Proposal would clarify sole-source language

Officials today proposed a rule to revise acquisition regulations to clarify when a service-disabled veteran may receive a sole-source contract.

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council said the intent of the Federal Acquisition Regulation is not that a sole-source contract is prohibited if there is more than one small business owned by a service-disabled veteran that could perform the work. However, they say the FAR should be amended because it can be misinterpreted to say that.

The amendment isn’t expected to have significant economic effects, but it's intended to more closely reflect the law, the proposal states.

The changes are based on a 2007 Government Accountability Office protest decision. A small-business owner who is a service-disabled veteran objected to the Air Force’s decision to award a small-business set-aside contract instead of a sole-source award to a small business owned by a service-disabled veteran. The Air Force chose the set-aside because one other firm owned by a service-disabled veteran could have performed the contract’s work. However, the protester countered that the company didn’t respond to the solicitation.

GAO ruled against the notion, arguing that to say “no sole-source award can be made where another [company] exists that could conceivably perform the contract, even where the firm has expressed no interest in the work, would, in our view, frustrate the intent” of the law. It would limit sole-source awards to small businesses owned by service-disabled veterans beyond what the governing statute clearly authorizes, GAO said.

The regulatory councils have determined that to lessen the possibility of misinterpretation, the FAR should be revised to more closely mirror the Veterans Benefits Act of 2003. That legislation established rules that allow sole-source awards if a contracting officer does not expect to receive bids from at least two small companies owned by service-disabled veterans.

At the same time, the councils propose amending similar FAR language regarding awarding sole-source contracts to small businesses in Historically Underutilized Business Zones.

The deadline for comments on the proposal is July 20.