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followed by procurement agencies in or- the Small Business Act, as amended (15 der to further the general policy stated U.S.C. 631-647), in accordance with in (a) of this § 1-1.702:

$ 1-1.705. (1) Small business concerns shall be (13) Placement of small purchases afforded an equitable opportunity to with small business concerns shall be encompete for prime contracts and sub- couraged (see § 1-3.602). contracts.

§ 1-1.703 Determination of status as a (2) Bidders mailing lists (see § 1

small business concern. 2.205) shall include all established and potential small business suppliers who 81-1.703–1 Representation by bidder have made acceptable application for

or offeror. inclusion or who appear from other in (a) Except as provided in paragraph formation (including recommendations (b) of this $ 1-1.703-1, the contracting by the SBA representative) to be qual- officer shall accept as conclusive for the ified for inclusion therein.

purpose of a specific procurement a rep(3) Invitations for bids or requests for resentation by the bidder or offeror that proposals shall be sent to all firms on the it is a small business concern as defined appropriate mailing list except that by SBA. where less than a complete list is used (b) A representation by a bidder or pursuant to § 1-2.205–4, a pro rata num offeror that it is a small business concern ber of small business concerns shall be shall be effective, even though questions solicited.

in accordance with the terms of § 1-1.(4) Proposed procurements and con- 703–2, unless the SBA, in response to such tract awards shall be publicized in the question and pursuant to the procedures "Commerce Business Daily” in accord in § 1-1.703–2, determines that the bidder ance with Subpart 1-1.10.

or offeror in question is not a small busi(5) Procurement of property and ness concern. The controlling point in services shall be divided into reasonably time for a determination concerning the small lots (not less than economic pro size status of a questioned bidder or ofduction runs) in order to permit bidding feror shall be the date of award, except on quantities less than the total require that no bidder or offeror shall be eligible ments.

for award as a small business concern (6) The maximum amount of time unless it has in good faith represented practicable (see $ 1.202–1) shall be al itself as small business prior to the openlowed for preparation and submission of ing of bids or closing date for submission bids and proposals.

of offers (see § 1-2.405(b) regarding (7) Delivery schedules shall be estab minor informalities and irregularities lished on a realistic basis which will en- in bids). courage small business participation to [30 F.R. 9590, July 31, 1965) the extent consistent with the actual requirements of the Government.

§ 1-1.703–2 Protest regarding small (8) Applicable specifications, plans,

business status. and drawings either shall be furnished (a) Any bidder or offeror may chalwith invitations for bids and requests for lenge the small business status of any proposals or, when not so furnished, in other bidder or offeror on the same proformation as to locations where they may curement by sending a written protest, be obtained or examined shall be fur as defined in paragraph (b) of this § 1-1.nished.

703–2, to the contracting officer responsi(9) Procurements shall be set aside ble for the particular procurement. Any for exclusive participation by small contracting officer who receives a timely business concerns in accordance with protest, or who wishes to question the § 1-1.706.

small business status of a bidder or of(10) In the event of equal low bids, feror himself, shall forward such protest preference shall be given to small busi record (or submit his protest) to the SBA ness concerns in accordance with regional office serving the area in which § 1-2.407-6.

the protested concern is located. (11) Subcontracting to small busi (b) As used in this section, "protest” ness concerns shall be encouraged in means a challenge in writing from any accordance with § 1-1.710.

bidder or offeror as to the small business (12) Procurement agencies and SBA status of any other bidder or offeror on are responsible for consulting and co- the same procurement. The protest shall operating in carrying out the purposes of contain the basis for the protest, together

with specific detailed evidence supporting the protestant's claim that such bid. der or offeror is not a small business concern. Such protest must be received by the contracting officer prior to the close of business on the 5th working day after bid opening date or closing date for the receipt of proposals. A protest received after such time shall be considered timely, if in the case of mailed protests, such protest is sent by registered or certified mail and the postmark thereon indicates that the protest would have been delivered within this time limit but for delays beyond the control of the protestant or, in any case of telegraphed protests, the telegram date and time line indicates that the protest would have been delivered within this time limit but for delays beyond the control of the protestant. A protest received after award of a contract, even though timely, will not be considered a “protest” and will be returned to the sender with an explanation of why it could not be acted upon.

