The US Supreme Court [official website] ruled [opinion, PDF] unanimously Thursday in Kingdomware Technologies, Inc. v. United States [SCOTUSblog materials] in favor of a veteran-owned business in a challenge against the Department of Veterans Affairs (VA) [official website]. In 2006 Congress passed a bill that states the VA “shall” award contracts to veteran-owned small businesses if at least two such businesses bid on the work at a fair price. Kingdomware [website], an information technology firm owned by service-disabled Army veteran Timothy Barton, argued that the VA has an obligation to seek veteran-owned businesses, while the VA rebutted that it need only consider them in the scope of what is best to achieve its business goals. The US Court of Appeals for the Federal Circuit ruled in favor of the VA, stating that the Federal Acquisition Regulation [text], the general procedures for government contracting, permit agencies significant leeway in deciding how best to allocate business resources. In an option by Justice Clarence Thomas, the Supreme Court reversed:
In this case, we consider whether the Department must use the Rule of Two every time it awards contracts or whether it must use the Rule of Two only to the extent necessary to meet annual minimum goals for contracting with veteran-owned small businesses. 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.
The court heard oral arguments [JURIST report] in the case in February. The court granted certiorari [JURIST report] last June.