Veterans Contracting Group, Inc. v. United States

The Department of Veterans Affairs (VA) is required by statute to award contracts based on competition limited to small businesses owned by servicedisabled veterans when certain requirements are met. See 38 U.S.C. § 8127(d); Kingdomware Techs., Inc. v. United States, 136 S. Ct. 1969, 1976-1977 (2016). To compete for such contracts, a veteran-owned small business must be listed in a database maintained by the government. Shortly before the procurement at issue in this case, Veterans Contracting Group (VCG) was improperly removed from that database. There is no dispute that VCG’s removal was unlawful, but the Federal Circuit held that the VA’s decision to cancel the solicitation in reliance on VCG’s absence from the database was not unlawful because the individual contracting officer making the recommendation to do so allegedly did not have subjective knowledge of the VA’s underlying violation of the law. The question presented is: Whether agency action based on an earlier, unlawful act by the agency is shielded from judicial correction based on an individual employee’s alleged lack of knowledge that the agency’s earlier action was illegal. (i)