July 1, 2016
Large DoD 8(a) Sole Source Contracts Have Dropped By 86.5%
Source: SmallGovCon, Steven Koprince, June 9, 2016
The number of 8(a) sole source contracts over $20 million awarded by the DoD has been “steadily declining since 2011,” when a new requirement was adopted requiring agencies to prepare written justifications of such awards.
According to a recent GAO report, such awards have dropped more than 86% compared to the period before the justification requirement took effect. The report states that much of the work that was previously awarded on a sole source basis has now been competed.
8(a) Program participants owned by Alaska Native Corporations or Indian Tribes (which the GAO collectively refers to as “tribal 8(a) firms”) are eligible to receive 8(a) sole source contracts for any dollar amount. In contrast, as the GAO writes, other 8(a) firms “generally must compete for contracts valued above certain thresholds: $4 million or $7 million, depending on what is being purchased.”
Section 811 of the 2010 National Defense Authorization Act did not eliminate the special sole source authority for tribal 8(a) firms, but required a contracting officer to issue a written justification and approval for any sole source 8(a) award over $20 million. This portion of the 2010 NDAA was incorporated in the FAR in March 2011. A regulatory update in late 2015 increased the threshold to $22 million, where it remains today.
Does your business qualify as a 8(a) entity? Contact your nearest PTAC to learn more what this means.
For help with Government Contracting: contact your nearest Procurement Technical Assistance Center (PTAC). Funded through Cooperative Agreements between the U.S. Department of Defense and state and local governments/institutions, PTACs provide free and low-cost assistance in virtually all areas of government contracting.