[Federal Register Volume 81, Number 234 (Tuesday, December 6, 2016)]
[Proposed Rules]
[Pages 88072-88095]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28432]
[[Page 88071]]
Vol. 81
Tuesday,
No. 234
December 6, 2016
Part III
Department of Defense
General Services Administration
National Aeronautics and Space Administration
-----------------------------------------------------------------------
48 CFR Parts 2, 4, 7, et al.
Federal Acquisition Regulation: Set-Asides Under Multiple-Award
Contracts; Proposed Rule
Federal Register / Vol. 81 , No. 234 / Tuesday, December 6, 2016 /
Proposed Rules
[[Page 88072]]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 4, 7, 8, 9, 10, 13, 15, 16, 19, 42, and 52
[FAR Case 2014-002; Docket No. 2014-0002, Sequence No. 1]
RIN 9000-AM93
Federal Acquisition Regulation: Set-Asides Under Multiple-Award
Contracts
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and the National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to implement regulatory changes made by
the Small Business Administration, which provide Government-wide policy
for partial set-asides and reserves, and setting aside orders for small
business concerns under multiple-award contracts.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat Division at one of the addresses shown below on
or before February 6, 2017 to be considered in the formation of the
final rule.
ADDRESSES: Submit comments in response to FAR case 2014-002 by any of
the following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by searching for ``FAR Case
2014-002.'' Select the link ``Comment Now'' that corresponds with ``FAR
Case 2014-002.'' Follow the instructions provided on the screen. Please
include your name, company name (if any), and ``FAR Case 2014-002'' on
your attached document.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd
Floor, Washington, DC 20405.
Instructions: Please submit comments only and cite FAR Case 2014-
002, in all correspondence related to this case. All comments received
will be posted without change to http://www.regulations.gov, including
any personal and/or business confidential information provided.
To confirm receipt of your comment(s), please check
www.regulations.gov, approximately two to three days after submission
to verify posting (except allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms. Mahruba Uddowla, Procurement
Analyst, at 703-605-2868 or by email at [email protected] for
clarification of content. For information pertaining to status or
publication schedules, contact the Regulatory Secretariat Division at
202-501-4755. Please cite FAR Case 2014-002.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing to revise the FAR to implement
regulatory changes made by the Small Business Administration (SBA) in
its final rule at 78 FR 61114, dated October 2, 2013, regarding the use
of small business partial set-asides, reserves, and orders placed under
multiple-award contracts. SBA's final rule implements the statutory
requirements set forth at section 1331 of the Small Business Jobs Act
of 2010 (15 U.S.C. 644(r)), (Jobs Act).
The Jobs Act, signed into law by President Obama on September 27,
2010, was a landmark event aimed at reenergizing small business
entrepreneurship. It provided an array of tools to enhance small
business participation in Federal procurement. In particular, section
1331 of the Jobs Act, the focus of this rule, provided authority for
three acquisition techniques to facilitate contracting with small
businesses on multiple-award contracts:
(1) Setting aside part or parts of the requirement for small
businesses.
(2) Reserving one or more contract awards for small business
concerns under full and open multiple-award procurements.
(3) Setting aside orders placed against multiple-award contracts,
notwithstanding the fair opportunity requirements of 10 U.S.C. 2304c(b)
and 41 U.S.C. 4106(c).
Multiple-award contracts, due to their inherent flexibility,
competitive nature, and administrative efficiency, are commonly used in
Federal procurement. They have proven to be an effective means of
contracting for large quantities of supplies and services for which the
quantity and delivery requirements cannot be definitively determined at
contract award. However, prior to 2011, the FAR was largely silent on
the use of acquisition strategies to promote small business
participation in conjunction with multiple-award contracts.
DoD, GSA, and NASA published an interim rule in the Federal
Register, at 76 FR 68032, on November 2, 2011, under FAR Case 2011-024,
so that Federal agencies could begin taking advantage of the
authorities set forth in section 1331 while SBA developed rules with
additional detail on the use of these tools. DoD, GSA, and NASA
intended to provide more complete guidance after publication of SBA's
final rule.
This proposed rule provides additional guidance on the use of
partial set-asides, reserves, and set-asides of orders under multiple-
award contracts, based on SBA's final rule published in the Federal
Register at 78 FR 61114, dated October 2, 2013. It also clarifies
agencies' and small business contractors' responsibilities with respect
to performance of work requirements, i.e., the limitations on
subcontracting and the nonmanufacturer rule. Inasmuch as small
businesses have this preference, compliance with the limitations on
subcontracting and the nonmanufacturer rule is essential to assure that
the small business contractor performs the appropriate percentage of
requirements in contracts or orders that have been set aside, in total
or in part, and is not acting as a pass-through.
Because the interim rule described above to implement section 1331
of the Jobs Act has already authorized agencies to use partial set-
asides, reserves, and order set-asides under multiple award contracts,
agencies are encouraged to provide feedback on their use of these tools
to date and how their use of the tools compares to the guidance and
procedures outlined in this proposed rule.
II. Discussion and Analysis
A. Analysis of Public Comments
DoD, GSA, and NASA reviewed the comments to the FAR interim rule in
development of this proposed rule. Many of the public comments
submitted in response to the interim rule have been overcome by events,
primarily the issuance of SBA's final rule. A discussion of the
comments is as follows:
Clarification of new multiple-award contract procedures.
Comment: Many respondents indicated that the guidance provided in
the interim rule lacked clarity.
Response: The intent of the interim rule was to provide authority
to Federal agencies for using the new acquisition tools established by
section 1331 (15 U.S.C. 644(r)) as quickly as possible,
[[Page 88073]]
allowing time for SBA to complete the drafting, coordination, and
publication process for its forthcoming, more explicit, regulatory
guidance. SBA has since completed these efforts and published the
requisite regulatory changes in its final rule (78 FR 61114, dated
October 2, 2013). This proposed rule implements the regulatory changes
in SBA's final rule and provides more in-depth guidance in the FAR.
One respondent pointed out that the prescription for new FAR clause
52.219-13, Notice of Set-Aside of Orders, states the purpose of
including the clause but not the types of solicitations and contracts
in which inclusion of 52.219-13 is required. Language has been added in
the proposed rule clarifying the circumstances under which clause
52.219-13 should be used.
Updating of Federal data systems.
Comment: A few respondents mentioned that Federal data systems such
as the Federal Procurement Data System (FPDS) and FedBizOpps do not
presently have the capability to accept the new data inputs associated
with the implementation of section 1331 (15 U.S.C. 644(r)).
Response: This concern is duly noted. The system enhancements
needed to accommodate the new data requirements are in process.
Application of the limitations on subcontracting to
multiple-award contracts.
Comment: A number of respondents pointed out that the limitations
on subcontracting requirements only come into play when a small
business receives a contract award under a small business set-aside and
should not apply when a small business receives a contract award under
a full and open solicitation, even when the award was made pursuant to
a reserve under a full and open, multiple-award solicitation.
Response: The interim rule did not change the basic requirements
for the application of the limitations on subcontracting, i.e., the
limitations on subcontracting restrictions only apply when the small
business contractor received the award as the result of a solicitation
that limited the field of potential offerors to small businesses. SBA,
in its final rule, further clarified that the limitations on
subcontracting do not apply to contract reserves but will apply to
orders that are set aside under such contracts.
Written justifications for small business set-asides.
Comment: One respondent stated that a written justification should
be required for order set-asides under multiple-award contracts.
Response: The interim rule did not change FAR subpart 6.2, which
provides that a written justification is not required for small
business set-asides or set-asides to any small business concern
participating in the socioeconomic programs identified at FAR
19.000(a). In addition, section 1331 (15 U.S.C. 644(r)) established an
exception to the fair opportunity requirements for set-asides of orders
under multiple-award contracts, which was incorporated into FAR
subparts 8.4 and 16.5 under the interim rule. However, contracting
officers are required to adhere to the criteria at FAR 19.502-2 to
determine whether or not a small business set-aside is feasible before
proceeding with this acquisition strategy.
Mandatory set aside of orders below the simplified
acquisition threshold.
Comment: A number of respondents stated that 15 U.S.C. 644(j)
requires orders between the micropurchase threshold and the simplified
acquisition threshold to be automatically set aside for small business,
and recommended amendments to the FAR to ensure this.
Response: The interim FAR rule was published in advance of SBA's
own rulemaking to provide authority for contracting officers to use the
new acquisition tools established in section 1331 (15 U.S.C. 644(r)) as
quickly as possible. The proposed FAR rule implements the regulatory
changes provided in SBA's final rule, including clarification of the
procedures for setting aside task and delivery orders under multiple-
award contracts. SBA's rule does not require orders to be set aside.
Out-of-scope comments.
Comment: A number of respondents submitted comments that are out of
scope of both the interim rule and this proposed rule. These comments
ranged from updating the clause matrix for clauses other than those
prescribed in FAR part 19 to providing guidance on contractor team
arrangements under Federal Supply Schedules to concerns associated with
the bundling of requirements.
Response: No changes were made for the out-of-scope comments.
B. Summary of Significant Changes
Partial set-asides.
The proposed rule clarifies the distinction between the use of
partial set-asides on multiple-award contracts and partial set-asides
on all other contracts. Section 1331 only addresses multiple-award
contracts and provides that partial set-asides should be considered
when market research indicates a total set-aside is not feasible, and
the acquisition can be divided into smaller discrete portions or
categories which can then be set aside with the reasonable expectation
of obtaining adequate competition from small business, and a fair
market price. For all other contracts, the Small Business Act already
mandated that partial set-asides be considered when market research
indicates a total set-aside is not feasible, and the acquisition can be
divided into smaller discrete portions or categories which can then be
set aside with the reasonable expectation of obtaining adequate
competition from small business, and a fair market price. The proposed
rule expands on the current guidance provided in the FAR for the use of
partial small business set-asides and initiates changes to improve the
overall process. Most significantly, small businesses will no longer be
required to submit an offer on the non-set-aside portion of a
solicitation in order to be considered for the set-aside portion of the
solicitation.
Reserves.
The proposed rule adds substantial coverage for the new concept of
a ``reserve''. Reserves are used in solicitations for a multiple-award
contract when a total or a partial set-aside of the work is not
feasible, but the agency wants to be sure that small businesses
participate at the prime contract level.
Orders under multiple-award contracts.
The proposed rule builds on the guidance provided in the FAR
interim rule, published in the Federal Register at 76 FR 68032, on
November 2, 2011, for setting aside orders under multiple-award
contracts and provides several new methodologies to complement various
acquisition conditions. For example, in solicitations employing a
partial set-aside of a multiple-award contract, the contracting officer
may establish terms and conditions in the solicitation and resultant
contract providing that all subsequent task or delivery orders are set
aside for any of the small businesses awarded contracts under the set-
aside portion. Or, the contracting officer may state in the
solicitation and resultant contract that the determination to set aside
an order will be made on a case-by-case basis. This flexibility allows
the contracting officer to employ the ordering technique that is best
suited to the surrounding acquisition environment.
Assignment of NAICS codes and size standards.
The proposed rule provides new guidance for assigning North
American Industry Category System (NAICS) codes in solicitations that
will result in
[[Page 88074]]
multiple-award contracts. Contracting officers have the discretion to--
(1) Assign one NAICS code (and corresponding size standard) to the
entire solicitation; or
(2) When the procurement can be divided into portions or
categories, assign each a NAICS code and corresponding size standard
which best describes the principal purpose attributed to the part or
category.
Application of the limitations on subcontracting and the
nonmanufacturer rule.
The proposed rule moves the nonmanufacturer rule coverage and
limitations on subcontracting together in FAR part 19. Collectively
referred to as the ``performance of work'' requirements, these
restrictions set forth the contractual obligations of small business
concerns awarded contracts or orders by virtue of their small business
status. Limitations on subcontracting are the minimum percentages of
work the prime small business contractor must itself perform. The
limitations currently appear in the clauses; the proposed rule also
places them in FAR part 19 for easier reference by contracting
officers. In addition, the proposed rule clarifies that compliance with
the limitations on subcontracting may be determined by measuring the
minimum percentage of work performed at the aggregate contract level or
order level. The proposed rule also clarifies that the performance of
work requirements do not apply when full and open competition
procurement methods are used, including reserves.
C. Other Changes
FAR part 2--Definitions of Words and Terms.
FAR 2.101, Definitions. The proposed rule revises the
definition of ``HUBZone contract'' to add awards to HUBZone concerns
under a reserve in a solicitation for a multiple-award contract. The
proposed rule also adds a definition for the term ``HUBZone order''.
FAR part 4--Administrative Matters.
FAR 4.803, Contents of contract files. The proposed rule
adds a reference to the documentation requirements in new FAR section
19.506.
FAR 4.1202, Solicitation provision and contract clause.
The proposed rule adds the prescription for use of new Alternate I to
FAR provision 52.204-8.
FAR part 7--Acquisition Planning.
FAR 7.105(b)(1), Sources. The proposed rule makes
editorial changes.
FAR part 8--Required Sources of Supplies and Services.
FAR 8.405-5(b), Small business. The change references the
discretionary authority that ordering contracting officers have to
require a contractor to rerepresent its small business size and
socioeconomic status for an individual task or delivery order.
FAR part 9--Contractor Qualifications.
FAR 9.104-3, Application of standards. The proposed rule
revises this subsection to clarify when compliance with the limitations
on subcontracting factors into the determination of small business
offerors' responsiveness.
FAR part 10--Market Research.
FAR 10.001, Policy. The proposed rule revises this section
to clarify that the results of market research are to be used to
determine whether small business programs should be utilized for the
acquisition.
FAR 10.002, Procedures.
[cir] FAR 10.002(b)(1)(vii). This paragraph has been revised to
more clearly require contracting officers to consider small business.
[cir] FAR 10.002(b)(2)(ix), Procedures. The proposed rule revises
the paragraph to include the review of databases such as the System for
Award Management database and SBA's Dynamic Small Business Search as
another technique for conducting market research.
FAR part 13--Simplified Acquisition Procedures.
FAR 13.003, Policy. The proposed rule makes revisions to
this section to remove an obsolete use of the term ``reserve''.
FAR part 15--Contracting by Negotiation.
FAR 15.101-3, Tiered evaluation of small business offers.
The proposed rule advises that agencies cannot use a tiered evaluation
approach during source selection of a multiple-award contract unless
the agency has statutory authority to do so.
FAR part 16--Types of Contracts.
FAR 16.500, Scope of subpart. A reference has been added
for set-asides and reserves.
FAR 16.505, Ordering. References have been added for
protests of order set-asides and for the rerepresentation authority.
FAR part 19--Small Business Programs.
FAR 19.000, Scope of part. Language has been added to
specify that part 19 now includes coverage on reserves.
FAR 19.001, Definitions. The definition of
``nonmanufacturer rule'' is removed, and a definition of
``nonmanufacturer'' is added.
FAR 19.102, Assignment of North American Industry
Classification System codes and small business size standards. The
previous coverage regarding the nonmanufacturer rule has been moved
from FAR 19.102(f) to FAR 19.505(c) (for HUBZones, see FAR 19.1308).
The revisions in this section reflect a combination of guidance that is
currently in the FAR and new guidance that has been added to
accommodate the assignment of NAICS codes in solicitations that will
result in multiple-award contracts, including guidance for assigning
NAICS codes in the subsequent task or delivery orders. Contracting
officers have the discretion to--
(1) Assign one North American Industry Category System (NAICS) code
(and corresponding size standard), to the entire solicitation; or
(2) When the procurement can be divided into portions or
categories, assign each a NAICS code and corresponding size standard
which best describes the principal purpose attributed to the portion or
category. This is authorized for solicitations issued after January 31,
2017.
FAR 19.103, Appealing the contracting officer's North
American Industry Classification. This information has been moved from
FAR 19.303.
FAR subpart 19.2, Policies. Guidance is added on duties of
the agency small business specialist.
FAR subpart 19.3, Representations and rerepresentations.
[cir] 19.301-1, Representation by the offeror. Paragraph (a) of
this subsection has been revised to implement SBA's regulations. These
changes underscore SBA's requirements for representing small business
size and socioeconomic status by clarifying that the offeror shall
represent at the time of its initial offer, which includes price,
that--
(1) It meets the size standard for the NAICS code identified in the
solicitation; or
(2) It meets the size standard identified in the solicitation for
the specific portion or category on which it intends to make an offer.
This direction corresponds to FAR 19.101.
Paragraph (c) of this subsection has been revised to clarify that
for awards under the HUBZone program, the offeror must also represent
its HUBZone status at time of contract award.
Paragraph (d) adds new language to clarify that a business that
represents itself as small at the time of its initial offer, either for
the entire contract or for each portion or category it submits an offer
on, will then be small for each order issued under the contract, or
relevant portion or category.
[cir] FAR 19.301-2, Rerepresentation by a contractor that
represented itself as a
[[Page 88075]]
small business concern. The following revisions are proposed by this
rule:
(1) Clarification of the requirement for a contractor to
rerepresent its size and socioeconomic status for an order issued under
a multiple-award contract when the contracting officer specifically
requires it to do so.
(2) In the case of a multiple-award contract with more than one
assigned NAICS code, clarification that the contractor shall
rerepresent that it meets the size standard set forth in each relevant
category.
