New Authority to Award Sole-Source Contracts to Women-Owned Businesses

In last year's NDAA (National Defense Authorization Act), in a move designed to increase participation by Women-Owned businesses in Federal contracting, Congress added a provision to allow contracting officers to award sole-source contracts to Women-Owned Small Businesses (WSOB) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) under certain circumstances. The SBA (Small Business Administration) has just released proposed regulations for implementing that statutory authority.

The first requirement is a set-aside contract. The SBA must first determine that WOSBs are underrepresented or substantially underrepresented in Federal procurement in the particular industry. Once that determination has been made, a contracting officer may restrict competition or make a sole source award.

Under the statutory authority, if a contracting officer cannot identify two or more WOSBs or EDWOSBs that can perform at a fair and reasonable price, but identifies one WOSB or EDWOSB that can perform at a fair and reasonable price, the contracting officer can award the contract on a sole source basis, if the value of the contract, including options, does not exceed $6.5 million for manufacturing contracts and $4 million for all other contracts.

This sole source authority can only be used where a contracting officer conducts market research in an industry where a WOSB or EDWOSB set-aside is authorized, and the contracting officer cannot identify two or more WOSBs or EDWOSBs that can perform at a fair and reasonable price, but identifies one that can perform.

Note here the provision that the contracting officer must ensure that the award is made at a fair and reasonable price. This provision is not a license to award contracts on a sole-source basis at any cost.