8a Sole source contracts are awarded when there is evidence that there is but a sole supplier that is capable of providing the products or purchases sought by the government. Under the SBA 8(a) Business Development Program, small businesses can also get single source contracts by statute.
The government contracting agreement is not required to seek out a single supplier. This is but one exception to the full and open competition rules. However, there are many 8(a) companies that have yet to get their first sole 8a sole source contract.
For companies in the SBA’s 8(a) Program that consider themselves for single source for a specific product or service, they should promote these services or products to the government contracting agency.
What are the Single Source Thresholds for 8(a) Companies? Under the SBA regulations, small businesses in the 8(a) Program have certain thresholds/ limits to where they can get a single source contract. The exception to 8a sole source contracts caps typically apply to Native American Tribal entities, Alaskan Native Corporations (ANC) and NHOs. These groups are generally referred to as “Super 8(a)” companies.
- ANCs or Native American Tribal entities may receive a sole source bid up to $22 million, and with proper justification, unlimited dollar amounts.
- Other 8(a) companies can only receive sole source awards for manufacturing contracts up to $6.5 million and for service contracts up to $4 million.
FAR 19.8 Government 8a Sole Source Contracts & Bid Mandates
Although there is a sole source threshold for awarding single source contracts to 8(a) companies, there are some caveats. Under FAR 18.8, the SBA cannot accept 8a sole source contracts that exceed $22 million unless the contracting agency completes a Justification and Approval under FAR 6.303.
There are agency negotiation timeliness that might come into play. The SBA and the contracting agency are required to work out the negotiation kinks together. However, if the SBA cannot meet the agency timelines, the contracting offer, after notifying the SBA, can move ahead with the single source contract.
Common Perceptions By 8(a) Sole Supplier Small Businesses: Small businesses must understand that the SBA is not mandated to go out and find government contracts for 8(a) certified companies. Instead, companies have to market their product or services to the government. Knowing how to reach the end result of getting sole source projects is a constant problem for many companies trying to be a sole supplier across the U.S.
On the other hand, the contracting officer is not required to contract directly with the SBA if she is making a sole source contract award for other small businesses not in the 8(a) Program.
Additional Government Contracting and 8a Sole Source Contracts Information
For help with structuring your company for 8a government contracts and sole source contracts opportunities with the government under the SBA 8a Program, call our government small business consultants and lawyers at 1-866-601-5518.