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Legion fighting for veteran business owners

Legion fighting for veteran business owners

The American Legion has filed a friend-of-the-court brief in support of a veteran-owned small business (VOSB) that says VA isn’t following the law.

Kingdomware Technologies, Inc., a service-disabled veteran-owned small business (SDVOSB), is hoping to have its case against VA heard by the United States Court of Appeals after the United States Court of Federal Claims dismissed it last year. At issue in the case is VA’s noncompliance with a federal law that requires VA to award contracts to VOSBs when two or more VOSBs could submit reasonable and fair bids for the contract.

The American Legion has joined the fight, filing a 42-page amicus brief in support of Kingdomware.

Kingdomware filed the claim against VA in federal claims court in July of 2012, alleging that VA failed to comply with the Veterans Benefits, Health Care, and Information Technology Act of 2006 - a federal law which requires, in part, that VA evaluates subprime and prime contracts submitted by VOSBs and SDVOSBs before it evaluates contracts submitted by non-military contractors. Under the law, VA is required to award the contract to a veteran contractor provided the bid is reasonable and of fair value, and the veteran contractor isn’t the only veteran contractor who could submit a reasonable bid.

Kingdomware sought injunctive relief from the federal claims court to force VA’s compliance with the statute but was denied when the court awarded summary judgment to VA. That dismissal brought this appeal.

VA takes the position that the law’s “set-aside” requirement for contracts submitted by VOSBs and SDVOSBs is optional and that it may continue to award contracts according to its usual procurement method - the Federal Supply Schedule - which evaluates veteran-submitted contracts alongside contracts submitted by the general public.

The case turns on statutory interpretation of “shall” in 38 U.S.C. § 8127(d). The United States Court of Appeals has ruled several times that when legislation uses “shall,” as opposed to “may,” a mandatory requirement is created. The Legion’s brief cites a 2013 case, Sharp Elecs. Corp. v. McHugh, where the Court of Appeals reiterated its stance on “shall.”

“... the word ‘shall’ is not ambiguous: As this Court has recently reiterated, ‘‘[s]hall’’ is ‘mandatory’ language,’ and ‘[n]othing in the language of the statute states or suggests that the word ‘shall’ does not mean exactly what it says.”

38 U.S.C. § 8127(d) states that: “... a contracting officer of the Department shall award contracts on the basis of competition restricted to small business concerns owned and controlled by veterans... .”

The Legion’s amicus brief argues that the federal claims court’s failure to follow this precedent for statutory interpretation of “shall” is reversible error. As such, the court of appeals should grant cert to Kingdomware’s appeal and reverse the lower court’s decision, forcing VA’s compliance with the law.

The Legion’s argument takes shelter in Congress’ intent when drafting the Veterans Benefits, Health Care, and Information Technology Act of 2006. The 2006 act is progeny to a government-wide directive passed by Congress in 1999 that set a goal of having 3 percent of all federal contracts be awarded to SDVOSBs. Prompted by the federal government’s failure to meet the goal, Congress passed a law in 2003 that provided that VA and other federal departments “may” set aside contracts from SDVOSBs to help them reach the 3 percent goal.

This law led to the 2006 act, which borrows nearly identical language from the 2003 act but replaces “may” with “shall,” further evincing Congress’ intent that the “set-aside” requirement is mandatory. Congress’ emphatic language is due to a government-wide failure to reach 3 percent since 1999. The federal government reported from 2001-2002 only .12 percent of its contracts were being filled by SDVOSBs and only .5 percent in 2005.

VA argues that because “may” is used earlier in the statute, its compliance with the set-aside mandate is optional. VA also argues that because it already meets the 3 percent requirement, it is exempt from the statute – a position that has no merit in earlier provisions of the statute.

“The Claims Court’s decision empowers the VA to deny 2.5 million veteran-owned small businesses their statutory rights,” the Legion’s amicus brief says. “Indeed, by awarding contracts to non-veteran businesses in violation of the 2006 Act, the VA diverts up to nearly $3 billion per year in government contracts away from veteran-owned small businesses.”

Click here to read the entirety of the Legion’s amicus brief.

