(6) A class set-aside of the item or service concerned has been made at some other NASA field installation; or

giving to the SBA representative written notice containing the reasons for withdrawing a joint determination.

(c) In approving a proposed class setaside, the contracting officer shall make sure that the set-aside determination (1) specifically identifies the items or services subject thereto, (2) provides that it will, at least once each year, be reviewed jointly by a SBA representative and the contracting officer to determine whether it should be withdrawn (see § 18-1.706-3 for withdrawal procedure), (3) provides that it does not apply to any individual procurement for which small purchase procedures are to be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 installation making or participating in the set-aside determination. Any class of procurements proposed to be totally set aside shall satisfy the requirements of § 18-1.706-5(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.

§ 18-1.706-3 Withdrawal or modification of set-asides.

the

(a) Each individual procurement governed by a class set-aside shall be carefully reviewed to ensure that any changes in the magnitude of anticipated requirements, specifications for items or services, delivery requirements, or competitive market conditions, since the initial approval of the class setaside, are not of such material nature as to result in the probable payment of an unreasonable price by the Government or in a change in small business capability.

(b) (1) If, prior to the award of a contract involving an individual or class set-aside for small business, the contracting officer considers that procurement of the set-aside from a small business concern would be detrimental to the public interest (e.g., because of unreasonable price), the contracting officer may withdraw a unilateral set-aside determination or initiate the withdrawal of a joint set-aside determination by

fied 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 SBA representative shall be allowed 2 workdays to appeal the matter to the Director of the field installation involved or his designee for decision. Within one workday after receipt of a decision of the Director of the field installation or his designee approving such a withdrawal or modification, the SBA representative may request the contracting officer to suspend any procurement actions which would be affected by the withdrawal or modification pending a further appeal by the Administrator, SBA, to the Administrator, NASA, for determination. The SBA shall be allowed 7 workdays after making any such request within which (i) the Administrator, SBA, may appeal the decision of the Director of the field installation or his designee to the Administrator, NASA, 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 7-day period, it shall be deemed that the SBA request to suspend procurement action has been withdrawn and that no appeal to the Administrator, NASA, was taken. Where an appeal to the Administrator, NASA, has been taken and the contracting officer has been notified of that fact within the 7-day period, the Director of the field installation shall forward to the Administrator, NASA, via the Director of Procurement, a full justification of his decision.

(2) Any procurement action affected by a proposed withdrawal or modification which has been appealed by the SBA representative shall be suspended pending the decision of the Director of the field installation or his designee. If the decision sustains the withdrawal or modification, and if the SBA representative requests further suspension in accordance with subparagraph (1) of this paragraph, the suspension shall continue until (i) the SBA appeal is deemed to have been withdrawn (as provided in

subparagraph (1) of this paragraph, or (ii) the matter is determined by the Administrator, NASA: Provided, That such suspension shall not apply 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 justifying the determination. The contracting officer shall promptly notify the SBA representative of any procurement action initiated pursuant to the proviso of the preceding sentence.

(3) A record of any withdrawal or modification shall be made by the contracting officer and retained in the contract file.

§ 18-1.706-4 Reporting for Department of Commerce procurement synopsis. See

18-1.1003-4.

§ 18-1.706-5 Total set-asides.

(a) Subject to any applicable preference for labor surplus area set-asides the entire amount of an individual procurement or class of procurements (including but not limited to contracts for maintenance, repair, and construction) shall be set aside for exclusive small business participation (see § 18-1.706-1) 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 setasides shall not be made unless such a reasonable expectation exists; however, see § 18-1.706-6 as to partial set-asides. While the past procurement history of the item or similar items is important, it is not the only controlling factor which should be considered in determining whether a reasonable expectation exists.

The

(b) Contracts for total small business set-asides may be entered into by conventional negotiation or by a special method of procurement known as "Small Business Restricted Advertising." latter method shall be used whenever possible. Invitations for bids shall be restricted to small business concerns. Small Business Restricted Advertising, including awards thereunder, shall be conducted in the same way as prescribed for formal advertising in Part 18-2 of

this chapter, except that bids and awards shall be restricted to small business concerns. Bids received from firms which do not qualify as small business concerns shall be considered nonresponsive and shall be rejected.

(c) In procurements involving total set-asides for small business, each invitation for bids or request for proposals shall contain substantially the following Notice:

NOTICE OF TOTAL SMALL BUSINESS SET-ASIDE (SEPTEMBER 1963)

(a) Restriction. Bids or proposals under this procurement are solicited from small business concerns only and this procurement is to be awarded only to one or more small business concerns. This action is based on a determination by the contracting officer, alone or in conjunction with a representative of the Small Business Administration, that it is in the interest of maintaining or mobilizing the Nation's full productive capacity, or in the interest of assuring that a fair proportion of Government procurement is placed with small business concerns. Bids or proposals received from firms which are not small business concerns shall be considered nonresponsive and shall be rejected.

(b) Definition. A "small business concern" is a concern that is independently owned and operated, is not dominant in the fleld of operation in which it is bidding on Government contracts, and, with its affiliates, has not more than (----*) employees, except that where a concern is a regular dealer or nonmanufacturer, such concern must have not more than 500 employees. In addition to meeting these criteria, a manufacturer or regular dealer submitting bids or proposals in his own name must agree to furnish in the performance of the contract end items manufactured or produced in the United States, its possessions, or Puerto Rico, by small business concerns: Provided, That this additional requirement does not apply in connection with construction or service contracts.

Where the definition of a small business concern for a given industry, as prescribed by SBA and promulgated by NASA, differs from that set forth in the above Notice, the Notice shall be appropriately modified to reflect such definition.

§ 18-1.706-6 Partial set-asides.

