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  • Dec 05, 2008
WHAT: GAO and U.S. appeals court
decisions that are roiling the smallbusiness
contracting community

Rothe Development Corp. v.
Department of Defense and
Department of the Air Force

In this case, the U.S. Court of Appeals
for the Federal Circuit declared the
Defense Department's small, disadvantaged
business program unconstitutional.
The court used what it called a
strict scrutiny view of the congressional
record for the National Defense
Authorization Act and said Congress
failed to show a pattern of discrimination
against such businesses.

The potential fallout could affect
other set-aside programs that use similar
criteria, such as the 8(a) system.
READ the entire decision at www.cafc.
uscourts.gov/opinions/08-1017.pdf.

GAO HUBZone decision

The Government Accountability Office
said Historically Underutilized
Business Zone companies should get
preference over companies in other
small-business categories. GAO officials
made their decision in response
to a protest involving a Marine Corps
decision to set aside a contract for
businesses owned by service-disabled
veterans.

A HUBZone business protested,
and the decision came down to the
language in the regulations. The
HUBZone rules say the contracting
officer "shall" set aside contracts while
the rules for businesses owned by
service-disabled veterans say he or
she "may" set aside contracts.

GAO said the Marine Corps should
have looked for HUBZone companies
first, and if they could not find a qualified
one, then they could have chosen
a company owned by a service-disabled
veteran.

READ GAO's decision at www.gao.gov/
decisions/bidpro/400278.pdf.

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