Supreme Court Rules for Veteran Business Owners

On Thursday, June 16th, 2016, the Supreme Court ruled that the Department of Veteran Affairs needs to dole out more contractual work to its veterans who are running small businesses.



The vote was 8-0 in favor of this ruling and clearly sent the message that the department has not done enough to support the veterans and disabled veterans who are running these businesses with little help. This decision is considered to be a huge win for veteran-owned businesses that are competing with private companies over contractual work that the department gives out yearly.

The Supreme Court came to this conclusion based on a law that had been passed by Congress back in 2006 which became known as the “Rule of Two.”

This rule helps veteran-owned small businesses by stating that whenever two of these types of businesses can submit a decent and reasonable proposal, the bidding for that contract must be limited to these two businesses. This virtually guarantees that the contract will be won by a veteran-owned small business.



The Obama administration did their job and abided by this rule. But, when they hit their quota, which was twelve percent of contracts being given to veteran-owned small businesses, they no longer felt they were obligated to keep abiding by the “Rule of Two.”

They said they had done exactly what the law demanded of them, and that they should be under no pressure to provide more veteran-owned businesses with chances at federal contract work.

The Supreme Court, however, felt differently. After this case was brought to them by way of Kingdomware Technologies (a veteran-owned software and technology service business), the court ruled that the Obama administration and the Department of Veteran Affairs must keep the “Rule of Two” going even after they have met their appointed goal.

This was done after Kingdomware Technologies claimed that the department did not abide by Congress’ rule when they purchased a service which sent emergency information to workers at four medical centers.

Justice Clarence Thomas wrote the court’s opinion for this case and he was very clear on his feelings. He said that Congress’ use of the word shall when writing this law was very clear to him and the other judges sitting on the bench. He claimed that the use of the word shall and not may meant it was imperative that this law be practiced each and every time it was deemed possible.

His opinion and the ruling of the Supreme Court are viewed as a victory for veterans looking to seek contractual work, and for the interpretation of law. Congress clearly meant for the veterans to get as much work as they possibly could; and, with the court’s help, it appears that they will be getting that work after all.

Transactional Group attorney Joel Nied of Price Benowitz commented, “This is a significant victory for veteran-owned businesses. Any entrepreneurial veteran who has been thinking about starting his own business should see this ruling as a call to action.”