Court Slaps Down Set-Aside Parity Rule—Again For the second time, the U.S. Court of Federal Claims has ruled that HUBZone firms are first in line for set-asides, while the Obama administration and some members of Congress are pushing legislation to overturn the court decisions. In the latest case, DGR Associates Inc. v. United States, the claims court ordered the Air Force to terminate a contract awarded to an 8(a) firm and offer the work to HUBZone companies. In addition, it issued a permanent injunction prohibiting the Air Force “from awarding any contract that is not in compliance with” the decision. As they have before, government lawyers argued that SBA’s parity rule, giving all socioeconomic programs equal priority in set-asides, correctly expressed the intent of Congress. The same court struck down the parity rule in February, deciding a protest by Mission Critical Solutions against the Army. (SAA, 3/19) In both cases the court found that Congress had never explicitly provided for parity. The Justice Department disagrees with the court’s interpretation of the law. It has told agencies to abide by the parity rule, but SBA officials have acknowledged that set-aside contracts are now a magnet for bid protests. The law governing the HUBZone program says a contract “shall” be set aside for those firms under the rule of two. Laws governing 8(a) and service-disabled veteran programs say contracts “may” be set aside. In his Aug. 13 opinion in the DGR case, Judge Thomas Wheeler wrote, “[T]he language of the Small Business Act granting priority to the HUBZone program could not be more clear.” Legislation has been introduced in both houses of Congress to change “shall” to “may,” so all programs would be on an equal footing. The bills have not moved out of the House and Senate small business committees. Backers of the parity rule, including the Obama administration, have said they will try to attach a parity amendment to the 2011 Defense Authorization bill, which is due to be considered by the Senate soon. The administration has appealed the Mission Critical ruling to the U.S. Court of Appeals for the Federal Circuit. The court has not set a date to hear arguments.