(c) Upon receipt of a protest, the SBA Regional Director or his delegate will promptly notify the contracting officer of the date it was received, and will inform the affected bidder or offeror that its size status is under review.

(d) SBA will, within 10 working days, if possible, after receipt of a protest, investigate and determine the small business status of the protested bidder or offeror and notify the contracting officer, the protestant, and the protested bidder or offeror of its decision. Such decision is final unless appealed in accordance with paragraph (f) of this 1-1.703–2 and the procuring activity is notified of the appeal prior to award. If an award was made prior to the time the contracting officer receives notice of the appeal. the contract shall be presumed to be valid and any determination rendered shall be considered in future procurements.

(e) Procurement action shall be suspended pending SBA's determination or expiration of the 10-day period, whichever is earlier, unless unusual conditions make it necessary that an award be made. If SBA's determination is not received by the contracting officer within 10 working days after SBA's receipt of the protest, the contracting officer shall ascertain when such determination can be expected. In cases where further delay in awarding the contract would be disadvantageous to the Government, it shall be presumed that the questioned

bidder or offeror is a small business concern.

(f) An appeal from a size determination made by an SBA Regional Director may be taken before the close of business on the 5th working day after the receipt of such decision. Unless such written notice of appeal is received by the SBA Size Appeals Board, Washington, D.C., within this time and the contracting officer has been notified of such appeal prior to award, the appellant will be deemed to have waived its rights of appeal insofar as the pending procurement is concerned.

(g) The determination of the appropriate classification of a product establishing the small business definition to be used in a specific procurement shall be made by the contracting officer and his determination shall be final unless appealed in accordance with paragraph (h) of this § 1-1.703–2.

(h) An appeal from a product classification determination made by a contracting officer may be taken not less than 10 days before the bid opening date or closing date for the submission of proposals wherein the bid opening or closing date is more than 30 days after the issuance of the invitation for bids or request for proposals, or not less than 5 working days before the bid opening date or closing date for the submission of proposals in cases wherein the bid opening date or closing date for the submission of proposals is 30 days or less after the issuance of an invitation for bids or a request for proposals. Such appeals shall be directed to the SBA Size Appeals Board, Washington, D.C. [30 F.R. 9590, July 31, 1965] § 1-1.704 Agency program direction

and operation. [Reserved for us by

individual agencies] § 1-1.705 Cooperation with the Small

Business Administration. § 1-1.705-1 General.

It is a requirement of the Small Business Act that SBA and procurement agencies consult and cooperate in carrying out the policies of that Act. Such consultation and cooperation is particularly significant in the areas and programs described in §§ 1-1.705–2 through 1–1.705–7. $ 1–1.705–2 SBA representatives.

SBA may assign one or more representatives (hereinafter referred to as “SBA representatives”) on a full- or part-time basis to any procuring activity for the purpose of carrying out SBA responsibilities under the Small Business Act. SBA representatives will comply with agency directives concerning the conduct of procurement personnel and instructions concerning release of procurement information. § 1-1.705–3 Screening of procurements.

(a) Individual set-asides. SBA representatives (cleared for security where classified procurements are to be screened) shall, upon request, promptly be afforded an opportunity at the procuring activity to review all proposed procurements if it is anticipated that the resulting contract or contracts will exceed $2,500 unless in the case of procurements which are not expected to exceed $10,000, the head of the procuring activity determines that such review would unduly delay the procurement process. A copy of the determination and the justification therefor shall be furnished to the SBA representative. Where it is anticipated that the resulting contract or contracts will exceed $2,500, such SBA representatives shall, upon request, promptly be afforded an opportunity to make recommendations concerning proposed procurements, including that they be exclusively or partially set aside for small business concerns.

The contracting officer shall afford the SBA representative an opportunity to recommend appropriate names of small business concerns for inclusion in lists of bidders for firms to be solicited in connection with current and future procurements.

(b) Class set-asides. SBA representatives shall be afforded an opportunity to make recommendations that current and future procurements, or portions thereof, of selected items or services, or groups of like items or services, shall be set aside as provided in § 1-1.706, for ex. clusive small business participation. Such set-asides, when approved by the contracting officer, shall be known as class set-asides. Concurrence in a class

currence in a class set-aside shall not be dependent upon the existence of a current procurement if future procurements can be clearly foreseen. § 1-1.705-4 Access to information.

