Supreme Court to determine critical VOSB and SDVOSB contracting issue

February 15, 2016

Follow the Kingdomware Case regarding the VA’s VOSB and SDVOSB priority requirement

APTAC staff article

At long last, the Supreme Court is set on February 22, 2016 to hear Kingdomware Technologies, Inc. vs United States, which charges the US Department of Veterans Affairs with creating loopholes to avoid a statutory contracting preference for veterans. This is a critical moment for Veteran-owned and Service-Disabled Veteran-owned Small Businesses; fortunately, there are some tremendous resources- including real-time blogs and a free webinar recapping the oral arguments – for those wishing to stay informed.

At issue is the requirements of the Veterans Benefits, Health Care and Technology Act of 2006 (the “VA Act”) directed the VA to prioritize SDVOSBs and VOSBs in agency contracting. The VA Act directed the VA to establish annual goals for contracting with SDVOSBs and VOSBs. The VA Act then establishes a contracting preference for SDVOSBs and VOSBs, codified at 38 U.S.C. § 8127(d):

(d) Use of Restricted Competition.— Except as provided in subsections (b) and (c), for purposes of meeting the goals under subsection (a), and in accordance with this section, 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. 

Elsewhere, the statute specifies that SDVOSBs are to be given top priority under this “rule of two” process; VOSBs have the second highest-priority.

The SDVOSB and VOSB priorities created under the VA Act were widely viewed as a “Veterans First” policy under which veteran-owned businesses would be preferred for all VA procurements. But instead of applying the “rule of two” across the board, the VA has taken the position that it can buy goods and services using the Federal Supply Schedule without first considering SDVOSBs or VOSBs. The VA’s position has enabled the VA to circumvent SDVOSBs and VOSBs whenever goods or services were available on the FSS.

A number of bid protests in response to this practice have been upheld by the GAO, which stated in Aldevra, B-405271, B-405524 (Oct. 11, 2011) that the law was “unequivocal; the VA ‘shall’ award contracts on the basis of competition restricted to SDVOSBs where there is a reasonable expectation that two or more SDVOSBs will submit offers and award can be made at a fair and reasonable price.” But the Court of Federal Claims held that the VA had reasonably interpreted the VA Act, and the Federal Circuit court upheld that decision. The issue will now be heard by the U.S. Supreme Court.

Government Contracting lawyer Steven Koprince has followed this case closely and submitted an “amicus” (friend of the court) brief on Kingdomware’s behalf. He will be traveling to Washington, DC to attend the hearing and report back on what happens, hosting several free events surrounding the case, including:

  • Posting his impressions on SmallGovCon the afternoon of February 22nd.
  • Answering questions via Twitter on Tuesday February 23rd starting at 10am EST for a full hour. You can follow him on Twitter @stevenkoprince or use the hashtag #Koprince4Vets.
  • Offering a free webinar to those who are interested in hearing what he learned at the oral arguments. The webinar will take place at 12pm EST.  Register here.

For more information on the Kingdomware case, see Koprince’s previous blog articles:


Are you a Veteran or Service-Disabled Veteran Business owner? Wondering how to best take advantage of Veteran preferences?
Contact your PTAC today for free assistance with all VOSB/SDVOSB contracting issues.