Kingdomware Technologies, Inc., v. United States, No. 14-916 (2016)

New SCOTUS Ruling is a GAME CHANGER for companies selling to the VA!

The U.S. Supreme Court’s recent unanimous decision in Kingdomware Technologies, Inc. vs. United States is a huge win for Service Disabled Veteran Owned Small Businesses (SDVOSB) as well as any company who partners with an SDVOSB such as Red One Medical! In a nutshell, this new SCOTUS ruling has removed all major marketplace obstacles for SDVOSBs by “clarifying” the laws pertaining to their special status. SDVOSBs and Veteran Owned Small Businesses (VOSB) have always had a special priority status with the VA and other federal agencies, but in the past it’s been common practice for agency officials to deny a SDVOSB or VOSB a fair chance to compete for contracting opportunities by restricting those opportunities to the Federal Supply Schedule (FSS) or GSA Scheduel. Well that may all be changing according to the VA and many leading Federal Acquisition Regulation (FAR) Attorneys.

Many legal experts now agree that the new SCOTUS ruling may trump the FSS and GSA completely and force agency officials at the VA and other agencies to give a qualified SDVOSB or VOSB a chance to openly compete for any federal opportunity regardless of whether they are on the FSS or GSA. Getting on the FSS or GSA can take anywhere from 6 months up to a year and GSA modifications are certainly stormy waters to navigate. There are also many other conditions for doing business with some VA facilities such as being required to participate in the National Acquisition Center (NAC) program or some other regional buying schedule. If you have tried doing business with the VA in the past it’s very likely all this sounds very familiar (and frustrating).

Thanks to the new SCOTUS decision the days of frustrating government red tape might be drawing to a swift end. The solution to cutting through all this government red tape? Become an SDVOSB/VOSB (Veteran Owned 51% and Controlled) or simply partner with an SDVOSB like Red One Medical. Red One not only has extensive contracting history with the VA but now also has a direct line of access to all VA opportunities through their newly empowered SDVOSB status.

A closer look at the Supreme Court Ruling and what it means:

  • The new Supreme Court ruling makes SDVOSB followed by VOSB the highest priority VA Set-Aside status. (Red One Medical is an SDVOSB)
  • The Supreme Court ruling gives higher priority to SDVOSBs and VOSBs than policies or mandates giving priority to the FSS (Federal Supply Schedule) or GSA.
  • The Supreme Court Ruling supersedes any priority requirements of VAAR 808.002(a).
  • The Supreme Court Ruling decided that “Orders” are still considered “Contracts” and are not exempt from their ruling.
  • The VA must first perform a “Rule of Two” analysis and may only buy from a non-veteran source when the conditions of the “Rule of Two” are not satisfied.
  • Contracting Officers must prioritize SDVOSBs by applying the Rule of Two under 38 U.S.C. § 8127(d)
  • Supreme Court Ruling utilizes commanding and clear language leaving no room for optional compliance.
  • A contracting officer must perform documented market research in an attempt to allow SDVOSBs and VOSBs a fair chance to compete for an opportunity.
  • A review of the original market research and VA Form 2268 shall be accomplished to confirm whether or not the “Rule of Two” was appropriately considered and whether offers are likely to be received from two or more qualified, capable and verified SDVOSBs or VOSBs at a fair and reasonable price. If the review finds that there are two or more SDVOSBs or VOSBs, an amendment shall be issued that cancels the solicitation. This means that if a contracting officer does not give Red One Medical a fair chance to compete for an opportunity and Red One contests that decision successfully, the opportunity will be cancelled and Red One will be given an opportunity to fairly compete for those federal dollars. If Rule of Two conditions are satisfied, Red One Medical could win that opportunity with its SDVOSB status instead of the original company who was awarded the contract.

Our existing relationships with federal agencies and our ability to harness the resources of all of our partners play a large role in what we do, but our SDVOSB Status also plays a special role in giving our partners direct access to the federal marketplace. We leverage this priority status through a FAR regulation called The Rule of Two.

What Is The Rule of Two?

The Rule of Two States:

1.) If the contract is between $3,000 and $150,000, it’s automatically reserved for small business. (SDVOSB is The Highest Set-Aside Priority for the VA and other Agencies and this new SCOTUS ruling also applies to contracts greater than $150,000).

2.) If the contracting officer does not have access to at least two responsive, responsible small businesses, he/she is allowed to award to any qualified contractor through full and open competition.

3.) If the opportunity goes to full and open competition, the contracting officer must justify their decision. That justification is reviewed and accepted or rejected by other members of the acquisition team – including the Small Business Advocate who will not sign off on the contract unless market research has been conducted to determine if there are any qualifying Small Businesses. (Concerning the VA, these are first and foremost SDVOSBs like Red One Medical and following that, VOSBs)

Download Red One Medical’s Capability Statement

What exactly is Service Disabled Veterans Owned Small Business status (SDVOSB) and How Does it Help Me Gain Special Access to Government Opportunities?

There are several federal initiatives that give Red One’s SDVOSB status priority access.

The Veterans Entrepreneurship and Small Business Development Act of 1999 established an annual government-wide goal of not less than 3% of the total value of all prime contract and subcontract awards for participation by small business concerns owned and controlled by service-disabled veterans.

In reality each agency has goals that far exceed 3%. In FY 2015 the VA had a combined Prime/Sub SDVOSB goal of 13% and far exceeded that goal in actual awards. With the new SCOTUS ruling SDVOSBs are guaranteed to win several times more federal contracting opportunities than in 2015 and SDVOSBs like Red One will automatically get priority over all other businesses to include VOSBs.

The Veterans Benefits Act of 2003 established a procurement program for Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBC). This procurement program mandates that federal contracting officers may restrict competition to SDVOSBs and award a sole source or set-aside contract where certain criteria are met.

With the new SCOTUS ruling now in place, SDVOSBs like Red One will automatically be awarded any VA contracting opportunity as long as The Rule of Two criteria are satisfied.

The Department of Veterans Affairs (VA) grants the highest priority to SDVOSB and VOSB for set aside and sole source contracts. This procurement authority and its subsequent implementation is a logical extension of VA’s mission, to care for our nation’s Veterans.  The VA refers to this program as the Veterans First Contracting Program (Per VA Acquisition Regulation Part 808, required sources of supplies and services for the priorities in acquisition).

Previously the VA could deny an SDVOSB a fair opportunity to compete for a contracting opportunity by restricting that opportunity to the FSS, GSA or other contracting vehicle but with the new SCOTUS ruling now in effect SDVOSBs like Red One Medical must be allowed a fair opportunity to compete for a VA contract regardless of FSS or GSA restrictions or mandates. Effectively, Red One’s SDVOSB status trumps all other contracting mandates or obstacles.