Justices side with veteran-owned small business over VA

Justices side with veteran-owned small business over VA
© Getty Images

The Supreme Court ruled against the Department of Veterans Affairs Thursday in a dispute over government contracts.  


A unanimous court ruled that the department must comply with all laws aimed at increasing the number of federal contracts awarded to veteran-owned small businesses.

The case, Kingdomware Technologies Inc. v. United States, centers on a Maryland-based software company, which argued the VA should have given it priority as a service-disabled, veteran-owned small business under the Rule of Two.

The Veterans Benefits, Health Care and Information Technology Act of 2006 requires the secretary of Veterans Affairs to get annual goals for contracting with service-disabled and other veteran-owned small businesses.

To help the government meet that goal, a separate provision, known as the Rule of Two, says a contracting officer “shall award contracts” by restricting competition to veteran-owned small businesses if the officer reasonably expects at least two businesses will submit offers and that “the award can be made at a fair and reasonable price.”

In delivering the opinion of the court, Justice Clarence Thomas said Congress used the word "shall" in the Rule of Two as a command.

"When a statute distinguishes between 'may' and 'shall,' it is generally clear that 'shall' imposes a madatory duty."

The case was reveresed and remanded back to the lower court for further review.

This was the first case the justices heard following the February death of Justice Antonin Scalia.