Last week's Supreme Court decision will significantly impact the way the Department of Veterans Affairs purchases from FSS multiple award schedules. In Kingdomware Technologies, the Court unanimously held that a statutory preference, commonly known as the Veterans First Program, requires that the VA must follow the “Rule of Two” for all purchases, unless two narrow exceptions apply.

The “Rule of Two” requires the VA to restrict procurements to small businesses concerns owned and controlled by veterans if the contracting officer has a reasonable expectation that two or more such small business will submit offers and that the award can be made at a fair and reasonable price that offers the best value to the Government. The statute includes two exception to the “Rule of Two,” both of which relate to circumstances permitting sole source awards to veteran-owned companies.

The VA has long taken the position that the “Rule of Two” is inapplicable to purchases under the GSA schedule program. Last week, the Supreme Court settled the issue and held that the VA must apply the “Rule of Two” to all purchases, even those made under the FSS program. VA contractors that are not veteran-owned should expect to see additional competition from veteran-owned and controlled contractors in the future.