There is still great confusion between small businesses about 8a sole source and 8a set aside contracts versus HUBZone contracts set-aside requirements. 8a set asides are a powerful tool for agencies to achieve small business and small disadvantaged business contracting goals.
When challenging the agency’s decision, contractors should beware of the rules of engagement. For example, the agency’s goals could be a factor.
8a Set Aside Vs HUBZone Set Aside Program
Others make the deadly mistake of disagreeing with whether there is a statutory priority between 8(a) set asides versus a HUBZone Set Aside contract. The agency has great discretion in this area. For companies to succeed in a bid protest, they must show how the agency violated procurement law or acted unreasonably.
When agencies choose to conduct 8a set aside contracts, only small businesses with 8a status can compete for award. Unless you show some other reason why the decision was unlawful, the contracting agency’s decision will be upheld in a bid protest.
Prior GAO Decision About Set Asides: When deciding whether or not to file a GAO protest based upon the government’s 8a set aside decision versus HUBZone set aside contracts, keep in mind the GAO’s decision in 2010 where it stated that the plain language of the statute authorizing the HUB Zone contracts program is mandatory and requires that an agency set aside a procurement when certain criteria are met (specifically, where the agency has a reasonable expectation of receiving offers from at least two qualified HUBZone small business concerns and where the award can be made at a fair market price).
GAO compared the statute for the SBA 8(a) program and stated that the agency decisions for a set aside were discretionary. The result then is that government contracting agencies must first comply with the HUBZone statute before it can reach the set aside decision.
When considering whether to challenge the government’s decision to solicit its requirements for 8a set asides versus federal HUBZone contracts in a GAO protest, it may be difficult to overcome unless you also argue that it failed to first comply with the mandatory language of the HUBZone statute. However, there is still more confusion without superseding legal decisions.
Added Confusion About 8a Set Aside Contracts Versus HUBZone Contracts
More confusion comes about on the issue of 8a set aside versus HUBZone contracts after reading the proposed rules in March 2011 where it was determined that “There is no order of precedence among the 8(a) Program (subpart 19.8), HUBZone Set Aside Program (subpart 19.13), or Service-Disabled Veteran-Owned Small Business (SDVOSB) Procurement.” If your company happens to be an 8a HUBZone business, then your ability compete for either is substantially increased.
Contracting officer requirements: Under the Federal Acquisition Regulations (FAR), the contracting officer shall review acquisitions to determine if they can be set aside for small businesses, giving consideration to the recommendations of agency personnel having cognizance of the agency’s small business programs.
Market research done? The contracting officer shall perform market research and document why a small business set-aside is inappropriate when an acquisition is not set aside for small businessES, unless an award is anticipated to a small business under the 8(a), HUB Zone contracts, SDVOSB, or WOSB programs.
If the acquisition is set aside for small businesses based on this review, it is a unilateral set-aside by the contracting officer. Agencies may establish threshold levels for this review, depending upon their needs.
Do Agencies Get Credit for 8 a Set Aside Contracts? Federal contracting agencies do not have goals specifically for the 8a program. However, since every 8a certified company also has the status of a Small Disadvantaged Business (SDB), the government contract agencies can fulfill their goals when they award contracts under 8a set asides. Learn more about teaming agreements and joint venture agreements.
For legal advice and guidance about sole source or 8a set aside contracting versus federal HUBZone contracts, call our government small business lawyers at 1-866-601-5518. FREE INITIAL CONSULTATION.