Kingdomware Technologies, Inc. v. United States
107 Fed. Cl. 226
Fed. Cl.2012Background
- Kingdomware Technologies, a service-disabled veteran-owned small business (SDVOSB), alleges VA violated the 2006 Act by not set‑asideting procurements for SDVOSBs/VOSBs before using the Federal Supply Schedule (FSS).
- VA used the FSS to procure Emergency Notification Service (ENS) for VISN 5, after market research found none of the FSS sources sufficient; Everbridge was awarded the FSS task order.
- GAO sustained Kingdomware’s protest in Aldevra and subsequent GAO protests held VA must consider SDVOSB/VOSB set-asides before FSS, but VA declined to follow GAO recommendations.
- The parties stipulated to the facts for one procurement and focus the dispute on whether § 8127(d) requires prior restricted competition before using the FSS.
- The court held that § 8127(d) is ambiguous and VA’s interpretation that FSS orders may proceed without prior SDVOSB/VOSB set-asides, consistent with the Act’s goal-setting structure, is reasonable.
- GAO decisions are not binding on VA, and the court grants the government’s judgment on the stipulated facts for the ENS procurement, denying Kingdomware’s motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 8127(d) mandates upfront SDVOSB/VOSB set-asides before FSS use | Kingdomware: 'shall award' SDVOSB/VOSB set-asides are mandatory for every procurement. | VA: Act is goal-setting and allows FSS use with discretion to meet goals. | Ambiguous; Congress left discretion; not plain requirement to forego FSS. |
| Whether the 2006 Act’s goal-setting language controls FSS procurements | Act’s language requires SDVOSB/VOSB set-asides before any other method. | Act’s goals are to be met, but do not mandate in all cases a set-aside prior to FSS. | Goal-setting language makes the Act ambiguous on FSS relation. |
| Whether VAAR preamble interpretation defers to VA's position that FSS procurements are exempt from set-asides | VAAR preamble wrongly excludes FSS from § 8127(d) constraints; deference should apply to GAO interpretation. | VAAR preamble is a persuasive, not binding, interpretation; deference due under Skidmore. | VA’s preamble interpretation is reasonable and entitled to Skidmore deference. |
| Whether the case’s statutory silence on FSS orders should be interpreted in light of historical FSS exemptions | Congress intended to extinguish FSS exemption via silence. | FSS exemption remains; the Act is silent and agency may fill the gap. | Statutory silence does not abolish historical FSS exemption; agency may decide. |
Key Cases Cited
- Distrib. Solutions, Inc. v. United States, 104 Fed.Cl. 368 (2012) (discusses Rule of Two and interpretation of § 8127 within VA procurement)
- Angelica Textile Sens., Inc. v. United States, 95 Fed.Cl. 208 (2010) (statutory interpretation of 2006 Act; VA contracting goals)
- K-Lak Corp. v. United States, 98 Fed.Cl. 1 (2011) (agency discretion in procurement methods; FSS context)
- DGR Assocs., Inc. v. United States, 94 Fed.Cl. 189 (2010) (HUBZone priority; statutory interpretation under Small Business Act)
- Mission Critical Solutions v. United States, 91 Fed.Cl. 386 (2010) (HUBZone/priority considerations in small business set-aside context)
- Contract Mgmt., Inc. v. Rumsfeld, 291 F.Supp.2d 1166 (D. Haw. 2003) (HUBZone/priority and set-aside framework in SB programs)
- Aldevra LLC, B-405271 (2011) (GAO finding that VA must set aside before FSS; official reporter unavailable)