(3) Clarification that an order-level rerepresentation does not
change the size representation made to the contract.
(4) Clarification that when a contractor rerepresents as a
different type of small business than it represented for award (e.g., a
HUBZone small business concern rerepresents as a women-owned small
business), an agency may take credit for that contract going forward in
its small business prime contracting goal achievements consistent with
the rerepresentation (e.g., women-owned small business goal instead of
HUBZone small business goal).
[cir] FAR 19.303, Determining North American Industry
Classification System codes and size standards. The language currently
in this section has been moved to FAR 19.102 and FAR 19.103.
[cir] FAR 19.307, Protesting a firm's status as a service-disabled
veteran-owned small business concern. The proposed language in
paragraph (b)(1) was added to bring the FAR into alignment with SBA's
regulations at 13 CFR 125.8(b). It clarifies that only the contracting
officer or SBA may protest the apparently successful offeror's status
as a service-disabled veteran-owned small business when award will be
made on a sole-source basis.
[cir] FAR 19.309, Solicitation provisions and contract clauses. The
proposed rule adds the prescription for use of new Alternate II to FAR
provision 52.219-1.
FAR subpart 19.4, Cooperation with the Small Business
Administration.
[cir] FAR 19.401, General. The proposed rule adds language
clarifying the appropriate point of contact at the Office of Small
Business Programs for DoD.
[cir] FAR 19.402, Small Business Administration procurement center
representatives. The proposed rule adds a reference to SBA's
regulations for a complete description of the responsibilities of SBA's
procurement center representatives.
FAR subpart 19.5, Small Business Total Set-Asides, Partial
Set-Asides and Reserves. The title of this subpart has been changed to
reflect the addition of guidance regarding reserves.
[cir] FAR 19.501, General. The proposed rule clarifies that
reserves may only be used in solicitations that will result in
multiple-award contracts and provides the name of the appropriate
office in agencies that have cognizance over the agency's small
business programs. Paragraph (h) clarifies that small businesses that
receive a contract or order as a result of a set-aside or that receive
a sole-source award pursuant to the socioeconomic programs identified
at FAR subparts 19.8, 19.13, 19.14, or 19.15 shall comply with the
limitations on subcontracting and non manu fac tur ing rule
requirements set forth in the contract. This material previously
appeared in the clauses, and now is also being shown in FAR part 19.
[cir] FAR 19.502, Setting aside acquisitions. Sections have been
moved to place all text related to set-asides in one location: FAR
19.502-6 is moved to FAR 19.502-5; FAR 19.503 through FAR 19.507 have
been moved to FAR 19.502-6 through FAR 19.502-10, respectively.
[cir] FAR 19.502-1, Requirements for setting aside acquisitions.
The proposed rule updates the text to reflect that Federal Supply
Schedule contracts are not ``required sources'' under FAR part 8.
[cir] FAR 19.502-2, Total small business set-asides. The FAR
currently requires that the contracting officer expect offers to be
received from two small business concerns offering products of
different small business concerns before setting aside an acquisition.
This requirement has been revised to remove the expectation that the
products of different small businesses will be offered.
The proposed rule moves paragraph (c) of this subsection regarding
the nonmanufacturer rule. This guidance is now located in FAR 19.505.
[cir] FAR 19.502-3, Partial set-asides of contracts other than
multiple-award contracts.
(1) The proposed rule clarifies that the contracting officer shall
specify in the solicitation how offers will be submitted.
(2) The proposed rule removes cumbersome requirements for awarding
and evaluating offers for partial set-asides, such as the requirement
for awarding the non-set-aside portion of the solicitation prior to
awarding the set-aside portion, and the requirement that the
contracting officer will conduct negotiations only with those small
business offerors that submitted offers on both the non-set-aside and
the set-aside portion of the solicitation.
(3) The proposed rule clarifies that the requirements in this
subsection apply to contracts other than multiple-award contracts.
[cir] FAR 19.502-4. Most of the previous coverage at FAR 19.502-4
has been moved to the different sections which now provide guidance on
reserves and order set-asides: FAR sections 19.503 and 19.504. New
coverage has been added for partial set-asides of multiple-award
contracts.
[cir] FAR 19.502-5. The previous coverage at FAR 19.502-5(b) has
been moved to FAR 19.502-3.
[cir] FAR 19.503, Reserves. The proposed rule implements the
policies and procedures provided in SBA's final rule regarding the use
of reserves:
(1) The use of a reserve under a multiple-award contract is
discretionary. Nevertheless, the contracting officer should consider
using a reserve when neither a total set-aside nor partial set-aside is
feasible because--
There is no reasonable expectation of receiving offers
from at least two responsible small business concerns, at a fair market
price, for the entire requirement; or
The requirement cannot be divided into discrete portions
or categories, or even if it were possible to divide the requirement,
there is still no reasonable expectation of receiving offers from at
least two responsible small business concerns able to perform any
portion of the requirement at a fair market price.
(2) Paragraph (b) of the proposed rule describes the possible
outcomes resulting from solicitations using reserves:
One or more contract awards to any one or more types of
small business.
In the case of a bundled requirement, an award to one or
more Small Business Teaming Arrangements.
[cir] FAR 19.504, Setting aside orders under multiple-award
contracts. The proposed rule revises the FAR to provide guidance for
using set-asides of task or delivery orders under a multiple-award
contract.
(1) Partial set-asides. Only small business concerns awarded
contracts under the partial set-aside may compete for orders for those
portions that have been set aside.
(2) Reserves. The contracting officer may set aside orders for
small business concerns or, when only one small business award was made
under the reserve, may issue orders directly to that contractor.
(3) Orders under full and open, multiple-award contracts. The
contracting officer is required to specify in the solicitation whether
order set-
[[Page 88076]]
asides will be discretionary or mandatory. When setting aside orders
under a full and open multiple-award contract, the contracting officer
has to comply with the requirements of 19.203(b) and (c).
[cir] FAR 19.505, Performance of work requirements. The proposed
rule consolidates guidance from other areas of the FAR regarding the
application of the limitations on subcontracting and the
nonmanufacturer rule for contracts and orders. It also clarifies the
compliance period for the limitation on subcontracting for contracts
that are set aside, in total or in part, and for orders that are set
aside. Similar guidance is provided for 8(a), HUBZones, SDVOSBs, and
women-owned small businesses in their respective subparts.
[cir] FAR 19.506, Documentation Requirements. The proposed rule
consolidates guidance from other areas of the FAR regarding the
documentation requirements that are necessary when a contracting
officer does not use a set-aside or reserve.
[cir] FAR 19.507, Solicitation provisions and contract clauses. The
revisions proposed for this section have been made to accommodate the
new text in FAR 52.219-14(d), a new alternate for FAR 52.219-13 for
multiple-award contracts under which order set-asides will be
mandatory, a new clause for reserves under multiple-award contracts,
and a new clause for the requirements of the nonmanufacturer rule. In
addition, the prescription for the use of the basic clause at FAR
52.219-13 is revised to clarify that it is to be used when orders may
be set aside under a multiple-award contract, and a prescription is
added for the use of Alternate I of FAR 52.219-13.
FAR subpart 19.6, Certificates of Competency and
Determinations of Responsibility. The proposed rule explains that, for
the purposes of receiving a Certificate of Competency (COC) as a
nonmanufacturer, the small business may furnish any domestically
produced or manufactured product. Language has been added to clarify
that a contracting officer is not required to issue an award to a
contractor that receives a COC if the reason for not doing so is
unrelated to responsibility.
FAR subpart 19.8, Contracting with the Small Business
Administration (The 8(a) Program).
[cir] FAR 19.804-2, Agency offering. The proposed rule clarifies
that agencies are required to notify SBA of multiple-award contracts
that are reserved under the 8(a) program.
[cir] FAR 19.804-6, Indefinite delivery contracts. The proposed
rule clarifies that under the 8(a) program, a contracting officer may
issue a sole-source task or delivery order as long as the value of the
order is equal to or less than the thresholds at FAR 19.805-1(a)(2),
the contract was set aside for exclusive competition among 8(a)
participants, and the agency goes through offer and acceptance for the
order.
[cir] FAR 19.809-2, Performance of work requirements. The proposed
rule clarifies the compliance period for the limitation on
subcontracting requirement. In addition, the applicable SBA District
Director may permit the 8(a) contractor to exceed the limitations on
subcontracting, if it is essential to do so during certain stages of
contract performance.
FAR subpart 19.13, Historically Underutilized Business
Zone (HUBZone) Program.
[cir] FAR 19.1307, Price evaluation preference for HUBZone small
business concerns. The proposed rule clarifies that the price
evaluation preference for HUBZone small business concerns shall not be
used when the solicitation for the multiple-award contract has been
reserved for a HUBZone small business concern.
[cir] FAR 19.1308, Performance of work requirements. The proposed
rule clarifies the compliance period for the limitation on
subcontracting requirement. In addition, this section includes the
HUBZone nonmanufacturer rule, which currently appears within the
HUBZone clause.
[cir] FAR 19.1309 has been amended to consolidate the language
regarding the Alternate I version of FAR clauses 52.219-3 and 52.219-4.
Language has also been added to direct the contracting workforce to the
prescription for the new nonmanufacturer rule clause.
FAR subpart 19.14, Service-Disabled Veteran-Owned Small
Business Procurement Program.
[cir] FAR 19.1407 Performance of work requirements. The proposed
rule clarifies the compliance period for the limitation on
subcontracting requirement. In addition, the proposed rule now provides
information pertaining to the nonmanufacturer rule in this new
location.
FAR subpart 19.15, Women-Owned Small Business (WOSB)
Program.
[cir] FAR 19.1506, Performance of work requirements. The proposed
rule clarifies the compliance period for the limitation on
subcontracting requirement. In addition, the proposed rule provides
information regarding the nonmanufacturer rule in this location.
FAR part 42--Contract Administration and Audit Services.
FAR 42.1503, Procedures. The proposed rule clarifies that
contractor past performance evaluations are to include compliance with
the limitations on subcontracting, as applicable.
FAR part 52--Solicitation Provisions and Contract Clauses.
FAR 52.204-8, Annual Representations and Certifications. A
new Alternate I has been added to allow small businesses to represent
their status as a small business for solicitations of multiple-award
contracts that have more than one NAICS code assigned.
FAR 52.212-1, Instructions to Offerors-Commercial Items.
Revises the language to refer offerors to the solicitation for the
NAICS code(s) and corresponding size standard(s) assigned to the
acquisition instead of limiting the location to the Standard Form 1449.
FAR 52.212-5, Contract Terms and Conditions Required to
Implement Statutes or Executive Orders--Commercial Items. Conforming
changes have been made to accommodate changes made to existing clauses
and the incorporation of two new clauses.
FAR 52.219-1, Small Business Program Representations. A
new Alternate II has been added to allow small businesses to represent
their status as a small business for solicitations of multiple-award
contracts that have more than one NAICS code assigned.
FAR 52.219-3, Notice of HUBZone Set-aside or Sole Source
Award. Adds a new paragraph (e) to allow contracting officers to
identify the appropriate compliance period for the limitation on
subcontracting requirement.
FAR 52.219-4, Notice of Price Evaluation Preference for
HUBZone Small Business Concerns. The clause has been revised to exempt
solicitations containing a reserve for HUBZone small business concerns
from using the price evaluation preference.
FAR 52.219-6, Notice of Total Small Business Set-Aside.
Language relating to the nonmanufacturer rule has been removed, since
it will now reside in 52.219-YY.
FAR 52.219-7, Notice of Partial Small Business Set-Aside.
The proposed rule replaces the existing, cumbersome procedures for
awarding contracts under the set-aside and non-set-aside portions with
the new, more simplified approach. New language has been added for
multiple-award contracts to clarify the requirements issuing orders
against the set-aside and non-set-aside portions.
FAR 52.219-13, Notice of Set-Aside of Orders. The clause
has been revised to clarify that the basic version is for use when
orders may be set aside. In
[[Page 88077]]
addition, Alternate I has been created for use when orders will be set
aside.
FAR 52.219-14, Limitations on Subcontracting. The clause
has been revised to reflect the changes made at FAR 19.505 to clarify
the compliance period for the limitation on subcontracting.
FAR 52.219-18, Notification Of Competition Limited To
Eligible 8(a) Concerns. Language relating to the nonmanufacturer rule
has been removed, since it will now reside in FAR 52.219-YY.
FAR 52.219-27, Notice of Service-Disabled Veteran-Owned
Small Business Set-Aside. The clause has been revised to reflect the
changes made at FAR 19.1407 to clarify the compliance period for the
limitation on subcontracting.
FAR 52.219-28, Post-Award Small Business Program
Rerepresentation. New language has been added to advise small
businesses they shall rerepresent their size and socioeconomic status
for an order issued under a multiple-award contract when explicitly
required by the contracting officer. New language has also been added
to allow for small businesses to rerepresent their socioeconomic status
(i.e., 8(a), small disadvantaged, HUBZone, service-disabled veteran-
owned, women-owned) in addition to size.
FAR 52.219-29, Notice of Set-Aside for Economically
Disadvantaged Women-Owned Small Business Concerns. The clause has been
revised to reflect the changes made at FAR 19.1506 to clarify the
compliance period for the limitation on subcontracting.
FAR 52.219-30, Notice of Set-Aside for Women-Owned Small
Business Concerns Eligible Under the Women-Owned Small Business
Program. The clause has been revised to reflect the changes made at FAR
19.1506 to clarify the compliance period for the limitation on
subcontracting.
In addition, language relating to the nonmanufacturer rule
in FAR sections 52.219-3, 52,219-4, 52.219-6, 52.219-7, 52.219-27,
52.219-29, and 52.219-30 has been removed, since it will now reside in
the new clause at FAR 52.219-YY.
FAR 52.219-XX, Notice of Small Business Reserve. This is a
new clause to provide notification and guidance to offerors when a
solicitation that will result in the award of a multiple-award contract
is solicited under full and open procedures, and the contracting
officer has provided for a reserve or reserves. The proposed clause
provides guidance--
(1) For submitting offers on a reserve to offerors eligible to
participate in the reserve; and
(2) Clarifying that the contracting officer may set-aside orders
for the small businesses that received awards pursuant to the reserve
for small business; or
(3) Clarifying when only one small business concern has received a
contract pursuant to a reserve, that the contracting officer may issue
orders directly to that small business.
FAR 52.219-YY, Nonmanufacturer Rule. This new clause is
added to provide guidance to offerors regarding the application and
requirements of the nonmanufacturer rule.
III. Applicability to Acquisitions Not Greater Than the Simplified
Acquisition Threshold, Commercial Items, and Commercial Off-the-Shelf
Items
The Federal Acquisition Regulatory Council has made preliminary
determinations, in accordance with 41 U.S.C. 1905 and 41 U.S.C. 1906,
that the rule will apply to acquisitions under the simplified
acquisition threshold (SAT) and acquisitions of commercial items.
Discussion of these preliminary determinations is set forth below. The
FAR Council will consider public feedback before making a final
determination on the scope of the final rule.
The rule will also apply to acquisitions for commercial off-the-
shelf (COTS) items. As explained below, no determination is necessary
by the FAR Council in connection with applicability to COTS items,
because 41 U.S.C. 1907 requires that a law be applied to the
acquisition of COTS if the law concerns authorities or responsibilities
under the Small Business Act.
A. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT)
41 U.S.C. 1905 governs the applicability of laws to acquisitions at
or below the SAT. Section 1905 generally limits the applicability of
new laws when agencies are making acquisitions at or below the SAT, but
provides that such acquisitions will not be exempt from a provision of
law if--
The law contains criminal or civil penalties,
The law specifically refers to 41 U.S.C. 1905 and states
that the law applies to contracts and subcontracts in amounts not
greater than the SAT, or
The Federal Acquisition Regulatory Council makes a written
determination and finding that it would not be in the best interest of
the Federal Government to exempt contracts and subcontracts in amounts
not greater that the SAT from the provision of law.
Section 1331 of the Small Business Jobs Act of 2010 is silent on
the applicability of the requirements set forth above to acquisitions
at or below the SAT and does not provide for criminal or civil
penalties. Therefore, under 41 U.S.C. 1905, section 1331 does not apply
to SAT acquisitions unless the FAR Council makes a written
determination that such application is in the best interest of the
Federal Government.
The FAR Council has made a preliminary determination that
applicability of the proposed rule to SAT acquisitions is in the best
interest of the government for the following reasons. SAT acquisitions
are often well suited for performance by small businesses. While few,
if any, multiple-award contracts are likely to be in values under the
SAT, a very significant portion of orders made under multiple-award
contracts could fall below the SAT. In addition, as a result of current
legal and regulatory requirements applicable to contracts other than
multiple-award contracts, which call for work below the SAT to be set
aside for small businesses, most agency practices are already geared
towards taking advantage of this important tool in connection with
small dollar purchases to maximize small business participation.
B. Applicability to Contracts for the Acquisition of Commercial Items
41 U.S.C. 1906 governs the applicability of laws to the acquisition
of commercial items (other than COTS items). Section 1906 generally
limits the applicability of new laws when agencies are acquiring
commercial items, but provides that such acquisitions will not be
exempt from a provision of law if--
The law contains criminal or civil penalties;
The law specifically refers to 41 U.S.C. 1906 and states
that the law applies to the acquisition of commercial items; or
The FAR Council makes a written determination that it is
not in the best interest of the Federal Government to exempt the
acquisition of commercial items from the provision of law.
