Per the FAR 52.204-11: "First-tier subcontract" means a subcontract awarded directly by a Federal Government prime contractor whose contract is funded by the Recovery Act.

The contract is awarded directly to the 8(a) and not the SBA. You don't send your bills to the SBA, right? Of coures not.

Vern Edwards

Posted 03 September 2009 - 07:11 PM

That clause defines first-tier subcontractor as used in the clause. It does not define that term for all contractual purposes.

contractor100

Posted 03 September 2009 - 08:01 PM

FAR fetched:

Where does it say in 19.8 that the contract is awarded to the 8(a) firm? It says its awarded to the SBA or an agency designee.

carl r culham

Posted 04 September 2009 - 09:04 AM

I offer the following for consideration in the debate unfolding in this thread.

Civilian Agency Acquisition Council Letter 98-3 found here http://www.acquisition.gov/comp/caac/caacletters/cl98-03.pdf  By my read there is such a thing as a direct award contract to an 8(a) firm if authorized between the SBA and the agency and in these instances the direct subcontractor to the 8(a) firm is clearly first tier.

Also these CFR's apply as appropriate -

13 CFR 124.512 Delegation of contract administration to procuring agencies.

(a) SBA may delegate, by the use of special clauses in the 8(a)
contract documents or by a separate agreement with the procuring
activity, all responsibilities for administering an 8(a) contract to the
procuring activity except the approval of novation agreements under 48
CFR 42.302(a)(25).
(b) This delegation of contract administration authorizes a
contracting officer to execute any priced option or in scope
modification without SBA's concurrence. The contracting officer must,
however, notify SBA of all modifications and options exercised.

13 CFR 124.508 How is an 8(a) contract executed?

(a) An 8(a) contract can be awarded in the following ways:
(1) As a tripartite agreement in which the procuring activity, SBA
and the Participant all sign the appropriate contract documents. There
may be separate prime and subcontract documents (i.e., a prime contract
between the procuring activity and SBA and a subcontract between SBA and
the selected 8(a) concern) or a combined contract document representing
both the prime and subcontract relationships; or
(2) Where SBA has delegated contract execution authority to the
procuring activity, directly by the procuring activity through a
contract between the procuring activity and the Participant.
(b) Where SBA receives a contract for signature valued at or below
the simplified acquisition threshold, it will sign the contract and
return it to the procuring activity within three (3) days of receipt.
© In order to be eligible to receive a sole source 8(a) contract,
a firm must be a current Participant on the date of award. (See Sec.
124.507(d) for competitive 8(a) awards.)

I still hold to my original post that to treat a subcontractor direct to an 8(a) firm that has been awarded a contract under the 8(a) Program as anything other than a 1st tier subcontractor for ARRA reporting purposes would be a very slippery slope.

Don Mansfield

Posted 04 September 2009 - 11:27 AM

Carl,

I don't know about other agencies, but for DoD the SBA is still the prime contractor when you make a direct award to an 8(a) firm pursuant to the Partnership Agreement. DFARS 219.800(a) states:
 

[Bold added].
 

contractor100

Posted 04 September 2009 - 12:20 PM

I think the SBA is still the prime. See the language at the bottom of the message from DOT's Partnership Agreement (broken link), which effects the delegation referred to in section (B) of your cite. This language seems to be standard - I find it in three other agreements.

But I agree it's ridiculous to treat SBA as the prime for ARRA reporting purposes. If subs to other small businesses have to do these reports, so should 8(a) awardees. I am sure many people would be interested in the compensation reporting for subs to ANCs for example.

Here's the law, at sec 1512:

DEFINITIONS.?In this section:
(1) RECIPIENT.?The term ??recipient???
(A) means any entity that receives recovery funds
directly from the Federal Government (including recovery
funds received through grant, loan, or contract) other than
an individual; and
(B) includes a State that receives recovery funds.

Here's how the reporting site interprets that language.

Prime Recipients [are] non-Federal entities that receive Recovery Act funding as Federal awards.

This is better than the FAR language, I think.

"The purpose of this Partnership Agreement (PA) between the U.S. Small Business Administration (SBA) and the Department of Transportation (DOT) is to establish basic procedures for expediting the award of requirements pursuant to section 8(a) of the Small Business Act, as amended (15 U.S.C. 637(a)) (the Act), and the SBA's regulations. This PA replaces all terms and conditions of any previously executed Memorandum of Understanding (MOU) or PA with DOT or subordinate agencies on the issue of expediting the award of requirements pursuant to section 8(a) of the Act.


