Sole source
Sole-source 8(a) contracts over $30 million require special justification, and strict eligibility and negotiation procedures must be followed to ensure compliance.
Overview
FAR 19.808-1 outlines the procedures and requirements for awarding sole-source contracts under the 8(a) Business Development Program. It details the roles of the Small Business Administration (SBA), the contracting agency, and the 8(a) participant in the negotiation and award process. The section sets a $30 million threshold for sole-source 8(a) contracts, requiring a justification for awards above this amount. It also clarifies the SBA's negotiation responsibilities, the need for SBA approval before contract award, and eligibility requirements for 8(a) participants, including size representation and program participation status. Special restrictions apply to follow-on contracts for entities owned by Alaska Native Corporations, Indian Tribes, Native Hawaiian Organizations, or Community Development Corporations.
Key Rules
- Justification Requirement for Large Awards
- Sole-source 8(a) contracts over $30 million require a justification per FAR 6.303.
- SBA Negotiation Role
- SBA must initiate negotiations within the agency's established timeframe or risk the agency proceeding with other sources.
- SBA Participation and Approval
- SBA should participate in negotiations and must approve the contract before award, even if direct negotiations occur between the agency and the 8(a) participant.
- Small Business Representation
- 8(a) participants must certify their small business status under the assigned NAICS code.
- Current 8(a) Program Participation
- The awardee must be a current 8(a) participant at the time of award.
- Restrictions on Follow-On Awards
- Certain entities cannot receive follow-on 8(a) sole-source awards if the predecessor was performed by another entity owned by the same parent organization.
Responsibilities
- Contracting Officers: Ensure justification for large awards, coordinate with SBA, verify 8(a) eligibility, and obtain SBA approval before award.
- Contractors (8(a) Participants): Certify small business status, maintain current 8(a) program participation, and comply with follow-on award restrictions.
- Agencies: Set negotiation timelines, notify SBA if deadlines are missed, and ensure compliance with all requirements.
Practical Implications
This section ensures transparency and fairness in sole-source 8(a) contracting, especially for high-value awards. Contractors must be vigilant about eligibility and timely certifications, while agencies must coordinate closely with the SBA. Common pitfalls include missing justification for large awards, failing to verify 8(a) status, or improper follow-on awards to related entities.