For the past 50 years, Congress has passed a National Defense Authorization Act which is designed for budgeting purposes as well as various other provisions that impact a variety of concerns held by the federal government. The 2017 National Defense Authorization Act was signed into law in December 2016 and contains several notable changes to how the United States Department of Veteran Affairs program for veteran-owned small businesses and service-disabled veteran owned small businesses. To fully understand and respond to these changes, it might be important to consult with an experienced attorney who specializes in helping veterans
HR 3945-Another Attempt to Revamp the SDVOSB Verification Process
The SDVOSB verification process can be tricky. On November 5, 2015, Representative Mike Coffman, along with five co-sponsors introduced HR 3945, titled Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2015. While the text of the bill was not available at the time of this writing, Ben Stein, Coffman’s chief of staff, sent over a brief description of the components of the bill. That document can be downloaded here. Importantly, Representative Coffman, who served in both the United States Army and Marine Corps as both enlisted and an officer, has submitted similar bills for passing in previous sessions of Congress.
<em>By <a title="Dan McAuliffe" href="http://whitcomblawpc.mystagingwebsite.com/attorneys/dan-mcauliffe-government-contracting/" target="_blank">Dan McAuliffe</a></em>
Satisfying the Rule of Two
The Veteran's Administration (VA) is a frequent target for criticism. However, veterans themselves are responsible for some of that criticism because they fail to participate in programs designed to benefit them. For example in the case of VA procurements where veterans mistakenly assume there will be set-asides for veteran owned businesses. The VA will only set aside procurements for veterans if there are veteran businesses that are registered to compete for these procurement opportunities and the contracting officer can satisfy the rule of two requirement using normal market research. However, if the VA, or other federal agencies, seek veteran-business sources and find none the federal government is under NO obligation to set aside procurements.
Veteran-Owned Small Business Must Be Small
In early June, the U.S. Court of Appeals for the Federal Circuit issued a notable opinion for those involved in government procurement. The case, Kingdomware Techs, Inc. v. United States, was on appeal from the U.S. Court of Federal Claims. Kingdomware, a small certified service-disabled veteran-owned small business, brought suit against the U.S. when the U.S. Department of Veterans Affairs (VA) procured services it needed to install an Emergency Notification Service in several of its hospitals from a vendor on the FSS, although the specific vendor was not a Veteran-Owned Small Business (VOSB). The FSS (Federal Supply Schedule) is a list of vendors approved to do business for any governmental agency, and a Veteran-Owned Small Business may appear on the list. The U.S. Court of Federal Claims found against Kingdomware and the Court of Appeals agreed. The issue came down to statutory construction. Particularly important to the decision was 38 U.S.C. § 8127(c), which states:
Does the veteran owner have control of the SDVOSB?
In the Matter of: Battalion, LLC, Appellant
This case arose from a Dept. of the Air Force SDVOSB set aside. The SBA's OHA decided this case pursuant to the Small Business Act of 1958. The bid protest arose when an unsuccessful offeror, Douglas P Fleming, LLC, filed a protest challenging appellant's size and status as an SDVOSB. Fleming alleged in part that the appellant's majority owner, Mr. Jason Harris, was a full-time employee of Sota Construction Services, Inc., a firm controlled by appellant's minority owner, Mr. Earnest Sota.
Topics: Bid Protests, Government Procurement, sdvosb, bid protest attorneys, bid protest lawyer, CVE certification, CVE denial, SDVOSB, SDVOSB attorney, SDVOSB bid-protest, sdvosb certification, SDVOSB challenge, SDVOSB denial, SDVOSB Status protest, service disabled veteran owned business, service disabled veteran owned small business, CVE-Center for Verification and Eligibility, veteran control, veteran owned business, veteran owner control
SDVOSB Status Protest Case Study: Matter of MJL enterprises
Many of my clients express worry about an SBA SDVOSB status protest in the event they are awarded a contract before their CVE certification is complete. This recent ruling from the SBA OHA sheds some light on that issue.
