By Robin James,
What is a Sole Source Contract
A Sole Source Contract is a contract that is awarded directly to an 8(a) firm by a Federal Contracting Officer without a formalized bidding process.
Sole Source Contract Size
Dollar values for these contracts are greater than the $150K Simplified Acquisition Procedures (SAP) yet less than the maximum 8(a) Sole Source award amounts of either $7.0MM for manufacturing or 4.0MM for all other industries.
Sole Source Pricing
Sole Source Contracts are direct award meaning that as long as the contracting officer has reason to believe the 8(a) firms pricing is fair and reasonable, (generally a guideline for this is that the 8(a) firms pricing is not more than 10% above market rates) than the contracting officer can directly award the contract to the 8(a) firm. The benefit to the federal government is that they can save administrative time and costs by not having to go through a formalized bidding process.
How Does and 8(a) Firm Find Sole Source Contracts?
The Search Process for Sole Source Contracts generally consists of four methods:
SBA Search Letter – This process begins when your local SBA Business Development Specialist sends out a group of “Search Letters” on behalf of your company advising various agencies of your firm’s capabilities and NAICS codes. The letter asks the agency to identify current or planned acquisitions that your firm could qualify to perform. This can also be followed up by a phone call and a meeting between your SBA Business Opportunity Specialist, the Target Agencies Procurement Officer and the 8(a) firm’s owner.
Search and 8(a) SBA Targeted Letter – The 8(a) firm conducts research and finds a forecasted procurement (often times a graduated 8(a) firms past contract) that they think their 8(a) firm could perform. The next step is to contact the SBA’s District office who will work to prepare an introduction. Additionally the 8(a) firm should send a letter to the SBA asking for consideration on the procurement because in the event the SBA receives two letters from different 8(a) firms for the same procurement the SBA will generally chose to support the firm based upon first come first serve basis based upon the date of the letter.
Agency Unilateral Process – The third pathway is when the agency has a procurement that they wish to place with an 8(a) firm. The agency will then typically evaluate the capabilities of 8(a) firms at that local SBA office and select the firm they believe is the most capable. This is likely to occur when a contract held by a graduating 8(a) firm requires a new 8(a) firm to perform on the contract. Therefore it is critical that your local SBA office understand the scope of work that your firm engages and has good rapport with your local SBA representatives.
GSA Schedule Market Research – The Procurement Officer conducts market research searching for 8(a) firms to work with. Often times for more niche or specialized needs sole source contracts it is easier to identify the 8(a) firm first via GSA Schedule Contracts. This is because a greater amount of information is available about the firm through the GSA Schedule process than simply a capabilities statement such as work provided, D&B Open Ratings as well as the 8(a) firms pricing.
Note: GSA Schedules are not applicable for most construction businesses.
TIP: Proactive 8(a) companies do a lot of Search Process #2 (above) in their efforts to market themselves to Federal Agencies. In most cases sole source search process #1 & #3 requires networking within your local SBA office and networking to make sure the SBA is well aware of your firm’s capabilities. #4 Requires the firm undergo the lengthy process of obtaining a GSA Schedule. All can be very good sources of 8(a) Sole Source Revenue.
Feel free to give me a call if you would like for me to review your 8a program eligibility at 703-688-3546.
SOURCE: Advance GSA/8a