Noteboom The Law Firm

Disabled Veteran-Owned Businesses Get Favorable GAO Decision

October 19, 2010 - A disabled veteran business owner recently won an appeal that could mean millions of dollars in opportunities for contracts being offered to disabled veteran-owned businesses. The Government Accountability Office (GAO) decided the Department of Veterans Affairs (VA) erred in not limiting competition for bids for 8 specific design contracts to disabled veteran-owned businesses, per a law implemented in 2006 mandating they get preference.

The VA argued the contracts in question were for projects to be constructed at various VA locations and the federal stimulus law funded many of these projects. Because of this, the contracts were not eligible to fall under the set-aside law. Therefore, they argued, specific comments in the Federal Register justified them in not limiting the architectural and engineering contracts. The GAO found no legal justification for excluding these contracts from disabled veteran-owned businesses.

The 8 projects combined may be worth as much as $45 million. Average design fees run 8-10% of the total project costs. Since the GAO handed down their decision, multiple businesses have been attempting to benefit from the ruling.

As part of their decision, the GAO suggested the VA's practice of allowing open competitive bids give way to their legal obligation. That is, they must follow their mandate to limit competitive bidding to disabled veteran-owned businesses if it is likely at least two disabled veteran-owned businesses will tender bill proposals.