Sole source awards
Contracting officers must prioritize sole source awards to SBA-certified SDVOSBs, following strict eligibility and value thresholds, 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 offers from two or more SDVOSBs, contract value thresholds ($8.5 million for manufacturing, $5 million for other NAICS codes), and that the requirement is not currently performed by or accepted for 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 for sole source awards. The SBA retains the right to appeal a contracting officer’s decision not to make a sole source award to an SDVOSB.
Key Rules
- Sole Source Consideration Order
- Contracting officers must consider SDVOSB sole source awards before small business set-asides if all criteria are met.
- Eligibility and Value Thresholds
- Applies if there is no reasonable expectation of two or more SDVOSB offers, and the contract value does not exceed $8.5M (manufacturing) or $5M (other NAICS codes).
- 8(a) Program Exclusion
- The requirement cannot be currently performed by or accepted into the 8(a) program.
- Responsibility and Price
- The SDVOSB must be responsible, and the price must be fair and reasonable.
- Certification Requirement (2024 Onward)
- Only SBA-certified SDVOSBs or those with pending applications (submitted by 12/31/2023) are eligible.
- SBA Appeal Rights
- SBA can appeal a decision not to make an SDVOSB sole source award.
Responsibilities
- Contracting Officers: Must follow the order of consideration, verify eligibility, ensure compliance with value thresholds, check certification status, and document decisions. Must also be aware of SBA’s appeal rights.
- Contractors (SDVOSBs): Must be SBA-certified (or have a pending application if submitted by 12/31/2023), demonstrate responsibility, and offer fair and reasonable pricing.
- Agencies: Must ensure oversight of compliance and respond to SBA appeals as necessary.
Practical Implications
This section ensures SDVOSBs have a prioritized opportunity for sole source awards, supporting veteran-owned businesses. Contractors must maintain up-to-date certification and be prepared for eligibility verification. Contracting officers must carefully document their market research and decision-making process, especially regarding the number of potential SDVOSB offerors and certification status. Failure to comply can result in delays, protests, or SBA appeals.