Department of Veterans Affairs Takes Drastic Step to Meet Socioeconomic Goals
Large businesses who contract with the Department of Veterans Affairs (VA) may need to dramatically rework their capture plans for the remainder of GFY2012. The Professional Services Council (PSC) is reporting that on August 1, VA Deputy Secretary Scott Gould issued a memorandum to the heads of contracting activities “directing them to make contract awards only to small businesses for the remainder of fiscal year 2012.”
Despite ongoing efforts to increase the VA’s percentage of small business contract awards, the agency is still considerably short of its goal of 34.0%. As a result, Gould is implementing “extraordinary measures to insure success,” stating that no contracts should be awarded to large businesses unless reviewed and approved by a team led by the Chief of Staff at the Veterans Affairs Central Office (VACO). Several exceptions to this directive are noted:
- VA Federal Supply Schedule master contracts (not task orders)
- Orders against enterprise-wide prime vendor contracts (pharmaceuticals, medical/surgical, and subsistence)
- Government purchase card acquisitions below the micro-purchase threshold ($3,000)
It is easy to see the benefit this policy will have on small businesses, but what does it mean for large businesses? Contracting officials wishing to issue contracts to large businesses must prepare a case for the procurement and forward it to the head of the activity who then refers it to the VACO team for discussion in a weekly review. Each of the proposed contracts will undergo “rigorous analysis to determine its suitability for award in relationship to the Department’s socioeconomic goals.” Due to the extremely high level of visibility that any large business procurement will attract in the review process, it is likely that many contracting professionals will be reticent to pursue many large business awards until GFY2013. Large businesses would be well apprised to cultivate their relationships with small business partners in order to be able to offer solutions to their VA customers for the remainder of the fiscal year.
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