A recent Government Accountability Office (GAO) report issued on December 12, 2012, asserts that government agencies are having a slow start to the implementation of a requirement to properly provide justifications for 8(a) sole-source contracts over a $20 million threshold. The justification requirement was put in place through a revision to the FAR in an effort to bring more attention to large 8(a) sole-source contracts. The Small Business Administration’s (SBA) 8(a) program is one of the federal government’s primary means for developing small businesses owned by socially and economically disadvantaged individuals.
The report notes that of the 14 sole-source 8(a) contracts awarded since the FAR was revised, only three included an 8(a) justification. The agencies awarding the remaining 11 contracts did not comply, either because contracting officials were not aware of the justification requirement or because they were confused about what the FAR required. Moreover, the report explains that the SBA does not have a process in place to confirm that 8(a) justifications are being completed or that agencies are complying with the general requirements. As a result, the GAO report recommended that the administrator of the Office of Federal Procurement, in consultation with the FAR council, provide clarification concerning actions that contracting officers should take to comply with the justification requirement and clarify the requirements for contracts that are modified to above or below the $20 million threshold. The report also recommended that the administrator of the SBA provide instructions concerning the process for ensuring compliance with the justification requirement.
These changes will likely assist contracting officers in understanding the requirements for 8(a) justifications with the GAO’s desired effect of increasing the 8(a) sole-source justifications. Additionally, since these changes will likely be incorporated in consultation with the FAR council, there may be significant changes made to the FAR regulations concerning 8(a) sole-source contracts, and those contracting actions that modify the contract value above or below the $20 million threshold. As the saying goes, time will tell, but it will remain important to follow any changes to this type of government contracting as companies and government agencies work collectively to ensure compliance with the FAR.