8(a) STARS II Hits Ceiling: Implications for Small Business Contractors

The General Services Administration’s 8(a) STARS II program has been one of the most popular governmentwide acquisition contracts (GWAC) in history. So much so, that for the first time since the GWAC has been around, it hit its $15 billion ceiling.

Other notable GWACs for reference would be Alliant at $50 billion, Networx at $20 billion, and Veterans Technology Services (VETS) GWAC at $5 billion. Note of said contract vehicles have hit or even come close to reaching their respective ceilings.

What makes the 8(a) STARS II GWAC’s milestone so significant is that it reached its $15 billion ceiling 16 months before the end of the contract, which is set to expire August 30, 2021. While the popularity may seem like an overall positive, it can also have negative implications for those small businesses which credit high percentages of their earnings to STARS II. Should an 8(a) small business seek to acquire the follow-on to one if its contracts, for example, it would be ineligible if the contracting office released it via the 8(a)STARS II GWAC.

With this in mind, there are a number of avenues that may be taken by the GSA, and some that small businesses should consider. First, 8(a) small businesses should seek out other contract vehicles with which to obtain 8(a) contracts. Should STARS II not up its ceiling, 8(a) companies can convince their customers to procure follow-ons through these alternate contract vehicles.

The GSA may also increase the ceiling by $5-7 billion. “GSA is exploring its options regarding the 8(a) STARS II GWAC; however, at this time, there is no guarantee of additional contract value being made available. In the interim, agencies should contact GSA regarding short term options such as VETS and the GSA Schedule,” said Bill Zielinski, the assistant commissioner for the Office of Information Technology Category. “GSA intends to issue the solicitation for 8(a) STARS III in fiscal 2020. GSA has developed an aggressive solicitation and evaluation timeline to award 8(a) STARS III as soon as possible.”

While 8(a) STARS III may be a beacon of hope, it is a light at the end of a long tunnel. Despite releasing the draft solicitation last summer, little movement has been seen on the contractor end.

Author: Paul McVeigh

Source: https://federalnewsnetwork.com/reporters-notebook-jason-miller/2020/05/the-downside-of-a-wildly-successful-governmentwide-8a-contract/

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