8(a) sole source contract thresholds

The short version

Two questions decide whether an 8(a) contract is competed or directly awarded to one Participant. How big is it, and will more than one qualified Participant want it? Section 124.506 puts numbers on the first question and a test on the second. This page explains those numbers and how SBA counts toward them, using the eCFR text, current as of October 29, 2026, and the FAR figures that apply since October 1, 2025. The current thresholds are $8,500,000 for contracts assigned manufacturing NAICS codes and $5,500,000 for all other contracts. The 13 CFR text in the eCFR has not yet been conformed to the October 1, 2025 FAR inflation adjustment and still prints $7,000,000 and $4,500,000.

What triggers competition

Paragraph (a)(2) says a procurement offered to and accepted into the 8(a) program must be competed among eligible Participants if three things are true together. There is a reasonable expectation that at least two eligible Participants will submit offers at a fair market price. The anticipated award price, including options, will exceed the applicable threshold. And the requirement has not been accepted by SBA as a sole source procurement on behalf of a tribally owned or Alaska Native Corporation owned concern. If any one of the three is missing, the competition mandate in this paragraph does not apply, which is why most smaller 8(a) awards are sole source.

The word "exceed" matters. A requirement whose anticipated price is exactly at the threshold does not exceed it. The tool above treats a value equal to the threshold as not competitive and a value of one dollar more as competitive, which follows the text.

Which number is yours

The manufacturing figure applies only when the contract is assigned a manufacturing NAICS code. Everything else, including services, construction and supplies sold by non-manufacturers, uses the lower figure. The code comes from the solicitation, so look at the NAICS code the agency assigned rather than at what your company mainly does.

There is also a built-in adjustment mechanism. Paragraph (a)(1) says the Federal Acquisition Regulatory Council adjusts each acquisition-related dollar threshold on October 1 of every year evenly divisible by five and publishes the adjusted figures in the Federal Register, effective on publication. The 8(a) rules contain acquisition-related thresholds subject to those adjustments. The October 1, 2025 adjustment set the thresholds at $8,500,000 (manufacturing) and $5,500,000 (all others) under FAR 19.805-1(a)(2); the 13 CFR text in the eCFR has not yet been conformed to that adjustment. Confirm the current dollar figure with SBA before relying on it for a bid decision.

How the estimate is applied

Paragraph (a)(3) says the competitive threshold is applied to the procuring activity's estimate of the total value of the contract, including all options. The regulation's own example: if the anticipated award price for a professional services requirement is $3.8 million and it is accepted as sole source on that basis, the award is valid even if negotiation produces a price of $4.2 million.

Paragraph (a)(4) generalizes that. If the estimate is under the threshold and the requirement is accepted as sole source on that basis, award may be made even though the negotiated price exceeds the threshold, provided it is not more than 10 percent above the threshold amount. For a non-manufacturing contract that ceiling is $6,050,000, and for a manufacturing contract it is $9,350,000. The tool computes both. Notice that the allowance depends on the estimate being under the threshold at acceptance, not on the final price, so an agency cannot start with a high estimate and expect the same allowance.

Paragraph (a)(5) closes an obvious loophole: a requirement above the competitive threshold cannot be split into several smaller procurement actions to use sole source procedures for a single contractor.

Tribal, ANC and NHO exceptions

Paragraph (b) exempts certain Participants from the competitive thresholds. A concern owned and controlled by an Indian Tribe or an Alaska Native Corporation may be awarded a sole source 8(a) contract above the threshold if SBA has not accepted the requirement into the program as a competitive procurement. A Native Hawaiian Organization owned concern gets the same treatment for Department of Defense contracts only. There is an anti-switch rule: an agency that signals an intent to compete a requirement, by issuing a competitive 8(a) solicitation or otherwise, cannot cancel it and then award it sole source to an entity-owned concern. A follow-on to a previously competed 8(a) requirement, however, can be offered, accepted and awarded sole source to such a concern. A joint venture between an eligible entity-owned Participant and non-8(a) concerns can receive sole source awards above the threshold if it meets section 124.513.

The $30 million and $100 million approvals

Paragraphs (b)(5) and (d) say an agency may not award an 8(a) sole source contract for more than $30,000,000 (the figure in FAR 19.808-1(a) since the October 1, 2025 adjustment; 13 CFR 124.506 still prints $25,000,000), or $100,000,000 for a Department of Defense agency, unless the contracting officer justifies the use of a sole source contract in writing and obtains the necessary approval under the Federal Acquisition Regulation. The tool flags values above those lines. The text points to FAR 19.808-1 and DFARS 219.808-1(a) for the approval step in paragraph (d), which this page does not summarize.

Competing below the threshold, and sole source above it

Paragraph (c) lets the AA/BD (SBA's 8(a) program official), on a nondelegable basis, approve an agency request to compete a requirement that is below the threshold. The text says the authority is used mainly when technical competitions are appropriate or when many potential awardees exist, and it names factors including whether the agency has given the program a significant number of noncompetitive contracts. Paragraph (d) works the other way: where a requirement exceeds the threshold but there is no reasonable expectation of two eligible offerors at a fair price, the official may accept it as a sole source if an eligible Participant is capable at a fair price, or if a FAR exception to full and open competition applies, such as unusual and compelling urgency.

Worked example

An agency wants a facilities maintenance service with a total estimated value of $4.2 million including options. The NAICS code is not a manufacturing code, so the threshold is $5,500,000. The estimate is below it, so the requirement can be accepted as a sole source. Negotiations land at $5.8 million. That is above the threshold, but under the $6,050,000 ceiling, so the award stays valid. At $6.2 million it would exceed the 10 percent allowance. Had the estimate been $5.6 million, the requirement would have to be competed if two eligible Participants were reasonably expected to offer at a fair price.

What this page does not decide

It does not decide whether SBA will accept a requirement, whether two Participants are reasonably expected to compete, or how a given agency estimates its options. The program has seen policy and rule changes in 2025 and 2026 that may not be reflected in the eCFR text read here, so treat it as the written baseline and ask your SBA business opportunity specialist about current practice.

Sources

• 13 CFR 124.506 (eCFR, current as of October 29, 2026): At what dollar threshold must an 8(a) procurement be competed among eligible Participants? Read November 2, 2026.

Edition read: 13 CFR part 124 as published in the eCFR, current as of October 29, 2026 (read November 2, 2026). The 8(a) program has been the subject of policy and rule changes, and regulations change; this page states only the eCFR text read on that date and may be out of date, so check the current eCFR text and SBA's program pages. This page explains the regulation in plain language and does not replace it. Review needed: business-law YMYL page, not yet reviewed by a qualified professional.