II. OBJECTIVES

a. To delineate the responsibilities regarding 8(a) contracts between the SBA and the DOT;

b. To establish the procedures for offer and acceptance between the SBA and the DOT;

c. To reduce the interval between the time DOT contracting offices send an offering letter to the SBA and receive an SBA decision on the offering to a maximum of 5 workdays;

d. To emphasize that the SBA only delegates the authority to sign contracts on their behalf. The SBA remains the prime contractor on all 8(a) contracts;

e. To eliminate SBA review of contracts and purchase orders executed under the authority of this PA; and

f. To establish uniform policy and procedures regarding application of purchase orders to the 8(a) contracting process, when applicable.

FAR Fetched

Posted 04 September 2009 - 12:48 PM

It seemed a lot clearer yesterday; I?m slowly leaning toward agreeing with you, but I would prepare to report anyway.

Question though, is the 8(a) concerned with making owner compensation public?

contractor100

Posted 04 September 2009 - 06:07 PM


FAR Fetched, on Sep 4 2009, 02:48 PM, said:


It seemed a lot clearer yesterday; I?m slowly leaning toward agreeing with you, but I would prepare to report anyway.

Question though, is the 8(a) concerned with making owner compensation public?

The 8(a) has to report either way, yes? Because it's either the prime or a first tier sub. It's the subk to the 8(a) that has to provide the info (to the 8(a), not the website). Probably not much of a issue - only large privately held government contractors have to report the compensation, and they probably will have to report directly anyway. Same for FFATA, when it kicks in for smaller subcontracts.

Vern Edwards

Posted 05 September 2009 - 07:27 AM

Interesting discussion. By the standard language of the FAR, the standard terms of 8(a) contracts, and ordinary usage, the SBA is the prime contractor and the 8(a) is the first-tier subcontractor. Carl's "slippery slop" argument is based entirely upon supposition, reasoning from his notion of the intent of the Recovery Act. However, I think he has made a good point about delegated executions under 13 CFR 124.108(a)(2).

If the intent of the Recovery Act authors was for non-delegated execution 8(a) contracts to be considered prime contracts, they can say so. Otherwise, if I was a contracting officer, I would stick with custom and usage.

joel hoffman

Posted 06 September 2009 - 06:03 PM

13 CFR 124.508 How is an 8(a) contract executed?

(a) An 8(a) contract can be awarded in the following ways:

(1) As a tripartite agreement in which the procuring activity, SBA and the Participant all sign the appropriate contract documents. There may be separate prime and subcontract documents (i.e., a prime contract between the procuring activity and SBA and a subcontract between SBA and the selected 8(a) concern) or a combined contract document representing both the prime and subcontract relationships; or

(2) Where SBA has delegated contract execution authority to the procuring activity, directly by the procuring activity through a contract between the procuring activity and the Participant.
 

Vern Edwards

Posted 06 September 2009 - 06:06 PM

We know about that, Joel. Carl pointed it out a couple of days ago. I wrote 124.108(a)(2) when I should have written 124.508(a)(2). I think Carl is right in that part of his analysis.

Whynot

Posted 05 October 2009 - 10:01 AM

In the OFPP 9/30/2009 memo posted on WIFCON today, in the FAC

16. The guides and other information posted at FederalReporting.gov use the terms ?Prime Recipient? and ?Sub Recipient.? What do these terms mean?
Prime Recipients are non-federal entities that receive Recovery Act funding through federal awards. The terms ?prime recipient? and ?recipient? are interchangeable. For federal contracts subject to reporting under FAR clause 52.204-11, these terms translate to ?federal contractor? (i.e., prime contractor).

Sub Recipients are non-federal entities that are awarded Recovery funding through a legal instrument from a Prime Recipient. For federal contracts subject to reporting under FAR clause 52.204-11, the term translates to ?first-tier subcontractor.?

SBA can not be considered a prime recipient because it is not a "non-federal entity"; and if SBA can not be a prime recipient there can not be a "sub recipient" because a sub recipient is a first tier subcontractor to a prime recipient of which there is none

On the SBA website:

"The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government"

So what happens to these contracts? No reporting?

Whynot

Posted 05 October 2009 - 10:04 AM

Maybe they should be considered Federal to Federal contracts and not subject to ARRA reporting.

contractor100

Posted 05 October 2009 - 12:37 PM

So where does the "non-federal" definition come from. Law says;

SEC. 1512. REPORTS ON USE OF FUNDS.
(a) SHORT TITLE.?This section may be cited as the ??Jobs
Accountability Act??.
(B) DEFINITIONS.?In this section:
(1) RECIPIENT.?The term ??recipient???
(A) means any entity that receives recovery funds
directly from the Federal Government (including recovery
funds received through grant, loan, or contract) other than
an individual; and
(B) includes a State that receives recovery funds.

joel hoffman

Posted 05 October 2009 - 03:04 PM

Just a reminder that last week Bob posted a link to the Extension of Partnership Agreement Between the SBA and the DOD, where DOD may contract directly with 8(a) firms, notwithstanding some discussion above to the contrary.

