Legal Issues: Parity For 8(a), SDV, HUBZone Firms By Philip M.Dearborn In recent years, a question that has plagued both contracting officials and small businesses is how to interpret the Federal Acquisition Regulation with regard to determining the order of precedence for contract awards to small businesses, HUBZone small businesses, service-disabled veteran-owned small businesses (SDVOSB) and small businesses participating in the 8(a) Business Development Program. On March 10 the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council proposed an amendment to the FAR in an effort to clarify this confusion. The proposed rule is intended to reflect the Small Business Administration’s interpretation of its regulations regarding the order of precedence. The proposed FAR rule provides that there is generally no order of precedence when a contracting office determines whether to make an award to a HUBZone, SDVOSB, 8(a), or a small business. However, there are two rules of thumb to keep in mind: •Once the SBA agrees that a contract may be awarded through the 8(a) program, it must remain in the 8(a) program until the SBA agrees to release it.  •If the contract exceeds $100,000 and meets the criteria for setting it aside for HUBZone companies, then the contracting officer must award it under the HUBZone, SDVOSB or 8(a) programs.  If the contract does not meet the criteria for a HUBZone contract, then the contracting officer is only required to consider making an award under the SDVOSB or 8(a) programs, after which it may set it aside for small businesses.  In addition to making clear the above exceptions, the proposed rule also aims to clarify any misguided interpretations limiting FAR 19.502-2(a). As currently written, FAR 19.502-2(a) exclusively reserves acquisitions between $3,000 and $100,000 for small businesses, unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more small businesses that are competitive in terms of market prices, quality and delivery. Exceptions to FAR 19.502-2(a) come into play when the supplies or services are to be used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack (41 U.S.C. 428a). In any of these instances, acquisitions are exclusively reserved for small businesses if the contract is to be awarded and performed or the purchase is to be made in the United States and it is between $15,000 and $250,000 or if the contract is to be awarded and performed or the purchase is to be made outside the United States and it is between $25,000 and $1 million. The proposed rule clarifies that discretionary authority may be used by the contracting officer to employ the HUBZone, SDVOSB or 8(a) programs at these dollar levels. The rule also purports to clarify that in this type of instance it is not mandatory that the contracting officer set aside an acquisition for HUBZone small business concerns before setting aside the requirement for small businesses. The effect on the small business community as a whole will likely be minimal as the rule does not change the number of contracts awarded to small businesses. However, it goes without saying, contractors who lose work to other socioeconomic groups may view the proposed rule quite differently. Comments on the proposed rule are due by May 9. Philip M. Dearborn is a partner with PilieroMazza PLLC. His government contracts practice includes extensive experience in litigating bid protests, claims and disputes at the Government Accountability Office (GAO), agency Boards of Contract Appeals, the Court of Federal Claims, federal and state courts, and arbitration.