CVE SDVOSB Denial – Challenging in Federal Court

Challenging a CVE SDVOSB denial in pre-award contest

In KWV, Inc. v. United States, a disappointed bidder filed a pre-award bid protest of the CVE’s denial  of  their SDVOSB status.  In that case,  the US Court of Federal Claims found the CVE’s reliance on the Veteran applicant’s residency alone was “arbitrary and capricious” and not in accordance with VA’s regulations.  KWV, Inc. v. United States, 111 Fed. Cl. 119, 127 (Fed. Cl. 2013).  In deciding in the Veteran’s favor, the Court indicated that  “there [was] nothing in the administrative record to suggest that [the Veteran] was not exercising sufficient control over [the company]” and “the government has not provided a coherent and reasonable explanation of its exercise of discretion…nor articulated a rational connection between the facts found and the choice made”  Id., see also Impresa Construzioni Geom. Domenico Garufi, 238 F.3d at 1333 (quoting Latecoere Int’l, Inc. v. United States Dep’t of the Navy, 19 F.3d 1342, 1356 (11th Cir. 1994)); Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962))(internal quotations removed).

Court finds CVE SDVOSB denial for implausibility insufficient

The U.S. Court of Federal Claims remanded an OSDBU determination in CS-360 v. U.S. Dep’t of Veteran Affairs, where the cited reason for denying certification was the posited “implausibility” that a non-veteran participant would make capital contributions without “control.”  The Court ruled “To the extent the CVE intends to suggest that investment generally must be accompanied by some level of control over a company’s affairs, it must explain why it believes that to be the case and indicate how it applies to CS360. CS-360, LLC v. U.S. Dep’t of Veteran Affairs, 846 F. Supp. 2d 171, 191 (D.D.C. 2012) The Court has already found that this cursory statement fails to provide a sufficiently reasoned explanation. To the extent the CVE intended to rely upon some other “underlying implausibility,” it has failed to identify it with sufficient particularity to permit this Court to exercise its function of judicial review. CS-360, LLC v. U.S. Dep’t of Veteran Affairs, 846 F. Supp. 2d 171, 189 (D.D.C. 2012)

Conclusion

The lesson to be learned from these two cases is that there is value is persevering and having your CVE SDVOSB denial reviewed by the Federal Claims court, which has jurisdiction in these matters. Of course, finding a good lawyer to represent you will be important. We hope that you will think of us at Whitcomb Law, PC if you are faced with contesting a CVE SDVOSB denial in federal court.

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