Upon request, and subject to applicable security regulations, SBA repre.

sentatives shall be given access to available or reasonably obtainable information, including technical data (including drawings and specifications), procurement history, bidders lists, and planned requirements immediately upon receipt by the procuring activity. The SBA representative will be furnished such other available or reasonably obtainable information as may be required for the SBA referral program. 81-1.705-5 Joint small business set

asides. The policies and procedures for joint small business set-asides, set forth in § 1-1.706, were developed cooperatively with the SBA and Government procurement agencies. § 1-1.705–6 Certificates of competency.

Section 1–1.708 prescribes policies and procedures governing cooperative action with SBA concerning certificates of competency. § 1-1.705–7 Performance of contract by

SBA. In accordance with the Small Business Act (15 U.S.C. 637(a)), in any case in which the Administrator of SBA certifies to the head of the procuring agency concerned that SBA is competent to perform any specific contract, the contracting officer is authorized, in his discretion, to award the contract to SBA upon such terms and conditions, consistent with applicable procurement regulations, as may be agreed upon between SBA and the contracting officer. § 1-1.706 Procurement set-asides for

small business. § 1-1.706–) General.

(a) Purpose. The purpose of small business set-asides is to increase small business participation in Government procurement.

(b) Applicability. This section is applicable to small business set-aside programs of executive agencies in connection with all procurement of property and services, maintenance, repair and construction, and research and development.

(c) Implementation. Subject to any applicable preference for labor surplus area set-asides as provided in § 1-1.802, any individual procurement or class of procurements, or an appropriate part thereof, shall be set aside for the exclusive participation of small business con

cerns when such action (1) is unilaterally determined by a contracting officer, or (2) is jointly determined by an SBA rep. resentative and a contracting officer, upon initiation by either party, to be in the interest of maintaining or mobilizing the Nation's full productive capacity, or to be in the interest of war or national defense programs, or to be in the interest of assuring that a fair proportion of Government procurement is placed with small business concerns.

(d) Initiation of set-asides. Insofar as practicable, unilateral determinations initiated by a contracting officer of a procuring agency shall be used as the basis for small business set-asides rather than joint determinations by an SBA representative and a contracting officer. This, however, does not preclude SBA from initiating with an agency a proposal for a joint determination set-aside. [29 F.R. 10104, July 24, 1964, as amended at 33 F.R. 10393, July 20, 1968] § 1-1.706–2 Review of SBA set-aside

proposals. (a) (1) When an SBA representative has recommended that all, or a portion, of an individual procurement or class of procurements be set aside for small business, the contracting officer (or other designated representative) of the procurement agency shall promptly either (i) concur in the recommendation, or (ii) disapprove the recommendation, stating in writing his reasons for disapproval. The SBA representative shall be allowed two working days to appeal any such disapproval to the head of the procuring activity or his designee for decision. During consideration of such appeal there shall be full and free interchange of all pertinent facts between the SBA representative and the procuring activity concerned. Within one working day after receipt of a decision from the

ob we procuring activity or his designee disapproving a recommended set-aside, the SBA representative may request the contracting officer to suspend procurement actions affected by the recommended set-aside pending a further appeal by the Administrator of SBA to the head of the agency concerned for determination, SBA shall be allowed seven working days after making any such request within which (i) the Administrator of SBA may appeal the decision of the head of the procuring activity (or his designee) to the head of the agency concerned, and (ii) to notify

the contracting officer whether such an appeal has in fact been taken. If such notification is not received by the contracting officer within the seven-day period, it shall be deemed that the SBA request to suspend procurement action has been withdrawn and that no appeal to the head of the agency was taken. Where an appeal to the head of the agency concerned has been taken and the contracting officer has been notified of that fact within the seven-day period, the head of the procuring activity will, in accordance with agency procedures, forward through appropriate channels to the head of the agency a full justification of his decision.

