Sole source awards
Contracting officers must prioritize SDVOSB sole source awards within specific thresholds and certification requirements before considering other small business set-asides.
Overview
FAR 19.1406 outlines the requirements and procedures for awarding sole source contracts to Service-Disabled Veteran-Owned Small Business (SDVOSB) concerns. Contracting officers must consider SDVOSB sole source awards before small business set-asides, provided certain conditions are met. These include the absence of reasonable expectation of competition among SDVOSBs, specific dollar thresholds ($7 million for manufacturing, $4 million for other NAICS codes), and that the requirement is not currently performed by or accepted into the 8(a) program. The SDVOSB must be a responsible contractor, and the award must be at a fair and reasonable price. As of January 1, 2024, only SDVOSBs certified by the SBA or those with pending certification applications (submitted by December 31, 2023) are eligible. The SBA retains the right to appeal a contracting officer’s decision not to make a sole source award to an SDVOSB.
Key Rules
- SDVOSB Sole Source Consideration
- Contracting officers must consider SDVOSB sole source awards before small business set-asides if all regulatory conditions are met.
- Eligibility and Thresholds
- Applies only if there is no reasonable expectation of two or more SDVOSB offers, the contract value does not exceed $7M (manufacturing) or $4M (other), and the requirement is not under the 8(a) program.
- Certification Requirement (2024 Onward)
- Only SDVOSBs certified by SBA or with pending certification applications (submitted by 12/31/2023) are eligible for sole source awards.
- SBA Appeal Rights
- SBA can appeal a decision not to make an SDVOSB sole source award.
Responsibilities
- Contracting Officers: Must evaluate SDVOSB sole source eligibility, verify certification status, ensure price reasonableness, and document decisions. Must also be aware of SBA’s appeal rights.
- Contractors: SDVOSBs must be certified by SBA or have a pending application (if submitted by 12/31/2023), demonstrate responsibility, and offer fair and reasonable pricing.
- Agencies: Must ensure compliance with SDVOSB program requirements and respond to SBA appeals as necessary.
Practical Implications
- This section prioritizes SDVOSB sole source awards, supporting veteran-owned businesses and ensuring compliance with set thresholds and certification requirements. Contracting officers must carefully document market research, eligibility, and pricing. SDVOSBs must maintain certification and readiness for sole source opportunities. Common pitfalls include missing certification deadlines, exceeding dollar thresholds, or overlooking SBA’s appeal rights.