Legion files amicus brief in disabled veterans small business case
This one is kind of complicated, but let's start with the story from Law 360:
The American Legion last week called on the Federal Circuit to reverse a ruling that found the U.S. Department of Veterans Affairs isn’t obligated to set aside more contracts for veteran-owned small businesses, arguing the VA is subverting the will of Congress.
In an amicus curiae brief, the veterans’ support group contends that the VA is running afoul of the Veterans Benefits, Health Care and Information Technology Act of 2006, which it says requires the VA to use small business set-aside contracts when two or more businesses owned by service-disabled veterans can provide needed goods at a reasonable price.
The Court of Federal Claims in November overturned a line of U.S. Government Accountability Office decisions, ruling the VA has broad discretion to implement the 2006 law because the statute was ambiguous and did not directly address the new “Veterans First” preference's relationship to the Federal Supply Schedules, which are generally exempt from small business contracting preferences.
The GAO and the VA have been at an impasse for two years, with the latter ignoring the GAO’s consistent findings that the 2006 law requires the VA to use small business set-aside contracts when there is competition for the contracts from service-disabled veteran-owned businesses.
Basically, what happened was that Congress passed two seperate laws aimed at getting Federal Agencies to give more contracts to disabled veterans. The goal was 3 percent, but it set this goal as aspirational. When these laws passed (1999 and 2003) they went back and looked at the numbers to see how the government was doing on this 3 percent goal. The answer was not well. From 2001 to 2002 the percent was 0.12 percent. In 2005, after the second one was passed, it still only managed about 0.5 percent.
So Congress went back, and instead of weak aspirational goals, it changed the law to read that the federal Department "shall award" contracts. (Instead of "may" award.) Now, despite the obvious requirement of the language, and despite the General Accounting Office telling VA "you have to do this", VA has decided that it doesn't want to, and thus it will not do so.
VA's argument is basically that they exceed the 3 percent (which they do*) and thus those requirements that they "shall award" doesn't apply to them. [* To clarify: VA is above 3 percent, the government as a whole is south of 1 percent. But the law specifies how the contracts are awarded, being over 3 percent for one Department doesn't exempt them.]
From our amicus brief on the case:
Alarmed by the VA’s refusal to comply with the law, two subcommittees of the House Committee on Veterans’ Affairs held a hearing in November 2011 and sharply criticized the VA for its unlawful overreliance on the FSS. Rep. Bill Johnson, Chairman of the Subcommittee on Oversight and Investigations, began by remarking that “[w]hen the VA cannot or chooses not to implement clearly written legislation, we have a problem. This is not rocket science.” Follow-up on the U.S. Department of Veterans Affairs Service-Disabled-Veteran-Owned Small Business Certification, Hearing before the Subcommittee on Oversight and Investigation, Serial No. 112-35, 112th Congress (Nov. 30, 2011). He explained that § 8127(d) “contains clear wording” and “straightforward language,” and that “it is difficult to understand the VA’s failure to correctly interpret this law.” Id. Further, he emphasized that “[t]he word ‘shall’ has a very, very explicit meaning” and “does not leave much to interpretation.”
At the hearing, the VA argued (as it did in the Claims Court) that it does not need to follow § 8127(d) because it meets or exceeds both its own and the government-wide goals for VOSB and SDVOSB participation. Countering that argument, Rep. Marlin A. Stutzman (Chairman of the Subcommittee on Economic Opportunity) observed that “the process in achieving those numbers has been painful at best.” Id. He also explained that meeting goals “is not the sole intent of Section 8127,” which had also charged the VA with “picking up part of the slack for the rest of the Federal Government,” including “the literally dozens of federal agencies who continue to fail miserably to meet even the three percent goal.”
It's startling that the VA, the Department tasked with making sure that disabled veterans are taken care of, chooses to interpret "shall" as "may" in an effort to avoid giving contracts to companies owned by the very veterans they are tasked with taking care of. Literally startling.
So anyway, The American Legion has filed an amicus curiae brief ("friend of the court") in the case Kingdomware Technologies v. U.S. in the Court of Appeals for the Federal Circuit. It's almost beyond belief that we even have to do that, but so it goes. I should have more on this in the future as the case is decided.