Lucrative sole-source contracts to 8(a) firms now require justification

[The Straight Story]

Lucrative sole-source contracts to 8(a) firms now require justification

Federal agencies that want to issue lucrative sole-source contracts to 8(a) small businesses now must justify the award to the public and to senior management.

In a highly anticipated interim rule change published on Wednesday in the Federal Register, the Federal Acquisition Regulation Councils determined that contracts in excess of $20 million issued to companies in the 8(a) small business development program now must include written justification and approval by a senior agency leader. The approval would then be made public.

The contracting officer's justification must include a description of the agency's needs, a determination that the contract is in the government's best interest, and verification that its costs will be fair and reasonable.

Ostensibly, the rule is designed to prevent ANCs from passing most of the work on big-budget contracts through to large subcontractors. While the new provision technically refers to all 8(a) contractors, Obama administration officials concede the rule affects tribes, ANCs and NHOs most directly.

http://www.govexec.com/story_page.cfm?articleid=47355&oref=todaysnews

[Bonhomme Richard]

1. "contracts in excess of $20 million " Whew! I'm safe. n/t