Overview
This section prescribes the specific conditions and dollar thresholds under which a contracting officer may award a sole-source contract to a Service-Disabled Veteran-Owned Small Business (SDVOSB) before considering general small business set-asides. It also establishes mandatory SBA certification requirements and outlines the SBA's right to appeal a contracting officer's decision.
Key Rules
- Priority of Consideration: Contracting officers must consider an SDVOSB sole-source award before moving to general small business set-asides, provided specific criteria are met.
- The "Rule of Two" Condition: Sole-source awards are permitted only when the contracting officer does not expect to receive offers from two or more SDVOSB concerns.
- Statutory Thresholds: The total anticipated price (including options) cannot exceed $8.5 million for manufacturing NAICS codes or $5 million for all other NAICS codes.
- Exclusions: A sole-source award cannot be made if the requirement is currently being performed by an 8(a) participant or has been accepted into the 8(a) program.
- SBA Certification Requirements: Since January 1, 2024, contractors must be formally certified by the SBA (designated in SAM) or have a qualifying pending application submitted prior to the end of 2023.
- Standard Determinations: The contractor must be deemed responsible, and the award must be made at a fair and reasonable price.
- SBA Appeal Rights: The SBA has the authority to appeal a contracting officer’s decision if they choose not to proceed with an SDVOSB sole-source award.
Practical Implications
- Streamlined Acquisition: This authority provides a faster procurement route for requirements under the $5M/$8.5M thresholds when competition among multiple SDVOSBs is unlikely.
- Strict Verification: Contracting officers must diligently verify a firm’s SBA certification status in the Veteran Small Business Certification Program database, as self-representation is no longer sufficient for sole-source awards.