19.1406 Sole source awards
Source: FAR 19.1406 on acquisition.gov
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.
(a) A contracting officer shall consider a contract award to a SDVOSB concern on a sole source basis (see 6.302-5(b)(6)), before considering small business set-asides (see 19.203 and subpart 19.5) provided none of the exclusions of 19.1404 apply and—
(1) The contracting officer does not have a reasonable expectation that offers would be received from two or more service-disabled veteran-owned small business concerns;
(2) The anticipated award price of the contract, including options, will not exceed-
(i) $8.5 million for a requirement within the NAICS codes for manufacturing; or
(ii) $5 million for a requirement within any other NAICS code;
(3) The requirement is not currently being performed by an 8(a) participant under the provisions of subpart 19.8 or has been accepted as a requirement by SBA under subpart 19.8;
(4) The service-disabled veteran-owned small business concern has been determined to be a responsible contractor with respect to performance; and
(5) Award can be made at a fair and reasonable price.
(b) Effective January 1, 2024, a contracting officer shall only award a sole-source contract to a concern that—
(1) Is designated in SAM as an SDVOSB concern certified by SBA; or
(2) Has represented that it is an SDVOSB concern in SAM and submitted an application for certification to SBA on or before December 31, 2023. Pending applications for certification are in the SBA Veteran Small Business Certification Program database at https://veterans.certify.sba.gov" target="_blank">https://veterans.certify.sba.gov.
(c) The SBA has the right to appeal the contracting officer’s decision not to make an SDVOSB sole-source award.