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Charles Fowler

September 27, 2013 - 2:39pm

I applaud the Legions efforts to push this issue forward. As an owner of multiple 1-2 person “micro” businesses, one of which is a VA certified SDVOSBC, I can give you both a clear and current picture of the hurdles placed in front of true VOSB and SDVOSBC’s when trying to save the VA money. These hurdles are both systematic (unintended), as well as in some cases, purposely placed to protect long term vendor relationships for rather dubious reasons. But regardless of the reason(s) for this continuous shell game played by the VA, it is encouraging to know that at least one organization understands how important this issue is. If you want to reduce veteran unemployment, then empower veteran owned companies to grow and expand because vets hire vets. In my case, regardless how much money I could save the VA on recurrent purchases, I will remain a 1-2 man operation until the stranglehold of big business is broken on all Federal Agencies to include most importantly, the VA. Caveat: For those of you who are already thinking of attacking my comments as “whining” or “self-promotion”, know this, I have never asked nor do I intend to ask that my government pay me more for the same items they can get from someone else. These are my tax dollars too we’re talking about. Conversely, I am only asking for an even playing field and if you think that the current situation is equitable, then I would submit you may be living in a bubble with a very strong tint on it…

Joseph Shlikas

September 26, 2013 - 3:50pm

I’ve owned a small cyber-security practice since 2005 and have worked in the Federal contracting world for nearly twenty years. If I’ve learned anything, it’s that Federal contracting isn’t a place for the casual entrepreneur and certainly not the immediate financial windfall people outside the beltway may believe it to be. The burdens of understanding of the various contract types, navigating the FAR, marketing to the fed, getting a GSA schedule, understanding contract language, partnering with large prime contractors and establishing certification of your status are only a few of the significant pieces to the puzzle and all are required knowledge for even beginning to develop a “hopefully” successful business strategy. The American Legion provides business services and advocacy for all the above in an effort to help veteran entrepreneurs through Small Business Training Workshops, conferences, teaming opportunities with fellow veterans and large businesses, financial advice and several others. In addition, they provide services for veteran benefits, family services, aid for homeless vets, employment assistance, volunteer programs, college assistance and many more… I agree with Mr. Mancini in that the Legion “takes a more holistic approach to the Veteran economic condition” and as with any broad strategy, the need to select battles carefully is paramount. Therefore, when criticism is presented such as Mr. Gibbs has done in stating that Legion's Amicus Brief can “hardly be called a service to veterans” he paints the Legion’s efforts with an unduly broad brush. It would be no different and no less a disservice to put forth a similar statement minimizing all of his other great efforts within The Veteran’s Business Institute, or the Interagency Task Force by criticizing solely his work on drafting and presenting H.R. 3167. Our nation’s veterans gave and continue to give selflessly to support our way of life and all selfless efforts in advocating for their support should be applauded and never minimized.

Michael Phipps

September 26, 2013 - 12:58pm

Andy’s comments come from someone that has intimate knowledge of Veteran’s issues in the legal process and has had some personal experiences that he interprets as a negative experience regarding the Legion. However for myself and other Veteran business owners that I have discussed this issue with we see this case as major support from the Legion. I get concerned when we decide to diminish the efforts of an organization like the Legion for what is essentially excellent support for a Veteran business. I also have to mention about the numbers about the number of one person companies that are qualified for government contracting are probably much higher. There are a plethora of one man companies and one man Veteran companies that do go after Veteran work. Those of us in the Veteran business community know and work with them constantly. Coming from such an organization I know it’s even more important to see the Legion support a Veteran company that had the courage to stand up to the VA and give them more words of reassurance.

Bill Jenkins

September 26, 2013 - 12:14pm

The American Legion has helped a tremendous number of Veterans in the Government contracting area. The amicus brief is a step in the right direction to deal with the court issue at hand. Keep up the great work American Legion we will win this battle too.

