Memorandum Approves  a Class Deviation

    Purpose

    This memorandum serves to officially endorse a class deviation from the Federal Acquisition Regulation (FAR), specifically concerning the offer and acceptance procedures within the Small Business Administration (SBA) 8(a) Program. The deviations in question pertain to FAR 19.804-3(a)(1) and (a)(2), as detailed in the attachment accompanying this memorandum.

    In light of the recent court ruling, this memorandum will supersede the existing GSA and SBA Partnership Agreement in relation to the verification of 8(a) Participant eligibility for the purposes of offer and acceptance. This adjustment reflects the need to ensure our practices are in line with the latest legal requirements and uphold the integrity of our procurement processes.

    Background

    This memorandum and the accompanying Federal Acquisition Regulation (FAR) Class Deviation are issued in response to the recent court case of Ultima Services Corporation vs. USDA et al.1, as well as the Small Business Administration (SBA) guidance released on Friday, August 18, 2023.

    Following this decision, the SBA has made several announcements:

    a.  For contracts awarded prior to July 19, 2023, there is generally no impact. This includes in-scope modifications and priced options, as these awards were made under the regulations in place at that time. You may continue to issue competitively awarded task orders without interruption.

    b.  SBA now requires an affirmative finding of social disadvantage for:

    • Unpriced options on 8(a) contracts,
    • 8(a) set-aside orders under non-8(a) Governmentwide Acquisition Contract (GWAC)/Indefinite Delivery Indefinite Quantity (IDIQ) contracts or Multi-Agency Contracts (MAC),
    • 8(a) directed or sole-source orders under 8(a) GWAC/IDIQ (i.e., 8(a) STARS III) or Blanket Purchase Agreements under the Federal Supply Schedule (FSS),
    • New sole-source awards using 8(a) authority, and
    • 8(a) contract novation.

    For these cases, the procuring agency will request an eligibility determination of the identified apparent successful offeror or offerors. The SBA will then verify that the nominee(s) meet(s) the social disadvantage requirement for contract eligibility determination.

     

    As a general guideline:

    a.  For new contracts awarded after July 19, 2023 utilizing 8(a) authority, all new awards will require an affirmative determination of social disadvantage by the SBA for the apparent successful offeror. This includes directed or sole-source awards to an 8(a) participant, or set-aside awards, partially or in whole, to 8(a) participants.

    b.  For existing contracts awarded prior to July 19, 2023 utilizing 8(a) authority, an affirmative determination of social disadvantage by the SBA is necessary when exercising an unpriced option or issuing a modification in response to a novation request.

    c.  For existing contracts awarded prior to July 19, 2023 utilizing 8(a) authority, an affirmative determination of social disadvantage by the SBA is not necessary when exercising a priced option or issuing an in-scope modification.

    #GovAccountingCompliance #FARandCAS #GovernmentContracting #AuditPreparedness

    #SBA8a #8a #Assumption #GSA

     

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