A government investigation is seeking a response from the Department of Veterans Affairs after the agency allegedly failed to follow a law that would have it set aside work for qualifying firms owned by disabled veterans.

The U.S. Government Accountability Office began its probe after a complaint filed by former Marine Rodney Marshall, who runs a commercial supply business in Portage, Mich., after returning from the Persian Gulf War with injuries to his knees, hips and back, according to a report by McClatchy Newspapers.

Rodney, 40, filed his protest with GAO after becoming frustrated by not being able to seek a pair of VA supply contracts because the bidding was restricted.  Marshall says the VA failed to follow a 2006 law – known as “Veterans First” – that requires the agency to set aside work for qualifying, service-disabled, veteran-owned firms.

Marshall was trying to get a contract to supply kitchen equipment to some veterans hospitals.

After an investigation, the GAO agreed with Marshall. The VA now has two months to respond to the GAO's recent findings.

An internal VA memo dated Oct. 17 and obtained by McClatchy states that, because the GAO is part of the legislative branch, the VA was not bound by its decision. It said the issue would likely be decided by the courts.

"The GAO recommendation does not change how VA will acquire goods and services in support of its mission," the memo stated.

The VA also noted that it awards more contracts to service-disabled, veteran-owned businesses than other federal agencies. They received $3.1 billion in VA contracts in fiscal 2010 of the more than $15 billion worth of business the agency does.

Marshall's company, Aldevra, has one kitchen supply contract with the VA, apart from the others he has been unable to win.

"It's been an ongoing battle," said Frank Clay, a service-disabled veteran and VA contractor from Olathe, Kan. "Out of all the federal agencies, they (the VA) should rule in favor of the set-aside and try to make the process better."

Clay, whose Clay Group company distributes medical and janitorial products, said he doesn't understand why the agency isn't embracing "the spirit" of the 2006 law.

"The irony is, this is the Department of Veterans Affairs," Clay said.

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