A Sole-Source Contract is a type of non-competitive procurement awarded directly to a single source without a competitive bidding process. It is often granted to 8(a) firms—minority-owned, small-disadvantaged businesses that are part of the U.S. Small Business Administration’s (SBA) 8(a) Business Development Program. This program aims to help provide more equitable opportunities for such businesses within government contracting.
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Types of Sole-Source Contracts
- 8(a) Sole-Source Contract: Specifically for SBA 8(a) certified firms.
- Justified Sole-Source Contract: Contracts that are not part of the 8(a) program but justified under certain circumstances such as urgency.
Special Considerations for 8(a) Sole-Source Contracts
- Eligibility Requirements: Only firms certified by the SBA 8(a) Program are eligible.
- Contract Value Limits: There is a threshold for the value of contracts an 8(a) firm can receive under sole-source awards.
- Regulatory Compliance: Must comply with Federal Acquisition Regulation (FAR) subpart 19.8 and other relevant regulations.
Examples and Applications
Example 1: A federal agency may award a sole-source contract to an 8(a) firm for IT services if the firm has a unique capability.
Example 2: If a critical component is required urgently and only one supplier can provide it, a sole-source contract may be justified.
Historical Context
The concept of sole-source contracting was extended significantly under the 8(a) Program initiated by the Small Business Administration in 1953. This program has seen various amendments to enhance access for minority-owned businesses and stimulate economic equity.
Applicability
- Federal Government: Most frequent users, especially for specialized or urgent needs.
- Military Contracts: Often use sole-source contracts for specialized equipment.
- Emergency Services: Can utilize for quick procurement during disasters.
Comparisons with Other Contracts
Competitive Contracts: Unlike sole-source contracts, these involve multiple bidders and competitive processes.
Multiple-Award Contracts (MAC): These are contracts awarded to several firms and utilize mini-bidding among the selected few, as opposed to a single source.
Related Terms with Definitions
- 8(a) Program: SBA’s business development program to help small and disadvantaged businesses grow.
- Federal Acquisition Regulation (FAR): The body of rules governing procurement processes.
- Set-Aside Contracts: Contracts reserved for small businesses or other specific groups to stimulate participation in public contracts.
FAQs
Q1: What are the advantages of a sole-source contract?
A1: The primary advantage is the expedited procurement process, which is critical for urgent needs and specialized procurements.
Q2: Are sole-source contracts legal?
A2: Yes, they are legal when justified and comply with regulatory requirements like the FAR.
Q3: Can any small business receive an 8(a) sole-source contract?
A3: No, only those certified under the SBA’s 8(a) Program are eligible.
References
- “Federal Acquisition Regulation (FAR) Subpart 19.8—Contracting with the Small Business Administration (The 8(a) Program).”
- Small Business Administration (SBA) official resources on the 8(a) Business Development Program.
Summary
A Sole-Source Contract is non-competitive and often awarded to 8(a) certified small disadvantaged businesses under the SBA’s program. These contracts allow for expedient procurement, ensuring that government agencies can meet specialized or urgent needs without the delay of a competitive bidding process. Despite their advantages, these contracts must meet stringent regulatory requirements to ensure fairness and transparency.
