In a case that may interest Texas military veterans, the U.S. Supreme Court has ruled that the Department of Veterans Affairs failed to comply with a law designed to increase federal contracts awarded to small businesses operated by disabled veterans. The June 16 decision was unanimous.
The case before the court involved veteran-owned Kingdomware Technologies Inc., a company based in Maryland that was not considered for a service contract at a VA medical center. Federal law requires the VA to allow contract bidding whenever two or more companies owned by disabled veterans can offer competitive prices for a service. However, the VA claimed that the law did not apply when it purchases goods and services from companies already contracted under the Federal Supply Schedule service. Justice Clarence Thomas countered that "the rule of two" applies to all contracts.
The Supreme Court's decision was a victory for veterans groups that alleged the VA's interpretation of the bidding rule was depriving lucrative contracts to thousands of veteran business owners. A federal appeals court had previously ruled the VA could ignore the rule of two if they awarded 7 to 12 percent of all annual contracts to veteran-owned companies. However, the high court stated the VA is required to follow the bidding rule in all cases, whether or not a yearly threshold is met.
Business contracts can be complex, especially when one of the parties is a governmental agency. Companies entering contract negotiations may benefit by consulting with an attorney to ensure the agreement meets their expectations and to avoid protracted and expensive litigation that could arise over contract disputes.
Source: PBS, "Justices rule against VA in disabled vets contract dispute," Associated Press, June 16, 2016