We represent American manufacturers that sell American made products to the Veterans Administration and Department of Defense in the areas Clinical Laboratory Medicine, Diabetes Care and Vaccines.
A June 16th Supreme Court decision mandated that Veteran Owned Businesses must be given preferences in all contracting decisions. They wrote, “We conclude that the Department must use the Rule of Two when awarding contracts, even when the Department will otherwise meet its annual minimum contracting goals.”
RULE OF TWO 38 U. S. C. §8127(d)
if a contracting officer has a reasonable expectation that two or more small business concerns owned and controlled by veterans will submit offers and that the award can be made at a fair and reasonable price that offers best value to the United States
If you assume from the VA’s perspective three companies of a standard product, who will win?
Fair and Reasonable Price, the VA may determine that $1.05 in a Veterans set-aside program is a fair and reasonable price compared to $1.00 from a national distributor? The VA won’t choose a $1.10 over a $1.05 on the same products from two competing veteran distributors?
A Veteran Owned Distributor that loses the first case costs you nothing if the VA strictly decides a fair and reasonable price is the lowest price in all situations.
Not appointing a Veteran Owned Distributor will cost you the business in the first case if the VA decides $0.05 is close enough. If the contract is for $1 million, you could lose all of the business for a year or multiple years.
In the next year, there will be a sales manager explaining why waiting and seeing was the correct course, as opposed to proactively appointing a veteran owned distributor.