FAR 19.805-1—General.
Plain-English Summary
FAR 19.805-1 explains when an 8(a) acquisition must be competed among eligible 8(a) participants, when SBA may approve a sole-source 8(a) award, and when an agency may ask SBA to allow competition below the normal competitive thresholds. It sets the key dollar thresholds for mandatory 8(a) competition—$8.5 million for manufacturing NAICS codes and $5.5 million for all other acquisitions—and ties competition to two conditions: a reasonable expectation of at least two eligible, responsible 8(a) offerors and award at fair market price. The section also addresses sole-source awards above the threshold, including the special rule for requirements accepted on behalf of Indian tribes and Alaska Native Corporations. In addition, it prohibits splitting a larger 8(a) requirement into smaller pieces to avoid the competitive 8(a) rules and use sole-source procedures. Finally, it gives SBA’s Associate Administrator for Business Development discretion to approve limited requests for competition below the threshold, usually where technical competition makes sense or where many responsible 8(a) firms are available, and allows agencies to recommend that approach in the offering letter or separate correspondence. In practice, this section is important because it determines whether an 8(a) procurement is competed or sole-sourced, shapes market research and acquisition planning, and affects how agencies structure requirements and coordinate with SBA.
Key Rules
Competitive 8(a) awards required
When the acquisition is offered to SBA under the 8(a) program, it must be competed among eligible 8(a) participants if there is a reasonable expectation of at least two eligible, responsible 8(a) offerors and award can be made at a fair market price. This is the default rule unless paragraph (b) applies.
Competitive threshold amounts
The competitive 8(a) requirement applies only when the anticipated total value of the contract, including options, exceeds $8.5 million for manufacturing NAICS codes and $5.5 million for all other acquisitions. These thresholds determine whether the acquisition falls into the competitive or potentially sole-source category.
Sole-source 8(a) awards above threshold
If the acquisition exceeds the competitive threshold, SBA may still accept it for a sole-source 8(a) award when there is not a reasonable expectation of at least two eligible, responsible 8(a) offerors at fair market price. SBA may also accept a sole-source award for a concern owned by an Indian tribe or Alaska Native Corporation.
No splitting to avoid competition
A proposed 8(a) requirement above the applicable competitive threshold may not be divided into several smaller requirements to use 8(a) sole-source procedures for award to a single firm. Agencies must not break up work to evade the competition requirement.
Limited competition below threshold
SBA’s Associate Administrator for Business Development may approve a contracting office’s request to compete an 8(a) requirement below the competitive thresholds, but only on a limited basis. Approval is generally reserved for situations where technical competition is appropriate or where many responsible 8(a) participants are available.
SBA considers program balance
In deciding whether to approve competition below the threshold, SBA will consider, among other things, the extent to which the contracting activity is supporting the 8(a) program on a noncompetitive basis. This means SBA looks at the agency’s overall use of sole-source 8(a) awards when evaluating the request.
Agency may recommend competition
The agency may recommend competition below the threshold in the offering letter or in separate correspondence to the SBA Associate Administrator for Business Development. The recommendation does not itself authorize competition; SBA must approve it.
Responsibilities
Contracting Officer
Determine whether the 8(a) requirement exceeds the applicable threshold, whether there is a reasonable expectation of at least two eligible and responsible 8(a) offerors, and whether award can be made at fair market price. The contracting officer must avoid splitting requirements to bypass competition and may submit or support a request to SBA for competition below the threshold when appropriate.
SBA
Decide whether to accept an offered requirement for competitive 8(a) award or for sole-source 8(a) award above the threshold. SBA also determines whether to approve a request for competition below the threshold and may consider the agency’s overall noncompetitive use of the 8(a) program.
SBA Associate Administrator for Business Development
Review and decide agency requests to compete 8(a) acquisitions below the competitive thresholds. Approve such requests only on a limited basis, primarily where technical competition is appropriate or where a large pool of responsible 8(a) participants exists.
Agency/Contracting Activity
Prepare and submit the offering letter or separate correspondence to SBA, including any recommendation for competition below the threshold. The agency must structure requirements properly, support market research, and ensure it does not divide larger requirements to avoid the competitive 8(a) rules.
Eligible 8(a) Participants
Compete when the acquisition is set aside for competitive 8(a) participation and submit offers if interested and responsible. Participants must be eligible under the 8(a) program to be considered for award.
Practical Implications
This section drives the first major decision in an 8(a) procurement: compete it among 8(a) firms or pursue a sole-source award. That decision depends on market research, estimated value including options, and whether enough eligible firms are likely to bid at a fair market price.
A common pitfall is miscalculating the threshold by ignoring options or using the wrong NAICS category. Contracting officers should confirm whether the NAICS is manufacturing, because the threshold is higher for manufacturing acquisitions.
Another major risk is improper requirement splitting. If a larger 8(a) need is broken into smaller buys to fit sole-source procedures, the action can be challenged as an evasion of the competition rules.
Agencies seeking competition below the threshold should not assume approval is routine. SBA treats these requests as limited exceptions, so the agency should provide a strong rationale, such as a technical competition need or a broad pool of capable 8(a) firms.
For contractors, this section affects whether a procurement is open to one 8(a) firm or many. Firms should watch for threshold calculations, market research assumptions, and whether the agency is trying to compete or sole-source the requirement.
Official Regulatory Text
(a) Except as provided in paragraph (b) of this section, an acquisition offered to the SBA under the 8(a) program shall be awarded on the basis of competition limited to eligible 8(a) participants when- (1) There is a reasonable expectation that at least two eligible and responsible 8(a) participants will submit offers and that award can be made at a fair market price; and (2) The anticipated total value of the contract, including options, will exceed $8.5 million for acquisitions assigned manufacturing North American Industry Classification System (NAICS) codes and $5.5 million for all other acquisitions. (b) Where an acquisition exceeds the competitive threshold (see paragraph (a)(2) of this section), the SBA may accept the requirement for a sole source 8(a) award if- (1) There is not a reasonable expectation that at least two eligible and responsible 8(a) participants will submit offers at a fair market price; or (2) SBA accepts the requirement on behalf of a concern owned by an Indian tribe or an Alaska Native Corporation. (c) A proposed 8(a) requirement with an estimated value exceeding the applicable competitive threshold amount shall not be divided into several requirements for lesser amounts in order to use 8(a) sole source procedures for award to a single firm. (d) The SBA Associate Administrator for Business Development may approve a contracting office's request for a competitive 8(a) award below the competitive thresholds. Such requests will be approved only on a limited basis and will be primarily granted where technical competitions are appropriate or where a large number of responsible 8(a) participants are available for competition. In determining whether a request to compete below the threshold will be approved, the SBA Associate Administrator for Business Development will, in part, consider the extent to which the contracting activity is supporting the 8(a) program on a noncompetitive basis. The agency may include recommendations for competition below the threshold in the offering letter or by separate correspondence to the SBA Associate Administrator for Business Development.