19.805-1 General
Source: FAR 19.805-1 on acquisition.gov
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.
(a) Except as provided in paragraph (b) of this section, an acquisition offered to the SBA under the 8(a) program shall be awarded on the basis of competition limited to eligible 8(a) participants when-
(1) There is a reasonable expectation that at least two eligible and responsible 8(a) participants will submit offers and that award can be made at a fair market price; and
(2) The anticipated total value of the contract, including options, will exceed $8.5 million for acquisitions assigned manufacturing North American Industry Classification System (NAICS) codes and $5.5 million for all other acquisitions.
(b) Where an acquisition exceeds the competitive threshold (see paragraph (a)(2) of this section), the SBA may accept the requirement for a sole source 8(a) award if-
(1) There is not a reasonable expectation that at least two eligible and responsible 8(a) participants will submit offers at a fair market price; or
(2) SBA accepts the requirement on behalf of a concern owned by an Indian tribe or an Alaska Native Corporation.
(c) A proposed 8(a) requirement with an estimated value exceeding the applicable competitive threshold amount shall not be divided into several requirements for lesser amounts in order to use 8(a) sole source procedures for award to a single firm.
(d) The SBA Associate Administrator for Business Development may approve a contracting office's request for a competitive 8(a) award below the competitive thresholds. Such requests will be approved only on a limited basis and will be primarily granted where technical competitions are appropriate or where a large number of responsible 8(a) participants are available for competition. In determining whether a request to compete below the threshold will be approved, the SBA Associate Administrator for Business Development will, in part, consider the extent to which the contracting activity is supporting the 8(a) program on a noncompetitive basis. The agency may include recommendations for competition below the threshold in the offering letter or by separate correspondence to the SBA Associate Administrator for Business Development.