Frank Mancini

September 26, 2013 - 11:00am

Mr. Gibbs, With “Small Business Advocates” like you who needs enemies? Assumptions, assumptions and more assumptions. It appears to me that you are more interested in advertising that you were the author of the Veteran Entrepreneurial Transition Act of 2011 – H.R. 3167 than in representing all of those SDVOSB/VOB and Veterans that have been asking the American Legion to bring substantial and positive change for ALL Veterans in Federal Contracting. It is because of the American Legion that us Veterans have a Voice, a voice that is not only heard but respected, finally we are making inroads in taming an agency that despite its name Veteran Administration seems to have its focus on everything else but its core mission: Mission Statement To fulfill President Lincoln's promise “To care for him who shall have borne the battle, and for his widow, and his orphan” by serving and honoring the men and women who are America’s veterans. Core Values Compassion: We will treat all veterans and their families with the utmost dignity and compassion. We will provide services in a caring manner, with a sympathetic consciousness of others’ distress together with a desire to alleviate it. Commitment: Veterans have earned our gratitude and respect. Their health care, benefits, and memorial service needs to drive our actions Excellence: We strive to exceed the expectations of veterans and their families.We strive to perform at the highest level of competence and take pride in our accomplishments. Professionalism: Our success depends on maintaining a highly-skilled, diverse, and compassionate workforce. We foster a culture that values equal opportunity, innovation, and accountability. Integrity: We recognize the importance of accurate information. We practice open, truthful, and timely communication with veterans, employees, and external stakeholders. By carefully listening and responding to their concerns, we seek continuous improvement in our programs and services. An agency that does not seem to understand that when the Veteran’s rate of suicide goes from a suicide every 85 minutes to every 60 minutes, something is wrong with their approach to mental health services to Veterans. An agency that does not seem to understand that their culture and behavior is in contrast to their mission statement. An agency that is failing to comply not only with their mission but Federal Law! It is too much to ask that if you call yourself a Small Business Advocate that you would actually support Veteran Owned Small Businesses? Rather than bashing an effort that is finally getting visibility while disregarding thousands of Veteran supporters asking the American Legion to bring positive change? Small Business ownership is at the core of economic development and upper mobility, and indeed addressing the unemployment issue on yet another angle, that is thinking “outside of the box”. Your assumptions are insulting and dangerous the reality is a bit more fluid than what you represent in your comments. For you to assume that the American Legion’s small business advocacy efforts are a waste of time because there aren’t just that many Veteran owned businesses is not only a danger to all the Veteran community but an incorrect and flawed ridden statement. Every day I meet Veterans that refuse to go to a VA hospital because of a bad experience or another, yet they do not advocate to shut down VA hospitals nor make a case for doing away with the administration. It is a fact that today there are many more successful Veteran Owned Businesses doing business with the Federal Government than yesterday, not an assumption but a FACT. It is a fact that these businesses are empowering more Veterans as owners and as employees than yesterday. It is a fact that because of the American Legion involvement many of the Federal agencies and Prime contractors have increased their procurement performance with SDVOSB and VOSB. It is a fact that 97% of ALL employment is done by Small Businesses and the American Legion’s efforts not only helps the Veteran cause but also all small businesses across America regain their rightful place in the Public Sector arena. A place almost forgotten during the early 2000 where single-source multi-billion dollar contracts were awarded indiscriminately to companies such as Halliburton. What I find dangerous in your argument is your perpetuation of a flawed belief system: “the entire government contracting business is designed to make a very few, very rich….” These are the type of comments that attempt to distract us from the task at hand, Veterans at large are eager and want positive change and your negative statement is not the rule but the exception as we move towards these changes. The American Legion concerns with SDVOSB and VOSB clearly shows their holistic approach to the Veteran economic condition, as an advocate you should encourage anything that will positively impact Veterans, ANYTHING! Your efforts on placing the positive work the American Legion is making in a negative light are not very responsible and in direct opposition to your Small Business Advocacy status. The American Legion focus on Veteran unemployment is second to none they have raised awareness and pushed federal and state agencies across America to increase their efforts as well as the private sector. There is nothing more rewarding and one of the greatest satisfactions as to own a business and to freely engage into commerce, a freedom never possible without our Armed Forces. So at the end of the day the American Legion did exactly what it is supposed to do and that is to fight for Veterans’ rights and if they accomplish this by hiring Winston & Straw or engaging with the thousands of volunteers across American, well they are doing the right thing. I do not see anyone else do it, actually I see the opposite, people like you tearing down what it took years to accomplish. Your reference to SDVOSB whining is insulting and degrading! I’m a small business owner and DO NOT WHINE! I place the obvious into evidence and stick by the LAW! I would invite you to do a simple google search and you will find out that the American Legion is not: “like SO MANY We're here for the veterans non-profit organizations are more concerned with pumping rhetoric to boost revenue generation than they are with stepping outside of the box and using their profound political influence to create real change…..” But they are indeed bringing on change, and REAL change. I would dare say that you have forgotten or completely disregarded your Small Business Advocacy responsibilities. Unlike your comments, the Amicus Brief will have great positive impact on the Veteran community for years to come.

