The Department of Defense (DOD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA) have adopted a final rule, which became effective September 30, 2016. The rule amends the Federal Acquisition Regulation (FAR) to provide authority to contracting offices to award sole source contracts to economically disadvantaged women-owned small business (EDWOSB) concerns and to women-owned small business concerns (WOSB). While the FAR has been amended to incorporate the change, businesses in these categories might not want to celebrate just yet.
Let’s take a look at the process a Contracting Officer (CO) has to go through to make a sole source award to a WOSB/EDWOSB.
The FAR guidance says that a WOSB (including EDWOSB) sole source award cannot be made if:
• The work is currently being performed by an 8(a) company
• The work can be satisfied by Federal Prison Industries (FPI)
• The work can be satisfied by Ability One
• The work can be satisfied by award of an order under an existing Indefinite Delivery Indefinite Quantity (IDIQ) contract
• The work can be satisfied through award of an order against a Federal Supply Schedule (FSS)
To consider a sole source award to an EDWOSB, the following conditions must be met:
• The North American Industrial Classification System (NAICS) code must be one where WOSB concerns are underrepresented;
• The CO does not expect to receive offers from two or more qualified EDWOSB concerns; and
• The anticipated award price of the contract, including options, will not exceed–
– $6.5 million for work within manufacturing NAICS codes; or
– $4 million for work within any other NAICS codes.
• The EDWOSB/WOSB concern has been determined to be a responsible contractor.
• The award can be made at a fair and reasonable price.
To consider a sole source award to a WOSB (including EDWOSB), the following conditions must be met:
• The NAICS code must be one where WOSB concerns are substantially underrepresented;
• The CO does not expect to receive offers from two or more WOSB concerns (including EDWOSB); and
• The anticipated award price of the contract, including options, will not exceed–
– $6.5 million for work within manufacturing NAICS codes; or
– $4 million for work within any other NAICS codes.
• The EDWOSB or WOSB concern has been determined to be a responsible contractor.
• The award can be made at a fair and reasonable price.
COs and contractors alike should refer to the SBA’s WOSB page for the latest updates.
Let’s break this down.
The first thing the CO has to determine is that the specific work is not currently being performed by an 8(a) firm. This one should be relatively easy. If the work is being done by an 8(a), the CO knows he/she cannot do a WOSB/EDWOSB sole source.
Next the CO has to determine that the work cannot be satisfied by FPI, Ability One, an order under an IDIQ or FSS schedule. Making this determination will be much harder. You can probably get past the FPI and Ability One restrictions, but I cannot imagine there is much of anything that cannot be procured by ordering against an existing IDIQ or Federal Supply Schedule. Can you? If this prohibition cannot be met, no WOSB/EDWOSB sole source can be done.
Let’s just say the CO got past all the “cannot do a sole source” wickets.
Next the CO needs to look at the NAICS code to see if it is one where EDWOSBs are underrepresented or WOSBs are substantially underrepresented. The most current list of these NAICS codes are located on the SBA’s WOSB page link above. Now a CO can certainly look through all the designated NAICS codes and try to use one where WOSB/EDWOSB fit the criteria. By now you may notice that the time from requirement identification to award is getting longer and longer by requiring the CO to make all these determinations.
So the CO finds an applicable NAICS code and the next piece is that he/she has to do market research to determine that it is unlikely that two or more WOSB/EDWOB firms will submit proposals. Usually the CO will post a sources sought synopsis/request for information on the Federal Business Opportunities website. If capabilities packages are received by more than one WOSB/EDWOSB, the CO cannot do a sole source.
However, if the CO gets through all the above “gates”, and the acquisition falls into the dollar value range and be awarded at a fair and reasonable price, he/she can do a WOSB/EDWOSB sole source.
But wait, there’s more! Finally the CO would have to go to the SBA’s WOSB Repository because FAR 19.1505(e) requires them to check if the apparent successful offeror provided all the required eligibility documents set forth in 13 CFR 127.300(d) or (e).
I was a CO for 20+ years in DOD. I considered myself an advocate for all the small business socioeconomic categories. However, depending on the urgency of a requirement and how long the program office is going to wait to get a contract, would the average CO take all this time to make a sole source award? Probably not. So overall I think this is a hollow win for WOSBs.
So the bottom line is that COs can, in fact, make sole source awards to WOSBs/EDWOSBs. The real question is will they?