Whynot

Posted 05 October 2009 - 03:58 PM

Joel did you read the agreement? 219.800 (a)

"However, the SBA remains the prime contractor on all 8(a) contracts, continues to determine eligibility of concerns for contract award, and retains appeal rights under FAR 19.810. The SBA delegates only the authority to sign contracts on its behalf."

joel hoffman

Posted 05 October 2009 - 07:57 PM

Good catch. My 3 year old Grandson shredded my CAC card in the paper shredder yesterday so I couldn't pull it up on my laptop today. I read it last week but short term memory seems to be gone... B)

joel hoffman

Posted 06 October 2009 - 07:52 AM

Whynot, I'm sure we've been through this before in this forum about the weird status of an 8(a) contractor. Per DFARS 219.800, the DoD may sign the contract with the 8(a) firm on behalf of the SBA. The 8(a) firm is considered the "contractor" for most administrative purposes in performing the contract. We put the various construction and other clauses into construction contracts, then treat the 8(a) firm as a contractor for most administrative purposes. We do treat the firm as a subcontractor and go through its big brother, the SBA, if the firm has problems in contract execution. Otherwise, the SBA never got involved in contract administration affairs, while I was working contract admin day to day at our District level and in ACO offices. While technically, the "contract" may be a subcontract, for practical purposes the 8(a) firm is supposed to perform the role of a contractor. I think we tend to make things too difficult sometimes.

You quoted a portion of DFARS 219.800 (a).

DFARS 219.800 (bee) says "Contracts awarded under the PA may be awarded directly to the 8(a) participant on either a sole source or competitive basis. An SBA signature on the contract is not required."

"PGI 219.811 Preparing the contracts.

PGI 219.811-1 Sole source.

(1) Awards under the PA cited in DFARS 219.800 may be made directly to the 8(a) contractor and, except as provided in paragraph (2) of this subsection and in DFARS 219.811-3, award documents shall be prepared in accordance with procedures established for non-8(a) contracts, using any otherwise authorized award forms. The “Issued by” block shall identify the awarding DoD contracting office. The contractor’s name and address shall be that of the 8(a) participant.

(2) Use the following alternative procedures for direct awards made under the PA cited in DFARS 219.800:

(i) Cite 10 U.S.C. 2304(cee)(5) as the authority for use of other than full and open competition.

(ii) Include the clause at DFARS 252.219-7009, Section 8(a) Direct Award, in accordance with the prescription at DFARS 219.811-3(1). Identify the cognizant SBA district office for the 8(a) contractor.

(iii) No SBA contract number is required.

(iv) Do not require an SBA signature on the award document.

PGI 219.811-2 Competitive.

Awards made under the PA cited in DFARS 219.800 shall be prepared in accordance with the procedures in PGI 219.811-1."

The FAR Clause 52.219-14 refers to the firm as the Offeror/Contractor, referring to the firm's effective status before and after award.


"252.219-7009 Section 8(a) Direct Award.

As prescribed in 219.811-3(1), use the following clause:

SECTION 8(a) DIRECT AWARD (SEP 2007)

(a) This contract is issued as a direct award between the contracting office and the 8(a) Contractor pursuant to the Partnership Agreement between the Small Business Administration (SBA) and the Department of Defense. Accordingly, the SBA, even if not identified in Section A of this contract, is the prime contractor and retains responsibility for 8(a) certification, for 8(a) eligibility determinations and related issues, and for providing counseling and assistance to the 8(a) Contractor under the 8(a) Program. The cognizant SBA district office is:

________________________________________

________________________________________

________________________________________

________________________________________

[To be completed by the Contracting Officer
at the time of award]

(bee) The contracting office is responsible for administering the contract and for taking any action on behalf of the Government under the terms and conditions of the contract; provided that the contracting office shall give advance notice to the SBA before it issues a final notice terminating performance, either in whole or in part, under the contract. The contracting office also shall coordinate with the SBA prior to processing any novation agreement. The contracting office may assign contract administration functions to a contract administration office.

(cee) The 8(a) Contractor agrees that

(1) It will notify the Contracting Officer, simultaneous with its notification to the SBA (as required by SBA’s 8(a) regulations at 13 CFR 124.308), when the owner or owners upon whom 8(a) eligibility is based plan to relinquish ownership or control of the concern. Consistent with Section 407 of Pub. L. 100-656, transfer of ownership or control shall result in termination of the contract for convenience, unless the SBA waives the requirement for termination prior to the actual relinquishing of ownership and control; and

(2) It will not subcontract the performance of any of the requirements of this contract without the prior written approval of the SBA and the Contracting Officer.

(End of clause)"