Matt Davison, Veterans Incarcerated Chair

April 6, 2014 - 4:28pm

Frank...I don't know if you remember me from New Directions, but I am approaching a time in my life when I am seriously considering working for myself as a writer. Before serving veterans, I was Copy Chief and Creative Director for J. Walter Thompson Advertising. For 11 years, I've written articles for VietNow magazine and the Military Writers Society of America, as well as VVA magazine. I would now like to devote all my time to writing, including writing that book that has always been on my mind to do. Would you have any recommendations for me in this, what may well be, unique self business venture. I khow you've been doing this for a long while, and I would value your insights. Hopeing this finds you well, and thanks for your time. Respectfully, Matt Davison - Ddisabled Veteran

WildBillJr

September 26, 2013 - 10:31am

Andy, the American Legion advocates for veteran small business for many reasons here I will name two. One the Congress and the American people believe and have for over a decade that SDVOBS and VOSB's are at a competitive disadvantage in the Federal Contracting Marketplace. The various public laws enacted over the years should be enforced and that is the ultimate goal of the American Legion. Second veterans hire veterans. Business owners that are veterans are more likely than not willing to hire veterans for numerous reasons. You mention that the contracting system is designed to "make a very few very rich" that is what we are trying to solve, we believe this is a disservice to those who have fought and defended this nation so bravely and for very little money. I am a service disabled veteran small business owner and have spent $65,000.00 dollars trying to get contracts with the Agency for International Development to no avail. I believe that if we fire the first shots in a country that we have an ultimate right to see the mission thru to the end. Its a shame that some agencies disagree. I brought in USAID experts on my dime and had subject matter experts attend meetings and briefings but yet still no contract. I share your frustration and joined the American Legion Small Business Task Force to voice these concerns. The Task Force allowed me to ask questions to the agency and give them my opinion in person. I would not have had access to them if it wasn't for the American Legion. I see that you drafted Legislation and I think that is outstanding, however you must understand how the American Legion works. There are 55 Departments in the American Legion. Resolutions are generated at the Post level and presented and defended to the Departments annually at the Department Conventions. First the Post must agree to it by a vote,next the Departments vote on it by the membership of the entire State/Department. Then it moves on to the National Executive Committee which is comprised of one member per State/Department. The (NEC) then approves what the resolution says or tables it for further study or votes it down. It is the obligation of the presenting Department to advocate the other Departments to support it. This process keeps the way things are done fair and truly reflective of our grassroots support. If you wanted Legion support for your bill you would have had to done it threw this process. This process has been in place for over 95 years. The National Staff cannot just make a decision on a particular bill without a resolution that gives them an authorization to do so. If this happened more likely than not the Staff member wouldn't be working for the Legion very long. You are making alot of assumptions about how much we pay the staff. Most of the Staff make less than $50,000.00 a year. Think about living in the Washington,DC area on that amount of pay. It is extremely difficult and to raise and to support a family almost impossible. The workers do it not for the money fame or glory, but because they believe in what they are doing much like teachers and first responders. The management of the staff make a few bucks more, but consider their individual qualifications, they could easily make more money in the private sector or federal employment all of them have advanced degrees and are veterans themselves. Looking at your claim that the Legion pays an enormous fee for these lobbying firms doesn't make sense to me, because you don't consider that this is probably donated. Even if it wasn't donated fighting the CVE is like the old Bible story David and Goliath. The CVE has a budget of over $30,000,000.00 and over 150 employees mostly highly overpaid contractors and senior executives.The VA has created red tape against the intent of various laws in place and blatantly disregards the VETS First law. This law was enacted and signed into law for the purposes of forcing VA to first try to buy from a veteran. The VA receives a small percentage of the money the spend with the Federal Supply Schedule. Multiply this times the billions they spend every year and this becomes a sizable slush fund but we still don't know what they spend it on. The whole idea that this is a waste of time I cannot disagree more, why wouldn't the Legion fight for this? The Legion wants the law enforced and the membership of over 2.7 million members have agreed. You indicate that we have 700,000 veterans unemployed. The Economic commission works day in and day out to work with the Department of Labor for credentialing and licensure of veterans who have military skills that require state licensure. Example: An Air Force Firefighter should have state credentials, or a Combat Medic that deals with trauma patients that have wounds from battle can most certainly deal with a person on there way to a hospital in the back of an ambulance. The Legion also works on homelessness and believes that words homeless and veteran should never be used in the same sentence. We also get the fact that upward economic mobility is essential for veterans to have a chance at a first class future in this great country of ours. All the Legion wants is the agencies to comply with the promises that were made to veterans and are obligated to under the law. Membership is the way the Legion has influence "strength in numbers" why wouldn't we recruit. We provide more services than any other VSO in the United States ranging from Appeals and Service Officers all the way to Discharge Upgrades. This costs money, there is no such thing as a "free lunch" and those who work on these programs deserve to be paid. You mention ground pounders, I am a recipient of the Combat Infantrymans Badge and have been in harms way. Don't we deserve the promise of a fair shake at contracts? Does VETS first mean anything? If we didn't draw a line in the sand the Legion would be doing a dis service to vets. If you ultimately want and desire Legion support, go join a post, then join the Small Business Task Force then draft a resolution and follow the long standing process required to get our support.

