8(a) and Cost Savings
As an ANC subsidiary company,
KOMAN is eligible to receive sole source contracts greater than
$3 million as, per 13 CFR 124.506 (b), ANCs are exempt from
competitive threshold limitations. As a result, ANC-owned 8(a)
contracting is often less costly and more efficient than the
competitive cost comparison bidding alternative.
If a project has not been
advertised, federal governmental agencies can, through
3 CFR 124.506 (b), contract directly
with an ANC-owned 8(a) company. The agency simply indicates its
intent to award a project as an 8(a) contract by submitting a
written offering letter to the Small Business Administration
(SBA).
This ability to sole-source a
contract limits costs associated with awarding an ANC-owned 8(a)
contract; many contracts incur no costs.
In addition, ANC 8(a) sole-source contractors often realize
outsourcing savings in the first fiscal year, unlike
competitively awarded contracts, which can take three or more
years to realize savings. ANC-owned companies are also
sufficiently large enough and efficient enough to ensure a
competitive general and administrative cost rate. And, under a
partnering "open book" relationship, the government is virtually
guaranteed the ability to negotiate a fair and reasonable price,
with none of the uncertainties associated with the competitive
process alternative. For more on the historical and current
reasons for 8(a) set-asides, see the Goldbert Raven White Paper (opens as a PDF on
a new page).
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