In a unanimous opinion overturning the U.S. Court of Appeals for the Federal Circuit, the U.S. Supreme Court held that the Department of Veterans Affairs (VA) must consider whether two veteran-owned small businesses (VOSBs) can perform a proposed contract before issuing a solicitation. If this “rule of two” analysis leads to a reasonable expectation that two such businesses would submit offers and that the award can be made at a fair and reasonable price, the acquisition must be reserved for VOSBs. Although this finding is consistent with prior Government Accountability Office (GAO) decisions, courts had unanimously accepted the VA’s view that such set-asides were not required if the VA had met its statutory VOSB contracting goals. This decision will undoubtedly result in an increase in VOSB set-asides by the VA, but it may also have broad implications for small business set-aside requirements for the General Services Administration’s Federal Supply Schedules (FSS).
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