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November 7, 2025

VETS FIRST AND MICROPURCHASES AT DEPT. OF VETERANS AFFAIRS

BACKGROUND: Sections 502 & 503 of PL 109-461 established the “VETS First” contracting program at VA. This program gives first priority of contract opportunities at VA to verified small business owned and controlled by service-disabled veterans. On June 22, 2016, the Supreme Court of the United States in Kingdomware Technologies, Inc. v United States (14-916) found VETS First to be mandatory, not discretionary and requires VA to apply the Rule of Two (VETS First) to all contract determinations.

ISSUE: VA refuses to apply VETS First rules to micro-purchases. A micro- purchase is defined as any purchase under $15,000 and is generally exempt from government terms and conditions. VA spends approximately $5 billion through micro-purchase procedures. Micro-purchases is a proven way for new service-disabled veteran-owned small businesses to gain experience and have opportunities in the federal marketplace. VA is denying micro-purchase opportunities to service-disabled veteran-owned small business by not applying VETS First rules to micro-purchases. There is also strong consideration being given by the Administration to raise the micro-purchase threshold to $100,000 or more. This will further restrict contract opportunities for service-disabled veteran-owned small businesses at a time when the number of small businesses doing business with the federal government has been reduced by 50% over the last 10 years.

SOLUTION: S1591 “Acquisition Reform & Cost Assessment Act of 2025” has been introduced to the Senate Veterans Affairs Committee by Senator Moran. S 1591 will reorganize VA Acquisition Services as well as establish new cost-savings tools at VA. Amend S1591 to direct VA to apply VETS First to micro-purchase contracts. This will provide exponentially more opportunities for service-disabled veteran-owned small businesses at VA, comply with the Kingdomware Supreme Court decision, and further the intent of Congress in establishing the VETS First program.