19.806 Pricing the 8(a) contract
Source: FAR 19.806 on acquisition.gov
8(a) contracts must be priced fairly and cannot exceed fair market value, with strict data sharing and concurrence requirements involving the SBA.
Overview
FAR 19.806 outlines the requirements and procedures for pricing contracts awarded under the 8(a) program, which supports small disadvantaged businesses. The section mandates that 8(a) contracts be priced in accordance with FAR subpart 15.4, ensuring that prices are fair and reasonable. It also details the roles of the contracting officer and the Small Business Administration (SBA) in obtaining cost or pricing data, providing audit assistance, and determining fair market price. The regulation prohibits awarding 8(a) contracts at prices above fair market value and establishes a process for resolving disagreements between the contracting officer and the SBA regarding pricing.
Key Rules
- Pricing in Accordance with FAR 15.4
- 8(a) contracts must be priced following the procedures in FAR subpart 15.4, including obtaining certified cost or pricing data when required.
- Fair Market Price Requirement
- No 8(a) contract (sole source or competitive) can be awarded if its price exceeds the fair market price.
- Data Sharing with SBA
- Contracting officers must provide the SBA with data used to estimate fair market price within 10 working days if requested.
- SBA Concurrence and Dispute Resolution
- Both the negotiated contract price and the estimated fair market price require SBA concurrence; disputes may be appealed per FAR 19.810.
Responsibilities
- Contracting Officers: Ensure pricing follows FAR 15.4, provide audit assistance and data to SBA, and secure SBA concurrence on pricing.
- Contractors: Submit certified cost or pricing data if required.
- Agencies: Support SBA with audit assistance and comply with dispute resolution procedures.
Practical Implications
This section ensures 8(a) contracts are priced fairly, protecting government interests and supporting small businesses. Contractors and agencies must be diligent in documentation, timely data sharing, and compliance with pricing rules to avoid delays or disputes.
(a) The contracting officer shall price the 8(a) contract in accordance with subpart 15.4. If required by subpart 15.4, the SBA shall obtain certified cost or pricing data from the 8(a) contractor. If the SBA requests audit assistance to determine the proposed price to be fair and reasonable in a sole source acquisition, the contracting activity shall furnish it to the extent it is available.
(b) An 8(a) contract, sole source or competitive, may not be awarded if the price of the contract results in a cost to the contracting agency which exceeds a fair market price.
(c) If requested by the SBA, the contracting officer shall make available the data used to estimate the fair market price within 10 working days.
(d) The negotiated contract price and the estimated fair market price are subject to the concurrence of the SBA. In the event of a disagreement between the contracting officer and the SBA, the SBA may appeal in accordance with 19.810.