Topics: Bid Protests, Government Procurement, sdvosb, Bid Protest attorney, bid protest lawyer, CVE certification, CVE denial, CVE status denial, government contracting, government contracts attorney, SBA protests, SDVOSB, SDVOSB attorney, sdvosb certification, SDVOSB challenge, SDVOSB status, SDVOSB status denial, SDVOSB Status protest, service disabled veteran owned business, CVE-Center for Verification and Eligibility, veteran control, veteran owned business, veteran owner control
The US Court of Federal Claims Rules that SDVOSB Status Can Survive Veteran Owner's Death
On November 26, 2013, the US Court of Federal Claims heard an appeal from a the son of a veteran business owner after a contracting officer working for the defendant, the United States Environmental Protection Agency, issued a "determination of non-responsibility," proposed a debarment, and finally canceled the solicitation. [button link="http://www.uscfc.uscourts.gov/sites/default/files/BRADEN.NEIE120613.pdf" style="download" color="red" bg_color="red" border="black" window="yes"]Down Load this Case[/button]
Topics: Bid Protests, Appellate Law, Debarment, Government Procurement, sdvosb, Bid Protest attorney, bid protest attorneys, bid protest lawyer, contract cancellation, CVE certification, CVE denial, CVE status denial, Debarment, finding of non-responsibility, SBA protests, SDVOSB, SDVOSB attorney, SDVOSB bid-protest, sdvosb certification, SDVOSB challenge, SDVOSB lawyer, SDVOSB status, service disabled veteran owned business, service disabled veteran owned small business, CVE-Center for Verification and Eligibility, veteran control, veteran owned business, veteran owner control, veteran owner dies
Challenging a CVE SDVOSB denial in pre-award contest
In KWV, Inc. v. United States, a disappointed bidder filed a pre-award bid protest of the CVE's denial of their SDVOSB status. In that case, the US Court of Federal Claims found the CVE’s reliance on the Veteran applicant’s residency alone was “arbitrary and capricious” and not in accordance with VA’s regulations. KWV, Inc. v. United States, 111 Fed. Cl. 119, 127 (Fed. Cl. 2013). In deciding in the Veteran’s favor, the Court indicated that “there [was] nothing in the administrative record to suggest that [the Veteran] was not exercising sufficient control over [the company]” and “the government has not provided a coherent and reasonable explanation of its exercise of discretion…nor articulated a rational connection between the facts found and the choice made” Id., see also Impresa Construzioni Geom. Domenico Garufi, 238 F.3d at 1333 (quoting Latecoere Int'l, Inc. v. United States Dep't of the Navy, 19 F.3d 1342, 1356 (11th Cir. 1994)); Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962))(internal quotations removed).
Topics: Bid Protests, Appellate Law, sdvosb, Bid Protest attorney, CVE sdvosb denial, CVE status denial, GAO bid protest, SBA protests, SDVOSB, SDVOSB attorney, sdvosb certification, SDVOSB challenge, SDVOSB lawyer, SDVOSB status, service disabled veteran owned business, CVE-Center for Verification and Eligibility, veteran control, veteran owned business, veteran owner control
Regarding CVE verification, 38 CFR 74.3 (b) states:
(b) Ownership must be unconditional. Ownership by one or more veterans or service-disabled veterans must be unconditional ownership. Ownership must not be subject to conditions precedent, conditions subsequent, executory agreements, voting trusts, restrictions on assignments of voting rights, or other arrangements causing or potentially causing ownership benefits to go to another (other than after death or incapacity). The pledge or encumbrance of stock or other ownership interest as collateral, including seller-financed transactions, does not affect the unconditional nature of ownership if the terms follow normal commercial practices and the owner retains control absent violations of the terms. In particular, CVE will evaluate ownership according to the following criteria for specific types of small business concerns. http://www.va.gov/osdbu/docs/38CFR74.pdf
Topics: SBA Bid Protest, Government Procurement, CVE verification, sdvosb, CVE sdvosb denial, government contracts attorney, SDVOSB, SDVOSB attorney, SDVOSB lawyer, SDVOSB status, SDVOSB status denial, service disabled veteran owned small business, CVE-Center for Verification and Eligibility, veteran control, veteran owned business, veteran owner control