VA awards new veteran-owned small business program management contract — spurring another lawsuit

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Courtesy House Subcommittee on Contracting and Workforce

The Department of Veterans Affairs has struggled for more than a year to award two contracts to support its veteran-owned small business programs, which are overseen by Tom Leney.

Jill R. Aitoro

Senior Staff Reporter- Washington Business Journal

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Spurred by a protest in a federal court, the Department of Veteran Affairs picked a new company to manage the process of getting veteran-owned small businesses verified. The result? Another lawsuit from the prior winner that saw its contract terminated.

It's the latest in something of a contracting debacle for the department, which has left the management of its Center for Veterans Enterprise in a state of flux for more than a year.

The VA decided to award to the $39.9 million contract to manage its Center for Veterans Enterprise to Loch Harbour Group Inc. of Alexandria. The bulk of that work is for processing contractor applications to be verified as veteran-owned, which in turn allows them to be able to compete for work set aside by the VA. That contract was originally awarded to Monterey Consultants Inc. of Dayton, Ohio, but terminated in November when the VA opted to take corrective action in response to a protest filed by Loch Harbour in the U.S. Court of Federal Claims.

"I give them credit for stepping back, conducting the evaluation and doing the right thing," said Lee Dougherty, a principal at the Vienna office of law firm Offit Kurman who represented Loch Harbour in the protest.

But that decision by the VA to take corrective action spurred Monterey to file its own lawsuit Dec. 3 in the same court, protesting the VA's decision to no longer consider Monterey eligible for the contract. Monterey asked that the court order a permanent injunction on the decision by the VA to cancel the contract and — for now — stop the VA from taking corrective action. The court denied the latter, meaning that the contract can transition to Loch Harbour on Dec. 26, but is still considering the merits of Monterey's protest of the award decision.

Jill R. Aitoro covers federal contracting.