2.  Statutory Basis for the Rule

Comment: A number of respondents commented that there is no statutory basis for the new language at FAR 19.808-1(a), which states that the Small Business Administration (SBA) may not accept a sole-source 8(a) contract in excess of $20 million for negotiation, unless the requesting agency has completed a J&A in accordance with FAR 6.303. The respondents recommended amending this language in the final rule to clarify that the J&A is only required to be developed and executed prior to award and after coordinating and negotiating with the SBA (or the 8(a) participant where SBA has delegated its authority to the procuring agency).

Response: The law stipulates that the head of the agency may not award a sole-source contract that exceeds $20 million under the 8(a) program unless the contracting officer justifies the use of a sole-source contract in writing and the justification is approved by the appropriate official. However, the law does not specify the precise stage in the contract award process when the J&A must be executed. The language that was added to FAR 19.808-1 ensures that the J&A is executed prior to contract negotiation, a critical juncture in the contract award continuum. Contract negotiation, with rare exception, occurs before the contract is awarded; therefore there is no conflict with the law.

Execution of the J&A prior to the SBA's initiation of contract negotiations adheres to the established procedures in the FAR that require (1) at FAR 6.303-1, the contracting officer to justify the use of a sole-source contract in writing prior to negotiations; and (2) at FAR 19.804-2, the agency, if appropriate, to request in its offering letter to the SBA, that a requirement with a contract value over the applicable competitive threshold be awarded as a sole-source contract under the 8(a) program. The language that was added at FAR 19.808-1 does not pre-empt the obligation of agencies to cooperate with the SBA in determining the extent to which a requirement should be offered in support of the 8(a) program, nor does it impact SBA's acceptance of the requirement into the 8(a) program. It does not affect the timing of SBA's eligibility determination.