For better or for worse, these federal procurement “times they are a-changin’.” One obvious source of recent change is the shiny new FAR 2.0, a.k.a. the Revolutionary FAR Overhaul (RFO). With the government’s widespread implementation of the RFO and its many procurement rule and procedure updates, we at SmallGovCon have tried to cover as much as possible. But we’re talking about an essential rewrite of the decades-longstanding procurement playbook here. So unsurprisingly, there’s still a lot to go. One recent change well-worth some deeper discussion is the RFO’s updated “Once 8(a), Always 8(a)” Rule–which I’ve aptly deemed the “Once 8(a), Always 8(a)–or HUBZone, SDVOSB, or WOSB” Rule. As the SBA’s “Once 8(a), Always 8(a)” Rule remains unchanged, this RFO update has the potential for significant impacts on small business federal contracting, as well as some implementation conflicts–or confusion at the least.
As an initial matter, if you are looking for some background on the FAR 2.0/RFO–or the Executive Order underlying its creation and implementation–look no further than our many prior blogs on the topic. Indeed, we’ve covered some big picture initial thoughts on FAR 2.0/the RFO, some of the more specific changes to part 6 and to part 8, and the highly significant survival of the Small Business Rule of Two (and a few other small business-centered changes) found in part 19. As you can read more about here, the updated FAR Part 19 makes significant changes to our general small business and set-aside contracting priorities and procedures, as well as to the SBA’s 8(a) Business Development Program, more specifically.
One of the new FAR Part 19’s most notable 8(a) Program changes is to the prior “Once 8(a), Always 8(a)” Rule–a rule that used to strictly limit how the federal government could solicit follow-on contracts for requirements previously accepted into the 8(a) Program. With recent changes implemented by the RFO effectively replacing the “old FAR” rule but not addressing the corresponding SBA rule, where are we now?
Though we can’t offer an answer to this question with any real certainty just yet, through this article, we can shine some light on the “Once 8(a), Always 8(a)” Rule’s current implementation by SBA regulations, prior implementation by the “old FAR,” and relevant RFO update. And we can hopefully provide enough helpful context to allow at least some intelligent speculation on the future role of the “Once 8(a), Always 8(a)” Rule in the world of federal procurement.
The Prior FAR’s “Once 8(a), Always 8(a)” Rule.
In regard to the rules and procedures for government release of previously-accepted 8(a) work for non-8(a) competition/award (a.k.a., the “Once 8(a), Always 8(a)” Rule), section 9.815(a)-(b) of the “old FAR” said the following:
(a) Once a requirement has been accepted by SBA into the 8(a) program, any follow-on requirements (see definition at 13 CFR 124.3) shall remain in the 8(a) program unless—
(1) SBA agrees to release the requirement from the 8(a) program for a follow-on, non-8(a) procurement in accordance with 13 CFR 124.504(d) (see paragraph (b) of this section); or
(2) There is a mandatory source (see 8.002 or 8.003; also see paragraph (f) of this section).
(b) To obtain release of a requirement for a follow-on, non-8(a) procurement, (other than a mandatory source listed at 8.002 or 8.003), the contracting officer shall make a written request to, and receive concurrence from, the SBA Associate Administrator for Business Development.
Section (c)(1) of the old FAR went on to list the three following factors such written request should indicate: (i) whether the agency has met its small disadvantaged business goal; (ii) whether the agency’s “HUBZone, SDVOSB, WOSB, or small business goal(s)” have been met; (iii) whether such “requirement is critical to the business development of the 8(a) contractor that is currently performing the requirement.” And section (c)(2) said:
Generally, a requirement that was previously accepted into the 8(a) program will only be released for procurements outside the 8(a) program when the contracting activity agency agrees to set aside the requirement under the small business, HUBZone, SDVOSB, or WOSB programs.
Section (c)(3) of the old FAR also contained an exception to the default application of the rule for “task or delivery orders offered to and accepted into the 8(a) program, where the basic contract was not accepted into the 8(a) program.” And section (d) said:
(1) When a contracting officer decides that a requirement previously procured under the 8(a) program is a new requirement and not a follow-on requirement to an 8(a) contract(s), the contracting officer shall coordinate with and submit a written notice to the SBA District Office servicing the 8(a) incumbent firm and to the SBA procurement center representative (or, if a procurement center representative is not assigned, see 19.402(a)) indicating that the agency intends to procure the requirement outside the 8(a) program (see 19.810(a)(4)).
