FAR 19.805: Competitive 8(a)

Comptroller General - Key Excerpts

HRCI/MPSC alleges that the procurement of the professional administrative support services through a sole source 8(a) award is precluded by 13 C.F.R. § 124.506(b) (2013), which, according to the protester, prohibits accepting a requirement for a sole-source 8(a) award where the requirement had previously been accepted for a competitive 8(a) award. HRCI/MPSC argues that this work has been performed by 8(a) contractors since at least 2009, and was most recently competed as an 8(a) set-aside under solicitation No. W912JB-R-4001.

Section 8(a) of the Small Business Act authorizes the Small Business Administration (SBA) to contract with other government agencies and to arrange for the performance of those contracts via subcontracts awarded to socially and economically disadvantaged small businesses. 15 U.S.C. § 637(a) (2006). The Act affords the SBA and contracting agencies broad discretion in selecting procurements for the 8(a) program; we will not consider a protest challenging a decision to procure under the 8(a) program absent a showing of possible bad faith on the part of government officials or that regulations may have been violated. 4 C.F.R. § 21.5(b)(3) (2010); Rothe Computer Solutions, LLC d/b/a Rohmann Joint Venture, B-299452, May 9, 2007, 2007 CPD ¶ 92 at 3.

The section 8(a) program has both competitive and noncompetitive (that is, sole-source) components. Generally, where a procurement for services exceeds a certain threshold (currently $4 million for non-manufacturing contracts), the requirement must be competed among qualified 8(a) program participants. 13 C.F.R. § 124.506(a)(2)(ii). Under certain circumstances, however, the competitive threshold dollar value does not apply when awarding a sole-source 8(a) contract to an Indian tribe-owned entity or an Alaska Native Corporation. Id. at § 124.506(b).

In implementing this statutory regime, the SBA has established limits on moving an existing requirement from the 8(a) competitive program to the 8(a) sole-source program. In relevant part, SBA’s regulations provide as follows:

(1) A Participant concern owned and controlled by an Indian Tribe or an [Alaska Native Corporation] may be awarded a sole source 8(a) contract where the anticipated value of the procurement exceeds the applicable competitive threshold if SBA has not accepted the requirement into the 8(a) [Business Development] program as a competitive procurement.

* * * *

(3) There is no requirement that a procurement must be competed whenever possible before it can be accepted on a sole-source basis for a tribally-owned or [Alaska Native Corporation] -owned concern, but a procurement may not be removed from competition to award it to a tribally-owned or [Alaska Native Corporation]-owned concern on a sole-source basis.

Id. at § 124.506(b)(1) (emphasis added).

As set forth above, HRCI/MPSC argues that the SBA improperly accepted the requirement for award to Alutiiq on a sole-source basis since the very same requirement was recently competed under the 8(a) program under solicitation No. W912JB-R-4001. The agency responds that the particular requirement at issue--providing administrative support services to the National Guard for a six month base period plus two 3-month options periods with a ceiling amount of $18 million--has not been previously accepted into the 8(a) business development program as a competitive procurement and, accordingly, that there is no restriction on the sole-source award of the requirement to an Alaska Native Corporation-owned entity such as Alutiiq Pacific.

The Army asserts that in determining whether a requirement has been accepted into the 8(a) business development program as a competitive procurement, our Office has previously referenced the SBA’s regulations for determining whether a solicitation is for a “new requirement,” which provide that:

[t]he expansion or modification of an existing requirement will be considered a new requirement where the magnitude of change is significant enough to cause a price adjustment of at least 25 percent (adjusted for inflation) or to require significant additional or different types of capabilities or work.

13 C.F.R. § 124.504(c)(1)(ii)(C); see JXM, Inc., B-402643, June 25, 2010, 2010 CPD ¶ 158. The Army argues that because the bridge contract is for less than 20 percent of the value and maximum contract term solicited under solicitation No. W912JB-R-4001, the bridge contract should be considered different from the requirement previously accepted into the 8(a) business development program as a competitive procurement.

At our Office’s request, the SBA provided its views on the protest. We accord great weight to the SBA’s interpretation of its regulations as to what constitutes a new requirement, unless the interpretation is unreasonable. NANA Servs., LLC, B-297177.3; B-297177.4, Jan. 3, 2006, 2006 CPD ¶ 4 at 10. Here, the SBA agrees that the Army has done nothing improper where the original contract was within the 8(a) program and the Army clearly intends to procure the follow-on contract as a competitive 8(a) set-aside, but is using this bridge contract only to provide continuity of service until the follow-on contract can be successfully awarded. According to the SBA, the facts of the case demonstrate that the requirements under the contract with Alutiiq are properly considered “new” as that concept would be applied under 13 C.F.R. § 124.504(c)(1)(ii)(C), when compared to the much larger contract anticipated by the previously issued solicitation (solicitation No. W912JB-R-4001). In this regard, the SBA notes that the bridge contract is for a six month base period with two 3-month option periods and has a maximum value of $18 million, whereas the contemplated competitive 8(a) award is for a five-year contract, including base and options, with a maximum value of $100 million. Based on this record, as discussed above, we see no basis to object to the Army’s decision to offer this bridge requirement to the SBA, or to the SBA’s decision to accept the requirement, as an 8(a) sole-source award to Alutiiq Pacific.