(2) Any procurement action affected by a set-aside recommendation which has been disapproved by the contracting officer and appealed by the SBA representative shall be suspended pending the decision of the head of the procuring activity or his designee. If the decision sustains the disapproval and if the SBA representative requests further suspension in accordance with (1) of this § 11.706–2(a), the suspension shall continue until (i) the SBA appeal is deemed to have been withdrawn (as provided in (1) of this § 1-1.706–2(a), or (ii) the matter is determined by the head of the agency concerned. Such suspension shall not apply, however, to any particular procurement action which, as determined by the contracting officer, must, in order to protect the public interest, be initiated without delay and as to which he inserts in the contract file a statement signed by him setting forth the facts and circumstances justifying the determination. The contracting officer shall promptly notify the SBA representative of any procurement action initiated pursuant to the preceding sentence by supplying him with a copy of the justification.

(b) None of the following is, in itself, sufficient cause for not making a setaside:

(1) A large percentage of previous procurements of the item in question has been placed with small business concerns.

(2) The item to be purchased is on an established planning list under the Industrial Readiness Planning Program, except that a total set-aside shall not be authorized when one or more large business Planned Emergency Producers of the item desire to participate in the procurement.

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(3) The item to be purchased is on a Qualified Products List, except that a total set-aside shall not be authorized when the products of one or more large businesses are on the Qualified Products List unless it has been confirmed that none of such large businesses desires to participate in the procurement.

(4) A period of less than 30 days from date of issuance of invitations for bids or requests for proposals is prescribed for the submission of the bids or proposals.

(5) The procurement is classified.

(6) Small business concerns are receiving a fair proportion of the total contracts for property or services.

(7) A class set-aside of the item or service concerned has been made at some other procuring activity.

(8) The item will be described by “brand name or equal.”

(c) In approving a proposed class setaside, the contracting officer shall make sure that the set-aside determination (1) specifically identifies the items or seryices subject thereto; (2) provides that it will, at least once each year, be reviewed jointly by an SBA representative and the procuring activity to determine whether it should be withdrawn (see § 1-1.706–3 for withdrawal procedures); (3) provides that it does not apply to any individual procurement for which small purchase procedures are to be used; and (4) provides that such class set-aside applies only to the procuring activity making or participating in the set-aside determination. Any class of procurements proposed to be totally set aside shall satisfy the requirements of § 1-1.706–5(a). With respect to any class of procurements proposed to be partially set aside, the set-aside determination shall specify that it is not applicable to any individual procurement which is not severable into two or more economic production runs or reasonable lots. § 1-1.706–3 Withdrawal or modifica

tion of set-asides. (a) Each individual procurement governed by a class set-aside shall be carefully reviewed to insure that any changes in the magnitude of anticipated requirements, specifications for the items or services, delivery requirements, or competitive market conditions, since the initial approval of the class set-aside, are not of such material nature as to result in the probable payment of an un

reasonable price by the Government or in a change in small business capability.

(b) If, prior to the award of a contract involving an individual or class setaside for small business, the contracting officer considers that procurement of the set-aside portion from a small business concern would be detrimental to the public interest (e.g., because of unreasonable price), the contracting offcer shall withdraw a unilateral set-aside determination. In the case of a joint set-aside determination, the contracting officer may initiate the withdrawal thereof by giving notice, containing the reason therefor, to the SBA representative. Similarly, a class set-aside may be modified so as to withdraw one or more individual procurements therefrom. In the case of a joint set-aside determination, if the SBA representative does not agree to a withdrawal or modification, the action may be appealed in accordance with the procedures set forth in § 1-1.706–2(a).

(c) A statement supporting any withdrawal or modification of a set-aside shall be made by the procuring activity and retained in the contract file. § 1-1.706-4 Reporting for Department

of Commerce Procurement Synopsis. Section 1-1.1003–7 contains special instructions concerning reporting of procurements involving small business setasides to the Department of Commerce for publication in the “Commerce Business Daily.” § 1-1.706–5 Total set-asides.

(a) Subject to the conditions set forth in $$ 1–1.706–1 and 1-1.706–2, the entire amount of an individual procurement or class of procurements shall be set aside for exclusive small business participation where there is a reasonable expectation that bids or proposals will be obtained from a sufficient number of responsible small business concerns so that awards will be made at reasonable prices. Total set-asides shall not be made unless such a reasonable expectation exists; however, in the absence of such expectation, a partial set-aside shall be considered pursuant to § 1-1.706–6. Although past procurement history of the item or similar items is always important, it is not the only controlling factor which should be considered in determining whether a reasonable expectation exists.

(b) Contracts involving total small business set-asides shall be entered into

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