Veteran-owned business owners fight for exclusive inclusion

Veteran-owned business owners fight for exclusive inclusion

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Photo: Davis Staedtler

In its first sitting session back since the death of their colleague, Justice Antonin Scalia, the Supreme Court heard its first argument in Kingdomware Technologies v. United States.

WASHINGTON, D.C. (Talk Media News) – In its first sitting session back since the death of their colleague, Justice Antonin Scalia, the Supreme Court heard its first argument in Kingdomware Technologies v. United States.

A case that was supposed to be heard in November 2015, the Court asked for both sides to answer questions regarding whether the case would be moot by the time the full Court heard arguments. The Court is required to hear only cases involving a “live case or controversy.” Mootness becomes an issue when the Court cannot find an active legal point the two sides disagree upon.

Kingdomware Technologies claims the U.S. Department of Veterans Affairs improperly did not allow service-disabled, veteran-owned small businesses to bid on contracts through its system that establishes and organizes approved vendors and contractors. Represented by Thomas Saunders, Kingdomware argued the VA did not adhere to a law Congress passed in 2006 to address the systemic under-awarding of contracts to service-disabled, veteran-owned small businesses.

Under the Veterans Benefits, Health Care, and Information Technology Act of 2006, Congress said when awarding contracts, the VA shall consider only the veteran owned businesses if the contracting officer has a reasonable expectation that two or more of such businesses will submit offers and “the award can be made at a fair and reasonable price” offering best value. This is known as the rule of two.

The United States, represented by Assistant to the Solicitor General Zachary Tripp, argued the rule did not apply to the special database the VA uses known as the Federal Supply Schedule (FSS) or the GSA Schedule. Tripp argued the rule of two does not apply to the FSS database as these are extremely complex procurements and the contracting officials have deference regarding when to apply the rule of two.

The Justices asked serious questions regarding the importance of their decision. Justice Stephen Breyer focused on this rule potentially edging out all non-veteran business owners. He said, “This just can’t be what it means.” Chief Justice John Roberts said the “terms applied seem to allow a lot discretion” by the VA. Furthermore, when Justice Anthony Kennedy asked about empirical evidence, none could be given.

The outcome of this case will hinge upon the Court’s interpretation of the statute. It is on cases like this the loss of Justice Scalia will be felt the deepest. A stickler for what was written in the congressional text being what Congress meant, his focus on the text would have guided the Court. The Court’s determination of where the mandatory and discretionary line falls will be the decisive factor in the outcome of this case. If Kingdomware wins on the basis of their argument, it means veterans will get to bid on every major bid to the exclusion of others if VA believes the procurement bid will allow two or more veteran-owned businesses to bid on the contract. Additionally, it may mean the courts will see increased litigation from small veteran-owned businesses who did not get to bid under the rule of two in the FSS database. If the United States wins, it means, the Court will give continued deference to agencies when the text of a law is unclear.

What effect the passing of Justice Scalia will have on this case is unknown, but it will certainly continue to ripple through the Court’s current session and until a successor is chosen.

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