Kingdomware Techs., Inc. v. United States
| Decision Date | 16 June 2016 |
| Docket Number | No. 14–916.,14–916. |
| Citation | 195 L.Ed.2d 334,136 S.Ct. 1969 |
| Parties | KINGDOMWARE TECHNOLOGIES, INC., Petitioner v. UNITED STATES. |
| Court | U.S. Supreme Court |
Thomas G. Saunders, Washington, DC, for Petitioner.
Zachary D. Tripp, Washington, DC, for the United States.
Lauren B. Fletcher, Wilmer Cutler Pickering, Hale and Dorr LLP, Boston, MA, Jason D. Hirsch, Wilmer Cutler Pickering, Hale and Dorr LLP, New York, NY, Thomas G. Saunders, Seth P. Waxman, Amy K. Wigmore, Gregory H. Petkoff, Amanda L. Major, Joseph Gay, Matthew Guarnieri, Wilmer Cutler Pickering, Hale and Dorr LLP, Washington, DC, for Petitioner.
Donald B. Verrilli, Jr., Solicitor General, Department of Justice, Washington, DC, for Respondent.
Leigh A. Bradley, General Counsel, Department of Veterans Affairs, Washington, DC, Donald B. Verrilli, Jr., Solicitor General, Benjamin C. Mizer, Principal Deputy Assistant, Attorney General, Malcolm L. Stewart, Deputy Solicitor General, Zachary D. Tripp, Assistant to the Solicitor General, Robert E. Kirschman, Jr., Kirk T. Manhardt, Robert C. Bigler, Attorneys, Department of Justice, Washington, DC, for Respondent.
Petitioner Kingdomware Technologies, Inc., a veteran-owned small business, unsuccessfully vied for a federal contract from the Department of Veterans Affairs to provide emergency-notification services. Kingdomware sued, arguing that the Department violated a federal law providing that it "shall award" contracts to veteran-owned small businesses when there is a "reasonable expectation" that two or more such businesses will bid for the contract at "a fair and reasonable price that offers best value to the United States." 38 U.S.C. § 8127(d). This provision is known as the Rule of Two.
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.
This case concerns the interplay between several federal statutes governing federal procurement.
In an effort to encourage small businesses, Congress has mandated that federal agencies restrict competition for some federal contracts. The Small Business Act thus requires many federal agencies, including the Department of Veterans Affairs, to set aside contracts to be awarded to small businesses. The Act requires each agency to set "an annual goal that presents, for that agency, the maximum practicable opportunity" for contracting with small businesses, including those "small business concerns owned and controlled by service-disabled veterans." 15 U.S.C. § 644(g)(1)(B). And federal regulations set forth procedures for most agencies to "set aside" contracts for small businesses. See, e.g., 48 CFR § 19.502–2(b) (2015).
In 1999, Congress expanded small-business opportunities for veterans by passing the Veterans Entrepreneurship and Small Business Development Act, 113 Stat. 233. That Act established a 3% governmentwide contracting goal for contracting with service-disabled veteran-owned small businesses. 15 U.S.C. § 644(g)(1)(A)(ii).
When the Federal Government continually fell behind in achieving these goals, Congress tried to correct the situation. Relevant here, Congress enacted the Veterans Benefits, Health Care, and Information Technology Act of 2006, §§ 502, 503, 120 Stat. 3431–3436 (). That Act requires the Secretary of Veterans Affairs to set more specific annual goals that encourage contracting with veteran-owned and service-disabled veteran-owned small businesses. § 8127(a). The Act's "Rule of Two," at issue here, provides that the Department "shall award" contracts by restricting competition for the contract to service-disabled or other veteran-owned small businesses. To restrict competition under the Act, the contracting officer must reasonably expect that at least two of these businesses will submit offers and that "the award can be made at a fair and reasonable price that offers best value to the United States." § 8127(d).1
Congress provided two exceptions to the Rule. Under those exceptions, the Department may use noncompetitive and sole-source contracts when the contracts are below specific dollar amounts. Under § 8127(b), a contracting officer "may use procedures other than competitive procedures" to award contracts to veteran-owned small businesses when the goods or services that are the subject of such contracts are worth less than the simplified acquisition threshold. 38 U.S.C. § 8127(b) ; 41 U.S.C. § 134 (); see also § 1908 (); 75 Fed.Reg. 53130 (codified at 48 CFR § 2.101 (2010)) (raising the amount to $150,000). And under 38 U.S.C. § 8127(c), a contracting officer "may award a contract to a [veteran-owned small business] using procedures other than competitive procedures" if the contract is worth more than the simplified acquisition threshold but less than $5 million, the contracting officer determines that the business is "a responsible source with respect to performance of such contract opportunity," and the award can be made at "a fair and reasonable price." 38 U.S.C. § 8127(c).
