Lawsuit against VA dismissed

Business owner challenged notice about federal contracts

Posted: February 23, 2018 at 2:24 a.m.

A federal judge on Thursday threw out a lawsuit filed earlier this month by Ross Alan Hope and his business, Powers of Arkansas, challenging a recent notice that the U.S. Department of Veterans Affairs is considering "debarring" the business from continuing to bid on federal contracts.

Hope and Mikel Kullander, who owns a Little Rock construction company, were tried last year by a federal jury on major-fraud charges accusing them of falsely claiming that a joint business they formed, DAV Construction, was run by a service-disabled veteran. That allowed the company to qualify for lucrative government contracts set aside for businesses run by service-disabled veterans. However, after six days of trial and 1½ days of deliberation, jurors deadlocked on the charges, causing a mistrial. U.S. Attorney Cody Hiland declined to retry them, and the charges were dropped on Nov. 7.

In a lawsuit filed Feb. 8, Hope complained that a debarment notice he had recently received was unfairly forcing him to defend the same allegations in a civil investigation, when the department could and should have pursued the matter civilly in the first place. He alleged that the agency was violating his due-process rights, and sought an injunction to prevent the agency from enforcing a suspension of contracts with his company and a restraining order to prevent his business from being excluded from bidding on federal contracts.

In response, government attorneys said the notice Hope received was just the beginning of an administrative review process and that no decision has been made on whether to debar Powers of Arkansas from further bidding on government contracts. Until an agency decision is final, the attorneys said, federal courts don't have jurisdiction over agencies' administrative processes.

After a hearing on the matter Wednesday, U.S. District Judge Leon Holmes agreed in an order filed Thursday that "the VA's decision-making process has only just begun; there has been no final agency action. Therefore, the [Administrative Procedures Act] does not authorize the Court to review the merits of the proposed debarment at this stage."

He cited previous court cases holding that federal agencies are entitled to use their own discretion on whether to prosecute someone or enforce a policy through either the civil or criminal process, or both.

Metro on 02/23/2018