DATE: June 14, 2000

FROM: Barry McVay, CPCM

SUBJECT: Awards to 8(a) Firms Under Federal Supply Schedule Program to Count Towards Agencies' 8(a) Goals

SOURCE: Small Business Administration News Release, June 13, 2000

AGENCIES: Small Business Administration (SBA), General Services Administration (GSA)

ACTION: Announcement

SYNOPSIS: On June 7, 2000, GSA and SBA entered into an agreement in which a contracting agency placing an order under the Federal Supply Schedule (FSS) program to a participant in the SBA's 8(a) program will have the order count towards its 8(a) goal.

EDITOR'S NOTE: The SBA's 8(a) program regulations are Title 13 of the Code of Federal Regulations, Business Credit and Assistance; Chapter I, Small Business Administration; Part 124, 8(a) Business Development/Small Disadvantaged Business Status Determination; Subpart A, 8(a) Business Development. Also see Federal Acquisition Regulation (FAR) Subpart 19.8, Contracting with the Small Business Administration (The 8(a) Program).

The regulations governing GSA's FSS program are FAR Subpart 8.4, Federal Supply Schedules, and FAR Part 38, Federal Supply Schedule Contracting. Also see GSA Acquisition Regulation (GSAR) Part 538, Federal Supply Schedule Contracting.

FOR FURTHER INFORMATION CONTACT: Tiffani Clements, 202-205-6740.

SUPPLEMENTAL INFORMATION: SBA's 8(a) helps socially and economically disadvantaged businesses compete for federal contracts. In the past, the SBA acted as the "middleman" for all contracts between 8(a) firms and procuring agencies. However, because contracts awarded through the 8(a) program were generally awarded to a "selected" 8(a) firm without competition or synopsizing in the Commerce Business Daily (CBD), 8(a) contracts could be made much quicker than normal competed contracts, even with the SBA "middleman."

But the advantages of the 8(a) program started to evaporate. First, acquisitions accepted by the SBA into the 8(a) program that were over $5,000,000 for manufacturing, and $3,000,000 for all others, had to be competed among 8(a) firms. Then, acquisition streamlining made it possible for normal competed contracts to be awarded more quickly. The increased use of multiple award contracts, indefinite-delivery/indefinite quantity (IDIQ) contracts, and blanket purchase agreements (BPAs) made many purchases much quicker. Millions of purchases under $2,500 started to be made by thousands of government employees assigned credit cards. Simplified procedures were authorized to acquire commercial items up to $5,000,000 (see FAR Subpart 13.5, Test Program for Certain Commercial Items). Finally, GSA's FSS program became more competitive and easier to use.

The percentage of awards to 8(a) firms has been declining slowly but steadily the past few years, according to statistics from the Federal Procurement Data Center. What has made matters worse was that orders placed with 8(a) firms through the FSS program were counted towards an agency's small business goal, but not its 8(a) goal. Since there was no incentive to choose an unknown 8(a) firm instead of a well-known small business, most FSS orders would go to the well-known small business.

With this agreement, SBA will count FSS orders placed with 8(a) firms towards an agency's small business goal and 8(a) goal. It is expected that this "2-for-1" incentive will increase FSS orders to 8(a) firms.

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

Copyright 2000 by Panoptic Enterprises. All Rights Reserved.

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