19.805-1
General
FAR 19.805-1 sets clear competition thresholds for 8(a) contracts and outlines when sole source awards are allowed, ensuring fair access and preventing circumvention of competition rules.
Overview
FAR 19.805-1 outlines the general rules for awarding contracts under the 8(a) Business Development Program, focusing on when acquisitions must be competed among eligible 8(a) participants and when sole source awards are permissible. The section establishes competitive thresholds—$8.5 million for manufacturing NAICS codes and $5.5 million for all other acquisitions—above which competition is generally required unless specific exceptions apply. It also prohibits dividing requirements to circumvent competition and allows for rare exceptions to compete below the threshold with SBA approval.
Key Rules
- Competition Requirement
- Contracts offered to the SBA under the 8(a) program must be competed among eligible 8(a) participants if there is a reasonable expectation of at least two responsible offers and the value exceeds the competitive thresholds.
- Competitive Thresholds
- $8.5 million for manufacturing NAICS codes; $5.5 million for all other acquisitions (including options).
- Sole Source Exceptions
- Sole source awards above the threshold are allowed if there is not a reasonable expectation of competition or if the award is to a firm owned by an Indian tribe or Alaska Native Corporation.
- Prohibition on Requirement Splitting
- Agencies may not split requirements to avoid competition and use sole source procedures.
- Competing Below Thresholds
- SBA may approve competition below thresholds in limited cases, especially for technical competitions or when many eligible 8(a) firms exist.
Responsibilities
- Contracting Officers: Must determine if competition is required, apply thresholds, avoid splitting requirements, and seek SBA approval for exceptions.
- Contractors: Must be eligible 8(a) participants to compete; tribal and ANC firms may qualify for sole source above thresholds.
- Agencies: Must support 8(a) program goals and may recommend competition below thresholds to SBA.
Practical Implications
- Ensures fair competition among 8(a) firms for larger contracts.
- Prevents agencies from circumventing competition rules by splitting requirements.
- Provides flexibility for sole source awards in specific cases, supporting tribal and ANC participation.
- Contractors should monitor thresholds and eligibility to maximize opportunities.