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428A Russell Senate Office Building 10:00 a.m. EDT

Chairman David Vitter

Good morning and thank you for joining me today for the Senate Committee on Small Business and Entrepreneurship Hearing to review the ramifications of the Supreme Court’s recent decision on the Kingdomware Technologies, Inc. vs. the United States case.

I want to begin today by thanking Mr. Tim Barton, owner of Kingdomware Technologies Inc., for his service in the United States Army during Operation Desert Storm. We, as a nation, are indebted to you for the sacrifices you have made to preserve, protect, and defend the freedom of this great nation and are certainly very grateful.

As you all know, last week the Supreme Court ruled in favor of Kingdomware Technologies, a Service-Disabled Veteran-Owned Small Business that had unsuccessfully vied for a federal contract with the Department of Veterans Affairs. This is a huge win for veteran entrepreneurs competing for federal contracts and speaks volumes to the important role small businesses play in our nation’s economy.

Today, I want to discuss the importance of the Supreme Court’s ruling, how we got here, and what to expect moving forward.

As many of you know, Congress has mandated small business contracting goals for federal agencies. Perhaps less well-known is that these contracting goals are a floor – not a ceiling.

In 2012, Kingdomware Technologies was passed over for a contract with the Department of Veterans Affairs in favor of a non-veteran owned company. The VA’s decision maintained their decision despite recommendations from the Government Accountability Office (GAO) to reconsider awarding the contract to the non-veteran owned company. In fact, GAO stated the VA should reevaluate their market research, and pending that research, consider re-soliciting the requirement to award contracts to a Service Disabled Veteran Owned Small Business.

The VA refused to reconsider. That refusal spurred Mr. Barton to action. Knowing that the VA skirted its federal contracting requirements, Mr. Barton diligently pursued this issue through two levels of the federal court system, eventually going all the way up to the nation’s highest court.

In February of this year, Kingdomware Technologies successfully argued in front of the U.S. Supreme Court, that based off of language in the Veterans Benefits, Health Care, and Information Technology Act of 2006, the VA should have applied the “Rule of Two” to this contract procurement process.

The “Rule of Two” essentially states that if two or more Veteran Owned Small Businesses or Service Disabled Veteran Owned Small Businesses can provide the services at a reasonable price, agencies are required to award the contract to one of them.

One week ago today, the Supreme Court agreed with Kingdomware Technologies, and this landmark ruling will certainly have a positive impact on the ability of Veteran Owned Small Businesses to obtain federal contracts they not only qualify for, but so rightly deserve, and have earned.

Our nation’s veterans have sacrificed so much for our freedoms. When they return to civilian lives, it then becomes our duty to help them. By ensuring that veteran entrepreneurs have a fair chance at being awarded federal contracts, it is a small price to pay when one realizes how much we still owe them.

The Supreme Court’s ruling stands to end the VA’s penchant to put bureaucracy ahead of the priorities of veteran-owned small businesses. It also serves as a forceful reminder to other federal agencies that there are indeed mandatory requirements to engage small businesses – especially veteran-owned ones. This is an important precedent that allows the federal government to better serve our veteran entrepreneurs.

I applaud the Supreme Court’s decision and look forward to today’s productive discussion.

Now, let’s get today’s conversation started. Again, I’d like to thank everyone for being here today and look forward to our discussion.