The 8(a) contracting method is an effective contracting tool available to federal organizations. The 8(a) program is the only standard procurement technique that allows a procurement program manager to make a sole source purchase up to $3.5M. This procurement method saves substantial time, work, and cost for the organization making the procurement and is only available with federally certified 8(a) contractors such as Advanced Systems Design. This option represents a flexible procurement method.
About the SBA 8(a) Program
The 8(a) program is our country's effort to promote equal access for qualified socially and economically disadvantaged companies to participate in the mainstream of our nation's economy.
The term "8(a)" term refers to Section 8(a) of the Small Business Act of 1958, which permits the Small Business Administration (SBA) to enter into contracts with Federal procuring agencies directly (as the prime contractor) for the supply of goods and services, and then to subcontract the actual performance of the work to 8(a) certified companies.
Sole source contracts are usually approved in a short time period. Federal agencies have an 8(a) or small business program, and the Small Business Representative will understand how to guide their authorized procurement officials through the 8(a) contracting process. Because the 8(a) program is a federal mandate, federal agencies get credit for the amount of work they issue to 8(a) companies.
The 8(a) program is intended to benefit both the client as well
as the contractor through mechanisms that ensure accountability.
Prior to acceptance into the 8(a) program, the contractor is
subjected to a rigorous review of its ownership, daily
management, operations, experience and financial status. Only
those contractors that can document disadvantaged business
status and demonstrate the viability of the organization are
accepted into the program. Once accepted, the contractor is
required to provide the SBA with a detailed business plan that
must be updated annually.
Upon acceptance into the 8(a) program, each contractor is assigned Standard Industrial Classification (SIC) codes based on the qualifications and experience of the company and key personnel. Performance of 8(a) contracts by contractors is limited to those assigned SIC codes. As a company gains experience and expertise, it may request additional codes from the SBA based on documentation of this experience.
One of the goals of the 8(a) program is to allow non-8(a) contractors to expand their scope of services through sub-contracting with partners. The 8(a) contractor is permitted, with approval of the SBA, to subcontract a portion of contracted work to other qualified firms. While subcontracting is restricted to maintain the integrity of the program as an opportunity for disadvantaged businesses, subcontracting limits can generally be a substantial part of the contract, usually up to 49% of a contract's amount. This is a win/win situation for all involved. The client benefits from a qualified, experienced, well-rounded team and satisfaction of minority business goals, while contractors gain government work experience and develop valuable relationships with teaming partners.
Using the 8(a) contracting method
There are basically three different options for all federal organizations to contract with an 8(a) firm.
Option 1: Sole-Source Directly to ASD
Any federal agency can identify work especially suited for an 8(a) firm and can set-aside the project without advertising in FedBizOpps/Commerce Business Daily. This allows the federal agency to directly award a professional service contract to an 8(a) firm without lengthy contracting delays.
If this option is chosen, the steps typically followed for working with ASD under an 8(a) contract are as follows:
- The agency's program manager or project manager (authorized procurement officials) authors a statement of work, prepares a government estimate, and allocates funds.
- The agency chooses ASD to perform the work.
- An authorization to negotiate is obtained from the SBA by filling out what is called a Small Business Coordination Record form. The authorized procurement official may consult with their Small Business Program Office and/or the agency's contracting office in order to complete the Business Coordination Record or a Procurement Request Form, depending on the agency. Federal departments typically have different forms. For example, the DOD agencies use DD Form 2579.
- The prepared contract documents must include the following statement: "Request procurement be made pursuant to Section 8(a) of the Small Business Act 15 U.S.C. 637(a) and in accordance with FAR 19.8."
Once the procurement
request has been made, the Small Business Deputy or the
Contract Officer prepares an offer letter or a proposed
project form (FAR 19.804-2).
Download an offer letter template for SBA Region 4 (Word Doc format).
Note: For assistance with the contact information for other SBA Regions, please email firstname.lastname@example.org
- After the offering information in the last step is received and processed by the SBA, the process returns to the contracting officer who submits the Scope of Work and Request for Quotation to ASD (see our website for contact information).
- ASD submits its proposal and the procurement package is evaluated and negotiated (as needed) by the agency and its authorized procurement officials
- The contract is awarded (in a relatively short period of time).
Sole-Source Indefinite Delivery/Indefinite Quantity for ASD
When an agency finds an 8(a) company such as ASD that the agency would like to utilize on a regular basis, the agency might choose to award a sole-source Professional Services Indefinite Delivery/Indefinite Quantity (IDIQ) contract. Preparation of this IDIQ is cost-effective for the agency as it minimizes the length of time involved in contracting out individual task orders. The sole-source IDIQ is not as costly and time-consuming to award as a competitive IDIQ. This sole-source IDIQ type of contracting mechanism can be awarded very much like the sole-source contracts described above.
Option 3: Basic Order Agreement with ASD
A Basic Order Agreement (BOA) can be awarded on a sole-source basis under the 8(a) program. A BOA is a written instrument of understanding, negotiated between an agency, contracting activity, or contracting office and a contractor, that contains the following items:
- Terms and conditions applying to future orders or contracts between the parties during its term
- A specific description of supplies or services to be provided
- Methods for pricing, issuing, and delivering future orders under the Basic Ordering Agreement (BOA).
Benefits of the 8(a) Program
The "sole-source" method of procurement has become less available to the program manager than in the past. With the 8(a) firm, however, the sole source privilege is maintained for procuring federal agencies, and the agency may simply name the firm on its procurement request as the suggested source and request the procurement be pursued under the 8(a) program. While the main purpose of the 8(a) program is to develop 8(a) companies, the rules and regulations of the program recognize that a small business may not always possess the entire breadth of skills required by the procurement officials. For this reason the 8(a) company is authorized to subcontract portions of the work to other companies.
Speed at Which the Contract is Awarded
The 1984 Competition in Contracting Act requires the Federal Government to drastically increase the number of competitive procurements, which increases the time to procure needed requirements. The 8(a) program provides you with a contract vehicle to significantly reduce the procurement time cycle. There is no delay in obtaining approval of the sole-source selection. There is no need to develop rigorous specifications for evaluation of bidders. There is no pre-award documentation.
The Meeting of Agency 8(a) Goals
Most government agencies have contracting goals established for contracting with minority 8(a) firms. By using the 8(a) contracting method described on this page, you assist your agency in achieving these goals. Isn't it the American way to give a qualified, certified 8(a) firm a fair chance?