The federal government is increasingly using nontraditional ways to spend its money, such as purchasing goods and services through “other transaction authority,” which we recently wrote about and which does not require traditional competitive award procedures. Another alternative to traditional procurement by competition is a sole source award, and we are seeing more and more of our clients pursuing sole source awards or, in other cases, challenging the award of sole source contracts to other firms. If you are a small business, there are a number of ways your firm can be awarded a sole source award, including awards under various small business programs. You should be aware that these opportunities exist, so you can be ready to market your company and put it in the best position to receive a sole source award.
Perhaps the most common type of sole source award for the small business programs comes under the U.S. Small Business Administration’s 8(a) Business Development Program. Under the 8(a) program, a procuring agency does not need to determine that there is only one eligible 8(a) firm before making a sole source award. Similarly, under the U.S. Department of Veterans Affairs’ (“VA”) veteran-owned small business (“VOSB”) program, VA can award a sole source award without having to determine that only one VOSB or service-disabled veteran-owned small business (“SDVOSB”) can meet the requirement at issue. In contrast, to make a sole source award to a women-owned small business (“WOSB”), Historically Underutilized Business Zone (“HUBZone”) small business, and SDVOSB (as awarded by agencies other than VA), the procuring agency must first determine that it is unlikely that two or more of that type of small business will submit an offer for the procurement.
Being aware of the way small business sole source awards work will assist you in marketing your company to agencies that may be interested in making a sole source award. If you are a participant in the 8(a) Program or VA’s VOSB program, make sure your customers know about your small business program status and that they can make a sole source award to you. Under the WOSB, HUBZone, and non-VA SDVOSB programs, agencies will need to do some market research before making a sole source award. This means it is essential that you respond to all requests for information and highlight your small business program status and capabilities. You can also work with the agency before it conducts its market research to make sure your specific capabilities and small business status render your firm uniquely qualified to meet the agency’s needs.
There are other requirements that an agency must satisfy before making a small business sole source award, and there are other types of sole source awards outside the small business programs. If you would like to learn more about sole source awards, Jon Williams and I will be speaking on this topic at the National HUBZone Contractors National Conference on October 11, 2018. Sign up for the conference here.
About the Author: Julia Di Vito practices in the areas of government contracts, litigation, and labor and employment. She may be reached at [email protected].