Supreme Court rules for veterans with disabilities in contract dispute

Seal of the US Department of Veterans Affairs on a stone wall
photo credit: Mark Van Scyoc /

The Department of Veterans Affairs failed to follow a federal law, aimed at boosting business prospects for veterans with disabilities, when it issued a contract back in 2012, the Supreme Court ruled June 16 [PDF].

“The court’s ruling means that more veterans will have the opportunities that Congress wanted them to have to build their business through competition before the VA,” Luke McLoughlin, an attorney who filed briefs on behalf of veteran-owned business associations, told the Washington Post.

Congress passed the Veterans Entrepreneurship and Small Business Act in 1999, establishing a goal for federal agencies to award a minimum of three percent of their federal contracts to businesses run by veterans with service-related disabilities.

Seven years later, Congress enacted an additional measure, known as the Rule of 2, stating that the VA “shall award” contracts to veterans with disabilities where at least two such businesses submit offers and the “award can be made at a fair and reasonable price that offers best value to the United States,” with limited exceptions.

The plaintiff in the lawsuit, Kingdomware Technologies, was denied a federal contract to provide emergency notification services in 2012. In justifying its decision, the VA argued that the Rule of 2 was inapplicable because it had already met its annual three-percent goal.

The Court of Federal Claims ruled for the VA, prompting an appeal by Kingdomware Technologies to the Supreme Court. The Paralyzed Veterans of America, with the assistance of three other veterans services organizations, filed an amicus brief [PDF] on their behalf.

The Supreme Court unanimously reversed.

In a decision written by Justice Thomas, the Court said the VA had no discretion as to whether to apply the Rule of 2 outside the limited exceptions in the law, even where the agency had already met its contracting goals.

“We hold that §8127(d) unambiguously requires the Department to use the Rule of Two before contracting under the competitive procedures,” the Court stated.

See more information about this case on Scotusblog.