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High Court Says VA Must Open More Bids to Veteran-Owned Businesses

By Ephrat Livni, Esq. on June 22, 2016 | Last updated on March 21, 2019

Sometimes but not that often everyone on the US Supreme Court agrees on a topic. That is what happened last week when the eight justices had to consider government contracts for veteran-owned businesses. The nation's highest court decided last week that the Department of Veteran Affairs must set aside more contracts to be filled by veteran-owned small businesses, and that it's not optional as lower courts ruled.

The court's reasoning was remarkably simple and straightforward, and its decision turned on one word: "shall." The hope is that veterans in business will be awarded more government contracts as a result. Let's consider the case, reported by The Washington Post.

The Rule of Two

This case arises from a law requiring the Department of Veteran Affairs to give preference to veterans when awarding contracts. Under the "Rule of Two," if at least two veteran-owned businesses can compete for a contract, then bidding must be limited to veteran businesses as long as the "award can be made at a fair and reasonable price that offers best value to the United States."

Kingdomware Technologies filed suit when the rule was ignored for the purposes of a medical service contract, and the claim made its way up the federal courts. In Kingdomware Technologies v. US, the court of appeals did not find that application of the Rule of Two was a requirement when the VA met its quota of awarding 12 percent of its contracts to veteran-owned businesses.

But Justice Clarence Thomas, writing for a unanimous court, stated that application of the rule is not optional. He pointed to use of the word shall in the law. "Unlike the word 'may,' which implies discretion, the word 'shall' usually connotes a requirement," Thomas wrote.

Contracting With Gov

This decision will lead to more awards of government contracts to those who have served in the military and are now in business. "The court's ruling means that more veterans will have the opportunities that Congress wanted them to have to build their business through competition before the VA," said Luke McLoughlin, who filed briefs on behalf of veteran-owned business associations.

Consult With Counsel

If you're bidding for a government contract and need guidance -- regardless of whether you are a veteran -- or just need help with any other aspect of business operations, speak to a lawyer. Get help.

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