Term: 2015
Docket: 14-916
Kingdomware Technologies, Inc., v. United States
- Pro
14-916 KINGDOMWARE TECHNOLOGIES, INC. V. UNITED STATES DECISION BELOW: 754 F.3d 923 THIS CASE IS REMOVED FROM THE ARGUMENT CALENDAR FOR MONDAY, NOVEMBER 9, 2015. THE PARTIES ARE DIRECTED TO FILE SUPPLEMENTAL BRIEFS ADDRESSING THE FOLLOWING QUESTION: "WHETHER THE DEPARTMENT OF VETERANS AFFAIRS PROCUREMENTS AT ISSUE IN THIS CASE HAVE BEEN FULLY PERFORMED, AND IF SO, WHETHER THE CASE IS MOOT.” CERT. GRANTED 6/22/2015 QUESTION PRESENTED: The Veterans Benefits, Health Care, and Information Technology Act of 2006 provides that contracting officers at the Department of Veterans Affairs "shall award" contracts on the basis of competition restricted to small businesses owned by veterans whenever there is a "reasonable expectation" that two or more such businesses will bid for the contract at "a fair and reasonable price that offers best value to the United States." 38 U.S.C. § 8127(d). The Federal Circuit, however, relied on a prefatory clause in the statute to limit the application of this mandate to situations in which the Department believes that applying it is necessary to meet the goals that the Department estab-lishes for contracting with veteran-owned small businesses. The question presented is: Whether the Federal Circuit erred in construing 38 U.S.C. § 8127(d)’s mandatory set- aside restricting competition for Department of Veterans Affairs' contracts to veteran-owned small businesses as discretionary. LOWER COURT CASE NUMBER: 2013-5042
The case Kingdomware Technologies, Inc. v. United States (2015) revolved around the interpretation of a federal law that required the Department of Veterans Affairs (VA) to prioritize veteran-owned small businesses when awarding contracts. The VA had interpreted this rule as discretionary and did not apply it to all their contracts, leading Kingdomware Technologies - a veteran-owned business - to sue for breach of contract after losing out on several VA contracts. The Supreme Court ruled unanimously in favor of Kingdomware Technologies, stating that the law was mandatory and applied to all VA contracting decisions without exception. This ruling clarified how government agencies should interpret "Rule of Two" in federal procurement laws which requires them to award contracts first to veteran-owned small businesses if at least two such companies can offer fair market prices.
In the dissenting opinion for Kingdomware Technologies, Inc. v. United States, Justice Thomas argued that the majority misinterpreted the Veterans Benefits, Health Care and Information Technology Act of 2006 (the Act). He contended that while the law encourages federal agencies to award contracts to veteran-owned small businesses when possible, it does not mandate them to do so in all circumstances as suggested by the majority ruling. The language of "may" used in one section of the act was interpreted by him as permissive rather than obligatory. Furthermore, he pointed out that another provision allows contracting officers discretion on whether or not a contract should be set aside for veteran-owned companies based on market research results and reasonable expectation about offers from two or more such businesses at fair prices. Therefore, according to his interpretation of these provisions together with other parts of this legislation and its legislative history, he concluded that Department's decision not to use Rule-of-Two procedure did not violate any statutory requirement.
