Background
The Department of Veterans Affairs solicited nursing services for a New Orleans VA health center through a service-disabled veteran-owned small business set-aside under its Veterans First Contracting Program. The solicitation contemplated a five-year task order under an existing Federal Supply Schedule contract and assigned NAICS Code 561320, with a $34 million size standard.
The VA initially awarded the task order to Millbrook Support Services, Inc. in November 2025. After disappointed bidders questioned Millbrook’s eligibility, the agency checked the SBA certification database, determined that Millbrook was not an eligible SDVOSB under the assigned NAICS code at the time of award, and rescinded the award. Millbrook sued after the Government Accountability Office dismissed a materially similar protest.
Millbrook argued that its qualifying status when it received the underlying FSS contract in 2021 governed later orders and that only the SBA could determine its size. The government moved to dismiss under RCFC 12(b)(6), contending that VA regulations imposed eligibility requirements at both offer submission and award and that the contracting officer merely verified existing SBA database information.
The Court’s Holding
The court granted the government’s motion and dismissed the complaint in its entirety. It held that the VA did not act arbitrarily or capriciously by finding Millbrook ineligible because the applicable VA Acquisition Regulation provisions required an offeror to satisfy the relevant SDVOSB, small-business, and certification requirements both when submitting its offer and when receiving an award.
The court rejected Millbrook’s reliance on SBA regulations treating size status at the underlying FSS-contract level as applicable to later orders. Those provisions supplied default rules, the court concluded, but the VA’s independently authorized Veterans First regulations supplemented them with more stringent requirements. Because task orders are contracts and Millbrook did not satisfy the applicable requirements when the task order was awarded, its earlier status did not establish current eligibility.
The court also held that the contracting officer did not make an unauthorized formal size determination. The officer instead performed the verification required by VA regulations by consulting the SBA’s own certification database. With both substantive claims failing as a matter of law, the court also denied Millbrook’s request for permanent injunctive relief.
Key Takeaways
- For this Veterans First procurement, an offeror had to satisfy the applicable SDVOSB and small-business requirements at both offer submission and award.
- Qualifying for the underlying FSS contract did not establish Millbrook’s eligibility for a later VA task order governed by more stringent VA regulations.
- A contracting officer’s verification of eligibility through the SBA certification database was not itself a formal size determination requiring referral to the SBA.
Why It Matters
The decision underscores that contractors competing for VA Veterans First task orders cannot rely solely on their status when an umbrella schedule contract was awarded. They must remain eligible under the solicitation’s NAICS code and appear appropriately in the SBA certification database at the later points required by VA regulations.
It also distinguishes an agency’s required eligibility check from a formal size determination reserved to the SBA, permitting VA contracting officers to rely on existing SBA database information without initiating a new SBA proceeding each time an offeror’s eligibility is questioned.