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Veteran-owned Company Loses Bid Protest Against U.S. Government

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Veterans4You, Inc., a Florida based corporation, produces distinct products and services for federal and state governments. It provides a wide range of products and services including blankets, coveralls as well as physical and digital marketing materials. It recently undertook legal actions to garner greater contract opportunities for veteran-owned businesses like itself.

GAO Solicitation Protest

This case originated with the U. S. Department of Veterans Affairs (VA) submitting a printing and binding requisition to the Government Publishing Office (GPO) for “Suicide Prevention Gunlocks” that had printed on them the Veterans' Crisis Line and Suicide Prevention number and signs of of suicidal behavior.  It also provided for wallet cards with this information to be printed as part of the contract. On February 21, 2019, Veterans4You Inc. responded to the solicitation by filing a bid protest with the United States Government Accountability Office (GAO) challenging the solicitation on the grounds that the GPO did not give preference to veteran-owned small businesses (VOSB) and service-disabled veteran-owned small businesses (SDVOSB).

The GAO agreed with Veterans4U and sustained the protest. GAO held that the requirements of the Veterans Benefits Act were applicable to the GPO procurement. The GAO recommended the GPO coordinate with the VA to abide by the requirement for suicide prevention gun locks using Veteran's preference. On June 5, 2019, the VA submitted a new SF-1 printing and binding requisition to the GPO for the gunlocks, labels, and printed wallet cards.

The GPO Contracting Officer (CO) was obligated to employ competitive bidding and, at one time,  had set-aside authority for service-disabled businesses,  but that authority expired on October 1, 2000. The CO said the GPO was not authorized to engage in a set-aside award for Veterans but in the "spirit of the law' agreed to include VSOBs and SDVOSBs on the bid list. On June 13, 2019, the GPO issued a new Invitation For Bids (IFB) once again with unrestricted competition leading to Veterans4You filing a pre-award bid protest challenging the GPO’s Solicitation in the United States Court of Federal Claims (COFC).

A Little Background...

In 2006, Congress passed the Veterans Benefit Act (VBA) to increase contracting opportunities for small businesses owned and controlled by veterans. It requires the Secretary of the U.S. Dept. of Veterans Affairs (VA) to give priority to small business concerns owned and controlled by veterans when procuring goods and services. The VBA’s “Rule of Two “requires the VA to award contracts based on competition restricted to VOSB or SDVOSBs when two or more businesses are expected to offer bids and a contract can be made at a fair and reasonable price at the best value to the United States.

However, according to 38 U.S.C.A. § 8127(i)(1), the VA is not always required to perform a “Rule of Two” analysis when the VA acquires goods and services. It can using non-competitive procedures below the simplified acquisition threshold if the contracting officer determines the business is a responsible source and the award can be made at a “fair and reasonable price” and the VA may use sole source contracts for contracts above the Simplified Acquisition Threshold but below $5 million.

U.S. Court of Federal Claims’ Findings

The COFC held the GPO properly conducted the solicitation. It noted the solicitation was clear as to what was needed to be printed on the cable lock body and wallet cards. According to 44 U.S.C. § 501, all printing and binding of government agencies is must be done by the GPO. This includes the printing on the locks and wallet cards. The Court sided with the government and held the VA complied with the VBA and the administrative record supported the finding.

The Court stated that in this instance neither the VA nor the GPO is obligated to conduct a Rule of Two analysis, unlike the argument put forth by Veterans4You. The Court used the plain language of 38 U.S.C. § 8127(d) to determine the VA’s obligations regarding the Rule of Two. Congress made preference for VOSBs and SDVOSBs, but the VBA indicates this preference applies only when the VA conducts a procurement on behalf of the agency. This interpretation is supported by case law. In PDS Consultants, Inc. v. United States, 133 Fed. Cl. 810 (2017) and Kingdomware Techs.,Inc. v. United States, 136 S. Ct. 1969, 195 L. Ed. 2d 334 (2016), the VA must conduct a Rule of Two analysis because the procurements were made by the VA.

The Court stated the VA met its obligations under 38 U.S.C. § 8127(i) when it requested the GPO set aside any procurement action to SDVOSBs or VOSBs. The Court also held the evidence shows GPO reasonably determined it could not set aside the solicitation as requested by the VA. It however still fulfilled the agency’s regulatory requirements by including known SDVOSBs and VOSBs to its Bid List, allowing them to receive the opportunity to bid on the solicitation.

The Court found this inclusion as the GPO undertaking steps to accommodate the spirit of the VA’s request, while being consistent with the VBA. The COFC concluded that Veterans4You did not show that either the VA or the GPO violated the VBA. The Court granted the U.S. government’s cross-motion for judgment upon the administrative record, denied Veterans4You’s motion for a preliminary injunction, and dismissed the complaint.

Government Contract Law

The U.S. Government contracts with businesses of all types. Think of any type of business and the government has most likely contracted with it before. There are numerous opportunities for government contracts that can be used to expand your business while serving the country. We have years of expertise in helping companies acquire government contracts. If you have any questions about this case or are seeking help to acquire a government contract, contact Whitcomb Selinsky PC at 866) 476-4558.

About the AuthorRaymundo Ribota

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