Posted on 10/19/2011 11:45 AM

“SHALL” MEANS SHALL IN SET ASIDES FOR VETERANS

 GAO almost always gets it right in its protest decisions. Occasionally, the Court of Federal Claims (COFC) disagrees. But on one issue, all tribunals agree: shall means shall. GAO and the COFC agreed on the mandatory language in the HUBZone statute and regulation. Congress changed that to provide parity. But what about the VA? Is it required to conduct market research to determine if its procurements should be set aside for small business concerned owned by veterans before using the Federal Supply Schedule? According to GAO, emphatically, yes. 

You would not think there would be a debate over the meaning of the word shall. And yet it has happened over and over again over the last 50 years (and beyond, we are sure). Again and again, we must consult our dictionary for the meaning of shall. If this seems ludicrous, remember federal agencies believe in the sacrosanctity of their discretion to do what they want to do. Hence, the invention of the fiction that shall really means may.
In Aldevra, B-405271; B-405524. October 11.2011, GAO went to the Veterans Benefits, Health Care, and Information Technology Act of 2006 which reads: “A contracting officer of [the VA] shall award contracts on the basis of competition restricted to small business concerns owned and controlled by veterans if the contracting officer has a reasonable expectation that two or more small business concerns owned and controlled by veterans will submit offers and that the award can be made at a fair and reasonable price that offers best value to the United States.”
The VA argued discretion. GAO saw no discretion in the language. Why? It says “shall”. GAO also quickly disposed of the VA’s other argument that FAR exempts the FSS program from small business preference programs. GAO said the exception in FAR permitting agencies to award task and delivery orders under the FSS without regard to government-wide small business programs does not govern or apply to the program created in the mandatory language of the Veterans Benefits, Health Care, and Information Technology Act of 2006.
And, the protester gets its attorney fees and costs (as is always the case when you win a protest).
Most of us learned the meaning of shall before we walked.
UPDATE:  VA recently argued in a Congressional hearing that it need not comply because it is meeting its goal of awards to small veteran owned businesses.  GAO saw no such exception.  [Posted 12/1/11]
ADDITIONAL UPDATE:  GAO also sustained a protest on December 19, 2011, holding the VA improperly used non-mandatory FSS procedures to procure services, rather than using a set-aside for service-disabled veteran-owned small businesses.  [Posted 12/21/11]
bill@spriggsconsultingservices.com

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