On March 17th 2020 some major changes occured in the way the Department of Defense (DOD) works with 8(a) designated companies (like LDF Construction) can participate in sole-source awarded contracts. Meaning the Pentagon (or DOD) can simply offer a contract to someone who is in the 8(a) program without having to do a bid or RFP (Request for Proposal) or similar request.
The National Defense Authorization Act (NDAA) 2020, Section 823 increased the threshold for Department of Defense sole-source contracts that require justification and approval from $22 million to $100 million. Section 823 also directed the Secretary of Defense to issue guidance to implement this amendment no later than 90 days after the enactment of the Act or March 13th.
This Department of Defense class deviation implements the higher dollar amount that Congress set in the 2020 National Defense Authorization Act. This change will likely matter most for 8(a) concerns owned by an Indian Tribe, Alaska Native Corporation (ANC) or Native Hawaiian Organization (NHO), as other 8(a) firms are limited to a smaller dollar amount for sole source awards unless only one 8(a) firm can perform the work.
This deviation means that DOD contracting officers must use a threshold of $100 million in lieu of the $22 million threshold currently in a number of rules in the Federal Acquisition Regulation. In particular, FAR 6.302-5(b)(4), 6.303-1(b), and 19.808-1(a) will now allow sole-source contracts up to $100 million contract value with fewer agency requirements.
This would have an impact for LDF Construction to be able to offer our quality services without having to go through as much of an extensive bidding process for any DOD jobs like some of the military bases in Wisconsin or other Federal Defense contracts needing construction. The simple truth is that due to LDF Construction achieving an 8(a) designation we are immediately qualified to perform work for the Federal government in many different capacities.
Recently LDF Construction was awarded a contract through the United States Department of Agriculture due to our 8(a) designation. The expected six month federal 8(a) contract in Westboro, Wis., started in September. LDF Construction will restore, rehabilitate and re-roof the Mondeaux lodge, quarters building, garage, and a variety of other site work. This was the first contract awarded to LDF Construction through the federal 8(a) program, but it’s the fourth federal construction project LDF Construction has worked on for the U.S. government. We appreciate the DOD realizing how great a partnership could be with an 8a designated company and this increase in fund support shows that.
An example of LDF Construction’s military contracting work can be viewed in our Fort McCoy construction of guard shacks. The government awarded project consisted of providing all parts, tools, equipment and supervision necessary to construct bullet-proof guard shacks at Fort McCoy, Wisconsin. While not an 8(a) program project, this construction project was procured under the Historically Underutilized Business Zone (HUBZone) Small Business program under NAICS code 236220.