Contract Clash Ruling Leaves Fraught Dispute to Congress
The U.S. Supreme Court's recent refusal to review a decision allowing Veterans Affairs to prioritize veteran-owned businesses over companies that employ the blind and disabled places pressure on Congress to determine if either group should have an advantage in scoring federal contracts.
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And deciding price reasonableness frustrates not only veteran-owned small businesses, but VA contracting officers themselves, given the frequent litigation related to those pricing decisions, which slows down many VA procurements, said Merle DeLancey, a Blank Rome LLP partner whose practice focuses on government procurement law.
"There's still no clarity out there — what's a reasonable price, what's a differential [to market or estimated price] that's acceptable," he said. "The rule-of-thumb is 10%, but there's no [statutory definition]."
That frustration from contracting officers has also led to another front for litigation, as the VA has sought at times to use other agencies' contracting vehicles to sidestep having to make rule of two decisions, DeLancey noted.
"I almost get the feeling [the rule of two] is being abused [by small businesses]," DeLancey said. "They've got a good thing going, but if you're going to be greedy and think every procurement should be set aside, that's a mistake."
"Contract Clash Ruling Leaves Fraught Dispute to Congress," by Daniel Wilson was published in Law360 on January 15, 2020.