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Federal Market Intelligence for Small Business |
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SBA responds to 8(a) concernsEditor’s note: On March 1, a spokeswoman for the Small Business Administration provided this emailed response to Set-Aside Alert regarding attorney Ralph Thomas’ comments on alleged exceptions to 8(a) follow-on contracting rules (see lead story and this issue's column). From the SBA: “The 8(a) Business Development program is designed to assist eligible small disadvantaged businesses compete in the American economy through business development. To assist in the business development of Program Participants, SBA's regulations generally provide that where a procurement is awarded as an 8(a) contract, its follow-on requirement must remain in the 8(a) program unless SBA agrees to release it for non-8(a) competition. 13 CFR § 124.504(d). Although this has been SBA's longstanding policy, nothing in the Small Business Act requires a procurement to remain in the 8(a) program or for an agency to seek release where it desires to procure a follow-on requirement outside the 8(a) program. Thus, it is not accurate to say that the Small Business Act does not permit any exemptions or exceptions to the "once 8(a) always 8(a)" policy. Again, that policy is contained only in SBA's regulations, and those regulations specifically provide that the release process applies only to follow-on procurements and not to "new" requirements. Additionally, contrary to what seems to be inferred, SBA's rules do not allow an exception/exemption where an agency seeks to move a follow-on requirement from the 8(a) program to the Federal Supply Schedule (FSS). The FSS is not an 8(a) contract, and an agency seeking to move a follow-on requirement from the 8(a) program to the FSS must request release through the normal release process. SBA explained this position in the Supplementary Information to its final rule of October 16, 2020: “The proposed rule clarified SBA's intent regarding the requirement that a procuring agency must seek and obtain SBA's concurrence to release any follow-on procurement from the 8(a) BD program. This is not a change in policy, but rather a clarification of SBA's current policy and the position SBA has taken in several protests before the Government Accountability Office.” “Some agencies have attempted to remove a follow-on procurement from the incumbent 8(a) contractor and re-procure the requirement through a different contract vehicle (a MAC or Government-wide Acquisition Contract (GWAC) that is not an 8(a) contract) without seeking release by saying that they intend to issue a competitive 8(a) order off the other contract vehicle.” “In other words, because the order under a MAC or GWAC would be offered to and accepted for award through the 8(a) program and the follow-on work would be performed through the 8(a) program, some procuring agencies believe that release is not needed. SBA does not agree. In such a case, the underlying contract is not an 8(a) contract.” “The procuring agency may be attempting to remove a requirement from the 8(a) program to a contract that is not an 8(a) contract. That is precisely what release is intended to apply to.” “Moreover, because § 124.504(d)(4) provides that the requirement to seek release of an 8(a) requirement from SBA does not apply to orders offered to and accepted for the 8(a) program where the underlying MAC or GWAC is not itself an 8(a) contract, allowing a procuring agency to move an 8(a) contract to an 8(a) order under a non-8(a) contract vehicle would allow the procuring agency to then remove the next follow-on to the 8(a) order out of the 8(a) program entirely without any input from SBA.” “A procuring agency could take an 8(a) contract with a base year and four one-year option periods, turn it into a one-year 8(a) order under a non-8(a) contract vehicle, and then remove it from the 8(a) program entirely after that one-year performance period. That was certainly not the intent of SBA's regulations. 85 FR 66146, 66162-66163.”
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