After Court Mandate, VA Is Increasing Contracts With Vet-Owned Businesses

Under a mandate from the Supreme Court, the Department of Veterans Affairs has set goals for boosting the number of contracts awarded to small businesses owned by veterans and disabled veterans.

In a news release last week, the VA said it is seeking to award in this fiscal year at least 15% of its more than $26 billion in total procurement contracts to Service-Disabled Veteran-Owned Small Businesses, or SDVSOB, and 17% to Veteran-Owned Small Businesses, or VOSB.

The goals would represent a 5% increase for each, the VA said. In fiscal 2017, the department awarded $26.1 billion in total procurement contracts.

Previously, the SDVOSB and VOSB goals were 10% and 12% respectively, established by former VA Secretary Eric Shinseki in fiscal 2010, the department said.

The VA is acting in response to the Supreme Court's 2016 ruling in the case of Kingdomware Technologies v. United States, in which it decided that the so-called "Rule of Two" applies when awarding contracts under the Veterans Benefits, Health Care, and Information Technology Act of 2006.

Under the rule of two, competition for a contract is to be restricted to SDVOSBs or VOSBs when two or more firms are verified as able to submit bids at a fair and reasonable price that offers best value.

In its ruling, the court rejected the VA's argument that the rule of two is discretionary, saying it is mandatory.

VA Secretary Robert Wilkie said in a statement, "Three years ago, the U.S. Supreme Court underscored our mandate to do business with service-disabled and other veteran entrepreneurs.

"We have increased the dollars awarded each year, but now it's time to update the goals to reflect this new commitment," he said. "We need to lock in the gains we have made and continue to build for the future."

-- Richard Sisk can be reached at Richard.Sisk@Military.com.