An 8(a) contract was properly awarded on a sole source basis to a tribally-owned entity, even though the contract was a follow-on to a competitive 8(a) set-aside award.

In a recent decision, the GAO deferred to the SBA’s interpretation of the 8(a) program regulations–which, according to the SBA, allow such sole source awards.

The GAO’s decision in Agency Management Concepts, Inc., B-411206, B-411206.2 (April 21, 2015) involved a Department of State procurement for lock and lock services.  Beginning in 2003, DOS generally procured the requirement through the 8(a) program.  The most recent contract for the services (before the award at issue in this protest) was procured as a competitive 8(a) set-aside.

Advanced Management Concepts, Inc. was an active 8(a) program participant.  After learning that the incumbent contractor had graduated from the 8(a) program, AMC contacted DOS to express its interest in the requirement.  AMC was informed that DOS intended to make a sole source award to a tribally-owned concern, and that the SBA had accepted and approved the sole source offering letter.

AMC then file a GAO bid protest.  AMC alleged that DOS was required to compete the requirement among 8(a) program participants, rather than award it on a sole source basis.  AMC cited several sections of 13 C.F.R. § 124.506, an 8(a) program regulation, in support of its protest.  AMC contended that these regulatory sections prohibit the SBA from accepting a requirement on a sole source basis when that requirement has previously been competed among 8(a) program participants.

The GAO sought the SBA’s comments on the matter.  The SBA stated that “the fact that a recurring requirement was previously offered to and accepted by SBA as a competitive 8(a) procurement has no bearing on whether it can be offered and accepted on a sole source basis when it is reprocured.”  The SBA then rebutted AMC’s interpretations of the specific regulatory sections in question.

The GAO agreed with the SBA, stating that the SBA’s position was “reasonable.”  The GAO continued:

SBA’s 8(a) program regulations are reasonably interpreted to permit the award of a sole-source 8(a) contract to a tribally-owned concern regardless of whether the requirement previously was procured through competitive or sole-source 8(a) contracts, so long as a competition among 8(a) participants has not been initiated through issuance of a solicitation. AMC has not alleged, and there is nothing to suggest, that a competition among 8(a) participants was initiated here. Rather, the record reflects DOS offered the requirement to SBA as a sole-source 8(a) award, and SBA accepted the offer.  Accordingly, AMC’s allegations fail to show regulations may have been violated, and we will not further consider them. 

The GAO dismissed AMC’s protest.

Agencies generally have broad discretion to issue sole source awards to 8(a) program participants, provided that the SBA accepts and approves those awards.  As the Agency Management Concepts decision demonstrates, that broad discretion even encompasses situations in which the same requirement was previously competed.