Rule Of Two | The Contracting Education Academy

October 25, 2016 By AMK

Does ‘Kingdomware’ apply to non-VA FSS orders?

The Supreme Court’s rationale in a recent decision might compel every agency to set aside any Federal Supply Schedule order (or any other order, for that matter) valued between $3,000 and $150,000.

Earlier this year, the United States Supreme Court issued its decision in Kingdomware Technologies v. United States. As we’ve noted, this case was a monumental win for veteran-owned small businesses — it requires the Department of Veterans Affairs to set-aside solicitations for SDVOSBs or VOSBs where two or more such offerors will submit a proposal at a fair and reasonable price, even if that solicitation is issued under the Federal Supply Schedule.

A recent GAO decision suggests, however, that Kingdomware’s impact could be felt beyond the world of VA procurements.

In Aldevra, B-411752.2—Reconsideration (Oct. 5, 2016), the protester relied on Kingdomware to challenge a prior GAO decision that an agency is not required to set-aside an FSS order for small businesses. At issue in the initial protest was an Army National Guard Bureau solicitation under the FSS, seeking an ice machine/water dispenser (valued at $4300). According to Aldevra, the Small Business Act required the solicitation to be set aside for small businesses.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/does-kingdomware-apply-to-non-va-fss-orders/

September 23, 2016 By AMK

Kingdomware decision gives new meaning to the words ‘government contract’

The Supreme Court’s June 2016 decision in Kingdomware Techs., Inc. v. United States, No. 14-916 (June 16, 2016), may significantly impact the meaning of the term “government contract” for years to come.

Supreme Court seal The case centered on a project for the Department of Veteran Affairs. When VA continually fell behind in achieving its three percent goal for contracting with service-disabled veteran-owned small businesses, Congress enacted the Veterans Benefits, Health Care, and Information Technology Act of 2006. See 38 U.S.C. §§ 8127 & 8128. The Act includes a mandatory set-aside provision that requires competition to be restricted to veteran-owned small businesses if the government contracting officer reasonably expects that at least two such businesses will submit offers and that the “award can be made at a fair and reasonable price that offers best value to the United States.” This is an iteration of the well-known “Rule of Two.”

When it published regulations implementing this statutory requirement, VA took the position that the set-aside requirements in § 8127 “do not apply to [Federal Supply Schedule] task or delivery orders.” 74 Fed. Reg. 64619, 64624 (2009). The Kingdomware case posed a direct challenge to this interpretation.

Keep reading this article at: http://www.contractorsperspective.com/small-business/kingdomware-redefines-government-contract/#page=1

August 19, 2016 By AMK

VA doesn’t waste time in implementing Supreme Court decision

The Veterans Affairs Department acted unusually quickly to comply with the U.S. Supreme Court’s “rule of two” decision in the Kingdomware case.

So much so that it both surprised observers and had them wondering if VA was acting too hastily.

VA issued new acquisition regulations July 25, just more than a month after the decision, which found VA’s interpretation of a law requiring the agency to set-aside all procurements if at least two veteran-owned small businesses are qualified was flawed. The nation’s highest court reversed the lower court’s decision on June 16 by an 8-0 vote, finding VA must use the “rule of two” for supply schedule contracts even if it has met its statutory contracting goals.

Keep reading this article at: http://federalnewsradio.com/reporters-notebook-jason-miller/2016/08/va-doesnt-waste-time-implementing-supreme-court-decision/

See the VA’s new rules here.

See the VA’s “decision tree” for following the Rule of Two here.

August 2, 2016 By AMK

GSA guidance: “Rule of Two” doesn’t apply to all FSS task and delivery orders

There’s been speculation that a recent Supreme Court decision would have broader implications for small business set-aside requirements under General Services Administration (GSA) Federal Supply Schedules (FSS).

A recent article highlights the split between the Kingdomware Techs., Inc. v. United States decision and GSA’s longstanding position that orders under GSA FSS contracts are not required to be set aside for small businesses, even when the Rule of Two is satisfied (which occurs when the contracting officer reasonably expects that at least two eligible small businesses will submit offers and that the award can be made at a fair and reasonable price). The Kingdomware decision states that “orders” issued under FSS contracts are contracts and that, in some instances, the Rule of Two requirement therefore applies to FSS orders.

There have been worries that the Kingdomware decision would provoke conversations and, potentially, litigation regarding the applicability of the Rule of Two to certain orders under GSA FSS contracts. Instead of waiting for guidance, GSA has posted a blog entry unequivocally asserting that Kingdomware does not alter GSA’s longstanding position. According to GSA, unless agency-specific statutes or regulations require a contracting officer to set aside a procurement, “FAR 8.405-5(1) states ‘preference programs of [P]art 19 are not mandatory in this subpart,’ and ordering activity contracting officers are provided the discretionary authority to set aside FSS orders.” GSA also concludes that contractors can “jump into the fourth quarter buying season with confidence knowing there has been no change in procedures for using the Federal Supply Schedules.”

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=513318

June 16, 2016 By AMK

Supreme Court gives VA new marching orders

In a U.S. Supreme Court decision handed down today, the Department of Veterans Affairs (VA) was directed to change its contracting practices.

The Court’s June 16, 2016 ruling in Kingdomware Technologies, Inc. v. United States, No. 14-916 means that the VA can no longer chose to ignore a 2006 law that requires the VA to restrict contract competitions to veteran-owned small businesses (VOSBs) as long as there are at least two qualified VOSBs available to perform the work. This provision of the Veterans Benefits, Health Care, and Information Technology Act of 2006 (“the Act”) is known as the “Rule of Two.”

The VA long argued that it had the discretion to not follow the “Rule of Two” when it placed orders against GSA Schedule contracts. But the Court found the following provision of the Act to be unambiguous:

… 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.

It is not yet known how quickly the VA will change is practices with respect to GSA Schedule orders. But the Court has made it clear that the Rule of Two is mandatory, not discretionary — and there’s no exception for GSA Schedule orders.

Read the Supreme Court decision here: http://www.supremecourt.gov/opinions/15pdf/14-916_6j37.pdf

The Supreme Court’s rationale in a recent decision might compel every agency to set aside any Federal Supply Schedule order (or any other order, for that matter) valued between $3,000 and $150,000.

The Supreme Court’s June 2016 decision in Kingdomware Techs., Inc. v. United States, No. 14-916 (June 16, 2016), may significantly impact the meaning of the term “government contract” for years to come.

The Veterans Affairs Department acted unusually quickly to comply with the U.S. Supreme Court’s “rule of two” decision in the Kingdomware case.

There’s been speculation that a recent Supreme Court decision would have broader implications for small business set-aside requirements under General Services Administration (GSA) Federal Supply Schedules (FSS).

In a U.S. Supreme Court decision handed down today, the Department of Veterans Affairs (VA) was directed to change its contracting practices.

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