Section 1331 of the Small Business Jobs Act of 2010 is silent on
the applicability of the requirements set forth above to contracts for
commercial items and does not provide for criminal or civil penalties.
Therefore, under 41 U.S.C. 1906, section 1331 does not apply to
acquisitions for commercial
[[Page 88078]]
items unless the FAR Council makes a written determination that such
application is in the best interest of the Federal Government.
In making its initial determination of whether application of
section 1331 to commercial items is in the best interest of the Federal
Government, the FAR Council considered the following factors: (i) The
benefits of the policy in furthering Administration goals, (ii) the
extent to which the benefits of the policy would be reduced if an
exemption is provided for commercial items, and (iii) the burden on
contractors if the policy is applied to acquisitions for commercial
items.
With respect to the first factor, this Administration has long
recognized the important nexus between maximizing small business
participation in federal contracting and having effective tools to
promote such participation under multiple-award contracts, including
the Federal Supply Schedules, through which a significant portion of
federal contract spending flows. The Interagency Task Force on Small
Business Contracting, created by the President in 2010 to identify
meaningful ways to strengthen small business contracting, recommended
that rules on set-asides for multiple-award contracts be clarified. In
support of its recommendation, the Task Force noted that set-asides
accounted for a substantial portion of all small business contract
awards yet ``there has been no attempt to create a comprehensive policy
for orders placed under either general task-and-delivery-order
contracts or schedule contracts that rationalizes and appropriately
balances the need for efficiency with the need to maximize
opportunities for small businesses.'' Shortly after the Task Force
released its recommendations, the President signed the Jobs Act to
protect the interests of small businesses and expand their
opportunities in the Federal marketplace. In addition, as explained in
the Background section of this notice, DOD, GSA, and NASA published an
interim rule, with SBA's concurrence, to provide general guidance ahead
of SBA providing more specific guidance in its regulations. This action
allowed agencies to begin taking advantage of these impactful tools
instead of having to wait until more detailed changes were promulgated.
In short, the FAR Council believes these tools provide an important
benefit in helping agencies to carry out the purposes of the Small
Business Act and in helping the government meet its small business
contracting goals.
With respect to the second factor (the impact of excluding
commercial item acquisitions on the overall benefits of the underlying
policy), the FAR Council believes based on an analysis of FPDS data
that a significant amount of spending on new contracts is for
commercial item acquisitions and a substantial amount of these
activities (including all the transactions through the Federal Supply
Schedules) are for commercial items, many of which can be performed by
small businesses. Denying agencies the ability to apply the authorities
in section 1331 to commercial item acquisitions could result in many
missed opportunities for capable small business contractors seeking
work in the federal marketplace. For these reasons, the FAR Council
believes exclusion could have a material negative impact.
With respect to the third factor, burden on contractors selling
commercial items, there are no specific systems costs imposed by the
rule and reporting costs are minimal (see discussion on the Paperwork
Reduction Act under section VI).
Accordingly, for the reasons set forth above, the FAR Council has
made a preliminary determination that it is in the best interest of the
government to apply section 1331 to commercial item acquisitions.
C. Applicability to Contracts for the Acquisition of COTS Items
41 U.S.C. 1907 governs the applicability of laws to the acquisition
of COTS items. Section 1907 generally limits the applicability of new
laws when agencies are acquiring COTS items, but provides that such
acquisitions will not be exempt from a provision of law if--
The law contains criminal or civil penalties;
The law specifically refers to 41 U.S.C. 1907 and states
that the law applies to the acquisition of COTS items;
The law concerns authorities or responsibilities under the
Small Business Act or bid procedures; or
The Administrator for Federal Procurement Policy makes a
written determination that it is not in the best interest of the
Federal Government to exempt the acquisition of COTS items from the
provision of law.
Section 1331 amends section 15 of the Small Business Act (15 U.S.C.
644) to address the use of partial set-asides, order set-asides, and
reserves under multiple-award contracts. For this reason, the rule
applies to acquisitions of COTS items.
IV. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is a significant regulatory action and, therefore, was subject to
review under Section 6(b) of E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This rule is not a major rule under 5
U.S.C. 804.
V. Regulatory Flexibility Act
These changes may have a significant economic impact on a
substantial number of small entities within the meaning of the
Regulatory Flexibility Act 5 U.S.C. 601, et seq. The Initial Regulatory
Flexibility Analysis (IRFA) is summarized as follows:
DoD, GSA, and NASA are proposing to amend the FAR to provide
uniform guidance consistent with SBA's final rule at 78 FR 61114,
dated October 2, 2013, which implements section 1331 of the Small
Business Jobs Act of 2010 (15 U.S.C. 644(r)). Specifically, this
rule proposes to provide regulatory guidance by which Federal
agencies may--
(1) Set aside part or parts of multiple-award contracts for
small business;
(2) Reserve one or more awards when conducting multiple-award
procurements using full and open competition; and
(3) Set aside orders under multiple-award contracts,
notwithstanding the fair opportunity requirements.
This rule may have a positive economic impact on any small
business entity that wishes to participate in the Federal
procurement arena. By providing clarification and additional
guidance on the use of the Section 1331 authorities, small
businesses are expected to have greater access to multiple-award
contracts, including orders issued against such contracts. Analysis
of the System for Award Management (SAM) database indicates there
are over 304,980 small business registrants that can potentially
benefit from this rule.
This rule does not impose any new reporting, recordkeeping or
other compliance requirements for small businesses. This rule does
not duplicate, overlap, or conflict with any other Federal rules.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the IRFA may be obtained from the Regulatory
Secretariat Division. DoD,
[[Page 88079]]
GSA, and NASA invite comments from small business concerns and other
interested parties on the expected impact of this rule on small
entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by the rule
consistent with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAR Case 2014-002),
in correspondence.
VI. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The
proposed rule contains information collection requirements.
Accordingly, the Regulatory Secretariat Division has submitted a
request for approval to revise existing information collection
requirements, in connection with FAR Case 2014-002, Set-Asides under
Multiple-Award Contracts, to the Office of Management and Budget.
Based on the proposed revisions to the FAR, an upward adjustment is
being made to the number of respondents, responses per respondent,
total annual responses, total hours, and the total cost. As a result,
the estimated annual reporting burden is being adjusted upward from the
estimate in the notice regarding the extension of OMB Clearance 9000-
0163, published in the Federal Register at 80 FR 25293, on May 4, 2015.
The annual reporting burden is estimated as follows:
(1) Rerepresentation on long-term contracts, and other contracts as
a result of acquisitions, mergers, and novations:
Respondents: 1,700.
Responses per respondent: 1.
Total annual responses: 1,700.
Preparation hours per response: .5.
Total response burden hours: 850.
Cost per hour: $31.
Total annual burden: $26,350.
(2) Adjustment to OMB Clearance 9000-0163 for rerepresentation for
individual task or delivery orders under multiple-award contracts:
Respondents: 530.
Responses per respondent: 3.
Total annual responses: 1,590.
Preparation hours per response: .5.
Total response burden hours: 795.
Cost per hour: $31.
Total annual burden: $24,645.
Total combined annual burden:
Burden hours: 1,645.
Total Cost: $50,995.
B. Request for Comments Regarding Paperwork Burden
Submit comments, including suggestions for reducing this burden, no
later than February 6, 2017 to: FAR Desk Officer, OMB, Room 10102,
NEOB, Washington, DC 20503, and a copy to the General Services
Administration, Regulatory Secretariat Division (MVCB), ATTN: Ms.
Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20405.
Public comments are particularly invited on: Whether this
collection of information is necessary for the proper performance of
functions of the FAR, and will have practical utility; whether our
estimate of the public burden of this collection of information is
accurate, and based on valid assumptions and methodology; ways to
enhance the quality, utility, or clarity of the information to be
collected; and ways in which we can minimize the burden of the
collection of information on those who are to respond, through the use
of appropriate technological collection techniques or other forms of
information technology.
Requesters may obtain a copy of the supporting statements from the
General Services Administration, Regulatory Secretariat Division
(MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd Floor, Washington, DC
20405. Please cite OMB Control Number 9000-0163, Small Business Size
Representation, in all correspondence.
List of Subjects in 48 CFR Parts 2, 4, 7, 8, 9, 10, 13, 15, 16, 19,
42, and 52
Government procurement.
Dated: November 21, 2016.
William F. Clark,
Director, Office of Governmentwide Acquisition Policy, Office of
Acquisition Policy, Office of Governmentwide Policy.
Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR parts
2, 4, 7, 8, 9, 10, 13, 15, 16, 19, 42, and 52 as set forth below:
0
1. The authority citation for 48 CFR parts 2, 4, 7, 8, 9, 10, 13, 15,
16, 19, 42, and 52 continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 2--DEFINITIONS OF WORDS AND TERMS
0
2. In section 2.101 amend paragraph (b)(2) by adding to the definition
``HUBZone contract'' paragraph (4); and adding, in alphabetical order,
the definition ``HUBZone order'' to read as follows:
2.101 Definitions.
* * * * *
(b) * * *
(2) * * *
HUBZone contract * * *
(4) Awards based on a reserve for HUBZone small business concerns
in a solicitation for a multiple-award contract.
HUBZone order means an order set aside for a HUBZone small business
concern under a multiple-award contract, which had been awarded under
full and open competition.
* * * * *
PART 4--ADMINISTRATIVE MATTERS
4.803 [Amended]
0
3. Amend section 4.803 by removing from paragraph (a)(6) ``decision''
and adding ``decision (see 19.506)'' in its place.
0
4. Amend section 4.1202 by revising the introductory text of paragraph
(a) and paragraph (a)(12) to read as follows:
4.1202 Solicitation provision and contract clause.
(a) Except for commercial item solicitations issued under FAR part
12, insert in solicitations the provision at 52.204-8, Annual
Representations and Certifications. The contracting officer shall check
the applicable provisions at 52.204-8(c)(2). Use the provision with its
Alternate I in solicitations that will result in a multiple-award
contract with more than one North American Industry Classification
System code assigned; this is authorized for solicitations issued after
January 1, 2017 (see 19.102(b)). When the provision at 52.204-7, System
for Award Management, is included in the solicitation, do not include
the following representations and certifications:
* * *
(12) 52.219-1, Small Business Program Representation (Basic,
Alternates I, and II).
PART 7--ACQUISITION PLANNING
0
5. Amend section 7.104 by revising the first sentence of paragraph
(d)(1) to read as follows:
7.104 General procedures.
* * * * *
(d)(1) The planner shall coordinate the acquisition plan or
strategy with the cognizant small business specialist when the strategy
contemplates an acquisition meeting the dollar amounts in paragraph
(d)(2) of this section unless the contract or order is set-aside, in
total or in part, for small business under part 19. * * *
0
6. Amend section 7.105 by revising the introductory text of paragraph
(b) and paragraph (b)(1) to read as follows:
7.105 Contents of written acquisition plans
* * * * *
(b) Plan of action. (1) Sources. Indicate the prospective sources
of
[[Page 88080]]
supplies or services that can meet the need. Consider required sources
of supplies or services (see Part 8) and sources identifiable through
databases including the Governmentwide database of contracts and other
procurement instruments intended for use by multiple agencies available
at https://www.contractdirectory.gov/contractdirectory/. Include
consideration of small business, veteran-owned small business, service-
disabled veteran-owned small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns (see
part 19). Also, include consideration of the impact of any bundling
that might affect small business participation in the acquisition (see
7.107) (15 U.S.C. 644(e)). When the proposed acquisition strategy
involves bundling, identify the incumbent contractors and contracts
affected by the bundling. Address the extent and results of the market
research and indicate their impact on the various elements of the plan
(see part 10).
* * * * *
PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
0
7. Amend section 8.405-5 by removing from paragraph (b) ``against'' and
adding ``under'' in its place and revising the last sentence to read as
follows:
8.405-5 Small business.
* * * * *
(b) * * * Ordering activities should rely on the small business
representations made by schedule contractors at the contract level (but
see section 19.301-2(b)(4) concerning re-representation for an order).
* * * * *
PART 9--CONTRACTOR QUALIFICATIONS
0
8. Amend section 9.104-3 by revising paragraph (d)(2) to read as
follows:
9.104-3 Application of standards.
* * * * *
(d) * * *
(2) A small business that is unable to comply with the limitations
on subcontracting may be considered nonresponsible (see 52.219-3 Notice
of HUBZone Set-Aside or Sole Source Award, 52.219-4 Notice of Price
Evaluation Preference for HUBZone Small Business Concerns, 52.219-14
Limitations on Subcontracting, 52.219-27 Notice of Service-Disabled
Veteran-Owned Small Business Set-Aside, 52.219-29 Notice of Set-Aside
for, or Sole Source Award to, Economically Disadvantaged Women-Owned
Small Business Concerns, 52.219-30 Notice of Set-Aside for, or Sole
Source Award to, Women-Owned Small Business Concerns Eligible Under the
Women-Owned Small Business Program). A small business that has not
agreed to comply with the limitations on subcontracting may be
considered nonresponsive.
PART 10--MARKET RESEARCH
0
9. Amend section 10.001 by--
0
a. Removing from paragraph (a)(3)(v) ``and'';
0
b. Removing the period from paragraph (a)(3)(vi) and adding a semicolon
in its place;
0
c. Redesignating paragraph (a)(3)(vii) as paragraph (a)(3)(viii);
0
d. Adding paragraph (a)(3)(vii); and
0
e. Removing from newly designated paragraph (a)(3)(viii) ``Subpart
39.2'' and adding ``subpart 39.2'' in its place.
The addition to read as follows:
10.001 Policy.
(a) * * *
(3) * * *
(vii) Determine whether the acquisition should utilize any of the
small business programs in accordance with part 19; and
* * * * *
0
10. Amend section 10.002 by revising paragraph (b)(1)(vii); and adding
paragraph (b)(2)(ix).
The addition and revision to read as follows:
10.002 Procedures.
* * * * *
(b) * * *
(1) * * *
(vii) Whether the Government's needs can be met by small business
concerns that will likely submit a competitive offer at fair market
prices (see part 19).
(2) * * *
(ix) Reviewing databases such as the System for Award Management
(SAM) and the SBA's Dynamic Small Business Search (DSBS).
* * * * *
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
0
11. Amend section 13.003 by revising paragraph (b)(1) to read as
follows:
13.003 Policy.
* * * * *
(b)(1) Acquisitions of supplies or services that have an
anticipated dollar value exceeding $3,500 ($20,000 for acquisitions as
described in 13.201(g)(1)) but not exceeding $150,000 ($300,000 for
acquisitions described in paragraph (1)(i) of the simplified
acquisition threshold definition at 2.101) shall be set aside for small
business concerns (see 19.000, 19.203, and subpart 19.5).
* * * * *
PART 15--CONTRACTING BY NEGOTIATION
15.101-3 [Added]
0
12. Add section 15.101-3 to read as follows:
15.101-3 Tiered evaluation of small business offers.
An agency cannot create a tiered (or ``cascading'') evaluation of
offers, as described in 13 CFR 125.2, for multiple-award contracts
unless an agency has statutory authority.
PART 16--TYPES OF CONTRACTS
0
13. Amend section 16.500 by adding paragraph (e) to read as follows:
16.500 Scope of subpart.
* * * * *
(e) See subpart 19.5 for procedures to set aside part or parts of
multiple-award contracts for small business; to reserve one or more
awards for small business on multiple-award contracts; and to set aside
orders for small businesses under multiple-award contracts.
0
14. Amend section 16.505 by
0
a. Adding paragraph (a)(10)(iii);
0
b. Removing from the end of the introductory text of paragraph (b)
``contracts--'' and adding ``contracts.'' in its place;
0
c. Revising paragraph (b)(4);
0
d. Revising the heading of paragraph (b)(6); and
0
e. Adding paragraph (b)(9).
The addition and revisions to read as follows:
16.505 Ordering.
(a) * * *
(10) * * *
(iii) For protests of small business size status for set-aside
orders, see 19.302.
* * * * *
(b) * * *
(4) For additional requirements for cost-reimbursement orders, see
16.301-3.
* * * * *
(6) Postaward notices and debriefing of awardees for orders
exceeding $5 million. * * *
* * * * *
(9) Small business. The contracting officer should rely on the
small business representations at the contract level (but see section
19.301-2(b)(4) for order rerepresentations).
* * * * *
[[Page 88081]]
PART 19--SMALL BUSINESS PROGRAMS
0
15. Amend section 19.000 by--
0
a. Removing from paragraph (a)(3) ``aside'' and adding ``aside, in
total or in part,'' in its place;
0
b. Removing from paragraph (a)(8) ``and'';
0
c. Removing from paragraph (a)(9) ``Program.'' and adding ``Program;
and'' in its place; and
0
d. Adding paragraph (a)(10).
The addition to read as follows:
19.000 Scope of part.
(a) * * *
(10) The use of reserves.
* * * * *
0
16. Amend section 19.001 by removing the definition ``Nonmanufacturer
rule'' and adding, in alphabetical order, the definition
``Nonmanufacturer'' to read as follows:
19.001 Definitions.
* * * * *
Nonmanufacturer means a concern that furnishes a product it did not
manufacture or produce (see 13 CFR 121.406).