(2) The written notice shall include a copy of the acquisition plan, if available; the performance work statement (PWS), statement of work (SOW), or statement of objectives (SOO) for the new contract requirement; and the values of the existing 8(a) contract(s) and the new contract requirement.
Finally, section (e)(1) of the old FAR explained the following:
When a contracting officer decides to procure a follow-on requirement to an 8(a) contract using an existing, limited competition contracting vehicle that is not available to all 8(a) participants, and the current or previous 8(a) contract was available to all 8(a) participants, the contracting officer shall coordinate with and submit a written notice to the SBA District Office servicing the 8(a) incumbent firm and to the SBA procurement center representative (or, if a procurement center representative is not assigned, see 19.402(a)) indicating the intent to do so.
And in what has the potential to create some conflict–or at least some confusion–moving forward with the subject RFO update, SBA’s own regulations also implement this rule in the manner discussed below.
SBA’s “Once 8(a), Always 8(a)” Rule.
As relevant here, SBA’s rules state the following at 13 C.F.R. § 124.504(d)(1) regarding “release for non-8(a) or limited 8(a) competition”:
[W]here a procurement is awarded as an 8(a) contract, its follow-on requirement must remain in the 8(a) BD program unless SBA agrees to release it for non-8(a) competition. Where a procurement will contain work currently performed under one or more 8(a) contracts, and the procuring agency determines that the procurement should not be considered a follow-on requirement to the 8(a) contract(s), the procuring agency must coordinate with the SBA District Office servicing the 8(a) incumbent firm and the SBA Procurement Center Representative assigned to the contracting activity initiating a non-8(a) procurement action that it intends to procure such specified work outside the 8(a) BD program through a requirement that it considers to be new . . . Additionally, a procuring agency must coordinate with SBA where it seeks to reprocure a follow-on requirement through a pre-existing limited contracting vehicle which is not available to all 8(a) BD Program Participants and the previous/current 8(a) award was not so limited. If a procuring agency would like to fulfill a follow-on requirement outside of the 8(a) BD program, it must make a written request to and receive the concurrence of the AA/BD to do so.
And as this SBA rule is not addressed or presumably directly impacted by the RFO, we will cover it in more depth than the corresponding prior FAR rule. Indeed, this same regulation also lists the factors SBA must consider when deciding whether to release a specific requirement from the 8(a) Program for non-8(a) competition, which includes: (i) whether the agency’s small disadvantaged business goals have been met; (ii) the agency’s progress in meeting its “HUBZone, SDVO, WOSB, or small business goal[s], as appropriate”; and (iii) whether such “requirement is critical to the business development of the 8(a) Participant that is currently performing it.” And it provides some limited exceptions to SBA’s default “Once 8(a), Always 8(a)” Rule at sections 124.504(d)(2) and (d)(4).
Section (d)(2) outlines one exception for non-8(a) competitions/awards “to give a concern previously awarded the contract that is leaving or has left the 8(a) BD program the opportunity to compete for the requirement outside of the 8(a) BD program[,]” but only where: (A) the concern’s “program term will expire prior to contract completion, or . . . program term expired within one year of the date of the offering letter”; (B) the concern submits its request to SBA in writing prior to SBA’s acceptance of the follow-on requirement into the 8(a) Program; and (C) the concern qualifies as a small business for the follow-on requirement. Even then, the rule requires SBA to “balance the importance of the requirement to the concern’s business development needs against the business development needs of other Participants that are qualified to perform the requirement[,]” to “include consideration of whether rejection of the requirement would seriously reduce the pool of similar types of contracts available for award as 8(a) contracts[,]” and require SBA to “also seek the views of the procuring agency.”
Section 124.504(d)(4) of the rule provides two types of exceptions to SBA’s “Once 8(a), Always 8(a)” Rule’s application–effectively removing the agency’s need to even seek a specific requirement’s “release” from the 8(a) Program: (i) where the prior requirement was just a non-8(a)-set-aside Multiple Award Contract under which certain “orders were offered to and accepted for” 8(a) Program competition/award; or (ii) where the “agency will use a mandatory source (see FAR Subparts 8.6 and 8.7(48 CFR subparts 8.6 and 8.7))” and notifies “SBA at least 30 days prior to the end of the contract or order.”
