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KA20003

FAR 19.804-3 Offer Letter - No SBA Response

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I sent an offer letter to the SBA for a proposed contract of around $2.5M, directed 8(a), 11 business days ago. I have received no response from SBA.

My plan is to proceed with the action - do you agree?

"19.804-3 -- SBA Acceptance.

(a) Upon receipt of the contracting agency’s offer, the SBA will determine whether to accept the requirement for the 8(a) Program. The SBA’s decision whether to accept the requirement will be transmitted to the contracting agency in writing within 10 working days of receipt of the offer if the contract is likely to exceed the simplified acquisition threshold and within 2 days of receipt if the contract is at or below the simplified acquisition threshold. The contracting agency may grant an extension of these time periods. If SBA does not respond to an offering letter within 10 days, the contracting activity may seek SBA’s acceptance through the Associate Administrator."

19.804-3(a) doesn't appear to mandate that the SBA accept/reject within 10 business days (because of the use of the word "will"), and it only says that if the SBA does not respond to an offering letter within 10 days, the contracting activity "may" seek SBA's acceptance through the Associate Administrator.

I guess I'm feeling uncertain because 19.804-3(c) says that for actions below the SAT, if the contracting activity does not receive a reply within 2 days, then it may assume the offer is accepted and proceed. There is no similar section for actions above the SAT - unless I'm just an idiot and I don't see it/can't read.

Just looking for confirmation/agreement that I'm good to just proceed (or, if disagreement, why I'm wrong). Thanks!

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Questions -

1. You sent 11 days ago but do you know when SBA received the offer letter?

2. Have you called SBA to see if the acceptance letter which they would send "within 10 days" of your offer is in the mail?

3. What do you mean proceed with the action?

4.  Does your agency have a Partnership Agreement with SBA?  https://www.sba.gov/content/sba-agencies-executed-partnership-agreements

5.  Wouldn't it be wise to ask SBA the same question you are asking here?

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1. Offer letter was sent via email, per our agency's standard practice. Previously, we assumed that the date of sending was the date of receipt.

2. I have no specific point of contact at this SBA office, but I have called and emailed - no response.

3. "Proceed with action" means that I would like to send the solicitation. My understanding of FAR 19.804-2 is that the offer letter for above SAT is a pre-solicitation action, though I could be wrong.

5. I am not getting responses from SBA, and the customer's period of performance start date is approaching. I also don't want to sit around waiting for something if I don't need to - it seems to me like I can just proceed with soliciting and issuing the award, but the lack of a specific directive in the FAR, especially when one exists for awards below the SAT, makes me unsure.

#4 is the answer and confirms my initial inkling that I may just be an idiot - thank you. I didn't even think to check our MOU. I am good to go.

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FAR 19.804-3( a ) does not allow you to proceed by issuing your solicitation -- you need to read what FAR 19.804-3( a ) actually says -- it says that if you don't get a response within 10 days, you may "seek the SBA's acceptance through the Associate Administrator."  How do you turn "seek the SBA's acceptance through the Associate Administrator"  into "proceed" with issuing your solicitation?

Carl's No. 4 is right -- what does your SBA Partnership Agreement say?  Mmy agency's SBA Partnership Agreement says "Absent a notification of rejection within five (5) working days of receipt of the offer, acceptance may be assumed on the sixth (6th) working day..." for proposed sole-source 8( a ) acquisitions under $20 Million -- but for 8( a ) competitive acquisitions, the words are "Absent notification of rejection within five (5) working days of receipt of the offer, the procuring activity may seek SBA’s acceptance through the Associate Administrator, Office of Business Development (AA/BD). If the procuring activity does not receive a reply from the AA/BD within five (5) working days of the AA/BD’s receipt of the offer, the procuring activity may assume acceptance on the sixth (6th) working day."  In both cases (sole-source and competitive), the clock starts ticking upon SBA's receipt of the offer.

