Pds Consultants, Inc. v. United States
907 F.3d 1345
Fed. Cir.2018Background
- The VA’s Veterans Benefits Act (VBA) (38 U.S.C. § 8127) mandates a “Rule of Two”: VA contracting officers shall restrict competition to veteran‑owned small businesses when they reasonably expect two or more such offers and a fair market price.
- The Javits‑Wagner‑O’Day Act (JWOD) requires federal agencies to procure items on the AbilityOne procurement list from designated nonprofit agencies for the blind or severely disabled.
- VA implemented a Veterans First program and issued a 2010 letter and later memoranda directing contracting officers to apply the Rule of Two before adding new items to the AbilityOne list; items on the List prior to Jan 7, 2010 were to be grandfathered.
- PDS Consultants (a service‑disabled veteran‑owned small business) protested AbilityOne additions and VA procurements for prescription eyewear that had been on the List (VISNs 2 and 7) and sought injunctive relief requiring VA to perform Rule of Two analyses.
- The Court of Federal Claims held the VA must perform the Rule of Two for procurements post‑2006 (when VBA enacted), including items on the AbilityOne List; the Federal Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Claims Court had Tucker Act jurisdiction over PDS’s protest | PDS: Tucker Act covers bid protests alleging statutory violation in connection with procurements; PDS is an interested prospective offeror | Industries/Gov’t: challenges to AbilityOne/List validity belong in district court under APA; List procurements aren’t Tucker Act "procurements" | Held: Claims Court had Tucker Act jurisdiction; PDS is an interested party and the challenge was an alleged statutory violation in connection with procurement |
| Whether VBA’s Rule of Two applies when the item is on the AbilityOne procurement list (JWOD) | PDS: VBA is specific to VA and mandatory; it requires Rule of Two before awarding any VA contract, even for AbilityOne items | Industries/Gov’t: JWOD’s mandatory sourcing to AbilityOne should control; VBA lacks an express exception and shouldn’t displace AbilityOne | Held: VBA (more specific, later statute) controls when Rule of Two is satisfied; VA must perform Rule of Two before procuring items on AbilityOne list when VBA is implicated |
| Whether §8127(d) is limited to competitive procurements | PDS: §8127(d) applies broadly to all VA procurements when its conditions are met | Gov’t: §8127(d) should be read to govern only non‑mandatory, competitive awards; mandatory AbilityOne sourcing is outside it | Held: §8127(d) applies to all VA contracting determinations when its triggering conditions are met, not limited to discretionary competitive contracts |
| Whether FAR/VAAR (AbilityOne priority) or other regulations override the VBA | PDS: Statute controls; FAR acknowledges it is subject to law and cannot override VBA | Industries/Gov’t: FAR Part 8 prioritization (AbilityOne mandatory source) requires AbilityOne be used before other sources | Held: FAR/VAAR do not override a clear statutory mandate; FAR itself is subject to “except as otherwise provided by law,” so VBA prevails in VA procurements when Rule of Two applies |
Key Cases Cited
- Kingdomware Techs., Inc. v. United States, 136 S. Ct. 1969 (2016) (VBA’s Rule of Two is mandatory and applies to VA contracting determinations)
- Angelica Textile Servs., Inc. v. United States, 95 Fed. Cl. 208 (2010) (Claims Court required VA to follow its 2010 procedures for List additions)
- Distributed Sols., Inc. v. United States, 539 F.3d 1340 (Fed. Cir. 2008) ("procurement" for Tucker Act covers all stages from need determination through contract completion)
- Morton v. Mancari, 417 U.S. 535 (1974) (repeals by implication are disfavored)
- Arzio v. Shinseki, 602 F.3d 1343 (Fed. Cir. 2010) (specific statute governs over general statute)