WOSB and EDWOSB sole source contracts will be authorized under the SBA’s regulations effective October 14, 2015.

In a final rule published today, the SBA implemented regulatory authority pursuant to which Contracting Officers may issue sole source contracts.  The question now is whether Contracting Officers will be willing to issue sole source contracts based on the SBA’s rule–or will wait until the FAR Council adopts similar authority.

The SBA’s final rule adopts (with only minor changes) a proposed rule issued in May.  The rule implements statutory authority adopted as part of the 2015 National Defense Authorization Act, which authorized WOSBs and EDWOSBs to receive sole source contracts.

Under the final rule, a WOSB or EDWOSB may be awarded a sole source contract of up to $4 million (or up to $6.5 million for a manufacturing contract) so long as: (1) the WOSB or EDWOSB is a responsible contractor; (2) the Contracting Officer does not have a reasonable expectation that two or more WOSBs or EDWOSBs will submit offers; and (3) award can be made at a fair and reasonable price.  Sole source awards are limited to the same NAICS codes under which WOSB and EDWOSB set-asides are authorized, although the SBA is separately conducting a study to determine whether that list of NAICS codes should be expanded.

The SBA should be commended for its rapid rulemaking process (yes, in the world of government regulation-writing, this qualifies as very fast).  Now the question becomes whether Contracting Officers will feel comfortable issuing WOSB and EDWOSB set-asides in reliance on the SBA’s regulations, or will wait until the FAR Council adopts similar authority.  The SBA regulations are a perfectly valid legal basis upon which to award sole source contracts; hopefully, Contracting Officers will realize that and begin sole source awards next month.

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