U.S. Army Encourages Competitive Bidding in SBA 8(a) Acquisitions

On April 7, 2026, the U.S. Army issued a significant acquisition policy memorandum aimed at transforming the approach towards the Small Business Administration (SBA) 8(a) Business Development Program. Effective immediately, this policy mandates that Army contracting officers prioritize competitive bidding procedures rather than relying on sole source awards. Traditionally, the mantra of “once 8(a), always 8(a)” existed, which allowed for an uninterrupted flow of contracts from the SBA 8(a) program. However, this policy change signals a dramatic shift in strategy aimed at enhancing competition and increasing small business engagement in government procurement processes.

The memorandum, signed by Deputy Assistant Secretary of the Army (Procurement) Kimberly D. Buehler, emphasizes the directive’s dual objectives: promoting a more competitive landscape in federal contracting and expanding the pool of eligible small businesses that can benefit from government contracts. Under the newly established directives, follow-on contracts which previously had to remain within the SBA 8(a) program can now be made available for other small business classifications—such as HUBZone, Service-Disabled Veteran-Owned Small Business (SDVOSB), and Women-Owned Small Business (WOSB)—in situations deemed appropriate by contracting officers.

This modification could have profound implications for organizations traditionally benefiting from the 8(a) program, such as Alaska Native Corporations (ANCs), Indian tribes, and Native Hawaiian Organizations (NHOs), who historically garnered sole source contracts without competition. The change promotes not only an increase in competition but also reinforces compliance with evolving federal regulations regarding procurement practices. As stated in the memorandum, contracting officers are directed to engage in competitive procedures “to the maximum extent practicable,” even though this does not entirely eliminate the option of sole source procurement, especially under certain emergency circumstances as specified by the Federal Acquisition Regulation (FAR).

Organizations, particularly those representing ANCs, Indian tribes, and NHOs, are encouraged to reassess their strategies in light of the Army’s updated policy, as it may directly influence contract pipeline planning and future award success. While Congress has granted these entities the statutory authority to receive sole source awards under the 8(a) program, the recent changes could reduce the frequency of such awards, thereby compelling them to compete for contracts previously acquired without bidding.

Moreover, the new policy does not negate Congress’s clear authorization for unlimited sole source awards for these groups, illustrating a notable balance between policy directive and statutory law. This juxtaposition was encapsulated in a statement by attorney Christopher Slottee, who remarked, "An agency policy memorandum expressing a 'preference' for competition does not override Congress's clear authorization."

The effective application of this policy signifies a larger trend within the federal acquisition landscape—the pivot towards fostering competitiveness not only serves to broaden the pool of competitors but is also poised to drive innovation and enhance mission capabilities through enhanced service delivery. It also suggests forthcoming adjustments to acquisition planning processes, which procurement professionals must now integrate into their strategic frameworks.

Ultimately, this memorandum requires organizations to stay abreast of changes and actively adapt their strategies to engage with the United States Army effectively. As the landscape continues to shift, procurement officials and contractors should ensure compliance while maximizing opportunities offered by competitive set-asides to navigate this new environment successfully.

• Effective April 2026, Army contracting emphasizes competitive procedures over sole-source in SBA 8(a).
• Follow-on contracts can now be set aside for other small business categories, increasing opportunity.
• Key organizations need to revise their strategies considering reduced sole source contract frequency.
• Legal interpretations around new policies may vary, affecting contracting officer behaviors and decisions.
• Congressional authority for ANC, tribal, and NHO sole source awards remains intact despite policy shift.
• This policy change enhances the landscape for federal procurement professionals and invites increased participation from a wider pool of small businesses.