 8127(d).

For years VA has circumvented the “Rule of Two” when ordering using the FSS/GSA Schedule because in their view FSS/GSA Schedules were exempt. This gave VA lots of latitude to order from other than Veteran owned small businesses (VOSB) [includes Service Disabled Veteran Owned Small Businesses (SDVOSB)] through the FSS/GSA Schedule even when VOSBs were available, able, and willing to meet VA requirements.

In 2012 Kingdomware Technologies protested the VA award of a FSS order that didn’t employ the Rule of Two. After three years of court cases and appeals, the case made its way to the Supreme Court where it ruled that Kingdomware Technologies was correct in its interpretation that VA is required to use the Rule of Two for ALL contracts, including FSS/GSA Schedules.

This is a major win for Veteran owned small businesses and means that many more opportunities in VA will be set aside for VOSBs and SDVOSBs under FSS/GSA Schedules.  If you’re not on GSA Schedule, consider getting started now.

Good Hunting!

-Jack

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