Doing Business with a NHO-Owned 8(a) Company

Kokua Support Services received its SBA 8(a) SDB certification in August 2007. In March 2009, Kokua’s majority interest was acquired by the Native Hawaiian Organization (NHO), ‘Eo Na Punawai, located in Honolulu, HI.  A NHO is a non-profit organization whose purpose is to primarily benefit Native Hawaiians. ‘Eo Na Punawai’s charter states that profits are utilized for the education of Native Hawaiian youth pursuing advanced education in technical fields. Although a non-profit entity, a NHO can own a for-profit 8(a) company.  Often referred to as a “Super 8(a)” (although not an official government term), this type of company can bid on Federal work under the SBA program.

1. Federal Acquisition (FAR) & Defense Acquisition Regulations System (DFARS)

 48 CFR Part 219 provides NHOs the same status that is provided to Indian tribes and Alaska Native Corporations under the 8(a) Program.

 FAR 19.805-1(b) Where an acquisition exceeds the competitive threshold, the SBA may accept the requirement for a sole source 8(a) award if—  (2) SBA accepts the requirement on behalf of a concern owned by an Indian tribe or an Alaska Native Corporation.

 DFAR 219.805-1  General.(b)(2)(A)  For acquisitions that exceed the competitive threshold, the SBA also may accept the requirement for a sole source 8(a) award on behalf of a small business concern owned by a Native Hawaiian Organization (Section 8020 of Pub. L. 109-148).

 The rule applies to manufacturing contracts exceeding $6.0 million and non-manufacturing contracts exceeding $4 million.

2. Defense procurement & Acquisition Policy:

For requirements processed under the Partnership Agreement (PA) cited in DFARS 219.800, the notification to the SBA shall clearly indicate that the requirement is being processed under the PA.  All notifications shall be submitted in writing, using facsimile, or electronic mail, when possible, and shall clearly specify that:

Under the PA, an SBA acceptance or rejection of the offering is required within 5 working days of receipt of the offering.

 For soles source requirements, an SBA acceptance shall include a size verification and a determination of the 8(a) firm’s program eligibility.

 Upon acceptance, the contracting officer shall solicit a proposal, conduct negotiations, and make award directly to the 8(a) firm.

PGI 219.808 Contract negotiations.

PGI 219.808-1 Sole source.

For requirements processed under the PA cited in DFARS 219.800 —

 The agency may negotiate directly with the 8(a) firm.  The contracting officer is responsible for initiating negotiations;

 The 8(a) firm is responsible for negotiating within the time established by the contracting officer;

 If the 8(a) firm does not negotiate within the established time and the agency cannot allow additional time, the contracting officer may, after notifying the SBA, proceed with the acquisition from other sources;

 If requested by the 8(a) firm, the SBA may participate in negotiations.

 SBA approval of the contract is not required.