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Can Ordering Agencies Get 8(a) Socioeconomic credit in Schedule Orders?

SBA's rules say the answer is "no."

SBA Final Rule (71 Fed. Reg.) Eff. 6/30/2007

As shown in the linked pages from the Federal Register, here is what the SBA regulation says about agencies attempting to take 8(a) credit on Schedule orders they place with 8(a) firms:

QUOTE
[Page 66435]

A Memorandum of Understanding (MOU) between SBA and GSA which allowed agencies to take 8(a) credit for orders awarded under full and openly competed MAS contracts expired in 2003.  At this time procuring agencies should no longer be taking 8(a) credit for orders awarded under full and open MAS contracts.

[Page 66440]

Several commenters asked whether the final rule supersedes the 8(a) BD MOU between SBA and GSA concerning the MAS program.  The MOU between SBA and GSA expired in 2003.  Traditionally, procuring agencies have only been allowed to take credit towards their 8(a) contracting goals for sole source contract awards and contracts awarded pursuant to competition limited exclusively to 8(a) concerns.  Orders issued under full and openly competed MAS contracts, where an 8(a) firm competes with non-8(a) small firms and large firms, does not satisfy the statutory requirement that competition for an 8(a) award must be limited to eligible 8(a) firms.  Thus, procuring agencies can no longer take 8(a) credit for orders awarded to 8(a) firms under full and open MAS contracts.

UNQUOTE

My comment: Based on the foregoing, SBA's policy on 8(a) credit for Schedule orders appears unambiguous.  I believe the reasoning is sound. There aren't any GSA Schedules (and GWACs are not Schedules) under which 8(a) firms are competing only against other 8(a) firms for award of a Schedule contract.  As a result, SBA regulations hold that GSA Schedule contracts are therefore not "8(a) contract awards" within the meaning of the governing statute.  Because all 8(a) firms are, by definition, Small Disadvantaged Businesses (SDBs) [but not all SDBs are 8(a)s], ordering agencies are free to take credit toward their socioeconomic objectives based on some other (that is, non-8(a)) socioeconomic status.  In this way, award of a Schedule task order to an 8(a) contractor can help you meet your agency's SDB goals but not your 8(a) goals.

For more information. Click Here.

It was perfectly appropriate for the Air Force to award a prior 8(a) set aside as an FSS task order. Click Here.

[NOTE:  Original content created by Dave Clemens.  Edited by Dan Briest on 1/6/11.] 

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