In finalizing its regulations meant to implement the Act, the Department stated in a preamble that § 8127's procedures "do not apply to [Federal Supply Schedule] task or delivery orders." VA Acquisition Regulation, 74 Fed.Reg. 64624 (2009). The Federal Supply Schedule (FSS) generally is a streamlined method for Government agencies to acquire certain supplies and services in bulk, such as office supplies or food equipment. 48 CFR § 8.402(a) (2015). Instead of the normal bidding process for each individual order, FSS contracts are ordinarily pre-negotiated between outside vendors and the General Services Administration, which negotiates on behalf of various Government agencies. See § 8.402(b) ; Sharp Electronics Corp. v. McHugh, 707 F.3d 1367, 1369 (C.A.Fed.2013). Under FSS contracts, businesses agree to provide "[i]ndefinite delivery" of particular goods or services "at stated prices for given periods of time." § 8.402(a). Agencies receive a list of goods and services available through the FSS. Because the terms of purchasing these goods and services have already been negotiated, contracting officers can acquire these items and services simply by issuing purchase orders.
Kingdomware Technologies, Inc., is a service-disabled veteran-owned small business. Around January 2012, the Department decided to procure an Emergency Notification Service for four medical centers.2 In an emergency, this service sends important information to Department personnel. The Department sent a request for a price quotation to a non-veteran-owned company through the FSS system. That company responded with a favorable price, which the Department accepted around February 22, 2012. The agreement was for one year, with an option to extend the agreement for two more. The Department exercised the one option to extend the time, and performance was completed in May 2013. Decl. of Corydon Ford Heard III ¶ 8.
Kingdomware challenged the Department's decision to award the contract to a non-veteran-owned company by filing a bid protest with the Government Accountability Office (GAO). See 31 U.S.C. § 3552(a). Kingdomware alleged that the Department procured multiple contracts through the FSS without restricting competition using the Rule of Two, as required by § 8127. Kingdomware contended that the Department could not award the contracts at issue here without first checking to see whether at least two veteran-owned small businesses could perform the work at a fair and reasonable price. The GAO issued a nonbinding determination that the Department's failure to employ the Rule of Two was unlawful and recommended that the Department conduct market research to determine whether there were two veteran-owned businesses that could fulfill the procurement. The Department disagreed with the recommendation.
Petitioner then filed suit in the Court of Federal Claims and sought declaratory and injunctive relief.3 The Court of Federal Claims granted summary judgment to the Department. 107 Fed.Cl. 226 (2012).
A divided panel of the Federal Circuit affirmed. 754 F.3d 923 (2014). In the majority's view, § 8127 did not require the Department to use the Rule of Two in all contracting. Id., at 933–934. Instead, the court concluded, mandatory application of the Rule of Two was limited to contracts necessary to fulfill its statutory purpose—to provide a means of satisfying the Department's annual contracting goals described in § 8127(a). Id., at 934. Thus, so long as those goals were satisfied, the Court of Appeals concluded, the Department need not apply the Rule of Two any further. Ibid. Judge Reyna dissented, arguing that § 8127 employs mandatory language that "could not be clearer" in requiring the Department to apply the Rule of Two in every instance of contracting. Id., at 935.