0
17. Revise section 19.102 to read as follows:
19.102 Small business size standards and North American Industry
Classification System codes.
(a) Locating size standards and North American Industry
Classification System codes. (1) SBA establishes small business size
standards on an industry-by-industry basis. Small business size
standards and corresponding North American Industry Classification
System (NAICS) codes are provided at 13 CFR 121.201. They are also
available at http://www.sba.gov/content/table-small-business-size-standards.
(2) NAICS codes are updated by the Office of Management and Budget
through its Economic Classification Policy Committee every five years.
New NAICS codes are not available for use in Federal contracting until
SBA publishes corresponding size standards. NAICS codes are available
from the U.S. Census Bureau at http://www.census.gov/eos/www/naics/.
(b) Determining the appropriate NAICS codes for the solicitation.
(1) The contracting officer shall determine the appropriate NAICS code
by classifying the product or service being acquired in the one
industry which best describes the principal purpose of the supply or
service being acquired. Primary consideration is given to the industry
descriptions in the U.S. NAICS Manual, the product or service
descriptions in the solicitation, the relative value and importance of
the components of the requirement making up the end item being
procured, and the function of the goods or services being purchased. A
procurement is usually classified according to the component which
accounts for the greatest percentage of contract value.
(2)(i) For solicitations issued on or before January 31, 2017 that
will result in multiple-award contracts, the contracting officer shall
assign a NAICS code in accordance with paragraph (b)(1) of this
section.
(ii) For solicitations issued after January 31, 2017 that will
result in multiple-award contracts, the contracting officer shall--
(A) Assign a single NAICS code (and corresponding size standard)
which best describes the principal purpose of the acquisition and will
also best describe the principal purpose of each subsequent order; or
(B) Divide the acquisition into distinct portions or categories
(e.g., Line Item Numbers (LINs), Special Item Numbers (SINs), Sectors,
Functional Areas (FAs), or equivalent) and assign each portion or
category a single NAICS code and size standard which best describes the
principal purpose of the supplies or services to be acquired under that
distinct portion or category.
(3)(i) When placing orders under multiple-award contracts whose
solicitations were issued on or before January 31, 2017, the
contracting officer shall assign the order the same NAICS code and
corresponding size standard designated in the contract.
(ii) When placing orders under multiple-award contracts whose
solicitations were issued after January 31, 2017, the contracting
officer shall--
(A) Assign the order the same NAICS code and corresponding size
standard designated in the contract when conditions in (b)(2)(ii)(A)
are met; or
(B) Assign the order the NAICS code and corresponding size standard
designated for the distinct portion or category designated in the
contract when conditions in (b)(2)(ii)(B) are met. If an order covers
multiple portions or categories, select the NAICS code and
corresponding size standard which best represents the principal purpose
of the order.
(4) The contracting officer's designation is final. Appeal
procedures can be found in 19.103.
(c) Application of small business size standards to solicitations.
(1) The contracting officer shall apply the size standard in effect
on the date the solicitation is issued.
(2) The contracting officer may amend the solicitation and use the
new size standard if SBA amends the size standard and it becomes
effective before the due date for receipt of initial offers.
0
18. Add section 19.103 to read as follows:
19.103 Appealing the contracting officer's North American Industry
Classification System code and size standard determination.
(a) The contracting officer's determination is final unless
appealed as follows:
(1) An appeal from a contracting officer's NAICS code designation
and the applicable size standard shall be served and filed within 10
calendar days after the issuance of the initial solicitation or any
amendment affecting the NAICS code or size standard. However, SBA may
file a NAICS code appeal at any time before offers are due.
(2) Appeals from a contracting officer's NAICS code designation or
applicable size standard may be filed with SBA's Office of Hearings and
Appeals (OHA) by--
(i) Any person adversely affected by a NAICS code designation or
applicable size standard. However, with respect to a particular sole
source 8(a) contract, only the SBA Associate Administrator for Business
Development may appeal a NAICS code designation; or
(ii) The Associate or Assistant Director for the SBA program
involved, through SBA's Office of General Counsel.
(3) Contracting officers shall advise the public, by amendment to
the solicitation, of the existence of a NAICS code appeal (see
5.102(a)(1)). Such notices shall include the procedures and the
deadline for interested parties to file and serve arguments concerning
the appeal.
(4) SBA's OHA will dismiss summarily an untimely NAICS code appeal.
(5)(i) The appeal petition must be in writing and must be addressed
to the Office of Hearings and Appeals, Small Business Administration,
Suite 5900, 409 3rd Street SW., Washington, DC 20416.
(ii) There is no required format for the appeal; however, the
appeal must include--
(A) The solicitation or contract number and the name, address,
email address, and telephone number of the contracting officer;
(B) A full and specific statement as to why the NAICS code
designation is allegedly erroneous and argument supporting the
allegation; and
(C) The name, address, telephone number, and signature of the
appellant or its attorney.
[[Page 88082]]
(6) The appellant must serve the appeal petition upon--
(i) The contracting officer who assigned the NAICS code to the
acquisition; and
(ii) SBA's Office of General Counsel, Associate General Counsel for
Procurement Law, 409 3rd Street SW., Washington, DC 20416, facsimile
202-205-6873, or email at [email protected].
(7) Upon receipt of a NAICS code appeal, OHA will notify the
contracting officer by a notice and order of the date OHA received the
appeal, the docket number, and the Administrative Judge assigned to the
case. The contracting officer's response to the appeal, if any, must
include argument and evidence (see 13 CFR part 134), and must be
received by OHA within 15 calendar days from the date of the docketing
notice and order, unless otherwise specified by the Administrative
Judge. Upon receipt of OHA's docketing notice and order, the
contracting officer must withhold award, unless withholding award is
not in the best interests of the Government, and immediately send to
OHA an electronic link to or a paper copy of both the original
solicitation and all amendments relating to the NAICS code appeal. The
contracting officer shall inform OHA of any amendments, actions, or
developments concerning the procurement in question.
(8) After close of record, OHA will issue a decision and inform the
contracting officer. If OHA's decision is received by the contracting
officer before the date the offers are due, the decision shall be final
and the solicitation must be amended to reflect the decision, if
appropriate. OHA's decision received after the due date of the initial
offers shall not apply to the pending solicitation but shall apply to
future solicitations of the same products or services.
(b) SBA's regulations concerning appeals of NAICS code designations
are found at 13 CFR 121.1101 to 121.1103 and 13 CFR part 134.
0
19. Amend section 19.201 by--
0
a. In paragraph (c), revising the second sentence of the introductory
text of the paragraph;
0
b. Removing from paragraph (c)(1) ``Director of'' wherever it appears
and adding ``Director of the Office of'' in its place;
0
c. Revising paragraph (c)(3) and the introductory text of (c)(5); and
0
d. Revising paragraph (d).
The revised text reads as follows:
19.201 General policy.
* * * * *
(c) * * * For the Department of Defense, in accordance with 10
U.S.C. 144 note, the Office of Small and Disadvantaged Business
Utilization has been redesignated as the Office of Small Business
Programs. * * *
(3) Be responsible to and report directly to the agency head or the
deputy to the agency head (except that for the Department of Defense,
the Director of the Office of Small Business Programs reports to the
Secretary or the Secretary's designee);
* * * * *
(5) Work with the SBA procurement center representative (PCR) (or,
if a PCR is not assigned, see 19.402(a)) to--
* * * * *
(d) Small business specialists shall be appointed and act in
accordance with agency regulations.
(1) The contracting activity shall coordinate with the small
business specialist as early in the acquisition planning process as
practicable, but no later than 30 days before the issuance of a
solicitation, or prior to placing an order without a solicitation when
the acquisition meets the dollar thresholds set forth at 7.104(d)(2).
(2) The small business specialist shall notify the agency's
Director of the Office of Small and Disadvantaged Utilization, and for
the Department of Defense, the Director of the Office of Small Business
Programs, when the criteria relating to substantial bundling at
7.104(d)(2) are met.
(3) The small business specialist shall coordinate with the
contracting activity and the SBA PCR on all determinations and findings
required by 7.107 for consolidation or bundling of contract
requirements.
0
20. Revise section 19.202 to read as follows:
19.202 Specific policies.
In order to further the policy in 19.201(a), contracting officers
shall comply with the specific policies listed in this section and
shall consider recommendations of the agency Director of the Office of
Small and Disadvantaged Business Utilization, or for the Department of
Defense, the Director of the Office of Small Business Programs, or the
Director's designee, as to whether a particular acquisition should be
awarded under subpart 19.5, 19.8, 19.13, 19.14, or 19.15. Agencies
shall establish procedures including dollar thresholds for review of
acquisitions by the Director or the Director's designee for the purpose
of making these recommendations. The contracting officer shall document
the contract file whenever the Director's recommendations are not
accepted, in accordance with 19.506.
0
21. Amend section 19.202-1 by revising the introductory text of
paragraph (e)(1) and removing from paragraph (e)(4) ``19.505'' and
adding ``19.502-8'' in its place. The revision reads as follows:
19.202-1 Encouraging small business participation in acquisitions.
* * * * *
(e)(1) Provide a copy of the proposed acquisition package and other
reasonably obtainable information related to the acquisition, to the
SBA PCR (or, if a PCR is not assigned, see 19.402(a)) at least 30 days
prior to the issuance of the solicitation if--
* * * * *
0
22. Amend section 19.202-2 by removing from the introductory paragraph
``must'' and adding ``shall'' in its place and revising paragraph (a)
to read as follows:
19.202-2 Locating small business sources.
* * * * *
(a) Before issuing solicitations, make every reasonable effort to
find additional small business concerns (see 10.002(b)(2)). This effort
should include contacting the agency small business specialist and SBA
PCR (or, if a PCR is not assigned, see 19.402(a))
* * * * *
19.202-4 [Amended]
0
23. Amend section 19.202-4 by removing from the introductory paragraph
``must'' and adding ``shall'' in its place; and removing from paragraph
(c) ``bid sets and specifications'' and adding ``solicitations'' in its
place.
0
24. Amend section 19.202-5 by removing from the introductory paragraph
``must'' and adding ``shall'' in its place and revising paragraph
(c)(1) to read as follows:
19.202-5 Data collection and reporting requirements.
* * * * *
(c) * * *
(1) Require a contractor that represented itself as any of the
small business concerns identified in 19.000(a)(3) prior to award of
the contract to rerepresent its size and socioeconomic status (i.e.,
8(a), small disadvantaged business, HUBZone small business, service-
disabled veteran-owned small business, or women-owned small business
status); and
* * * * *
[[Page 88083]]
19.202-6 [Amended]
0
25. Amend section 19.202-6 by removing from paragraph (a)(1) ``set-
asides'' and adding ``set-asides, and reserves''.
19.203 [Amended]
0
26. Amend section 19.203 by removing from paragraph (b) ``exclusively
reserve'' and adding ``set aside'' in its place.
0
27. Amend section 19.301-1 by--
0
a. Revising paragraph (a);
0
b. Redesignating paragraphs (b) through (d) as paragraphs (e) through
(g); and
0
c. Adding new paragraphs (b) through (d).
The revision and additions read as follows:
19.301-1 Representation by the offeror.
(a) To be eligible for award as a small business concern identified
in 19.000(a)(3), an offeror is required to represent in good faith--
(1)(i) That it meets the small business size standard corresponding
to the North American Industry Classification Systems (NAICS) code
identified in the solicitation; or
(ii) For a multiple-award contract where there is more than one
NAICS code assigned, that it meets the small business size standard set
forth for each distinct portion or category (e.g. Line Item Numbers
(LINs), Special Item Numbers (SINs), Sectors, Functional Areas (FAs),
or the equivalent) for which it submits an offer. If the small business
concern submits an offer for the entire multiple-award contract, it
must meet the size standard for each distinct portion or category (e.g.
LIN, SIN, Sector, FA, or equivalent); and
(2) The Small Business Administration (SBA) has not issued a
written determination stating otherwise pursuant to 13 CFR 121.1009.
(b) An offeror is required to represent its size and socioeconomic
status in writing to the contracting officer at the time of initial
offer, including offers for Basic Ordering Agreements, and Blanket
Purchase Agreements (BPAs), except for BPAs issued under a multiple
award schedule contract pursuant to subpart 8.4.
(c) To be eligible for an award under the HUBZone Program (see
subpart 19.13), a HUBZone small business concern must represent its
size and socioeconomic status at the time of initial offer and at the
time of contract award.
(d) Multiple-award contract representations.
(1) A business that represents as a small business concern at the
time of its initial offer for the contract is considered a small
business concern for each order issued under the contract (but see
19.301-2 for rerepresentations).
(2) A business that represents as a small business concern at the
time of its initial offer for a distinct portion or category as set
forth in paragraph (a)(2) is considered a small business concern for
each order issued under that distinct portion or category (but see
19.301-2 for rerepresentations).
* * * * *
0
28. Amend section 19.301-2 by--
0
a. Revising the introductory text of paragraph (b);
0
b. Removing the period from the end of paragraph (b)(1) and adding a
semicolon in its place;
0
c. Revising paragraph (b)(2);
0
d. Removing from paragraph (b)(3)(ii) ``thereafter.'' and adding
``thereafter; or'' in its place;
0
e. Adding paragraph (b)(4); and
0
f. Revising paragraphs (c) and (d).
The revisions and addition read as follows:
19.301-2 Rerepresentation by a contractor that represented itself as
a small business concern.
* * * * *
(b) A contractor that represented itself as any of the small
business concerns identified in 19.000(a)(3) before contract award is
required to rerepresent its size and socioeconomic status for the NAICS
code in the contract--
* * * * *
(2) Within 30 days after a merger or acquisition (whether the
contractor acquires or is acquired by another company) of the
contractor that does not require novation or within 30 days after
modification of the contract to include the clause at FAR 52.219-28,
Post-Award Small Business Program Rerepresentation, if the merger or
acquisition occurred prior to inclusion of this clause in the contract;
* * * * *
(4) If the contracting officer requires contractors to rerepresent
their size and socioeconomic status for an order issued under a
multiple-award contract.
(c) A contractor is required to rerepresent its size status in
accordance with the size standard in effect at the time of its
rerepresentation that corresponds to the NAICS code that was initially
assigned to the contract. For multiple-award contracts where there is
more than one NAICS code assigned, the contractor is required to
rerepresent whether it meets the small business size standard set forth
for each distinct category or portion (e.g., LINs, SINS, Sectors, FAs,
or the equivalent) for which the contractor had previously represented.
(d)(1) Contract rerepresentation. When a contractor rerepresents
for a contract that it no longer qualifies as a small business concern
identified in 19.000(a)(3) in accordance with FAR 52.219-28, the agency
may no longer include the value of options exercised, modifications
issued, orders issued, or purchases made under BPAs on that contract in
its small business prime contracting goal achievements. When a
contractor's rerepresentation for a contract qualifies it as a
different small business concern identified in 19.000(a)(3) than what
it represented for award, the agency may include the value of options
exercised, modifications issued, orders issued, or purchases made under
BPAs on that contract in its small business prime contracting goal
achievements, consistent with the rerepresentation. Agencies should
issue a modification to the contract capturing the rerepresentation and
report it to FPDS within 30 days after notification of the
rerepresentation.
(2) Rerepresentation for an order. When a contractor rerepresents
for an order that it no longer qualifies as a small business concern
identified in 19.000(a)(3), the agency cannot include the value of the
order in its small business prime contracting goal achievements. When a
contractor's rerepresentation for an order qualifies it as a different
small business concern identified in 19.000(a)(3) than what it
represented for contract award, the agency can include the value of the
order in its small business prime contracting goal achievement,
consistent with the rerepresentation. A rerepresentation for an order
does not change the size or socioeconomic status representation for the
contract.
* * * * *
0
29. Amend section 19.302 by revising paragraphs (a), (b), and
(d)(1)(ii) to read as follows:
19.302 Protesting a small business representation or
rerepresentation.
(a)(1) The SBA regulations on small business size and size protests
are found at 13 CFR part 121.
(2) An offeror, the contracting officer, SBA, or another interested
party may protest the small business representation of an offeror in a
specific offer for a contract. However, for competitive 8(a) contracts,
the filing of a protest is limited to an offeror, the contracting
officer, or the SBA.
(b) Any time after offers are received by the contracting officer,
or in the case of bids, opened, the contracting officer
[[Page 88084]]
may question the small business representation of any offeror in a
specific offer by filing a contracting officer's protest (see paragraph
(c) of this section).
* * * * *
(d) * * *
(1) * * *
(ii) A protest may be made in writing if it is delivered to the
contracting officer by hand, telegram, mail, facsimile, email, express
or overnight delivery service or letter postmarked within the 5-day
period.
* * * * *
19.303 [Reserved]
0
30. Remove and reserve section 19.303.
0
31. Amend section 19.307 by revising paragraph (b)(1) to read as
follows:
19.307 Protesting a firm's status as a service-disabled veteran-owned
small business concern.
* * * * *
(b)(1) For sole source acquisitions, the contracting officer or SBA
may protest the apparently successful offeror's service-disabled
veteran-owned small business status. For all other acquisitions, any
interested party (see 13 CFR 125.8(b)) may protest the apparently
successful offeror's service-disabled veteran-owned small business
status.
