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Catch-22 for SDV: GAO Won't Void Contract to Ineligible Company

An agency is not required to terminate a contract awarded as a service-disabled veteran set-aside if the winning bidder turns out to be ineligible for SDV status, the Government Accountability Office has ruled.

The Army awarded a contract for various support services to Wexford Group International Inc. in March under an SDV set-aside. The contracting officer determined that the contract was urgently needed to avoid an interruption in services, so he awarded it without providing the customary notice to the losing offerors.

When Veteran Enterprise Technology Services LLC learned who had won the contract, it challenged Wexford’s eligibility as an SDV business. SBA agreed that Wexford did not qualify.

Veteran Enterprise was caught in a classic catch-22: it did not learn the name of the winning bidder until after the contract was awarded, but SBA regulations governing SDV set-asides say a contract can be canceled only if a protest is filed before it is awarded.

The Army let the contract stand because of the urgency, and GAO agreed.

GAO noted that the regulations for small business set-asides are different: a winning offeror can lose its contract if it is found not to be small after the contract is awarded.

The protest is Matter of: Veteran Enterprise Technology Services LLC, File: B-298201.2.


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