Justification and Approval of Sole-Source 8(a) Contracts (FAR Case 2008-038)

Summary:

FAC 2005-50 includes an interim rule amending the Federal Acquisition Regulation (FAR) to implement section 811 of the National Defense Authorization Act for Fiscal Year 2010. This FAR change encourages agencies to maximize the effective use of competition by making certain that the proper Justification and Approval (J&A) is obtained prior to award of 8(a) sole-source contracts over $20 million, as required by section 811.

Supplementary Information:

I. Background

DoD, DoD, GSA, and NASA are issuing an interim rule amending the FAR, to implement section 811 of the National Defense Authorization Act for Fiscal Year 2010 (Pub. L. 111-84), enacted October 28, 2009. Section 811 requires a J&A prior to awarding a sole-source contract in an amount over $20 million under the 8(a) program (15 U.S.C. 637(a)). This written J&A must be approved by an appropriate official and, after award, made public. Authorized by 15 U.S.C. 637(a), the 8(a) program enables contract awards to be made to small business concerns determined eligible for the 8(a) program by the Small Business Administration (SBA).

The requirement for a J&A is not a ceiling or a "cap" on sole-source awards over $20 million for 8(a) contractors. The statute requires execution of a J&A documenting the reasons for making the award on a sole-source basis rather than competing among the small businesses in the 8(a) program. Prior to the enactment of section 811, a sole-source award of a new contract made using the 8(a) contracting authority did not require a J&A, regardless of the dollar value, and the new statute does not institute any requirement for a J&A for sole-source 8(a) awards that are less than or equal to $20 million.

Dates:

The Effective Date for this interim rule is 16 March 2011.

Interested parties should submit written comments to the Regulatory Secretariat on or before 16 May 2011 to be considered in the formulation of a final rule.

Click here to read the entire Federal Register notice for this rule.

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