19.805-1
General
FAR 19.805-1 sets clear thresholds and rules for when 8(a) contracts must be competed and when sole source awards are allowed, ensuring fair access and preventing circumvention of competition requirements.
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 permitted. The regulation sets specific dollar thresholds—$7 million for manufacturing and $4.5 million for other acquisitions—above which competition is generally required unless certain exceptions apply. It also prohibits dividing requirements to circumvent competition and provides a process for requesting competitive awards below the threshold in limited circumstances.
Key Rules
- Competition Requirement
- Acquisitions 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 contract value exceeds $7 million (manufacturing) or $4.5 million (other).
- 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 an Indian tribe or Alaska Native Corporation.
- Prohibition on Requirement Splitting
- Requirements above the threshold cannot be split into smaller contracts to avoid competition.
- Competitive Awards Below Threshold
- The SBA Associate Administrator for Business Development may approve competitive 8(a) awards below the threshold in limited cases, especially for technical competitions or when many eligible firms exist.
Responsibilities
- Contracting Officers: Must determine if competition is required, ensure thresholds are met, avoid splitting requirements, and coordinate with SBA for exceptions or special requests.
- Contractors: Must be eligible 8(a) participants and meet responsibility standards to compete.
- Agencies: Must support the 8(a) program and may recommend competition below thresholds to the SBA.
Practical Implications
- Ensures fair competition among 8(a) firms for larger contracts while allowing flexibility for sole source awards in specific cases.
- Prevents agencies from circumventing competition by splitting contracts.
- Requires careful planning and documentation to justify competition or sole source awards under the 8(a) program.