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Don Mansfield

Critical Thinking Exercise

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DFARS 219.800(a) states:

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By Partnership Agreement (PA) between the Small Business Administration (SBA) and the Department of Defense (DoD), the SBA has delegated to the Under Secretary of Defense (Acquisition, Technology, and Logistics) its authority under paragraph 8(a)(1)(A) of the Small Business Act (15 U.S.C. 637(a)) to enter into 8(a) prime contracts, and its authority under 8(a)(1)(B) of the Small Business Act to award the performance of those contracts to eligible 8(a) Program participants. However, the SBA remains the prime contractor on all 8(a) contracts, continues to determine eligibility of concerns for contract award, and retains appeal rights under FAR 19.810. The SBA delegates only the authority to sign contracts on its behalf. Consistent with the provisions of the PA, this authority is hereby redelegated to DoD contracting officers. A copy of the PA, which includes the PA’s expiration date, is available at PGI 219.800.

1. Under the PA, can DoD enter into prime contracts with 8(a) Program Participants?

2. If yes to #1, who would be the prime contractor in such contracts?

3. According to the paragraph, DoD signs contracts for the Government on the SBA's behalf. Who would the contract be with?

Not looking for an explanation of how the program works or what you do in practice. Just read and interpret the paragraph. 

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1.  Yes

2.  For purposes of the automated contract writing system, the prime contractor will be the 8(a) Program Participant -- for other "legal" purposes, we can pretend like SBA is the prime contractor

3.  8(a) Program Participant

Under the PA, we don't use the process in FAR 19.811-1( a ) and ( b ) (one contract between agency and SBA and a subcontract between SBA and 8(a) Program Participant), and we also don't use the alternative process in FAR 19.911-1( c ) (a tripartite contract).  Instead, we use the process defined in the PA, which is a direct award between the agency and the 8(a) Program Participant.  I'm not in DoD, but I am assuming that my agency's partnership agreement is similar to DoD's -- my agency's PA says the PA takes precedence over FAR 19.811-1.

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1. No.

2. N/A

3. SBA, if by "the contract" you meant the prime contract. Under the PA DOD enters into a prime contract with SBA and signs for both DOD and SBA, acting as SBA's agent. It also enters into a subcontract with the 8(a) firm and signs on behalf of SBA, acting as SBA'a agent. I don't know how this works with the various automated contract writing systems.

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Pursuant to the paragraph provided:

1 - No, SBA remains the prime, but the 8(a) is awarded performance

2 - SBA is the prime as discussed above

3 - SBA

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  1. No
  2. N/A
  3. The contract is with the DoD and the SBA, the paragraph says that the "SBA remains the prime contractor...", the 8(a) prime contractor is the subcontractor.  When a DoD KO signs on the SBA's behalf, they are signing the subcontract with the SBA and the 8(a) "prime", who is the sub.

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SBA delegates authority "...to enter into [sign on SBA's behalf] 8(a) prime contracts, and its authority....to award [sign on SBA's behalf] performance of those contracts to eligible 8(a) Program participants."

"However, the SBA remains the prime contractor on all 8(a) contracts..."

"The SBA delegates only the authority to sign contracts on its behalf."

 

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1.  No.  SBA is the prime contactor.  DFARS 252.219-7000(a) reads in part, Accordingly, the SBA, even if not identified in Section A of this contract, is the prime contractor and retains responsibility for 8(a) certification, for 8(a) eligibility determinations and related issues, and for providing counseling and assistance to the 8(a) Contractor under the 8(a) Program.  Partnership Agreement Section II - Objectives,  Paragraph D of the PA reads, To emphasize that although the SBA delegates the authority to sign contracts on its behalf, it remains the prime contractor on all 8(a) contract awards (emphasis added), modifications, and purchase orders...

The first sentence of DFARS 219.800(a) (i.e. General) reads the same as the General cited in my agency. 

2.  N/A

3.  8(a) Participant.  It's a direct award between DOD and the 8(a) participant.  If you're talking "prime contract", its the SBA.  The contract writing system our agency has the 8(a) participant as the subcontractor.  For example, is you're awarding per the PA, SF-1449 block 17a, will read "SUB: Name of 8(a) Participant)".  Block 20 will read "PRIME: SMALL BUSINESS ADMINISTRATION."

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Does anyone have a link to where it tells why the SBA injected themselves into the contract award process to begin with?  And why do they want to be Prime if they don't have COs that administer the contract.   What where they trying to accomplish in the beginning that SBA has sent to the agencies now? 

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Don...(In agreement with Edwards but stated a little different.)

 

1.  No

2. N/A

3.  With DoD on SBAs behalf for the prime contract and with the 8a firm again on SBAs behalf.  So DoD is signing as SBA on the prime with DoD and as SBA with the 8a firm.

 

Boof....I suggest a read of Section 8a of the Small Business Act.

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Boof:

The SBA did not "inject itself." The process was mandated by Congress at the initiation of the Nixon Administration. It was Congress that made them prime contractor. SBA did not like the idea. They saw themselves as primarily a financial assistance and loan guarantee agency. Procurement was something of a backwater. If you wanted to advance in SBA you wanted to be in financial assistance, not procurement assistance.

The original idea was to foster capitalist enterprise in the Black community. The program used to be better staffed by SBA than it is now, and SBA employees once actually negotiated contracts for 8(a) companies. I did it briefly as an employee of the procurement assistance division of the Los Angeles District Office of the SBA a long, long time ago, when the program was relatively new. (It was weird to sit across from another civil servant and haggle over price.)

For some history of the 8(a) Program, see:

The Small Business Administration's 9(a) Program: An Historical Perspective on Affirmative Actionhttp://www.policy-perspectives.org/article/viewFile/4166/2916.

"Contracting with the Disadvantaged, Sec. 8(a) and the Small Business Administration," in Public Contract Law Journal (August 1975).

"Black Power-Nixon Style: The Nixon Administration and Minority Business Enterprise," The Business History Review (Autumn 1998).

You'll have to get the latter two publications from a library or online through JSTOR.

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