* * * * *
0
32. Amend section 19.309 by adding paragraph (a)(3) to read as follows:
19.309 Solicitation provisions and contract clauses.
(a)(1) * * *
(3) Use the provision with its Alternate II in solicitations that
will result in a multiple-award contract with more than one NAICS code
assigned. This is authorized for solicitations issued after January 31,
2017 (see 19.102(b)).
0
33. Amend section 19.401 by revising paragraph (b) to read as follows:
19.401 General.
* * * * *
(b) The Director of the Office of Small and Disadvantaged Business
Utilization serves as the agency focal point for interfacing with SBA.
The Director of the Office of Small Business Programs is the agency
focal point for the Department of Defense.
0
34. Amend section 19.402 by revising paragraphs (a)(1), (a)(2), (b),
and the introductory text to paragraph (c) to read as follows:
19.402 Small Business Administration procurement center
representatives.
(a)(1) The SBA may assign one or more procurement center
representatives (PCR) to any contracting activity or contract
administration office to carry out SBA policies and programs. Assigned
SBA PCRs are required to comply with the contracting agency's
directives governing the conduct of contracting personnel and the
release of contract information. The SBA must obtain for its PCRs
security clearances required by the contracting agency.
(2) If an SBA PCR is not assigned to the procuring activity or
contract administration office, contact the SBA Office of Government
Contracting Area Office serving the area in which the procuring
activity is located for assistance in carrying out SBA policies and
programs. See http://www.sba.gov/content/procurement-center-representatives for the location of the SBA office servicing the
activity.
(b) Upon their request and subject to applicable acquisition and
security regulations, contracting officers shall give SBA PCRs (or, if
a PCR is not assigned, see paragraph (a) of this section) access to all
reasonably obtainable contract information that is directly pertinent
to their official duties.
(c) The duties assigned by SBA to its PCR are set forth at 13 CFR
125.2(b) and include but are not limited to the following:
* * * * *
19.403 [Amended]
0
35. Amend section 19.403 by removing from paragraph (c)(8) ``at
19.505'' and adding ``at 19.502-8'' in its place.
0
36. Revise the heading of subpart 19.5 to read as follows:
Subpart 19.5 Small Business Total Set-Asides, Partial Set-Asides,
and Reserves
0
37. Revise section 19.501 to read as follows:
19.501 General.
(a)(1) The purpose of small business set-asides is to award certain
acquisitions exclusively to small business concerns. A ``set-aside for
small business'' is the limiting of an acquisition exclusively for
participation by small business concerns. A small business set-aside
may be open to any of the small business concerns identified at
19.000(a)(3). A small business set-aside of a single acquisition or a
class of acquisitions may be total or partial.
(2) The purpose of a small business reserve is to award one or more
contracts to any of the small business concerns identified at
19.000(a)(3), under a full and open competition that will result in a
multiple-award contract. A small business reserve shall not be used
when the acquisition can be set aside, in total or in part.
(b) The contracting officer makes the determination to make a small
business set-aside, in total or in part, or a reserve. The Small
Business Administration (SBA) PCR (or, if a PCR is not assigned, see
19.402(a)) may make a recommendation to the contracting officer.
(c) The contracting officer shall review acquisitions to determine
if they can be set aside, in total or in part, or reserved, for small
business, giving consideration to the recommendations of agency
personnel in the Office of Small and Disadvantaged Business
Utilization, or for the Department of Defense, in the Office of Small
Business Programs. Agencies may establish threshold levels for this
review depending upon their needs.
(d) At the request of an SBA PCR, (or, if a PCR is not assigned,
see 19.402(a)) the contracting officer shall make available for review
at the contracting office (to the extent of the SBA representative's
security clearance) all proposed acquisitions in excess of the micro-
purchase threshold that have not been unilaterally set aside for small
business.
(e) To the extent practicable, unilateral determinations initiated
by a contracting officer shall be used as the basis for small business
set-asides, in total or in part, or reserves, rather than joint
determinations by an SBA PCR and a contracting officer.
(f) All solicitations involving set-asides, in total or in part, or
reserves, shall] specify the NAICS code(s) and corresponding size
standard(s) (see 19.102).
(g) Except as authorized by law, a contract may not be awarded as a
result of a small business set-aside if the cost to the awarding agency
exceeds the fair market price.
(h) The performance of work requirements (i.e., limitations on
subcontracting and the nonmanufacturer rule) apply to small business
set-asides, in total or in part, sole source awards made pursuant to
subparts 19.8, 19.13, 19.14, and 19.15, and orders that are set aside
(see 19.505).
0
38. Amend section 19.502-1 by removing from paragraph (a)(2) ``industry
category'' and adding ``industry'' in its place; and revising paragraph
(b) to read as follows:
[[Page 88085]]
19.502-1 Requirements for setting aside acquisitions.
* * * * *
(b) This requirement does not apply to purchases of $3,500 or less
($20,000 or less for acquisitions as described in 13.201(g)(1)), or
purchases from required sources under part 8 (e.g., Committee for
Purchase From People Who are Blind or Severely Disabled).
0
39. Amend section 19.502-2 by revising paragraphs (a), (b)(1), and
(b)(2); and removing paragraph (c) to read as follows:
19.502-2 Total small business set-asides.
(a) Before setting aside an acquisition under this paragraph, refer
to 19.203(b). Each acquisition of supplies or services that has an
anticipated dollar value exceeding $3,500 ($20,000 for acquisitions as
described in 13.201(g)(1)), but not over $150,000 ($300,000 for
acquisitions described in paragraph (1)(i) of the Simplified
Acquisition Threshold definition at 2.101), shall be set aside for
small business unless the contracting officer determines there is not a
reasonable expectation of obtaining offers from two or more responsible
small business concerns that are competitive in terms of fair market
prices, quality, and delivery. If the contracting officer receives only
one acceptable offer from a responsible small business concern in
response to a set-aside, the contracting officer should make an award
to that firm. If the contracting officer receives no acceptable offers
from responsible small business concerns, the set-aside shall be
withdrawn and the requirement, if still valid, shall be resolicited on
an unrestricted basis. The small business set-aside does not preclude
the award of a contract as described in 19.203.
(b) * * *
(1) Offers will be obtained from at least two responsible small
business concerns; and
(2) Award will be made at fair market prices. Total small business
set-asides shall not be made unless such a reasonable expectation
exists (see 19.502-3 for partial set-asides). Although past acquisition
history and market research of an item or similar items are always
important, these are not the only factors to be considered in
determining whether a reasonable expectation exists. In making R&D
small business set-asides, there must also be a reasonable expectation
of obtaining from small businesses the best scientific and
technological sources consistent with the demands of the proposed
acquisition for the best mix of cost, performances, and schedules.
0
40. Revise section 19.502-3 to read as follows:
19.502-3 Partial set-asides of contracts other than multiple-award
contracts.
(a) The contracting officer shall set aside a portion or portions
of an acquisition, except for construction, for exclusive small
business participation when--
(1) Market research indicates that a total set-aside is not
appropriate (see 19.502-2);
(2) The requirement can be divided into distinct portions or
categories (e.g., Line Item Numbers (LINs), Special Item Numbers
(SINs), Sectors, Functional Areas (FAs), or equivalent);
(3) The acquisition is not subject to simplified acquisition
procedures;
(4) Two or more responsible small business concerns are expected to
submit an offer on the set-aside portion or portions of the acquisition
at a fair market price;
(5) The specific program eligibility requirements identified in
this part apply; and
(6) The solicitation will result in a contract other than a
multiple-award contract (see 2.101 for definition of multiple-award
contract.
(b) When the contracting officer determines that a requirement is
to be partially set aside, the solicitation shall identify which
portion or portions are set aside and not set aside.
(c) The contracting officer shall specify in the solicitation how
offers shall be submitted with regards to the set-aside and non-set-
aside portions.
(d) Offers received from concerns that do not qualify as small
business concerns shall be considered nonresponsive and shall be
rejected on the set-aside portion of partial set-asides. However,
before rejecting an offer otherwise eligible for award because of
questions concerning the size representation, an SBA determination must
be obtained (see subpart 19.3).
0
41. Revise section 19.502-4 to read as follows:
19.502-4 Partial set-asides of multiple-award contracts.
(a) In accordance with section 1331 of Public Law 111-240 (15
U.S.C. 644(r)(1)), the contracting officer may set aside a portion or
portions of a multiple-award contract, except for construction, for any
of the small business concerns identified at 19.000(a)(3) when--
(1) Market research indicates that a total set-aside is not
appropriate (see 19.502-2);
(2) The requirement can be divided into distinct portions or
categories (e.g., Line Item Numbers (LINs), Special Item Numbers
(SINs), Sectors, Functional Areas (FAs), or equivalent);
(3) The acquisition is not subject to simplified acquisition
procedures;
(4) Two or more responsible small business concerns are expected to
submit an offer on the set-aside portion or portions of the acquisition
at a fair market price; and
(5) The specific program eligibility requirements identified in
this part apply.
(b) When the contracting officer determines that a requirement is
to be partially set aside, the solicitation shall identify which
portion or portions are set aside and not set aside.
(c) The contracting officer shall specify in the solicitation how
offers shall be submitted with regards to the set-aside and non-set-
aside portions.
(d) Offers received from concerns that do not qualify as small
business concerns shall be considered nonresponsive and shall be
rejected on the set-aside portion of partial set-asides. However,
before rejecting an offer otherwise eligible for award because of
questions concerning the size representation, an SBA determination must
be obtained (see subpart 19.3).
19.502-5 [Removed]
0
42. Remove section 19.502-5.
19.502-6 [Redesignated as 19.502-5]
0
43. Redesignate section 19.502-6 as section 19.502-5 and revise the
heading to read as follows:
19.502-5 Insufficient reasons for not setting aside an acquisition.
19.503 thru 19.507 [Redesignated as 19.502-6 thru 19.502-10]
0
44. Redesignate sections 19.503 through 19.507 as sections 19.502-6
through 19.502-10.
0
45. Amend newly designated section 19.502-8 by--
0
a. Revising paragraph (a); and
0
b. Removing from paragraph (b) ``procurement center representative''
wherever it appears and adding ``PCR'' in its place.
The revision to read as follows:
19.502-8 Rejecting Small Business Administration recommendations.
(a) If the contracting officer rejects a recommendation of the SBA,
written notice shall be furnished to the appropriate SBA representative
within 5 working days of the contracting officer's receipt of the
recommendation.
0
46. Amend newly designated section 19.502-9 by revising paragraph (a);
and removing from paragraph (b) ``SBA representative'' and
``procurement
[[Page 88086]]
center representative'' and adding ``SBA PCR'' and ``PCR'' in their
places, respectively to read as follows:
19.502-9 Withdrawing or modifying small business set-asides.
(a) If, before award of a contract involving a total or partial
small business set-aside, the contracting officer considers that award
would be detrimental to the public interest (e.g., payment of more than
a fair market price), the contracting officer may withdraw the small
business set-aside, whether it was unilateral or joint. The contracting
officer shall initiate a withdrawal of an individual small business
set-aside in total or in part, by giving written notice to the agency
small business specialist and the SBA PCR (or, if a PCR is not
assigned, see 19.402(a)) stating the reasons. In a similar manner, the
contracting officer may modify a unilateral or joint class small
business set-aside to withdraw one or more individual acquisitions.
0
47. Add new section 19.503 to read as follows:
19.503 Reserves.
(a) In accordance with section 1331 of Public Law 111-240 (15
U.S.C. 644(r)(3)) and 13 CFR 125.2(e)(4), contracting officers may, at
their discretion when conducting multiple-award procurements using full
and open competition, reserve one or more contract awards for any of
the small business concerns identified in 19.000(a)(3), when market
research indicates--
(1) A total set-aside is not feasible because there is no
reasonable expectation of receiving offers from at least two
responsible small business concerns identified in 19.000(a)(3), at a
fair market price that can perform the entire requirement; and
(2) A partial set-aside is not feasible because--
(i) The contracting officer is unable to divide the requirement
into distinct portions or categories (e.g. Line Item Numbers (LINs),
Special Item Numbers (SINs), Functional Areas (FAs), or other
equivalent); or
(ii) There is no reasonable expectation that at least two
responsible small business concerns identified in 19.000(a)(3) can
perform any portion of the requirement at a fair market price.
(b) A reserve will result in one of the following--
(1) One or more contract awards to any one or more types of small
business concerns identified in 19.000(a)(3); or
(2) In the case of a solicitation of a bundled requirement that
will result in a multiple-award contract, an award to one or more small
businesses with a Small Business Teaming Arrangement.
(c) The specific program eligibility requirements identified in
this part apply.
(d) The limitation on subcontracting and the nonmanufacturer rule
do not apply to reserves at the contract level, but shall apply to
orders that are set aside (see 19.505).
0
48. Add new section 19.504 to read as follows:
19.504 Setting aside orders under multiple-award contracts.
(a) In accordance with section 1331 of Public Law 111-240 (15
U.S.C. 644(r)(2)), contracting officers may, at their discretion, set
aside orders placed under multiple-award contracts for any of the small
business concerns identified in 19.000(a)(3).
(b) Orders under partial set-aside contracts.
(1) Only small business concerns awarded contracts for the
portion(s) or category(s) that were set aside under the solicitation
for the multiple-award contract may compete for orders issued under
those portion(s) or category(s).
(2) Small business awardees may compete against other-than-small
business awardees for an order issued under the portion of the
multiple-award contract that was not set aside, if the small business
received a contract award for the non-set-aside portion.
(c) Orders under reserves.
(1) The contracting officer may set aside orders for any of the
small business concerns identified in 19.000(a)(3) when there are two
or more contract awards for that type of small business concern; or
(2) The contracting officer may issue orders directly to one small
business concern for work that it can perform when there is only one
contract award to any one type of small business concern identified in
19.000(a)(3).
(3) Small business awardees may compete against other-than-small
business awardees for an order that is not set aside if the small
business received a contract award for the supplies or services being
ordered.
(d) Orders under Full and Open contracts.
(1) The contracting officer shall state in the solicitation and
resulting contract whether order set-asides will be discretionary or
mandatory when the conditions in 19.502-2 are met at the time of order
set-aside, and the specific program eligibility requirements, as
applicable, are also then met.
(2) Below $150,000. When setting aside an order below $150,000, the
contracting officer may set aside for any of the small businesses
identified in 19.000(a)(3).
(3) Above $150,000. When setting aside an order above $150,000, the
contracting officer shall first consider setting aside the order for
the small business socioeconomic programs (i.e., 8(a), HUBZone,
service-disabled veteran-owned small business (SDVOSB), and Women-Owned
Small Business (WOSB)) before considering a small business set-aside.
(4) The contracting officer shall comply with the specific program
eligibility requirements identified in this part in addition to the
ordering procedures for a multiple-award contract. For orders placed
under the Federal Supply Schedules Program, see 8.405-5. For orders
placed under all other multiple-award contracts, see 16.505.
0
49. Add new section 19.505 to read as follows:
19.505 Performance of work requirements.
(a) Limitation on subcontracting. To be awarded a contract or order
under a set-aside, the small business concern is required to perform:
(1) For services (except construction), at least 50 percent of the
cost incurred for personnel with its own employees.
(2) For supplies or products (other than a procurement from a
nonmanufacturer of such supplies or products), at least 50 percent of
the cost of manufacturing the supplies or products (not including the
costs of materials).
(3) For general construction, at least 15 percent of the cost (not
including the costs of materials) with its own employees.
(4) For construction by special trade contractors, at least 25
percent of the cost (not including the cost of materials) with its own
employees.
(b) Compliance period. A small business contractor is required to
comply with the limitation on subcontracting--
(1) For a contract that has been set aside, by the end of the base
term and then by the end of each subsequent option period. However, the
contracting officer may instead require the contractor to comply with
the limitation on subcontracting by the end of the performance period
for each order issued under the contract; and
(2) For an order set aside under a contract as described in 8.405-5
and 16.505(b)(2)(i)(F), by the end of the performance period for the
order.
(c) Nonmanufacturer Rule. (1) To be awarded a set-aside contract or
order for supplies as a nonmanufacturer, a contractor is required--
[[Page 88087]]
(i) To provide the end item of a small business manufacturer, that
has been manufactured or produced in the United States or its outlying
areas (but see 19.1308(e)(1)(i) for HUBZone contracts and HUBZone
orders);
(ii) To not exceed 500 employees;
(iii) To be primarily engaged in the retail or wholesale trade and
normally sell the type of item being supplied; and
(iv) To take ownership or possession of the item(s) with its
personnel, equipment or facilities in a manner consistent with industry
practice.
(2) In addition to the requirements set forth in (c)(1) of this
section, when the end item being acquired is a kit of supplies or other
goods, 50 percent of the total value of the components of the kit shall
be manufactured in the United States or its outlying areas by small
business concerns. Where the Government has specified an item for the
kit which is not produced by U.S. small business concerns, such items
shall be excluded from the 50 percent calculation. See 13 CFR
121.406(c) for further information regarding nonmanufacturer kit
assemblers.
