SMALL BUSINESS (SB)ORDER OF PRECEDENCE

By Duane Mann

March 2006

POLICYIt is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. Such concerns must also have the maximum practicable opportunity to participate as subcontractors in the contracts awarded by any executive agency, consistent with efficient contract performance. The Small Business Administration (SBA) counsels and assists small business concerns and assists contracting personnel to ensure that a fair proportion of contracts for supplies and services is placed with small business. (FAR 19.201(a))

Purpose of Set Asides- To award certain contracts exclusively to SB consistent with policy- Stimulate business development

97% of all business firms are small (13.2M enterprises/3M farms)Account for 48% of non-farm GNPCreated 2/3 of all new jobs last ten years

SB inventions include: Air Conditioning, airplane, assembly lineheart valve, hydraulic break, insulin, personal computer, soft contact lenses

Did you know

Small Business - WHAT??- Requirements estimated between $2,500 and $100,000

-- Automatic SB set aside (FAR 19.501(a))UNLESS

- CO determines there is not a reasonable expectation of 2 offers from SB (FAR 19.502-2 (a)) -- Must be responsible business -- Must be competitive in terms of price, quality & delivery - If only one acceptable offer, should make award if price is fair & reasonable -- If not, set aside can be withdrawn & resolicited unrestricted

-- Must be fully documented

- Does not prohibit awards under 8(a) or HUBZone set asides

Small Business - WHAT??- Requirements estimated over $100,000 shall be set aside (FAR 15.502(b)) when: -- A reasonable expectation 2 responsible SB will make offer

- DIGs -- Construction -- Non nuclear Ship Repair -- Architectural and Engineering Services -- Refuse Systems and Related Services

-- Award will be made at fair market price-- Does not apply ^ $25 K in 4 designated industry groups (DIGS)

Does not apply to FPI, NISH, and Federal Supply Schedules

Federal Supply Schedules

Parts 13 (except 13.303-2(c)(3)), 14, 15, and 19 (except for the requirement at 19.202-1(e)(1)(iii)) do not apply to BPAs or orders placed against Federal Supply Schedules contracts (but see 8.405-5). (FAR 8.404(a))

Activity currently performed by a small business and intend to bundle the requirement into consolidated action that make it unlikely for small business to compete. (FAR 19.202-1(e)(1)(III))

(b) Ordering activities may consider socio-economic status when identifying contractor(s) for consideration or competition for award of an order or BPA. At a minimum, ordering activities should consider, if available, at least one small business, veteran-owned small business, service disabled veteran-owned small business, HUBZone small business, women-owned small business, or small disadvantaged business schedule contractor(s). (FAR 8.405-5(b)

Method of Set Aside- CO must review to determine the set aside (FAR 19.501(e)) -- HUBZone SB takes priority over SB set aside (19.501(c) -- 8(a) set aside takes precedence over SB set aside (19.800(e)

- All solicitations set aside must specify size standard & NAICS- Contract award must be at fair market value

- DD2579 used to document Acq Strategy Kickoff (DO EARLY IN THE CYCLE AFTER MARKET RESEARCH)

- CO may consider SDVOSB set-aside (FAR 19.1405(a)) Highly encouraged – AF Small Business Plan 2006

Which comes first?The small business reservation does not preclude the award of a contract with a value not greater than $100,000 under Subpart 19.8, Contracting with the Small Business Administration, under 19.1007(c), Solicitations equal to or less than the

ESB reserve amount, or under 19.1305, HUBZone set-aside procedures. (FAR 19.502-2(a)

Before deciding to set aside an acquisition in accordance with subpart 19.5, 19.13, or 19.14 the contracting officer should review the acquisition for offering under the 8(a) Program. If the acquisition is offered to the SBA, SBA regulations (13 CFR 126.607(b)) give first priority to HUBZone 8(a) concerns. (FAR 19.800(e))

The small business reservation and set-asides requirements at 19.502-2 do not preclude award of a contract to a service-disabled veteran-owned small business concern under Subpart 19.14 (FAR 19.501(d))

Order of PrecedenceHUBZone 8(a)

Other 8(a) -- If program is already in 8(a), don’t move to HUBZone

HUBZone Competitive - HUBZone Sole Source -- Must be only one that can do it/comply with Part 6

SDVOSB Competitive- SDVOSB Sole Source -- Must be only one that can do it/comply with Part 6

Small Business Set-Aside

Open Competition with Evaluation Preference

Open Competition

Sole Source

Questions?