House-Passed 2022 NDAA Raises Sole Source Thresholds for 8(a), SDVOSB, HUBZone, and WOSB/EDWOSB Contracts

The sole source thresholds for the major socioeconomic preference programs would increase significantly under the House-passed version of the 2022 National Defense Authorization Act.

The House version of the 2022 NDAA includes an amendment that would raise the sole source caps for contracts awarded to qualified 8(a) Program participants, service-disabled veteran-owned small businesses, HUBZone Program participants, and woman-owned small businesses (as well as the economically disadvantaged subcagetory of WOSBs).

During floor debate on the 2022 NDAA, the House considered an amendment offers by Representatives Salazar, Newman, and Evans. The amendment, if adopted, would make the following changes to the sole source thresholds for all contracts other than those for manufactured products:

8(a): $4.5 million$8 million
SDVOSB: $4 million (non-VA); $5 million (VA)$8 million (VA and non-VA)
HUBZone: $4.5 million $8 million
WOSB/EDWOSB: 4.5 million $8 million

In addition to increasing the sole source thresholds for these contracts, the House-passed 2022 NDAA would raise the sole source thresholds for manufacturing contracts to $10 million across all four socioeconomic categories.

If this amendment becomes law, the biggest winner may be “regular” 8(a) companies–that is, 8(a) Program Participants that are not controlled by Alaska Native Corporations or Indian tribes. ANC-owned and tribally-owned 8(a)s are exempt from the typical sole source cap, which can give them a tremendous competitive advantage over other 8(a) firms. Under the House-passed 2022 NDAA, ANC-owned and tribally-owned 8(a)s would continue to enjoy an exemption from the typical sole source cap, but that advantage would be narrowed because other 8(a)s would be able to receive much larger sole source awards than permitted under current law.

This is a bipartisan amendment: Representative Salazar is a Republican, while Representatives Newman and Evans are Democrats. The amendment itself passed the full House on a bipartisan 362 – 59 vote. This does not mean that the amendment necessarily will become law, but its bipartisan support may be a positive sign for its prospects as it now heads to the closely-divided Senate.

My colleagues and I will keep you posted on this initiative and other important proposals in the 2022 NDAA.

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