VA: Vets First Contracting Policy is Under Review The Obama administration is reviewing the Department of Veterans Affairs’ use of the Veterans First contracting preference to determine whether VA is unlawfully bypassing veteran-owned businesses when it orders through GSA schedules. The issue arose over VA’s policy that Veterans First does not apply to schedule orders. VA contends the Vets First preference applies only to the department’s set-aside contracts, giving service-disabled veteran-owned businesses first priority and other veteran-owned firms second priority for set-asides. The Government Accountability Office disagrees. Ruling on a bid protest by an SDV company, GAO said the Vets First law clearly gives SDVs and other veteran-owned firms top priority for all VA contracts. (SAA, 11/4) VA first rejected the GAO decision, then reversed course. In a Dec. 8 letter to GAO, the department said it had canceled the GSA schedule orders for kitchen equipment that were the subject of the protest and agreed to pay the legal costs of the protester, Aldevra, an SDV firm in Portage, MI. Dennis Foley, VA’s deputy associate general counsel, said the department had not decided whether to re-solicit the requirements. A Pleasanton, California, nonprofit, the Service-Disabled Veteran-Owned Small Business Network Inc., cited the GAO decision in a lawsuit charging that VA is ignoring the Vets First law. The suit was first reported by the Washington Business Journal. At a Nov. 30 hearing before two subcommittees of the House Veterans Affairs Committee, VA officials defended their policy under tough questioning by Rep. Bill Johnson, R-OH, chairman of the oversight subcommittee. Johnson asked, “Your department is supposed to be looking out for veteran-owned businesses. Why is there such reluctance from the department to follow the intent and the spirit of the law?” “We have a different interpretation than GAO,” replied VA’s deputy general counsel, Jack Thompson. “…GAO recommendations are just that.” GAO’s decisions are not binding on executive-branch agencies. Thompson added, “This issue is still being discussed within the executive branch. There has been no final decision as to what position the administration will take.” Johnson called VA’s testimony “disappointing at best.” He urged the department to change its policy without forcing veterans to wait for a court decision. GSA schedule orders account for about 20% of VA’s purchases. GAO’s top procurement lawyer, Ralph White, said the bid protest was decided on “the plain meaning of the [Veterans First] statute.” That law says “the [VA] Secretary shall give priority to a small business concern owned and controlled by veterans.” “Congress used the word ‘shall,’” White testified. “It didn’t provide any exceptions.” Chairman Johnson asked, “What does the word ‘shall’ mean?” “It doesn’t mean ‘may,’” White replied.