Andy Gibbs

September 25, 2013 - 1:23am

While I applaud the Legion's Amicus Brief, the Legion's efforts could hardly be called a service to veterans. If fact, I really have to call out the Legion on not pursuing or supporting substantive legislation that would fundamentally change the totality of veteran unemployment, and ultimately the US economy. It is too much to ask highly paid administrators to work "outside of the box" for the real betterment of veteran welfare rather than spend all day pushing papers and strategizing on how to gro their paid membership base? First: I do agree that the set-aside allocation of government contracts to veteran-owned-businesses, and more importantly, service disabled veteran owned small businesses (SDVOSB) is an important issue to nip in the bud. But in the big picture, even if an entirely successful court decision is reached, the effort does not even rise to the level of putting salve on the wound. There are about 2.4 million veteran-owned small businesses - 2 MILLION of which are 1-person businesses. (US Census) Those that could actually qualify to bid on government contracts is a small sub-set of the 400,000 remaining - 1-person businesses are more likely to be home-town service providers. That leaves a MAXIMUM of 400,000 businesses that would even consider putting up with the political nightmare of bidding on government contracts. And even at that, the average time fro entry into the government contracting business to first award is more than 1-1/2 years. Further, the entire government contracting business is designed to make a very few, very rich. The other smaller contractors need to be on edge every day under the current political environment of sequesters, government shut-downs and more, any of which would immediately terminate contracts, leaving veterans holding the bag. And government contracting is a PRIMARY FOCUS AREA???? Poorly allocated resources, in my opinion. There are currently 720,000 unemployed veterans, 18 years old and over. THIS is the travesty the Legion should be rising up to address - in a literal sense. (Data from Bureau of Labor) SO, at the end of the day, the Legion hired $1,000 / hour Winston & Straw lobbyists / law firm to address the "complaints" of a few thousand SDVOSBs whining about not getting their "fair share", when more than 2 million veteran small businesses are struggling in the commercial marketplace every day, and almost 2/4 million are WITHOUT JOBS? I drafted legislation in 2010 and 2011, introduced into Congress as H.R. 3167 - the Veterans Entrepreneurial Transition Act of 2011 (the VET Act). This ground-breaking GI Bill reached back to the spirit and text of the original GI Bill that provided GI Bill benefits to veterans who wanted to start their own business. THAT resulted in a groundswell of entrepreneurial business creation that lead America to post WWII economic dominance. My bill would have allowed veterans not college-bound (which is most of them) to use 100% of their entitlements to start a small business - of course with many qualifications so they didn't squander their benefits. Did the Legion rise to support this legislation? NO. Was the Legion brought into the process early enough to "get on board" and make real change for America's veterans? YES But the Legion - like SO MANY "We're here for the veterans" non-profit organizations are more concerned with pumping rhetoric to boost revenue generation than they are with stepping outside of the box and using their profound political influence to create real change. THe lack of support is also partially attributable to "Not Invented Here" syndrome - the Legion didn't come up with the idea, so they can't claim "credit" - reaching back to the promotional benefits it can garner to promote more revenue generation. And more importantly, why has the Legion not taken the bull by the horns to re-introduce this legislation, and spend their Winston and Straw monty to go "hell bent for leather" to make a monumental change in veteran unemployment - and boost the US economy ... at the grass roots level in every community across the nation? I welcome comments from veterans, and notably from Legion leadership who, I believe, may have forgotten (or completely disregarded) their mission, in part "The American Legion is a nonpartisan, not-for-profit organization with great political influence perpetuated by its grass-roots involvement in the legislation process from local districts to Capitol Hill." Time to get ground-pounders on the front line to move important, national scale programs forward. The Amicus Brief is commendable, but at the end of the day, relatively insignificant to the whole of the veteran population, veteran unemployment, and a deplorably inefficient use of funds, time and effort for the good of the whole. Andy Gibbs

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