Finally, in one aspect of SBA’s “Once 8(a), Always 8(a)” Rule that appears to lend itself to the RFO rule update discussed herein, SBA’s regulation also specifies at section 124.504(d)(3) that SBA may only release a requirement under this rule “where the procuring activity agrees to procure the requirement as a small business, HUBZone, SDVO small business, or WOSB set-aside or otherwise identifies a procurement strategy that would emphasize or target small business participation.”
RFO’s “Once 8(a), Always 8(a)–or HUBZone, SDVOSB, or WOSB” Rule.
In what now directly replaces the version of the “Once 8(a), Always 8(a)” Rule at prior FAR 9.815(e), the RFO states the following in full:
19.108-11 Release requirements for non-8(a) procurement.
(a) Once a requirement has been accepted by SBA into the 8(a) program, any follow-on requirements (see definition at 13 CFR 124.3) must remain in the 8(a) program unless—(1) There is a mandatory source (see 8.101 through 8.103); (2) The follow-on will be set aside under the HUBZone, SDVOSB, or WOSB programs; or (3) SBA agrees to release the requirement from the 8(a) program for a follow-on, non-8(a) procurement in accordance with 13 CFR 124.504(d) (see paragraph (b) of this section).
(b) To obtain release of a requirement from the 8(a) program, the contracting officer must make a written request to, and receive concurrence from, the SBA Associate Administrator for Business Development.
(c) (1) The written request to the SBA Associate Administrator for Business Development must indicate— (i) Whether the agency has achieved its small disadvantaged business goal; (ii) Whether the agency has achieved its HUBZone, SDVOSB, WOSB, or small business goal(s); and (iii) Whether the requirement is critical to the business development of the 8(a) contractor that is currently performing the requirement.
(2) The requirement that a follow-on procurement must be released from the 8(a) program in order for it to be fulfilled outside the 8(a) program does not apply to task or delivery orders offered to and accepted into the 8(a) program, where the basic contract was not accepted into the 8(a) program.
So, this new RFO version of the “Once 8(a), Always 8(a) Rule” grants contracting officers authority, even without the previously-strictly-required SBA approval, to release any follow-on 8(a) contracts from the 8(a) Program they so chose provided only that such follow-on must then be set aside for HUBZone, SDVOSB, or WOSB competition or award. The RFO has essentially removed the “teeth” from the prior FAR rule.
Under the old FAR, it was SBA with significant oversight authority over these 8(a) follow-on contract decisions. But much of that authority was dismantled by the RFO–both by the RFO’s: (1) addition of a new (quite-broad) exception to the “Once 8(a), Always 8(a)” Rule for any follow-on to an 8(a) contract that will be removed from the 8(a) Program as long as it will instead be solicited for HUBZone, SDVOSB, or WOSB competition or award; and (2) removal of the prior written SBA-approval requirements for such scenarios too.
While this RFO-added language, on its face, appears somewhat consistent with the old FAR’s and the SBA’s provisions: (1) requiring consideration of whether HUBZone, SDVOSB, and WOSB goals have been met; and (2) stating that release from 8(a) should only be allowed where the requirement will be re-solicited through one of these three SBA socioeconomic programs. But this exception added by the RFO actually packs a significant punch to SBA’s authority that was not part of the old FAR’s or SBA’s version of the rule.
Indeed, it essentially removes the need for SBA and eliminates SBA’s authority by removing SBA’s control over the subject follow-on contracting decisions. And in place of such SBA authority, consistent with a lot of general policy shifts we’ve seen in procurement law and procedure of late, it expands the contracting officer’s discretion and authority over how to best meet the agency’s needs and goals. And it further enforces the recent policy shift toward no SBA program receiving favor over another. What hasn’t changed, however, is the basic requirement to seek SBA’s prior approval of the release–and the relevant considerations and procedures for obtaining it–for situations where there is no mandatory source and the follow-on contract will not be solicited/awarded as a HUBZone, SDVOSB, or WOSB set-aside.
So, the SBA’s “Once 8(a), Always 8(a)” Rule remains in place. And it is unclear at this time exactly how the RFO’s replacement of the old FAR’s version of the rule with the new “Once 8(a), Always 8(a)–or HUBZone, SDVOSB, or WOSB” Rule will impact SBA’s retainment of the rule. It is also unclear whether and how enforcement of the rule–which has historically been through GAO or the Court of Federal Claims–will look moving forward, that is, if enforcement even remains a thing. But keep an eye out for future blogs on the subject, as we will continue to provide any relevant updates, cases, regulatory changes, etc., as we move forward under the RFO.
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