Procurement Information Circular
January 14, 1998
TERMINATION OF 8(a) CONTRACTS
PURPOSE: To provide information concerning termination of an 8(a) contract when ownership or control of the 8(a) concern transfers.
BACKGROUND: The Small Business Act, at 15 USC 637(a)(21)(A), requires a contract awarded under the 8(a) Program to be performed by the concern that initially received the contract. If the owner(s) upon whom eligibility was based subsequently relinquishes ownership or control, or enters into any agreement to relinquish ownership or control, the contract shall be terminated for convenience. Pursuant to 15 USC 637(a)(21)(B), only the Administrator of the SBA, on a non-delegable basis and under certain conditions, may waive this requirement. The 8(a) awardee is required to notify the SBA immediately in writing of any agreement transferring ownership or control of the firm and may request the SBA to waive the requirement that its 8(a) contract(s) be terminated for convenience. Also, the head of the procuring agency may request a waiver to this requirement when termination of any 8(a) contract(s) would severely impair the attainment of the agency's program objectives or mission.
The provisions at 15 USC 637(a)(21)(A) and (B) are implemented in SBA regulations at 13 CFR 124 and in FAR 19.812(d).
GUIDANCE: Pursuant to the Small Business Act, when an 8(a) firm transfers ownership or control, the standard course of action is to terminate for convenience the 8(a) contract(s) held by that firm. When a NASA contracting officer responsible for an 8(a) contract receives information that an 8(a) concern intends to transfer ownership or control:
a. The CO should begin immediately to review his/her contract. The CO should look at the timing of the proposed transfer, the contract period of performance, the nature of the work being performed, its mission/program criticality, and the likely impact termination would have on the program and mission. The CO should also notify the Office of Procurement (Code HS) regarding the proposed transfer. This will enable Code HS to advise any other centers having 8(a) contracts with the firm.
b. Within 10 business days of learning of a proposed transfer, the CO should call the cognizant SBA district office to ascertain if the SBA is considering, or expects to consider, a waiver request from the 8(a) concern. This should be followed up in writing. If the CO receives no written response from the SBA district office within 30 business days, the CO should make a follow-up call requesting status.
c. If the SBA indicates it is not considering a waiver request from the 8(a) concern (or that such a request has been or will be denied), and thus will instruct that the 8(a) contract(s) be terminated for convenience - but the CO determines that termination would severely impair the program or mission - then the CO should immediately call and advise the cognizant Office of Procurement (Code HS) analyst of the intent to request a waiver. The CO should then promptly advise the cognizant SBA district office in writing that a waiver request by the Agency will be prepared.
d. FAR 19.812(d) states that, within 15 business days after the CO advises the SBA that a waiver is being requested (or such longer period as agreed to by the agency and the SBA), the agency head shall either confirm or withdraw the waiver request. Accordingly, within 7 business days after notifying the SBA in writing of the intent to seek a waiver, the CO should forward the request for waiver - including detailed rationale supporting the CO's determination that termination would severely impair attainment of the program objectives or mission - to the Office of Procurement (Code HS) for action. This 7-day turn-around time may be extended by Code HS if SBA has agreed to an extension of the 15-day period for submittal of the agency request for waiver.
e. Within the remaining time allotted, Code HS will review and coordinate the package with cognizant Headquarters offices, as appropriate, and will either forward the request to the Administrator for signature to the SBA Administrator or will advise the CO of the decision not to submit the request to the SBA.
The NASA CO should take no independent action to terminate his/her contract for convenience but should wait until: (1) the CO receives a written notification from the SBA district office instructing the CO to do so, or (2) if a waiver has been requested by NASA, the SBA Administrator has advised NASA in writing that the request for waiver has been denied. If a request for waiver has been forwarded to the SBA Administrator and SBA has not responded within 30 business days, Code HS will follow up with a request for status.
If the SBA instructs the CO in writing to terminate the 8(a) contract(s) and the CO determines that an agency request for waiver is not warranted, or if the SBA Administrator has denied, in writing, NASA's request for a waiver, then the CO should initiate action to terminate the 8(a) contract(s) for convenience as soon as possible after receiving such written instruction from the SBA.
EFFECTIVE DATE: This PIC is effective as dated and will remain in effect until canceled or superseded.
HEADQUARTERS CONTACT: Christopher Jedrey, Code HK, (202) 358-0483.
Acting Director, Contract Management Division