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GAO Rejects Parity Rule for Service-Disabled Vets

The Government Accountability Office has ruled that service-disabled veteran-owned businesses are not entitled to equal preference with 8(a) and HUBZone firms in set-asides.

SBA has issued a regulation giving SDVs parity with 8(a) and HUBZone companies, and a pending proposed rule would make parity part of the Federal Acquisition Regulation. The proposed rule, issued in March says, “There is no order of precedence among the 8(a), HUBZone or SDVOSB Programs.” (SAA, 3/21)

In deciding a protest by a HUBZone company, GAO said the law creating the HUBZone program provides that an agency “must” set aside a contract if two or more HUBZone companies are willing and able to compete for it. The same wording is in the law creating the 8(a) program.

However, the law establishing SDV set-asides says a procurement “may” be reserved for those companies.

GAO’s decision implies that only Congress can grant parity for SDV firms. Several bills have been introduced to do that, but none has passed.

International Program Group Inc., a HUBZone firm, protested the Marine Corps’ decision to set aside two requirements for SDV companies to provide pre-deployment training for Marine units at Camp Pendleton, CA. The contracting officer acknowledged that he did not try to determine whether two HUBZone companies were available to compete for the work.

The cases are B-400278; B-400308, available at www.gao.gov.


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