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Acquisition Policy Flash! 13-04

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Procurement Policy Memorandum 2013-01, Sole Source Contracting under Title 38, United States Code (U.S.C.) Sections 8127 and 8128, the Veterans Benefits, Health Care and Information Technology Act of 2006

Purpose:  To inform the VA Acquisition Workforce of policy outlined in Procurement Policy Memorandum (PPM) 2013-01, “Sole Source Contracting under Title 38, United States Code (U.S.C.) Sections 8127 and 8128, the Veterans Benefits, Health Care and Information Technology Act of 2006” and Class Deviation from Federal Acquisition Regulation 6.304(a)(1); VA Acquisition Regulation (VAAR) 819.7007(b) and VAAR 819.7008(b).  This PPM (attached, signed by the DSPE for the SPE), promotes source competition when awarding actions under Title 38, United States Code (U.S.C.) Sections 8127 and 8128, the Veterans Benefits, Health Care and Information Technology Act of 2006.

Dated:  February 22, 2013

Federal Acquisition Regulation (FAR)/VA Acquisition Regulation (VAAR) Section Impacted:  FAR 6.3, Other Than Full and Open Competition; VAAR - 806.304, Approval of Justification; 819.7005, Service-Disabled Veteran-Owned Small Business (SDVOSB) Set-aside Procedures; 819.7006, Veteran-Owned Small Business (VOSB) Set-aside Procedures; 819.7007, Sole Source Awards to SDVOSB Concerns; and 819.7008, Sole Source Awards to VOSB Concerns.

Effective Date:  Immediately

Expiration Date:  N/A

Background:  Title 38 U.S.C. 8127 (b),(c) and (d) provide the authority for Department of Veterans Affairs (VA) contracting officers (COs) to make awards to Service-disabled Veteran-owned small business (SDVOSB) firms and Veteran-owned small business (VOSB) firms using other than full and open competition when certain conditions are met.  Since the law’s passage, VA COs have successfully awarded actions to these entities, and a robust cadre of SDVOSBs and VOSBs exist in numerous business categories.  Accordingly, the existence of many sources provides VA opportunities to compete requirements among SDVOSBs and VOSBs resulting in significant cost and price savings.

As such, VA PPM 2013-01 (attached) requires COs to obtain competition to the maximum extent practicable.  For all requirements in excess of the simplified acquisition threshold, VA COs shall consider using the competitive set-aside procedures pursuant to VAAR 819.7005 or 819.7006, as appropriate.  This PPM also changes the sole source approval thresholds as outlined in the class deviation (attached).

Action Required:  Effective immediately, contracting officers shall comply with the requirements outlined VA PPM 2013-01 and the sole source justification approval thresholds outlined in the Class Deviation.

To promote competition among SDVOSB and VOSB firms:

a.  COs shall obtain competition to the maximum extent practicable when contracting with SDVOSBs and VOSBs.  While COs may use other than full and open competition when awarding to SDVOSB and VOSB firms under this authority, the focus should be on competing requirements among SDVOSBs and VOSBs to achieve a fair and reasonable price.  For all requirements in excess of the simplified acquisition threshold, VA COs shall consider using the competitive set-aside procedures in VA Acquisition Regulation (VAAR) 819.7005 or 819.7006, as appropriate, if the market research required by VAAR Part 810 shows a reasonable expectation that offers will be received from two or more eligible firms and award will be made at a fair and reasonable price.

b.  COs may use the sole source procedures authorized in VAAR 819.7007 or 819.7008 up to $5,000,000, as appropriate, subject to the review and approval of the designated procurement official outlined in Table 806.304-1 at VAAR 806.304.

The sole source justification must comply with the format requirements at FAR 6.303-2.  Specific attention should be given to the requirements outlined in FAR 6.303-2 subparagraphs (b)(5), (b)(6), (b)(7), (b)(8), (b)(10) and (b)(11) to maximize efforts to increase competition.  The justification shall include:

(1)  The number of SDVOSBs and VOSBs reviewed;

(2)  An explanation why only one of the firms can accomplish the requirement;

(3)  Documentation of the basis of price reasonableness;

(4)  An explanation for finding the sole source procurement is in the best interest of the government; and

(5)  An explanation for selection of the contractor, which will allow the approving official to make a reasonable determination regarding whether a sole source procurement is appropriate.

In addition to the sole source justification, the CO must document the description of supplies or services required (including the estimated value) and requisite information from the sole source justification on VA Form 2268, Procurement Request for the Small Business Program and Contract Bundling.  COs submit the completed VA Form 2268 to the VA Office of Small and Disadvantaged Business Utilization for review and approval.  The CO shall make the justification publically available in accordance with FAR 6.305(d), by posting the justification at the Government Point of Entry.

Additional Information:  Questions or concerns should be addressed to the Office of Acquisition and Logistics (003A), Procurement Policy and Warrant Management Service (003A2A) at (202) 461-6918 or va.procurement.policy@va.gov.