The Department of Veterans Affairs can walk away from a three-year-old homeless-veterans services competition in New Jersey, but it cannot quietly carry the same disputed bed and sleeping requirements into its replacement. That is the split result of a Court of Federal Claims opinion in Patriot First Professional Services, Inc. v. United States, No. 25-1037C, in which Judge Horn upheld the VA’s March 24, 2025 cancellation of Solicitation No. 36-C-24222-R-0035 while finding the agency erred in how it handled the solicitation’s Amendment 0006.
The court issued the opinion under seal on Sept. 13, 2026 and released a redacted version for publication on Oct. 3, 2026. Patriot First’s motion for judgment on the administrative record and its motion to supplement the record were both denied, and the government’s cross-motion was granted. The cancellation stands.
How a $4 Million VA Shelter Contract Ended Up in Court Three Times
The VA issued the solicitation on July 8, 2022 to replace expiring contracts in its Contracted Emergency Residential Services (CERS) program, which houses homeless veterans while they receive case management and move toward permanent housing. The procurement covered the VA’s Hudson Valley, New Jersey and New York Harbor health care systems, with one award per catchment area.
Each award was a fixed-price, indefinite-delivery, indefinite-quantity contract with one base year and four option years. The solicitation set a guaranteed minimum of $250,000 in services during the base year and a potential aggregate contract total of $4,000,000 over the full term.
Judge Horn opened the opinion by noting it "follows after numerous protests, corrective actions, amendments, and ultimately a cancellation of a procurement." Patriot First first filed a pre-award protest, Case No. 23-147C, on Feb. 3, 2023. The court remanded that case after finding that the VA’s lack of explanation and documentation for a corrective action was arbitrary and capricious. After the remand, Patriot First filed Case No. 24-1365C, where the court again found the VA had not adequately explained continuing with the solicitation as issued and entered an injunction barring award under it.
What Amendment 0006 Changed at the New Jersey Site
The fight centered on Amendment 0006, which rewrote the minimum space requirements for the VA New Jersey Health Care System location. The original Performance Work Statement called for "30 beds (male and female separated by floor)." The amendment replaced that with "30 beds separated by gender to ensure safety and privacy." A related accommodation provision that originally read "Segregated sleeping where one wing is set aside" became "Segregated sleeping where one portion of the facility is set aside to ensure safety and privacy."
The change mattered for eligibility. The VA’s March 24, 2025 cancellation memorandum, as quoted in the opinion, said that once the court enjoined use of Amendment 0006, the other responding offeror, Veteran’s Haven North, was "no longer eligible to receive an award" because it "does not have a multi-level building." The same memorandum concluded that Patriot First was ineligible under Amendment 0007, leaving "neither offeror" eligible under the existing terms.
On Amendment 0006 itself, the court sided with the protestor. Judge Horn wrote that "The arbitrary and capricious decision to continue to rely on Amendment 0006 unchanged in the evaluation process for the Solicitation demonstrates an error by the VA in the procurement process." She also found that Patriot First was prejudiced by the agency’s decision to keep the unchanged amendment.
Why the Cancellation Survived Despite the VA’s Errors
Finding an error did not decide the case. The court reviewed the cancellation itself for rationality, asking whether the agency "provided a coherent and reasonable explanation of its exercise of discretion," and noted that agencies generally hold "broad discretion to assess and define its needs," including whether to amend or cancel a solicitation.
The VA’s cancellation memorandum cited the procurement’s age, turnover among contracting personnel and the seven amendments issued. It said "the fact that seven amendments were issued indicates that the Program Office has not fully refined the Performance Work Statement (PWS) and contract terms and conditions," and that it "would be beneficial for the Program Office to reassess its requirements and develop a more structured and comprehensive solicitation."
Judge Horn agreed with Patriot First that the delays and personnel turnover were largely the agency’s own doing. The opinion states that the court "has documented the problems with the agency’s approach to the Solicitation and procurement process, including the failure to contemporaneously explain and document its decisions or respond to identified issues with the procurement." Even so, the court concluded the agency was generally entitled to deference in setting its future requirements, and the cancellation held.
The Warning Aimed at Solicitation 36-C-24226-Q-0118
After the cancellation, the VA issued a new solicitation for the same homeless-veterans services, No. 36-C-24226-Q-0118. Patriot First is challenging it in a separate pre-award protest, Case No. 26-768C, which is assigned to Judge Horn and remains pending. The court denied Patriot First’s request to add the new solicitation to the record in this case, noting that the information about the cancellation will be available for review in the newer protest.
The opinion nonetheless signaled how the court may view that case. "If the agency continues to rely on the language of Amendment 0006 in the New Solicitation without further explanation or justification, it could suggest to the court that the agency’s procurement actions regarding the place of performance, the number of beds and the segregated sleeping requirements could be arbitrary and capricious," Judge Horn wrote. The court added that such reliance could also "undermine the justifications for the cancellation of the Solicitation."
Reta E. Bezak of the Justice Department’s Commercial Litigation Branch represented the government, with VA attorneys of counsel. J. Taylor Benson of Benson Law Office, PLLC represented Patriot First.
What It Means for Contractors
The ruling reinforces how hard it is to overturn an agency cancellation. Even a protestor that has won earlier rounds on a specific requirement can lose when the agency decides to start over, so long as the cancellation memo offers a coherent reason such as stale requirements or a lengthy amendment history.
The opinion also shows what a protestor can preserve. Patriot First did not get its solicitation reinstated, but it obtained a written finding that the VA’s reliance on Amendment 0006 was arbitrary and prejudicial, plus a pointed warning that copying that language into the follow-on solicitation without explanation could draw scrutiny. For incumbents and small facility operators competing for VA residential services work, the case underscores the value of documenting how a specific site requirement, such as floor-based gender separation, affects who can compete.
For contracting officers, the lesson is documentation. The court faulted the VA throughout the procurement for failing to explain and document its actions, and the information about the cancellation will be available to the court in Case No. 26-768C.
