Online Update: Judge Dumps Parity Rule; SBA Favors Congressional Fix Congress must decide whether to restore parity among small business programs after a federal judge put HUBZone firms first in line for set-asides. Chief Judge Emily Hewitt of the U.S. Court of Federal Claims overturned SBA’s parity rule, which gives 8(a), HUBZone and service-disabled veteran-owned companies equal priority in set-asides. She said the HUBZone law gives that program first claim on set-aside contracts. In a message to its field offices, SBA said the parity rule remains in force because the court decision applies only to the single contract involved in the case. But Jonathan Swain, assistant administrator for communications and public liaison, acknowledged, “This could cause a flood of protests in any non-HUBZone procurement, paralyzing the procurement process and making litigation-avoidance a primary contracting objective.” If the court decision stands, he said, it “could have a devastating impact” on non-HUBZone small businesses. Swain said the Obama administration favors parity and supports congressional action to write the policy into law. Senate Small Business Committee Chair Mary Landrieu, D-LA, plans to introduce legislation soon to accomplish that, a spokeswoman said. At issue are two little words. The HUBZone law says a contract “shall” be set aside for a HUBZone firm under the rule of two, while laws creating the 8(a) and SDV programs say contracts “may” be set aside. “The court concludes that the language of HUBZone statute is unambiguous and mandatory and that the plain meaning of the HUBZone statute prevails,” Judge Hewitt wrote. “…Congress did not explicitly provide for parity between the HUBZone and 8(a) programs.” She sustained a bid protest by Mission Critical Solutions, which argued that the Army improperly set aside an IT contract for 8(a) companies without considering HUBZone firms. The Government Accountability Office had agreed, but the Justice Department told agencies to ignore GAO and abide by SBA’s parity rule. Last year the Senate adopted Landrieu’s amendment to the 2010 Defense Authorization Act, writing the parity rule into law, but the amendment was dropped in a House-Senate conference committee. The conference report said no change in the law was needed because the Justice Department had upheld the parity rule. Before the Court of Claims, the Justice Department pointed to the conference report as evidence that Congress intended to provide for parity. But Judge Hewitt said, “Faced with conflicting interpretations [by Justice and GAO], Congress could have taken action to amend the statute if its intent was not correctly expressed in the statute as written.”