IMPACT OF COURT RULING CREATES UNCERTAINTY IN VA MARKET

Uncertainty and confusion are cropping up in the Department of Veterans Affairs over a recent Supreme Court ruling that directed the agency to increase set-asides when using certain Indefinite Delivery, Indefinite Quantity contracts.  While formal guidance on how VA CO’s should incorporate the ruling into their acquisition plans may come as early as mid-July, VA buying offices are likely to have multiple interpretations until then.  The Court’s ruling in Kingdomware said that the VA must set-aside both contracts and task orders for Service Disabled Veteran Owned Businesses when two or more such firms are capable of meeting the agency’s need.  If there are at least two SDVSOB’s on a GSA Schedule or NASA SEWP contract, therefore, one potential interpretation is that all subsequent task orders made through such contracts should be vetted for possible set-aside status, with the presumption being that they should be set-aside unless some prevailing issue is identified.  There are even reports that the set-aside requirement would extend to micro-purchases, a class of procurements heretofore exempt from most procurement rules.  While there is no immediate impact for other federal agencies, the ruling is under review at the SBA for possible broader applicability.  No final action on that front would come for at least two years.  This situation is fluid and companies must stay tuned to ensure they have the latest information.  In the meantime, strengthening ties to SDVSOB’s is advisable.  It is also likely, once again, that the better informed contractors are, the better business partners they can be to their VA customers.