The “Rule of Two” Rules the Day in Supreme Court’s Decision Against the VAThe recently decided case of Kingdomware Technologies, Inc. v. United States marks a big win for small business-owning veterans. The Supreme Court unanimously decided that the Department of Veterans Affairs (VA) misinterpreted the language of the Veterans Benefits, Health Care, and Information Technology Act of 2006 (codified in 38 U.S.C. § 8127) by applying it to only its small business contracting goals. According to the Court, the Act requires the VA to award contracts to a restricted pool of competition—namely, small businesses owned and controlled by veterans if at least two such businesses submit offers (the “Rule of Two”)—and it applies to all contracts entered into by the VA.

Notably, the Supreme Court opined that “all contracts” includes Federal Supply Schedules (FSS) orders. In doing so, the Court rejected the VA’s interpretation of an “order” as something other than a legally binding contract to which the Rule of Two does not apply, opening up a whole new category of contracts to veteran-owned (or controlled) small businesses.  While this decision may raise new issues as the VA seeks to implement the Rule of Two to FSS orders, it definitely sets veterans back on track to receive the broad competitive bidding opportunities that the legislature intended them to have.

Bradley is a proud supporter of our nation’s veterans, representing veteran-owned construction companies and other businesses, as well as employing more than 30 attorneys and staff who have served in a branch of the United States military.

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