(3) For size determination purposes, there can be only one
manufacturer of the end product being acquired. For the purposes of the
nonmanufacturer rule, the manufacturer of the end product being
acquired is the concern that transforms raw materials and/or
miscellaneous parts or components into the end product. Firms which
only minimally alter the item being procured do not qualify as
manufacturers of the end item, such as firms that add substances,
parts, or components to an existing end item to modify its performance
will not be considered the end item manufacturer, where those identical
modifications can be performed by and are available from the
manufacturer of the existing end item. See 13 CFR 121.406 for further
information regarding manufacturers.
(4) Waiver of nonmanufacturer rule. (i) The SBA may grant an
individual or a class waiver so that a nonmanufacturer does not have to
furnish the product of a small business (but see 19.1308(e)(2)).
(A) Class waiver. SBA may waive the performance of work requirement
for nonmanufacturers when SBA has determined that there are no small
business manufacturers or processors in the Federal market for a
particular class of products. This type of waiver is known as a class
waiver and would apply to an acquisition for a specific product (or a
product in a class of products). Contracting officers and other
interested parties may request that the SBA issue a waiver of the
nonmanufacturer rule, for a particular class of products.
(B) Individual waiver. The contracting officer may also request a
waiver for an individual acquisition because no known domestic small
business manufacturers or processors can reasonably be expected to
offer a product meeting the requirements of the solicitation. The type
of waiver is known as an individual waiver and would apply only to a
specific acquisition.
(ii) Requests for waivers shall be sent via email to
[email protected] or by mail to the--
Director for Government Contracting
United States Small Business Administration
Mail Code 6700
409 Third Street SW.
Washington, DC 20416.
(iii) For the most current listing of class waivers, contact the
SBA Office of Government Contracting or go to http://www.sba.gov/content/class-waivers.
(5) Exception to the nonmanufacturer rule. The SBA provides for an
exception to the nonmanufacturer rule when--
(i) The procurement of supplies or a manufactured end product--
(A) Is processed under simplified acquisition procedures (see part
13); or
(B) Is for an order set aside for any of the small business
concerns identified in 19.000(a)(3), placed under a full and openly
competed multiple-award contract;
(ii) The cost is not anticipated to exceed $25,000; and
(iii) The offeror supplies an end product that is manufactured or
produced in the United States.
(d) The contracting officer shall document a small business
contractor's compliance with the limitation on subcontracting as part
of its performance evaluation in accordance with the procedures set
forth in 42.1502.
0
50. Add section 19.506 to read as follows:
19.506 Documentation requirements
(a)(1) The contracting officer shall document the rationale when a
contract is not set aside for small business in accordance with 19.502-
2.
(2) The contracting officer shall document the rationale when a
multiple-award contract is not partially set aside, not reserved, and
does not allow for setting aside of orders, when these authorities
could have been used.
(b) If applicable, the documentation shall include the rationale
for not accepting the recommendations made by the agency Director of
Small and Disadvantaged Business Utilization, or, for the Department of
Defense, the Director of the Office of Small Business Programs, or the
Director's designee, as to whether a particular acquisition should be
awarded under subparts 19.5, 19.8, 19.13, 19.14, or 19.15.
(c) Documentation is not required if a contract award is
anticipated to a small business under subparts 19.5, 19.8, 19.13,
19.14, or 19.15.
19.508 [Redesignated as 19.507]
0
51. Redesignate section 19.508 as section 19.507 and amend newly
designated section 19.507 by revising paragraphs (c) through (f); and
adding new paragraphs (g) and (h) to read as follows:
19.507 Solicitation provisions and contract clauses.
* * * * *
(c) The contracting officer shall insert the clause at 52.219-6,
Notice of Total Small Business Set-Aside, in solicitations and
contracts involving total small business set-asides. This includes
multiple-award contracts when orders may be set aside for any of the
small business concerns identified in 19.000(a)(3), as described in
8.405-5 and 16.505(b)(2)(i)(F). Use the clause at 52.219-6 with its
Alternate I when including FPI in the competition in accordance with
19.502-7.
(d) The contracting officer shall insert the clause at 52.219-7,
Notice of Partial Small Business Set-Aside, in solicitations and
contracts involving partial small business set-asides. This includes
part or parts of multiple-award contracts, including those described in
38.101. Use the clause at 52.219-7 with its Alternate I when including
FPI in the competition in accordance with 19.502-7.
(e) The contracting officer shall insert the clause at 52.219-14,
Limitations on Subcontracting, in solicitations and contracts for
supplies, services, and construction, if any portion of the requirement
is to be set aside for small business and the contract amount is
expected to exceed $150,000. This includes multiple-award contracts
when orders may be set aside for small business concerns, as described
in 8.405-5 and 16.505(b)(2)(i)(F). For contracts that are set aside,
the contracting officer shall indicate in paragraph (d) of the clause
whether compliance with the limitations on subcontracting is required
at the contract or order level.
(f)(1) The contracting officer shall insert the clause at 52.219-
13, Notice of Set-Aside of Orders, in all solicitations for multiple-
award contracts under which orders may be set aside for any
[[Page 88088]]
of the small business concerns identified in 19.000(a)(3), and all
contracts awarded from such solicitations.
(2) The contracting officer shall insert the clause at 52.219-13
with its Alternate I in all full and open solicitations and contracts
for multiple-award contracts without reserves, under which orders will
be set aside for any of the small business concerns identified in
19.000(a)(3) if the conditions in 19.502-2 are met at the time of order
set-aside, and the specific program eligibility requirements, as
applicable, are also then met.
(g) The contracting officer shall insert the clause at 52.219-XX
Notice of Small Business Reserve, in solicitations and contracts
involving multiple-award contracts that have reserves.
(h)(1) The contracting officer shall insert the clause at 52.219-
YY, Nonmanufacturer Rule, in solicitations and contracts when the item
being acquired has been assigned a manufacturing or supply NAICS code,
and any portion of the requirement is set-aside for any of the small
business concerns identified in 19.000(a)(3) (with the exception of
HUBZone small business concerns) including multiple-award contracts
that provide for the set-aside of orders to small business concerns, or
is awarded on a sole-source basis in accordance with subparts 19.8 and
19.14. The clause shall not be used when the Small Business
Administration has determined that there are no small business
manufacturers of the product or end items and has waived the
nonmanufacturer rule (see 19.505(c)(4)).
(2) The clause at 52.219-YY with its Alternate I shall be used in
solicitations and contracts that have been set-aside or awarded on a
sole-source basis to HUBZone small business concerns, including
multiple-award contracts that provide for the set-aside of orders as
described in 8.405-5 and 16.505(b)(2)(i)(F).
0
52. Amend section 19.601 by adding paragraph (f) to read as follows:
19.601 General.
* * * * *
(f) For the purpose of receiving a COC on an unrestricted
acquisition, a small business nonmanufacturer may furnish any
domestically produced or manufactured product.
19.602-3 [Amended]
0
53. Amend section 19.602-3 by removing from paragraph (a)(2)
``Director,'' and adding ``Director of the'' in its place.
0
54. Amend section 19.602-4 by adding a sentence to the end of paragraph
(b) to read as follows:
19.602-4 Awarding the contract.
* * * * *
(b) * * * Where SBA issues a COC, the contracting officer may
decide not to award to that offeror for reasons unrelated to
responsibility.
0
55. Amend section 19.804-2 by revising paragraph (a) to read as
follows:
19.804-2 Agency offering.
(a) After completing its evaluation, the agency shall notify the
SBA of the extent of its plans to place 8(a) contracts with the SBA for
specific quantities of items or work, including 8(a) contracts that are
reserved in accordance with 19.503.
* * * * *
0
56. Amend section 19.804-6 by revising paragraphs (a) and (b) to read
as follows:
19.804-6 Indefinite delivery contracts.
(a) Separate offers and acceptances are not required for individual
orders under multiple-award contracts that have been set aside for
exclusive competition among 8(a) contractors, and the individual order
is to be competed among all 8(a) contract holders. SBA's acceptance of
the original contract is valid for the term of the contract.
(b) Sole source orders. The contracting officer may issue an order
as a sole source when--
(1) The multiple-award contract was set aside for exclusive
competition among 8(a) participants;
(2) The order has an estimated value less than or equal to the
dollar thresholds set forth at 19.805-1(a)(2);
(3) The offering and acceptance procedures at 19.804-2 and 19.804-3
are followed.
* * * * *
19.805-2 [Amended]
0
57. Amend section 19.805-2 by removing from paragraph (b)(2) ``under
19.809'' and adding ``under 19.809-1'' in its place.
0
58. Revise section 19.809 to read as follows:
19.809 Preaward considerations.
19.809-1 Preaward survey.
The contracting officer should request a preaward survey of the
8(a) contractor whenever considered useful. If the results of the
preaward survey or other information available to the contracting
officer raise substantial doubt as to the firm's ability to perform,
the contracting officer shall refer the matter to SBA for Certificate
of Competency consideration under subpart 19.6.
19.809-2 Performance of work requirements.
(a) Limitation on subcontracting. To be awarded a contract or order
under the 8(a) program, the 8(a) participant is required to perform--
(1) For services (except construction), at least 50 percent of the
cost incurred for personnel with its own employees;
(2) For supplies or products (other than a procurement from a
nonmanufacturer of such supplies or products), at least 50 percent of
the cost of manufacturing the supplies or products (not including the
costs of materials);
(3) For general construction, at least 15 percent of the cost with
its own employees (not including the costs of materials); and
(4) For construction by special trade contractors, at least 25
percent of the cost with its own employees (not including the cost of
materials).
(b) Compliance period. An 8(a) contractor is required to comply
with the limitation on subcontracting--
(1) For a contract under the 8(a) program, by the end of the base
term and then by the end of each subsequent option period. However, the
contracting officer may instead require the contractor to comply with
the limitation on subcontracting by the end of the performance period
for each order issued under the contract; and
(2) For an order set aside under the 8(a) program as described in
8.405-5 and 16.505(b)(2)(i)(F), by the end of the performance period
for the order.
(c) The applicable SBA District Director may waive the provisions
in paragraph (b)(1) requiring a participant to comply with the
limitation on subcontracting for each period of performance or for each
order. Instead, the District Director may permit the participant to
subcontract in excess of the limitations on subcontracting where the
District Director makes a written determination that larger amounts of
subcontracting are essential during certain stages of performance.
(1) The 8(a) participant is required to provide the SBA District
Director written assurance that the participant will ultimately comply
with the requirements of this section prior to contract completion. The
contracting officer shall review and concur with the written assurance
before submission to the SBA District Director.
(2) The contracting officer does not have the authority to waive
the provisions of this section requiring a participant to comply with
the
[[Page 88089]]
limitation on subcontracting for each period of performance or order,
even if the agency has a Partnership Agreement with SBA.
(3) Where the participant does not ultimately comply with the
performance of work requirements by the end of the contract, SBA will
not grant future waivers for the participant.
(d) Nonmanufacturer Rule. See 19.505(c) for application of the
nonmanufacturer rule, inclusive of waivers and exceptions to the
nonmanufacturer rule.
(e) The contracting officer shall document an 8(a) participant's
compliance with the limitation on subcontracting as part of its
performance evaluation in accordance with the procedures set forth in
42.1502.
19.810 [Amended]
0
59. Amend section 19.810 by removing from paragraph (b) ``for Small''
and adding ``for the Office of Small'' in its place.
0
60. Amend section 19.811-3 by revising paragraphs (d) and (e) to read
as follows:
19.811-3 Contract clauses.
* * * * *
(d) The contracting officer shall insert the clause at 52.219-18,
Notification of Competition Limited to Eligible 8(a) Concerns, in
competitive solicitations and contracts when the acquisition is
accomplished using the procedures of 19.805. The clause at 52.219-18
with its Alternate I shall be used when competition is to be limited to
8(a) concerns within one or more specific SBA districts pursuant to
19.804-2.
(e) See 19.507(e) regarding the limitations on subcontracting and
19.507(h) regarding the nonmanufacturer rule to any contract or order
resulting from this subpart.
19.1303 [Amended]
0
61. Amend section 19.1303 by removing paragraph (e).
0
62. Amend section 19.1307 by--
0
a. Removing from paragraph (a)(1) ``or'';
0
b. Removing from paragraph (a)(2) ``contracts).'' and adding
``contracts); or'' in its place; and
0
c. Adding paragraph (a)(3).
The addition to read as follows:
19.1307 Price evaluation preference for HUBZone small business
concerns.
(a) * * *
(3) Where the solicitation has been reserved for any of the small
business concerns identified in 19.000(a)(3).
* * * * *
0
63. Revise section 19.1308 to read as follows:
19.1308 Performance of work requirements.
(a) See 13 CFR 125.1 for definitions of terms used in paragraph (b)
of this section.
(b) Limitation on subcontracting. To be awarded a contract or order
that was set aside or awarded on a sole source basis to a HUBZone small
business concern, the HUBZone small business concern is required--
(1) For services (except construction), to spend at least 50
percent of the cost of performance incurred for personnel on its own
employees or on the employees of other HUBZone small business concerns;
(2) For supplies or products (other than a procurement from a
nonmanufacturer of such supplies or products), to spend at least 50
percent of the cost of manufacturing, excluding the cost of materials,
on performing the contract in a HUBZone.
(3) For general construction--
(i) To spend at least 15 percent of the cost of performance
incurred for personnel on its own employees; and
(ii) To spend at least 50 percent of the cost of performance
incurred for personnel on its own employees or on a combination of its
own employees and employees of HUBZone small business concern
subcontractors.
(4) For construction by special trade contractors--
(i) To spend at least 25 percent of the cost of contract
performance incurred for personnel on its own employees; and
(ii) To spend at least 50 percent of the cost of the contract
incurred for personnel on its own employees or on a combination of its
own employees and employees of HUBZone small business concern
subcontractors.
(c) Before issuing a solicitation for general construction or
construction by special trade contractors, the contracting officer
shall determine if at least two HUBZone small business concerns can
spend at least 50 percent of the cost of contract performance to be
incurred for personnel on their own employees or subcontract employees
of other HUBZone small business concerns. If the contracting officer is
unable to make this determination, he or she may waive the 50 percent
requirement; however, the HUBzone small business concern is still
required to meet the cost incurred for personnel requirements in
paragraphs (b)(3)(i) and (b)(4)(i).
(d) Compliance period. A HUBZone small business contractor is
required to comply with the limitation on subcontracting--
(1) For a contract that has been set aside or awarded on a sole
source basis to a HUBZone small business concern, by the end of the
base term and then by the end of each subsequent option period.
However, the contracting officer may instead require the contractor to
comply with the limitation on subcontracting by the end of the
performance period for each order issued under the contract; and
(2) For an order set aside for HUBZone small business concerns as
described in 8.405-5 and 16.505(b)(2)(i)(F), by the end of the
performance period for the order.
(e) Nonmanufacturer rule. (1) To be awarded a set-aside contract or
order for supplies as a nonmanufacturer, a contractor is required--
(i) To provide the end item of a HUBZone small business
manufacturer, that has been manufactured or produced in the United
States or its outlying areas;
(ii) Not to exceed 500 employees;
(iii) To be primarily engaged in the retail or wholesale trade and
normally sell the type of item being supplied; and
(iv) To take ownership or possession of the item(s) with its
personnel, equipment or facilities in a manner consistent with industry
practice.
(2) There are no class waivers or waivers to the nonmanufacturer
rule for individual solicitations for HUBZone contracts and HUBZone
orders.
(3) For HUBZone contracts and HUBZone orders at or below $25,000 in
total value, a HUBZone small business concern may supply the end item
of any manufacturer, including a large business, so long as the product
acquired is manufactured or produced in the United States.
(f) The contracting officer shall document a HUBZone contractor's
compliance with the limitation on subcontracting as part of its
performance evaluation in accordance with the procedures set forth in
42.1502.
0
64. Revise section 19.1309 to read as follows:
19.1309 Contract clauses.
(a)(1) The contracting officer shall insert the clause 52.219-3,
Notice of HUBZone Set-Aside or Sole Source Award, in solicitations and
contracts for acquisitions that are set aside or awarded on a sole
source basis to, HUBZone small business concerns under 19.1305 or
19.1306. This includes multiple-award contracts when orders may be set
aside for HUBZone small business concerns as described in 8.405-5 and
16.505(b)(2)(i)(F).
(2) The contracting officer shall use the clause with its Alternate
I to waive the 50 percent requirement if the conditions at 19.1308(c)
apply.
(b)(1) The contracting officer shall insert the clause at FAR
52.219-4,
[[Page 88090]]
Notice of Price Evaluation Preference for HUBZone Small Business
Concerns, in solicitations and contracts for acquisitions conducted
using full and open competition.
(2) The contracting officer shall use the clause with its Alternate
I to waive the 50 percent requirement if the conditions at 19.1308(c)
apply.
(c) For use of clause 52.219-YY, Nonmanufacturer Rule, see the
prescription at 19.507(h)(2).
0
65. Amend section 19.403 by revising paragraph (d) to read as follows:
19.1403 Status as a service-disabled veteran-owned small business
concern.
* * * * *
(d) Any service-disabled veteran-owned small business concern
(nonmanufacturer) is required to meet the requirements in 19.1407(c) to
receive a benefit under this program.