The protest is denied.  (HRCI-MPSC PASS, LLC, B-408919, B-408919.2, Jan 8, 2014)  (pdf)

Designer Associates alleges that the Air Force acted in bad faith. Designer Associates argues that the agency’s bad faith is evidenced by, among other things, the fact that the Air Force has changed the traditional duration of the contract here from its normal 5-year length, with an estimated value in excess of $6 million, to an 18-month contract, having an estimated value of less than $3 million, thereby permitting a noncompetitive award under the 8(a) program. See FAR § 19.805-1(a)(2). Government officials are presumed to act in good faith and, where a protester contends that contracting officials are motivated by bias or bad faith, it must provide convincing proof, since this Office will not attribute unfair or prejudicial motives to procurement officials on the basis of inference or suppositions. United Coatings, B-291978.2, July 7, 2003, 2003 CPD ¶ 146 at 14. Here, Designer Associates has not provided any proof to support this allegation. Moreover, we are unaware of any law or regulation dictating the “traditional duration” of a contract, see New Technology Mgmt., Inc., B-287714.2 et al., Dec. 4, 2001, 2001 CPD ¶ 196 at 4, and the record shows that the Air Force had valid reasons for limiting the duration of the contract here as it did, including the fact that the maintenance requirement would cease to exist with the privatization of Hill AFB family housing, estimated to occur in July 2004. (Designer Associates, Inc., B-293226, February 12, 2004) (pdf)

Purchases for an amount not greater than the simplified acquisition threshold are expressly exempted from the requirement that solicitations include a statement of all significant evaluation factors and subfactors that the agency reasonably expects to consider. 10 U.S.C. sect. 2305(a)(2)(A). Nevertheless, all procurements, including those to which this exemption applies, must be conducted consistent with the concern for a fair and equitable competition that is inherent in any procurement. General Metals, Inc., B-249259 et al., Nov. 3, 1992, 92-2 CPD para. 319 at 4. In this regard, an agency must evaluate quotations on the basis set forth in the RFQ. Id.  (Multi-Spec Products Corporation, B-287135, March 30, 2001)

Agency's sole-source award of contracts for services on a monthly basis through the Small Business Administration under the section 8(a) program, while the agency was developing specifications for a 1-year contract to be awarded on a sole-source basis through the section 8(a) program is not inconsistent with the provision in Federal Acquisition Regulation sect. 19.805-1(c) that prohibits an agency from dividing a proposed section 8(a) requirement into several separate action in order to avoid the $3 million threshold for competing such contracts.  (Champion Business Services, Inc., B-283927, January 24, 2000)

We have held that an agency need not consider subcontractor experience where the solicitation contemplates award of a service contract to a section 8(a) firm, and includes the provision at Federal Acquisition Regulation (FAR) sect. 52.219-14, which imposes a limitation on subcontracting to an amount less than 50 percent of the cost of contract performance. USATREX Int?l, Inc. supra at 4. In such cases, the agency properly may determine that only the offeror?s own capabilities are relevant for purposes of discriminating among the proposals. Since the RFP here provided for award of a service contract and contained the cited FAR provision, we think it properly could limit its evaluation to the prime contractor?s capabilities.  (North State Resources, Inc., B-282140, June 7, 1999)

Comptroller General - Listing of Decisions

For the Government For the Protester
HRCI-MPSC PASS, LLC, B-408919, B-408919.2, Jan 8, 2014  (pdf)  
Designer Associates, Inc., B-293226, February 12, 2004 (pdf)  
New Technology Management, Inc., B-287714.2; B-287714.3; B-287714.4, December 4, 2001  
Multi-Spec Products Corporation, B-287135, March 30, 2001  
Champion Business Services, Inc., B-283927, January 24, 2000  
North State Resources, Inc., B-282140, June 7, 1999  

U. S. Court of Federal Claims - Key Excerpts

U. S. Court of Federal Claims - Listing of Decisions
For the Government For the Protester
Myers Investigative and Security Services, Inc. v. U.S., No. 99-780C, September 7, 2000  


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