Socio-economic Designations: Super 8(a)s

Posted on September 2, 2020 Socio-economic Policies

The “8(a) Program” provides participating small businesses with training, technical assistance, and contracting opportunities in the form of set-aside and sole-source awards.   The 8(a) Program also includes “Super 8(a)” businesses.  Super 8(a) businesses are firms that are owned by Indian tribes, Alaskan Native Corporations (ANCs), and Native Hawaiian Organizations (NHOs). These businesses are presumed to be socially disadvantaged groups, which warrant a granting of 8(a) status to tribes, ANCs, and Native Hawaiian Organizations who unconditionally own at least 51% of the companies interest and are controlled by Indian tribes, ANCs, and NHOs. The super 8(a) businesses may also create subsidiary 8(a) firms under the super 8(a) umbrella.

Under 13 CFR § 124.506(a), procurements for contracts worth greater than $4 million, or $7 million for manufacturing contracts, are typically competed among eligible 8(a) small businesses.  While the competitive pool is smaller in the 8(a) program, requirements are competed among all eligible participants.   Super 8(a) companies, however, receive an additional advantage.

An agency may make a sole-source award above this threshold to an Alaskan native corporation or a firm owned by an Indian tribe. 13 CFR § 124.506(b).  However, if the agency sets aside procurement of a contract above the $4 million/$7 million threshold, the agency cannot subsequently remove this contract from competition to make a sole-source award to one of these corporations. Id.  Similarly, Native Hawaiian organizations may be awarded the Department of Defense contracts, which are above the applicable competitive threshold. 13 CFR 124.506(b)(2).

Importantly, 13 CFR § 124.506(b)(4) states a joint venture between one of these Super 8(a) businesses and one or more of non-8(a) businesses may still be awarded a sole-source award above the competitive threshold, so long as it meets the requirements of a joint venture. 13 CFR § 124.513. This regulation provides ample opportunity for a non-8(a) federal contractor to form a joint venture with a Super 8(a) to take advantage of these sole-source awards.

While the advantages of being a Super 8(a) are many, there is a limitation to this authority worth noting.   Any sole-source contract for greater than $22 million cannot be awarded “unless the contracting officer justifies the use of a sole-source contract in writing and has obtained the necessary approval under the Federal Acquisition Regulation.” 13 CFR § 124.506(b)(5).  Documentation requirements such as this help ensure transparency to the federal acquisition process and ensure that the government is not abusing this expedited acquisition path for Super 8(a) businesses.