Monday, April 23, 2012

Justifying Sole Source Contracts Awarded to 8(a) Firms

The awarding of sole source contracts by the Federal Government has always been a murky area. Except for those contractors who benefit from such awards, most are left in the dark as to how those awards are justified. Accusations and innuendo abound, ranging from kickbacks to political "quid pro quo" and other skulduggery. Congress did not feel like it had sufficient insight into what was going on and, if Congress had a hard time getting information, the public was totally in the dark. So, as part of the National Defense Authorization Act for 2010, Congress added a requirement that prohibited the award of sole-source contracts greater than $20 million awarded under the SBA's 8(a) Business Development Program without first obtaining written justification. Moreover, Congress added a provision that the justification had to be made publicly available prior to contract award.

The legislation and ensuing regulations specified certain criteria that must be present in the justification. These minimum criteria include:

  1. A description of the needs of the agency concerned for the matters covered by the contract.
  2. A specification of the statutory provision providing the exception from the requirement to use competitive procedures in entering into the contract (see 19.805-1)
  3. A determination that the use of a sole-source contract is in the best interest of the agency concerned.
  4. A determination that the anticipated cost of the contract will be fair and reasonable.
  5. Such other matters as the head of the agency concerned shall specify for purposes of this section.

These justifications should be of more than passing interest to Government contractors and prospective contractors. They might offer some kind of road map on how contractors might position themselves to someday secure some of the (usually) lucrative awards.

The justifications are posted to FedBizOpps for a period of at least 30 days. As of now, there is no requirement to maintain these beyond the 30 days.

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