On September 14, 2015, the Small Business Administration (SBA) published their final rule allowing sole source awards to Women-Owned Small Businesses (WOSBs) or Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) in certain circumstances. This final rule implements section 825 of the FY15 National Defense Authorization Act (NDAA). The Federal Acquisition Regulations (FAR) still needs to be amended to include the sole source authority so that there is no conflict between the SBA’s rules and the FAR.
Effective October 14, 2015, a contracting officer may award a sole source contract to a WOSB or EDWOSB where (1) the firm is a responsible contractor and the contracting officer does not have a reasonable expectation that two or more EDWOSBs or WOSBs (as the case may be) will submit offers; (2) the anticipated award price of the contract (including options) will not exceed $6.5 million for manufacturing or $4 million for any other contract; and (3) in the estimation of the contracting officer, award can be made at a fair and reasonable price.
The final rule did not address the NDAA’s requirement for WOSB and EDWOSB certification, other than in reference to comments received. It states: “SBA did not propose to address the certification portion because its implementation is more complicated. SBA continues to believe that the new WOSB sole source authority can and should be implemented as quickly as possible, using existing program rules and procedures, while SBA proceeds with development of the certification requirement through a separate rulemaking.”
This final rule represents the next step in creating parity among the set-aside programs. WOSBs and EDWOSBs are now on equal footing with HUBZone, 8(a) certified Small Disadvantaged Businesses, and Service Disabled Veteran Owned Small Businesses eligible for sole source contracts.
Before any WOSBs/EDWOSBs start celebrating, let’s break this down.
Condition (2) mentioned above is the same as the thresholds used for HUBZones and SDVOSBs. So these sole source awards will have a ceiling amount. In the world of Federal contracting, $4M or $6.5M contracts are considered pretty small.
Condition (3) is nothing new. In the case of set-asides (competitive) or sole source awards in Part 19 to socio-economic categories, the requirement has always been that they must meet “fair market price”.
To me, condition (1) is the one that really restricts the use of sole source for WOSBs/EDWOSBs. I think most contracting officers can make the case that they expect at least two offers from this socio-economic category, so it’s going to be very difficult to get a sole source award.
I’ve seen this happen with HUBZones and SDVOSBs also. Unless the business is so unique or fills such a specific niche, there are competitors out there.
So it is good news that WOSBs and EDWOSBs will have parity with HUBZones and SDVOSBs. But only time will tell exactly how good this news really is.