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Agreed re: the partnership; thanks. But disagree re: 19.804-3(a). I do not read 19.804-3(a) as MANDATING seeking the SBA's acceptance through the Associate administrator. It just says "MAY seek the SBA's acceptance..." "May" does not equal "must."

Nothing appears to prohibit proceeding with the solicitation, at least not within that section of the FAR. If no MOU/partnership existed, would you read the FAR as requiring a CO to seek SBA acceptance through the associate admin?

 

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KA20003, why do you think you can award an 8(a) contract over the SAT without SBA acceptance?  "May" as used in 19.804-3(a) merely indicates that the agency can ask for acceptance from the AA/BD or continue to wait for the SBA to accept or reject the offer.  Nothing in the FAR or SBA rules generally indicates that acceptance occurs if the SBA does not respond within 10 working days to an offering.  On the other hand, the SBA rules (13 CFR 124.503) state that an agency may assume that acceptance has occurred if the agency does not receive a notice of acceptance from the AA/BD within 5 working days after receipt of the request from the agency.

If you do have an MOU with the SBA and the SBA has delegated its 8(a) procurement function to your agency in that MOU, look at 13 CFR 124.503(a)(3) which permits an agency to assume acceptance if the SBA does not respond to a request for acceptance within 5 days after receipt of the notice.

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I guess it just comes down to how we interpret things. I like to look at the FAR as allowing whatever it (or other laws) do not expressly prohibit. The way I read this section of the FAR is, (1) Send your offer letter; (2) Wait the minimum required number of days; (3) If no response, you can, if you want, ask the AA/BD.....but nothing else. It doesn't say that the options are to either wait or ask, as you say.

It doesn't say one way or another what we are supposed to do, and I don't think it's unreasonable to think that the resulting options are to either wait or ask, but I also don't see it as prohibiting starting the award process. And, it seems like the regulations and MOUs take the same approach that I do, in that if there is no response, we can presume acceptance.

Clearly I wasn't totally comfortable with assuming that the award process could be made, based on the reading of the FAR...but I also don't think my original interpretation (which admittedly failed to consider the MOU/partnership) is so far off; especially since the regulations and MOU clarify it to be the way I was interpreting.

This is a common dispute/discussion in our office - whether we should read the FAR in terms of its prohibitions (and that therefore anything not prohibited is allowed) or whether we should find authority for every action we take. I find the former to more sensible, but I think that's a whole other discussion topic.

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KA20003, I'm not going to argue with your general approach to interpreting the FAR.  However, for some topics, we have to look at regulations outside of the FAR to guide our actions.  Small business matters are one of those and we have to look to the SBA regulations.  Those regulations do not have a provision in them equivalent to
FAR 1.102-4.  Therefore, those regulations are to be applied in a way that carries out the intent of the SBA in promulgating the regulation.

Note that the SBA rules provide for a deemed or assumed acceptance in three circumstances.  First, if the offered procurement is below the SAT and the agency does not receive a reply from the SBA within 2 working days after the agency makes an offering, acceptance will be assumed.  This is brought forward into the FAR at 19.804-3(c).  The other circumstance is if the award will exceed the SAT and the agency asks the AA/BD to accept an award but the agency does not receive a response within 5 working days, acceptance will be presumed.  This latter provision is not included in the FAR.   Third, if there is a delegation of the SBA's procurement authority to an agency, acceptance will be presumed if the agency does not receive a response from the SBA within 5 working days after receiving a request.  Again, this language is not included in the FAR.  Conspicuous is the absence of any assumed acceptance if the SBA does not respond within 10 working days to a request for acceptance for a procurement exceeding the SAT.  In this case, because the SBA is not required to accept a procurement, in the absence of a specific assumed or deemed acceptance, there is no basis for believing that acceptance  has occurred and that the agency can proceed with the procurement as an 8(a) procurement.  FAR 19.803-4 needs to be understood in the context of these SBA regulations.

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Thanks Retreadfed. I can't argue with that - I'm not too familiar with SBA regs, so that is something I will spend some time reviewing.

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