19.1407 [Redesignated as 19.1408]
0
66. Redesignate section 19.1407 as section 19.1408.
0
67. Add new section 19.1407 to read as follows:
19.1407 Performance of work requirements.
(a) Limitation on subcontracting. To be awarded a contract or order
under an SDVOSB set-aside or a contract as an SDVOSB sole source, the
SDVOSB concern is required to--
(1) For services (except construction), spend at least 50 percent
of the cost incurred for personnel on its own employees or the
employees of other SDVOSBs;
(2) For supplies or products (other than a procurement from a
nonmanufacturer of such supplies or products), spend at least 50
percent of the cost of manufacturing the supplies or products (not
including the costs of materials) on itself or by other SDVOSBs;
(3) For general construction, spend at least 15 percent of the cost
(not including the costs of materials) incurred for personnel on its
own employees or the employees of other SDVOSBs; or
(4) For construction by special trade contractors, incur at least
25 percent of the cost (not including the cost of materials) incurred
for personnel on its own employees or the employees of other SDVOSBs.
(b) Compliance period. An SDVOSB contractor is required to comply
with the limitation on subcontracting--
(1) For a contract that has been set aside or awarded on a sole
source basis to an SDVOSB concern, by the end of the base term and then
by the end of each subsequent option period. However, the contracting
officer may instead require the contractor to comply with the
limitation on subcontracting by the end of the performance period for
each order issued under the contract; and
(2) For an order set aside for SDVOSB contractor as described in
8.405-5 and 16.505(b)(2)(i)(F), by the end of the performance period
for the order.
(c) Nonmanufacturer rule. See 19.505(c) for application of the
nonmanufacturer rule, inclusive of waivers and exceptions to the
nonmanufacturer rule.
(d) The contracting officer shall document an SDVOSB contractor's
compliance with the limitation on subcontracting as part of its
performance evaluation in accordance with the procedures set forth in
42.1502.
0
68. Amend the newly designated section 19.1408 by removing from the
body paragraph ``or reserved for,'' and adding a sentence to the end of
the paragraph to read as follows:
19.1408 Contract clauses.
* * * For contracts that are set-aside, the contracting officer
shall indicate in paragraph (e) of the clause whether compliance with
the limitations on subcontracting is required at the contract level or
order level.
19.1503 [Amended]
0
69. Amend section 19.1503 by removing paragraph (g).
19.1507 [Redesignated as 19.1508]
0
70. Redesignate section 19.1507 as section 19.1508.
0
71. Add new section 19.1507 to read as follows:
19.1507 Performance of work requirements.
(a) Limitation on subcontracting. To be awarded a contract or order
that is set aside for an EDWOSB or for a WOSB eligible under the WOSB
Program, the contractor is required to perform--
(1) For services (except construction), at least 50 percent of the
cost incurred for personnel with its own employees;
(2) For supplies or products (other than a procurement from a
nonmanufacturer of such supplies or products), at least 50 percent of
the cost of manufacturing the supplies or products (not including the
costs of materials);
(3) For general construction, at least 15 percent of the cost with
its own employees (not including the costs of materials); or
(4) For construction by special trade contractors, at least 25
percent of the cost with its own employees (not including the cost of
materials).
(b) Compliance period. An EDWOSB or WOSB is required to comply with
the limitation on subcontracting--
(1) For a contract that has been set aside, by the end of the base
term and then by the end of each subsequent option period. However, the
contracting officer may instead require the contractor to comply with
the limitation on subcontracting by the end of the performance period
for each order issued under the contract; and
(2) For an order set aside as described in 8.405-5 and
16.505(b)(2)(i)(F), by the end of the performance period for the order.
(c) Nonmanufacturer rule. See 19.505(c) for application of the
nonmanufacturer rule, inclusive of waivers and exceptions to the
nonmanufacturer rule.
(d) The contracting officer shall document an EDWOSB or WOSB
contractor's compliance with the limitation on subcontracting as part
of its performance evaluation in accordance with the procedures set
forth in 42.1502.
0
72. Revise section 19.1508 by--
0
a. Redesignating paragraph (a) as paragraph (a)(1);
0
b. Removing from the newly designated paragraph (a)(1) ``or reserved'';
0
c. Adding paragraph (a)(2);
0
d. Redesignating paragraph (b) as paragraph (b)(1);
0
e. Removing from the newly designated paragraph (b)(1) ``or reserved'';
and
0
f. Adding paragraph (b)(2).
The additions to read as follows:
19.1508 Contract clauses.
(a) * * *
(2) For contracts that are set aside, the contracting officer shall
indicate in paragraph (e) of the clause whether compliance with the
limitations on subcontracting is required at the contract level or
order level.
(b) * * *
(2) For contracts that are set aside, the contracting officer shall
indicate in paragraph (e) of the clause whether compliance with the
limitations on subcontracting is required at the contract level or
order level.
Part 42--Contract Administration and Audit Services
0
73. Amend section 42.1503 by revising paragraph (b)(2)(vi) to read as
follows:
42.1503 Procedures.
* * * * *
[[Page 88091]]
(b) * * *
(2) * * *
(vi) Other (as applicable) (e.g., compliance with limitation on
subcontracting, late or nonpayment to subcontractors, trafficking
violations, tax delinquency, failure to report in accordance with
contract terms and conditions, defective cost or pricing data,
terminations, suspension and debarments).
* * * * *
Part 52--Solicitation Provisions and Contract Clauses
0
74. Amend section 52.204-8 by--
0
a. Revising the date of the clause;
0
b. Revising paragraph (c)(1)(x);
0
c. Adding paragraph (c)(1)(x)(C); and
0
d. Adding Alternate I.
The revisions and additions to read as follows:
52.204-8 Annual Representations and Certifications.
* * * * *
Annual Representations and Certifications (Date)
* * * * *
(c)(1) * * *
(x) 52.219-1, Small Business Program Representations (Basic,
Alternates I and II). This provision applies to solicitations when
the contract will be performed in the United States or its outlying
areas.
* * * * *
(C) The provision with its Alternate II applies to solicitations
that will result in a multiple-award contract with more than one
NAICS code assigned.
* * * * *
Alternate I (DATE). As prescribed in 4.1202(a), substitute the
following paragraph (a) for paragraph (a) of the basic provision:
(a)(1) The North American Industry Classification System (NAICS)
codes and corresponding size standards for this acquisition are as
follows; the categories or portions these NAICS codes are assigned
to are specified elsewhere in the solicitation:
------------------------------------------------------------------------
NAICS code Size standard
------------------------------------------------------------------------
---- ----
---- ----
---- ----
------------------------------------------------------------------------
[Contracting Officer to insert NAICS codes and size standards].
(2) The small business size standard for a concern which submits
an offer in its own name, other than on a construction or service
contract, but which proposes to furnish a product which it did not
itself manufacture (i.e. nonmanufacturer), is 500 employees.
0
75. Amend section 52.212-1 by revising the date of the provision and
paragraph (a) to read as follows:
52.212-1 Instructions to Offerors--Commercial Items.
* * * * *
Instructions to Offerors--Commercial Items (Date)
(a) North American Industry Classification System (NAICS) code
and small business size standard. The NAICS code(s) and small
business size standard(s) for this acquisition appear elsewhere in
the solicitation. However, the small business size standard for a
concern which submits an offer in its own name, but which proposes
to furnish an item which it did not itself manufacture, is 500
employees.
* * * * *
0
76. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Revising paragraphs (b)(11), (b)(12), (b)(14), (b)(15), (b)(19), and
(b)(21) through (b)(24);
0
c. Redesignating paragraphs (b)(25) through (b)(58) as paragraphs
(b)(27) through (b)(59), respectively; and
0
d. Adding new paragraphs (b)(25) and (b)(26).
The additions and revisions to read as follows:
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required to Implement Statutes or
Executive Orders--Commercial Items (Date)
* * * * *
(b) * * *
_(11)(i) 52.219-3, Notice of HUBZone Set-Aside or Sole-Source
Award (DATE) (15 U.S.C. 657a).
_(ii) Alternate I (DATE) of 52.219-3.
_(12)(i) 52.219-4, Notice of Price Evaluation Preference for
HUBZone Small Business Concerns (DATE) (if the offeror elects to
waive the preference, it shall so indicate in its offer) (15 U.S.C.
657a).
_(ii) Alternate I (DATE) of 52.219-4.
* * * * *
_(14)(i) 52.219-6, Notice of Total Small Business Set-Aside
(DATE) (15 U.S.C. 644).
_(ii) Alternate I (DATE).
_(15)(i) 52.219-7, Notice of Partial Small Business Set-Aside
(DATE) (15 U.S.C. 644).
_(ii) Alternate I (DATE) of 52.219-7.
* * * * *
_(19) 52.219-14, Limitations on Subcontracting (DATE) (15 U.S.C.
637(a)(14)).
* * * * *
_(21) 52.219-27, Notice of Service-Disabled Veteran-Owned Small
Business Set-Aside (DATE) (15 U.S.C. 657 f).
_(22) 52.219-28, Post Award Small Business Program
Rerepresentation (DATE) (15 U.S.C. 632(a)(2)).
_(23) 52.219-29, Notice of Set-Aside for, or Sole Source Award
to, Economically Disadvantaged Women-Owned Small Business (EDWOSB)
Concerns (DATE) (15 U.S.C. 637(m)).
_(24) 52.219-30, Notice of Set-Aside for, or Sole Source Award
to, Women-Owned Small Business Concerns Eligible Under the Women-
Owned Small Business Program (DATE) (15 U.S.C. 637(m)).
_(25) 52.219-XX, Notice of Small Business Reserve (DATE) (15
U.S.C. 644(r)).
_(26) 52.219-YY, Nonmanufacturer Rule (DATE) (15 U.S.C.
637(a)(17)).
_(i) Alternate I (DATE) of 52.219-YY.
* * * * *
0
77. Amend section 52.219-1 by--
0
a. Revising the date of the clause and paragraph (b)(3);
0
b. Removing the heading from paragraph (d) and paragraph (d)(1);
0
c. Redesignating paragraph (d)(2) as the introductory text of paragraph
(d);
0
d. Redesignating paragraphs (d)(2)(i) through (iii) as paragraphs
(d)(1) through (3);
0
e. Removing from the newly designated introductory paragraph (d)
``Under'' and adding ``Notice. Under'' in its place; and
0
f. Adding Alternate II to read as follows:
52.219-1 Small Business Program Representations.
* * * * *
Small Business Program Rerepresentations (Date)
* * * * *
(b) * * *
(3) The small business size standard for a concern which submits
an offer in its own name, other than on a construction or service
contract, but which proposes to furnish a product which it did not
itself manufacture i.e. nonmanufacturer, is 500 employees.
* * * * *
Alternate II (DATE). As prescribed in 19.309(a)(3), substitute
the following paragraphs (b) and (c)(1) for paragraphs (b) and
(c)(1) of the basic provision:
(b)(1) The North American Industry Classification System (NAICS)
codes and corresponding size standards for this acquisition are as
follows; the categories or portions these NAICS codes are assigned
to are specified elsewhere in the solicitation:
------------------------------------------------------------------------
NAICS code Size standard
------------------------------------------------------------------------
---- ----
---- ----
---- ----
------------------------------------------------------------------------
[Contracting Officer to insert NAICS codes and size standards].
(2) The small business size standard for a concern which submits
an offer in its own name, other than on a construction or service
contract, but which proposes to furnish a product which it did not
itself manufacture (i.e. nonmanufacturer), is 500 employees.
(c) Representations.
[[Page 88092]]
(1) The offeror shall represent its small business size status
for each one of the NAICS codes assigned to this acquisition under
which it is submitting an offer.
------------------------------------------------------------------------
NAICS code Small business concern (yes/no)
------------------------------------------------------------------------
---- ----
---- ----
---- ----
------------------------------------------------------------------------
0
78. Amend section 52.219-3 by--
0
a. Revising the introductory paragraph, the date of the clause, and
paragraph (a);
0
b. Removing from paragraph (b)(1) ``or reserved for,''
0
c. Revising paragraphs (d), (e), and (f); and
0
d. Revising Alternate I.
The revised text to read as follows:
52.219-3 Notice of HUBZone Set-Aside or Sole Source Award.
As prescribed in 19.1309(a)(1), insert the following clause:
Notice of HUBZone Set-Aside or Sole Source Award (Date)
(a) Definition. See 13 CFR 125.1 and 126.103 for definitions of
terms used in the clause.
* * * * *
(d) Limitation on subcontracting. The Contractor shall spend--
(1) For services (except construction), at least 50 percent of
the cost of contract performance incurred for personnel on its own
employees or employees of other HUBZone small business concerns;
(2) For supplies (other than acquisition from a nonmanufacturer
of the supplies), at least 50 percent of the cost of manufacturing,
excluding the cost of materials, in a HUBZone;
(3) For general construction--
(i) At least 15 percent of the cost of contract performance
incurred for personnel on its own employees;
(ii) At least 50 percent of the cost of the contract performance
incurred for personnel on its own employees or on a combination of
its own employees and employees of HUBZone small business concern
subcontractors; and
(iii) No more than 50 percent of the cost of contract
performance incurred for personnel on concerns that are not HUBZone
small business concerns; or
(4) For construction by special trade contractors--
(i) At least 25 percent of the cost of contract performance
incurred for personnel on its own employees;
(ii) At least 50 percent of the cost of the contract performance
incurred for personnel on its own employees or on a combination of
its own employees and employees of HUBZone small business concern
subcontractors;
(iii) No more than 50 percent of the cost of contract
performance to be incurred for personnel on concerns that are not
HUBZone small business concerns.
(e) A HUBZone small business contractor shall comply with the
limitation on subcontracting as follows:
(1) For contracts, in accordance with (b)(1) and (2) of this
clause--
[Contracting Officer check as appropriate.]
_By the end of the base term of the contract and then by the end
of each subsequent option period; or
_By the end of the performance period for each order issued
under the contract.
(2) For set-aside orders, in accordance with (b)(3) of this
clause, by the end of the performance period for the order.
(f) A HUBZone joint venture agrees that, in the performance of
the contract, the applicable percentage specified in paragraph (c)
of this clause shall be performed by the aggregate of the HUBZone
small business participants.
* * * * *
Alternate I (DATE). As prescribed in 19.1309(a)(2), substitute
the following paragraphs (d)(3) and (d)(4) for paragraphs (d)(3) and
(d)(4) of the basic clause:
(3) For general construction, at least 15 percent of the cost of
the contract performance to be incurred for personnel shall be spent
on the concern's employees; or
(4) For specialty trade construction, at least 25 percent of the
cost of the contract performance to be incurred for personnel shall
be spent on the concern's employees.
* * * * *
0
79. Amend section 52.219-4 by--
0
a. Revising the introductory paragraph, date, and paragraph (a) of the
clause;
0
b. Removing from paragraph (b)(1)(i) ``preference; and'' and adding
``preference;'' in its place;
0
c. Removing from paragraph (b)(1)(ii) ``concerns.'' and adding
``concerns; and'' in its place;
0
d. Adding paragraph (b)(1)(iii);
0
e. Revising paragraph (d);
0
f. Removing paragraph (f);
0
g. Redesignating paragraph (g) as paragraph (f); and
0
h. Revising Alternate I.
The additions and revisions to read as follows:
52.219-4 Notice of Price Evaluation Preference for HUBZone Small
Business Concerns.
As prescribed in 19.1309(b)(1), insert the following clause:
Notice of Price Evaluation for HUBZone Small Business Concerns (Date)
(a) Definition. See 13 CFR 126.103 for definition of HUBZone.
(b) * * *
(1) * * *
(iii) Where the solicitation has been reserved for a HUBZone
small business concern.
* * * * *
(d) Limitation on subcontracting. The Contractor shall spend--
(1) For services (except construction), at least 50 percent of
the cost of personnel for contract performance on its own employees
or employees of other HUBZone small business concerns;
(2) For supplies (other than acquisition from a nonmanufacturer
of the supplies), at least 50 percent of the cost of manufacturing,
excluding the cost of materials, in a HUBZone;
(3) For general construction--
(i) At least 15 percent of the cost of contract performance to
be incurred for personnel on its own employees;
(ii) At least 50 percent of the cost of the contract performance
to be incurred for personnel on its own employees or on a
combination of its own employees and employees of HUBZone small
business concern subcontractors; and
(iii) No more than 50 percent of the cost of contract
performance to be incurred for personnel on concerns that are not
HUBZone small business concerns; or
(4) For construction by special trade contractors--
(i) At least 25 percent of the cost of contract performance to
be incurred for on its own employees;
(ii) At least 50 percent of the cost of the contract performance
to be incurred for personnel on its own employees or on a
combination of its own employees and employees of HUBZone small
business concern subcontractors;
(iii) No more than 50 percent of the cost of contract
performance to be incurred for personnel on concerns that are not
HUBZone small business concerns.
* * * * *
(End of clause)
Alternate I (DATE). As prescribed in 19.1309(b)(2), substitute
the following paragraphs (d)(3) and (d)(4) for paragraphs (d)(3) and
(d)(4) of the basic clause:
(3) For general construction, at least 15 percent of the cost of
the contract performance to be incurred for personnel on its own
employees; or
(4) For construction by special trade contractors, at least 25
percent of the cost of the contract performance to be incurred for
personnel on its own employees.