We granted certiorari to decide whether § 8127(d) requires the Department to apply the Rule of Two in all contracting, or whether the statute gives the Department some discretion in applying the rule. 576 U.S. ––––, 135 S.Ct. 2857, 192 L.Ed.2d 894 (2015).
Before we reach the merits, we must assess our jurisdiction. Article III of the Constitution limits federal courts to deciding "Cases" and "Controversies," and "an actual controversy must exist not only at the time the complaint is filed, but through all stages of the litigation." Already, LLC v. Nike, Inc., 568 U.S. ––––, ––––, 133 S.Ct. 721, 726, 184 L.Ed.2d 553 (2013) (internal quotation marks omitted).
Here, no live controversy in...
To continue reading
Request your trial
-
City of San Jose v. Trump, No. 20-CV-05167-RRC-LHK-EMC
...mootness doctrine has an exception for injuries "capable of repetition, yet evading review." Kingdomware Techs., Inc. v. United States , ––– U.S. ––––, 136 S. Ct. 1969, 1976, 195 L.Ed.2d 334 (2016) (quoting Spencer v. Kemna , 523 U.S. 1, 17, 118 S.Ct. 978, 140 L.Ed.2d 43 (1998) ); see also ......
-
Casa De Md., Inc. v. Wolf
...language [of the Order] ... controls [and] speaks for itself." ECF No. 51-1 at 9; see also Kingdomware Tech., Inc. v. United States , ––– U.S. ––––, 136 S. Ct. 1969, 1978, 195 L.Ed.2d 334 (2016) ("prefatory clauses or preambles cannot change the plain meaning of the operative clause."); DHS......
-
Envtl. Def. Fund v. U.S. Envtl. Prot. Agency
...the word ‘may,’ which implies discretion, the word ‘shall’ usually connotes a requirement." Kingdomware Techs., Inc. v. United States , ––– U.S. ––––, 136 S. Ct. 1969, 1977, 195 L.Ed.2d 334 (2016). And where a rule, as here, is "couched in mandatory language, ... a binding intent is strongl......
-
W. Watersheds Project v. Bernhardt
...the "capable of repetition, yet evading review" exception to the mootness doctrine. See Kingdomware Techs., Inc. v. United States , ––– U.S. ––––, 136 S. Ct. 1969, 1976, 195 L.Ed.2d 334 (2016) (setting out exception to mootness doctrine for controversies that are "capable of repetition, yet......
-
AN UNEXPECTED CHALLENGE: THE CONSEQUENCE OF A LIMITED TRIBAL APPELLATE CASELOAD.
...in part, McDonnell Douglas Corp. v. Iran, 758 F.2d 341, 346-47 (8th Cir. 1985))); see also Kingdomware Techs., Inc. v. United States, 136 S. Ct. 1969, 1977 (2016) ("Unlike the word 'may,' which implies discretion, the word 'shall' usually connotes a requirement."); Smiljanic v. Niedermeyer,......
-
THE NATIONAL GUARD IN TITLE 32 STATUS: HOW THE EXECUTIVE'S POWER BECOMES A CITY'S CRISIS.
...Corp., 442 U.S. 330, 339 (1979))). (141.) 32 U.S.C. [section] 502(f)(2)(A). (142.) See, e.g., Kingdomware Techs., Inc. v. United States, 136 S. Ct. 1969, 1977 (2016) ("Unlike the word 'may,' which implies discretion, the word 'shall' usually connotes a (143.) See Burwell v. Hobby Lobby, Inc......
-
YOUR MONEY OR YOUR LIBERTY: CLARIFYING MILITARY CONTINGENT CONFINEMENT.
...rel. Shepherd v. Nebraska Equal Opportunity Com'n, 557 N.W.2d 684, 694 (Neb. 1997). See Kingdomware Technologies, Inc. v. United States, 136 S.Ct. 1969, 1977 (2016) ("Unlike the word 'may,' which implies discretion, the word 'shall' usually connotes a [93] See, e.g., United States v. Wilson......