PDS Consultants, Inc, v. United States
Agency: The Department of Veteran Affairs
Disposition: Protest Sustained (Court of Federal Claims)
Keywords: Contracting Preference; Javits-Wagner-O’Day Act; Rule of Two
Decided: May 30, 2017
General Counsel P.C. Highlight:
Where an agency has statutorily declared a preference with specificity, this preference takes precedence over general provisions for preference.
Summary of Facts
This case stems from two competing statutes, both of which govern procurement of items and services by the Department of Veteran Affairs (“VA”). The Javits-Wagner-O’Day Act 41 U.S.C. § 8501-06 (JWOD) requires all government agencies to purchase products and services from non-profits who employ blind and disabled people, when the non-profits’ services or products are on a list referred to as the “AbilityOne” list. The Veterans Benefits Act of 2006, (“VBA”) on the other hand, requires the VA to ascertain whether two or more veteran owned small business are capable of performing the work before procuring goods or services. Where there are at least two such businesses, the VA is required to limit competition to veteran owned small businesses. This requirement is referred to as the “Rule of Two.”
In this protest, PDS Consultants, Inc. (“PDS”) objects to the VA’s future handling of two current contracts for eyewear prescription services, VISN 2 and VISN 7, which were previously awarded from the AbilityOne list. The VA took the position, because the services and products required for VISN 2 and VISN 7 were put on the AbilityOne list prior to the creation of the Rule of Two, the contracts were not subject to the Rule of Two, and the VA was obliged to purchase available services from the AbilityOne list without first performing a Rule of Two analysis.
Basis for Protest
PDS objects to the VA’s position they may issue new contracts in VISN 2 and VISN 7, using the AbilityOne list, without first performing a Rule of Two analysis after the existing contracts expire.
The Court of Federal Claims starts by noting statutory interpretation requires deference to the “unambiguously expressed intent of Congress.” In other words, where a statute is unambiguous, the interpretation of the statute is not negotiable. The scope of the VBA was previously analyzed in Kingdomware Technologies, Inc. v. United States, 136 S.Ct. 1969, (2016). In Kingdomware, the U.S. Supreme Court quoted two sections of the VBA, including, “[A] contracting officer of the Department shall award contracts on the basis of competition restricted to small business concerns owned and controlled by veterans” where two or more veteran owned businesses can provide the services or products sought. Further, “In procuring goods and services pursuant to a contracting preference under this title or any other provision of law, the Secretary shall give priority to a small business concern owned and controlled by veterans. . . “
Additionally, the U. S. Supreme Court reviewed the legislative history of the VBA. Of particular note, an early version of the VBA included “an explicit exception for contracts under the JWOD.” This exception was eliminated from the final legislation. Given the removal of the exception for AbilityOne, it is apparent Congress did not intend an AbilityOne exception in the VBA statute.
Finally, the VBA is a more specific statute, in that the VBA is VA specific. Where a specific statute is enacted after a more general statute, the specific statute takes precedence.
In light of these considerations, the Court of Federal Claims ruled that the Rule of Two always takes precedence over the AbilityOne list for procurements of products and services for the VA and, accordingly, PDS’ protest was sustained.