* * * * *
0
80. Amend section 52.219-6 by--
0
a. Revising the introductory text and the date of the clause;
0
b. Removing from paragraph (b)(1) ``or reserved'';
0
c. Removing paragraph (d) and Alternate I;
0
d. Redesignating Alternate II as Alternate I; and
0
e. Revising the date and the introductory text of the newly designated
Alternate I.
The revisions to read as follows:
52.219-6 Notice of Total Small Business Set-Aside.
As prescribed in 19.507(c), insert the following clause:
[[Page 88093]]
Notice of Total Business Set-Aside (Date)
* * * * *
Alternate I (DATE). As prescribed in 19.507(c), substitute the
following paragraph (c) for paragraph (c) of the basic clause: * * *
0
81. Amend section 52.219-7 by--
0
a. Revising the introductory text and the date of the clause;
0
b. Revising paragraphs (b) and (c);
0
c. Adding paragraphs (d) and (e);
0
d. Removing Alternate I; and
0
e. Redesignating Alternate II as Alternate I and revising the
alternate.
The addition and revisions to read as follows:
52.219-7 Notice of Partial Small Business Set-Aside.
As prescribed in 19.507(d), insert the following clause:
Notice of Partial Small Business Set-Aside (Date)
* * * * *
(b) Applicability. This clause applies only to contracts that
have been partially set aside for small business concerns.
(c) General. (1) A portion of this requirement, identified
elsewhere in this solicitation, has been set aside for award to one
or more small business concerns identified in 19.000(a)(3). Offers
received from concerns that do not qualify as small business
concerns shall be considered nonresponsive and shall be rejected on
the set-aside portion of the requirement.
(2) Small business concerns may submit offers and compete for
the non-set-aside portion and the set-aside portion.
(d) The Offeror shall--
[Contracting Officer check as appropriate.]
_Submit a separate offer for each portion of the solicitation
for which it wants to compete (i.e. set-aside portion, non-set-aside
portion, or both); or
_Submit one offer to include all portions for which it wants to
compete.
(e) Partial set-asides of multiple-award contracts.
(1) Small business concerns will not compete against other-than-
small business concerns for any order issued under the part or parts
of the multiple-award contract that are set aside.
(2) Small business concerns may compete for orders issued under
the part or parts of the multiple-award contract that are not set
aside, if the small business concern received a contract award for
the non-set-aside portion.
(End of Clause)
Alternate I (DATE). As prescribed in 19.507(d), add the following
paragraph (f) to the basic clause:
(f) Notwithstanding paragraph (c) of this clause, offers from
Federal Prison Industries, Inc., will be solicited and considered
for both the set-aside and non-set-aside portion of this
requirement.
0
82. Amend section 52.219-13 by--
0
a. Revising the introductory text and the date of the clause;
0
b. Redesignating the body paragraph as paragraph (b);
0
c. Adding paragraph (a); and
0
d. Adding Alternate I.
The revised and added text reads as follows:
52.219-13 Notice of Set-Aside of Orders.
As prescribed in 19.507(f)(1), insert the following clause:
Notice of Set-Aside of Orders (Date)
(a) The contracting officer may set aside orders to the small
business concerns identified in 19.000(a)(3).
* * * * *
Alternate I (Date). As prescribed in 19.507(f)(2), substitute the
following paragraph (a) for paragraph (a) of the basic clause:
(a) The contracting officer will set aside orders to the small
business concerns identified in 19.000(a)(3) when the conditions of
FAR 19.502-2 and the specific program eligibility requirements are
met, as applicable.
0
83. Amend section 52.219-14 by--
0
a. Revising the introductory text and the date of the clause;
0
b. Removing from paragraph (b)(1) ``or reserved'';
0
c. Revising the introductory text of paragraph (c); and
0
d. Adding paragraph (d).
The addition and revision to read as follows:
52.219-14 Limitations on Subcontracting.
As prescribed in 19.507(e), insert the following clause:
Limitations on Subcontracting (Date)
* * * * *
(c) Limitation on subcontracting. By submission of an offer and
execution of a contract, the Offeror/Contractor agrees that in
performance of the contract in the case of a contract for--
* * * * *
(d) The Contractor shall comply with the limitation on
subcontracting as follows:
(1) For contracts, in accordance with (b)(1) and (2) of this
clause--
[Contracting Officer check as appropriate.]
_By the end of the base term of the contract and then by the end
of each subsequent option period; or
_By the end of the performance period for each order issued
under the contract.
(2) For set-aside orders, in accordance with (b)(3) of this
clause, by the end of the performance period for the order.
(End of clause)
0
84. Amend section 52.219-18 by revising the date of the clause and
paragraph (d); and removing Alternate II to read as follows:
52.219-18 Notification of Competition Limited to Eligible 8(a)
Concerns.
* * * * *
Notification of Competition Limited to Eligible 8(a) Concerns (Date)
* * * * *
(d) The___[insert name of SBA's contractor] shall notify the___
[insert name of contracting agency] Contracting Officer in writing
immediately upon entering an agreement (either oral or written) to
transfer all or part of its stock.
(End of clause)
* * * * *
0
85. Amend section 52.219-27 by--
0
a. Revising the introductory text and the date of the clause;
0
b. Removing from paragraph (b)(1) ``or reserved'';
0
c. Revising the heading of paragraph (d);
0
d. Removing paragraph (f);
0
e. Redesignating paragraph (e) as paragraph (f); and
0
f. Adding new paragraph (e).
The addition and revisions to read as follows:
52.219-27 Notice of Service-Disabled Veteran-Owned Small Business
Set-Aside.
As prescribed in 19.1408, insert the following clause:
Notice of Service-Disabled Veteran-Owned Small Business Set-Aside
(Date)
* * * * *
(d) Limitation on subcontracting. * * *
(e) A service-disabled veteran-owned small business concern
shall comply with the limitation on subcontracting as follows:
(1) For contracts, in accordance with (b)(1) and (2) of this
clause--
[Contracting Officer check as appropriate.]
_By the end of the base term of the contract and then by the end
of each subsequent option period; or
_By the end of the performance period for each order issued
under the contract.
(2) For set-aside orders, in accordance with (b)(3) of this
clause, by the end of the performance period for the order.
* * * * *
0
86. Amend section 52.219-28 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (b) ``status'' and adding ``and
socioeconomic status'' in its place;
0
c. Removing from paragraph (c) ``code'' and adding ``code(s)'' in its
place, twice;
0
d. Revising paragraph (g); and
0
e. Adding paragraph (h).
The addition and revision to read as follows:
52.219-28 Post-Award Small Business Program Rerepresentation.
* * * * *
[[Page 88094]]
Post-Award Small Business Program Rerepesentation (Date)
* * * * *
(g) If the Contractor does not have representations and
certifications in SAM, or does not have a representation in SAM for
the NAICS code applicable to this contract, the Contractor is
required to complete the following rerepresentation and submit it to
the contracting office, along with the contract number and the date
on which the rerepresentation was completed:
(1) The Contractor represents that it [square] is, [square] is
not a small business concern under NAICS Code___assigned to contract
number___.
(2) [Complete only if the Contractor rerepresented itself as a
small business concern in paragraph (g)(1) of this clause.] The
Contractor rerepresents that it [square] is, [square] is not, a
small disadvantaged business concern as defined in 13 CFR 124.1002.
(3) [Complete only if the Contractor rerepresented itself as a
small business concern in paragraph (g)(1) of this clause.] The
Contractor rerepresents that it [square] is, [square] is not a
women-owned small business concern.
(4) Women-owned small business (WOSB) concern eligible under the
WOSB Program. [Complete only if the Contractor rerepresented itself
as a women-owned small business concern in paragraph (g)(3) of this
clause.] The Contractor rerepresents that--
(i) It [square] is, [square] is not a WOSB concern eligible
under the WOSB Program, has provided all the required documents to
the WOSB Repository, and no change in circumstances or adverse
decisions have been issued that affects its eligibility; and
(ii) It [square] is, [square] is not a joint venture that
complies with the requirements of 13 CFR part 127, and the
rerepresentation in paragraph (g)(4)(i) of this clause is accurate
for each WOSB concern eligible under the WOSB Program participating
in the joint venture. [The Contractor shall enter the name or names
of the WOSB concern eligible under the WOSB Program and other small
businesses that are participating in the joint venture: ___] Each
WOSB concern eligible under the WOSB Program participating in the
joint venture shall submit a separate signed copy of the WOSB
rerepresentation.
(5) Economically disadvantaged women-owned small business
(EDWOSB) concern. [Complete only if the Contractor rerepresented
itself as a women-owned small business concern eligible under the
WOSB Program in (g)(4) of this clause.] The Contractor represents
that--
(i) It [square] is, [square] is not an EDWOSB concern eligible
under the WOSB Program, has provided all the required documents to
the WOSB Repository, and no change in circumstances or adverse
decisions have been issued that affects its eligibility; and
(ii) It [square] is, [square] is not a joint venture that
complies with the requirements of 13 CFR part 127, and the
rerepresentation in paragraph (g)(5)(i) of this clause is accurate
for each EDWOSB concern participating in the joint venture. [The
Contractor shall enter the name or names of the EDWOSB concern and
other small businesses that are participating in the joint
venture:___.] Each EDWOSB concern participating in the joint venture
shall submit a separate signed copy of the EDWOSB rerepresentation.
(6) [Complete only if the Contractor rerepresented itself as a
small business concern in paragraph (g)(1) of this provision.] The
Contractor rerepresents as part of its offer that it [square] is,
[square] is not a veteran-owned small business concern.
(7) [Complete only if the Contractor rerepresented itself as a
veteran-owned small business concern in paragraph (g)(6) of this
clause.] The Contractor rerepresents that it [square] is, [square]
is not a service-disabled veteran-owned small business concern.
(8) [Complete only if the Contractor rerepresented itself as a
small business concern in paragraph (g)(1) of this clause.] The
Contractor represents that--
(i) It [square] is, [square] is not a HUBZone small business
concern listed, on the date of this rerepresentation, on the List of
Qualified HUBZone Small Business Concerns maintained by the Small
Business Administration, and no material changes in ownership and
control, principal office, or HUBZone employee percentage have
occurred since it was certified in accordance with 13 CFR part 126;
and
(ii) It [square] is, [square] is not a HUBZone joint venture
that complies with the requirements of 13 CFR part 126, and the
rerepresentation in paragraph (g)(8)(i) of this clause is accurate
for each HUBZone small business concern participating in the HUBZone
joint venture. [The Contractor shall enter the names of each of the
HUBZone small business concerns participating in the HUBZone joint
venture: ___] Each HUBZone small business concern participating in
the HUBZone joint venture shall submit a separate signed copy of the
HUBZone rerepresentation.
[Contractor to sign and date and insert authorized signer's name
and title.]
(h) If the Contractor represented that it was a small business
concern prior to award of this contract, the Contractor shall
rerepresent its size and socioeconomic status according to paragraph
(e) of this clause or, if applicable, paragraph (g) of this clause,
when the contracting officer explicitly requires it for an order
issued under a multiple-award contract.
(End of clause)
0
87. Amend section 52.219-29 by--
0
a. Revising the introductory text and the date of the clause;
0
b. Removing from paragraph (b)(1) ``or reserved'';
0
c. Revising the heading of paragraph (d);
0
d. Removing paragraph (f);
0
e. Redesignating paragraph (e) as paragraph (f); and
0
f. Adding new paragraph (e).
The addition and revisions to read as follows:
52.219-29 Notice of Set-Aside for, or Sole Source Award to,
Economically Disadvantaged Women-Owned Small Business Concerns.
As prescribed in 19.1508(a), insert the following clause:
Notice of Set-Aside for, or Sole Source Award to, Economically
Disadvantaged Women-Owned Small Business Concerns (Date)
* * * * *
(d) Limitation on subcontracting. * * *
(e) An EDWOSB concern shall comply with the limitation on
subcontracting as follows:
(1) For contracts, in accordance with (b)(1) and (2) of this
clause--
[Contracting Officer check as appropriate.]
_By the end of the base term of the contract and then by the end
of each subsequent option period; or
_By the end of the performance period for each order issued
under the contract.
(2) For set-aside orders, in accordance with (b)(3) of this
clause, by the end of the performance period for the order.
* * * * *
0
88. Amend section 52.219-30 by--
0
a. Revising the introductory text and the date of the clause;
0
b. Removing from paragraph (b)(1) ``or reserved'';
0
c. Revising the heading of paragraph (d);
0
d. Removing paragraph (f);
0
e. Redesignating paragraph (e) as paragraph (f); and
0
f. Adding new paragraph (e).
The additions and revisions to read as follows:
52.219-30 Notice of Set-Aside for, or Sole Source Award to, Women-
Owned Small Business Concerns Eligible Under the Women-Owned Small
Business Program.
As prescribed in 19.1508(b), insert the following clause:
Notice of Set-Aside for, or Sole Source Award to, Economically
Disadvantaged Women-Owned Small Business Concerns Eligible Under The
Women-Owned Small Business Program (Date)
* * * * *
(d) Limitation on subcontracting. * * *
(e) A WOSB concern eligible under the WOSB Program shall comply
with the limitation on subcontracting as follows:
(1) For contracts, in accordance with (b)(1) and (2) of this
clause--
[Contracting Officer check as appropriate.]
_By the end of the base term of the contract and then by the end
of each subsequent option period; or
_By the end of the performance period for each order issued
under the contract.
(2) For set-aside orders, in accordance with (b)(3) of this
clause, by the end of the performance period for the order.
* * * * *
0
89. Add section 52.219-XX to read as follows:
52.219-XX Notice of Small Business Reserve.
As prescribed in 19.507(g), insert the following clause:
[[Page 88095]]
Notice of Small Business Reserve (Date)
(a) Applicability. This clause applies only to contracts that
have been reserved for any of the small business concerns identified
at 19.000(a)(3). The small business program eligibility requirements
apply.
(b) General. (1) This solicitation contains a reserve for one or
more small business concerns identified at 19.000(a)(3) and the
applicable small business program.
(2) The small business concern(s) eligible for participation in
the reserve shall submit one offer to include all portions of the
solicitation for which consideration for award is wanted. Award of
the contract will be based on criteria identified elsewhere in the
solicitation.
(c) If there are two or more contract awards to small businesses
as a result of the reserve, the Contracting Officer may, at his or
her discretion, set aside an order or orders for the small business
concerns identified in 19.000(a)(3) and the applicable small
business program, that were awarded contracts under a reserve,
provided the requirements of 19.502-2(b) are met.
(d) If there is only one contract award to a small business as a
result of the reserve, the Contracting Officer may, at his or her
discretion, issue an order or orders directly to the small business
concern.
(End of clause)
0
90. Add section 52.219-YY to read as follows:
52.219-YY Nonmanufacturer Rule.
As prescribed in 19.507(h)(1), insert the following clause:
Nonmanufacturer Rule (DATE)
(a) This clause does not apply to the unrestricted portion of a
partial set-aside.
(b) Applicability. This clause applies to contracts that have
been set aside, in total or in part, or orders under multiple-award
contracts as described in 8.405-5 and 16.505(b)(2)(i)(F) that have
been set aside, for any of the small business concerns identified in
19.000(a)(3).
(c)(1) The contractor shall--
(i)(A) Provide the end item of a small business manufacturer,
that has been manufactured or produced in the United States or its
outlying areas; or
(B) If this procurement is an order as described in 8.405-5 or
16.505(b)(2)(i)(F) or processed under simplified acquisition
procedures (see part 13), and the total amount does not exceed
$25,000, provide the end item of any domestic manufacturer;
(ii) Not exceed 500 employees;
(iii) Be primarily engaged in the retail or wholesale trade and
normally sell the type of item being supplied; and
(iv) Take ownership or possession of the item(s) with its
personnel, equipment or facilities in a manner consistent with
industry practice.
(2) In addition to the requirements set forth in (c)(1) of this
clause, when the end item being acquired is a kit of supplies or
other goods, 50 percent of the total value of the components of the
kit shall be manufactured in the United States or its outlying areas
by small business concerns. Where the Government has specified an
item for the kit which is not produced by U.S. small business
concerns, such items shall be excluded from the 50 percent
calculation. See 13 CFR 121.406(c) for further information regarding
nonmanufacturers.
(3) For size determination purposes, there can be only one
manufacturer of the end product being acquired. For the purposes of
the nonmanufacturer rule, the manufacturer of the end product being
acquired is the concern that transforms raw materials and/or
miscellaneous parts or components into the end product. Firms which
only minimally alter the item being procured do not qualify as
manufacturers of the end item, such as firms that add substances,
parts, or components to an existing end item to modify its
performance will not be considered the end item manufacturer, where
those identical modifications can be performed by and are available
from the manufacturer of the existing end item. See 13 CFR 121.406
for further information regarding manufacturers.
(End of clause)
Alternate I (DATE). As prescribed in 19.507(h)(2), substitute the
following paragraph in place of paragraph (c)(1)(i)(A) of the basic
clause:
(i)(A) Provide the end item of a HUBZone small business
manufacturer, that has been manufactured or produced in the United
States or its outlying areas; or
[FR Doc. 2016-28432 Filed 12-5-16; 8:45 am]
BILLING CODE 6820-EP-P