FAR 19.1406—Sole source awards.
Plain-English Summary
FAR 19.1406 explains when a contracting officer may make a sole-source award to a service-disabled veteran-owned small business (SDVOSB) concern and how that decision fits into the broader small business acquisition framework. It covers the required order of consideration between SDVOSB sole source and small business set-asides, the dollar thresholds for manufacturing and nonmanufacturing requirements, the need to confirm that no 8(a) program requirement blocks the award, the responsibility and fair-and-reasonable-price determinations, and the post-2024 certification rules for eligible SDVOSB concerns in SAM and SBA’s certification system. It also addresses the exclusion of certain requirements under FAR 19.1404 and recognizes SBA’s right to appeal a contracting officer’s decision not to use an SDVOSB sole source. In practice, this section tells contracting officers when they must consider SDVOSB sole source first, what eligibility and price checks must be completed before award, and which firms are eligible to receive these awards after the certification transition date. For contractors, it signals that SDVOSB status alone is not enough; the firm must also meet the certification and responsibility requirements and be able to support a fair and reasonable price.
Key Rules
Consider SDVOSB sole source first
Before turning to small business set-asides, the contracting officer must consider whether the requirement can be awarded on a sole-source basis to an SDVOSB concern. This priority applies only if none of the exclusions in FAR 19.1404 apply.
No reasonable expectation of competition
A sole-source SDVOSB award is allowed only when the contracting officer does not reasonably expect offers from two or more SDVOSB concerns. If two or more capable SDVOSB sources are expected, a sole-source award is not appropriate.
Dollar thresholds apply
The anticipated award price, including options, must not exceed $8.5 million for manufacturing requirements or $5 million for all other NAICS codes. These caps are mandatory eligibility limits for using the sole-source authority.
8(a) requirements block the award
The requirement cannot currently be performed by an 8(a) participant under subpart 19.8, and it cannot be a requirement that SBA has already accepted under the 8(a) program. If the work is in the 8(a) program, SDVOSB sole source is not available.
Responsibility and price must be acceptable
The SDVOSB concern must be determined responsible for performance, and the award must be made at a fair and reasonable price. The contracting officer must complete both determinations before award.
Certification rules after January 1, 2024
Effective January 1, 2024, sole-source awards may be made only to firms that are either SBA-certified SDVOSBs in SAM or firms that represented themselves as SDVOSBs in SAM and submitted a certification application to SBA on or before December 31, 2023. Pending applications are tracked in SBA’s Veteran Small Business Certification Program database.
SBA may appeal a non-award decision
If the contracting officer decides not to make an SDVOSB sole-source award, SBA has the right to appeal that decision. This creates oversight and reinforces the need for a well-documented acquisition decision.
Responsibilities
Contracting Officer
Must consider SDVOSB sole source before small business set-asides when the rule applies, verify that no FAR 19.1404 exclusion applies, confirm the absence of a reasonable expectation of two or more SDVOSB offers, ensure the price ceiling is not exceeded, check that the requirement is not in the 8(a) program, determine the concern is responsible, and make sure the price is fair and reasonable. After January 1, 2024, the contracting officer must also confirm the firm meets the certification requirements in SAM and SBA’s certification process.
SDVOSB Concern
Must qualify as an eligible SDVOSB for the award, including meeting the post-2024 certification or pending-application requirements, and must be able to demonstrate responsibility and support a fair and reasonable price. The concern should ensure its SAM representation and SBA certification status are current and accurate.
SBA
Maintains the certification framework for SDVOSB concerns, tracks pending applications, and may appeal a contracting officer’s decision not to make an SDVOSB sole-source award. SBA also serves as the gatekeeper for certification status after the transition date.
Agency
Must support acquisition planning and market research sufficient to determine whether a sole-source SDVOSB award is appropriate, including whether there is a reasonable expectation of competition and whether the requirement is already in the 8(a) program. Agencies must also ensure their contracting personnel apply the certification transition rules correctly.
Practical Implications
This section is a sequencing rule as much as an eligibility rule: contracting officers must think about SDVOSB sole source before moving to set-asides when the conditions are met.
Market research matters. If the file shows two or more capable SDVOSB sources are likely to respond, the sole-source path is generally unavailable.
The dollar cap is absolute and includes options, so acquisition planning must account for the full anticipated value, not just the base period.
Post-2024 certification status is critical. A firm that is not properly certified in SAM, or that missed the certification application deadline, may be ineligible even if it otherwise appears to be an SDVOSB.
Documentation should clearly support the no-competition judgment, responsibility determination, price analysis, and any conclusion that the requirement is not in the 8(a) program, because SBA can challenge a decision not to use the SDVOSB sole-source authority.
Official Regulatory Text
(a) A contracting officer shall consider a contract award to a SDVOSB concern on a sole source basis (see 6.302-5 (b)(6)), before considering small business set-asides (see 19.203 and subpart 19.5 ) provided none of the exclusions of 19.1404 apply and— (1) The contracting officer does not have a reasonable expectation that offers would be received from two or more service-disabled veteran-owned small business concerns; (2) The anticipated award price of the contract, including options, will not exceed- (i) $8.5 million for a requirement within the NAICS codes for manufacturing; or (ii) $5 million for a requirement within any other NAICS code; (3) The requirement is not currently being performed by an 8(a) participant under the provisions of subpart 19.8 or has been accepted as a requirement by SBA under subpart 19.8 ; (4) The service-disabled veteran-owned small business concern has been determined to be a responsible contractor with respect to performance; and (5) Award can be made at a fair and reasonable price. (b) Effective January 1, 2024, a contracting officer shall only award a sole-source contract to a concern that— (1) Is designated in SAM as an SDVOSB concern certified by SBA; or (2) Has represented that it is an SDVOSB concern in SAM and submitted an application for certification to SBA on or before December 31, 2023. Pending applications for certification are in the SBA Veteran Small Business Certification Program database at https://veterans.certify.sba.gov . (c) The SBA has the right to appeal the contracting officer’s decision not to make an SDVOSB sole-source award.