Link: GAO Decision
Agency: Department of Veterans Affairs
Disposition: Protests Denied.
Protests that the Department of Veterans Affairs violated the Veterans Benefits, Health Care, and Information Technology Act of 2006 (VA Act) by failing to consider whether procurements should be set aside for service-disabled, veteran-owned small business concerns before purchasing from an AbilityOne organization are denied, where the agency reasonably read the VA Act and the Javits-WagnerO’Day Act together to avoid conflict
General Counsel PC Highlight:
Alternative Contracting Enterprises, LLC (ACE) and Pierce First Medical (PFM) protested the issuance of purchase orders under two basic ordering agreements (BOA) to Bosma Industries for the Blind, Inc. for medical exam and surgical gloves. ACE and PFM argued that the agency failed to consider setting aside the procurements for SDVOSBs under the Veterans Benefits, Health Care, and Technology Act of 2006, before purchasing from Bosma, an AbilityOne non-profit agency, under the Javits-Wagner-O’Day (JWOD) Act. The JWOD Act requires government entities to procure items on an established list from qualified non-profit agencies for the blind or disabled under the AbilityOne program.
The GAO found that the two statutes could be read in a manner so as not to conflict, agreeing with the agency that the VA Act does not expressly address the preference required by the JWOD Act. The GAO noted that where there is a gap to fill, the agency has the express authority to clarify a specific provision of the statute by regulation. The agency had only addressed the AbilityOne preference in the preamble to its regulations implementing the VA Act and in its internal guidance. The GAO agreed with the protestors that these two constructions were not entitled to Chevron deference, as they did not reflect formal rulemaking and were not regulations. The GAO found instead that the agency’s construction of the two statutes in its preamble and guidelines is entitled to Skidmore deference, which the protestors had not shown to be inconsistent with the statutes or unreasonable.
The GAO then disagreed with the protestors’ argument that the procurement from Bosma would violate the Buy American Act, as Bosma intended to supply gloves made in China. It noted that the Buy American Act does not provide a basis for challenging a sole-source procurement, since the act merely requires a price comparison between competing products.
SDVOSBs must remember that, although the GAO has held that the VA is required to consider procurements for SDVOSB or VOSB set-asides before proceeding to procure through other set-aside programs or through full and open competition, there may still be other procurement programs, such as the AbilityOne preference, that permit the VA to procure from non-SDVOSBs or -VOSBs instead.