(a) Subject to any applicable preference for labor surplus area set-asides,

*The appropriate number of employees (500, 750, or 1,000) shall be inserted in accordance with §§ 18-1.701-1 and 18-1.701-4.

(3) Labor surplus area concern includes: (1) persistent labor surplus area concerns which agree to perform or cause to be performed any contracts awarded to them as labor surplus area concerns substantially in "Areas of Substantial and Persistent Labor Surplus" (also called "Areas of Substantial and Persistent Unemployment"); and

(i) substantial labor surplus area concerns which agree to perform or cause to be performed any contracts awarded to them as labor surplus area concerns substantially in "Areas of Substantial Labor Surplus."

A concern shall be deemed to perform a contract substantially in "Areas of Substantial and Persistent Labor Surplus" (also called "Areas of Substantial and Persistent Unemployment") if the costs that it incurs on account of manufacturing or production (by itself or its first-tier subcontractors) in such areas amount to more than 50 percent of the contract price. A concern shall be deemed to perform a contract substantially in "Areas of Substantial Labor Surplus" if the costs that it incurs on account of manufacturing or production (by itself or its first-tier subcontractors) in such areas or in "Areas of Substantial or Persistent Labor Surplus" (also called "Areas of Substantial and Persistent Unemployment") amount— to more than 50 percent of the contract price. (c) Identification of areas of performance. Each bidder desiring to be considered for award as a small business labor surplus area concern on the set-aside portion of this procurement shall identify in his bid the geographical areas in which he proposes to perform or cause to be performed, a substantial proportion of the production of the contract. If the Department of Labor classification of any such area changes after the bidder has submitted his bid, the bidder may change the areas in which he proposes to perform: Provided, That he so notifies the Contracting Officer before award of the setaside portion. Priority for negotiation will be based upon the labor surplus classification of the designated production areas as of the time of the proposed award.

(d) Agreement. The bidder agrees that, if awarded a contract as a small business persistent labor surplus area concern under the set-aside portion of this procurement, he will perform, or cause to be performed, a substantial proportion of the production in areas classified at the time of award, or at the time of performance of the contract, as persistent labor surplus area; and that if awarded a contract as a small business substantial labor surplus area concern under the set-aside portion of this procurement, he will perform, or cause to be performed, a substantial proportion of the production in areas classified at the time of award, or at the time of performance of the contract, as substantial or persistent labor surplus areas.

Where the definition of a small business concern for a given industry, as prescribed by SBA and promulgated by NASA, differs from that set forth in the above Notice, the Notice shall be appropriately modified to reflect such definition.

(d) Where it is anticipated that bids may be received which appear designed to take unfair advantage of bona fide bidders, by devices such as unrealistically low bids on mere token quantities, the Notice set forth below may be used instead of that in paragraph (c) of this section.

NOTICE OF PARTIAL SMALL BUSINESS SET-ASIDE (SEPTEMBER 1963)

(a) General. This procurement has been divided into two parts. All concerns, whether small business or not, may participate in accordance with customary procedures in that portion of this procurement herein called the "non-set-aside" portion. The quantities of the non-set-aside portion are set forth elsewhere in this Schedule. The other portion of the items to be procured has been set aside for participation by small business concerns. This is called the "setaside portion" and awards therefor are made in accordance with special procedures set forth in paragraph (c) of this Notice. This apportionment is based on a determination by the Contracting Officer, alone or in conjunction with a representative of the Small Business Administration, that it is in the interest of maintaining or mobilizing the Nation's full production capacity, or in the interest of assuring that a fair proportion of Government procurement is placed with small business concerns. "Small business concern" is defined in paragraph (d) of this Notice.

(1) A bidder which is not a small business concern shall submit a bid only for the non-set-aside portion of the procurement. Award thereof will be made in accordance with customary procedures.

(2) A bidder which is a small business concern and is interested in receiving an award for a quantity of an Item not exceeding the quantity set forth in the nonset-aside portion of the procurement, should submit a bid in the same maner as other concerns bidding only on the non-set-aside portion. If such a bidder is interested in receiving an award for a quantity of an Item in addition to the quantity set forth in the non-set-aside portion, he must bid the entire quantity of the non-set-aside portion of the Item, and indicate such additional quantity of the Item as he desires by so

specifying on the Bidder's Statement of SetAside Quantity Desired. Thus, the Bidder's Statement of Set-Aside Quantity Desired is not to be used unless the bidder has bid the entire quantity of an Item under the non-set-aside portion. However, a small business concern which receives no award, or receives an award for less than the total quantity of an Item for which it submitted a bid under the non-set-aside portion, may be eligible for an award of the quantity it bid, or the unawarded quantity thereof, under the following procedure governing the set-aside portion.

(c) Set-aside portion and award procedure. Award of the set-aside portion of this procurement will be made after award has been completed on the non-set-aside portion. It will be made only to small business concerns which are found to be eligible in accordance with (1) below; on the basis of priorities for award set forth in (2) below; for quantities as provided in (3) below; and at prices determined in accordance with (4) below.

(1) Eligibility. To be eligible for consideration for the set-aside portion of an Item, the small business concern must have submitted a responsive bid on such Item in accordance with the requirements of (b) (2) above at a unit price no greater than 120 percent of the highest unit price for such Item awarded under the non-set-aside portion. However, see (5) below when separate quantities are offered at different prices, (6) below when separate quantities are offered at tie-in prices, and (7) below when all-ornone bids are offered for more than one Item.

(2) Priorities. Negotiations for the setaside portion will be conducted with eligible concerns in the following order of priority: Group 1. Small business concerns which are also persistent labor surplus area con

cerns.

Group 2. Small business concerns which are also substantial labor surplus area con

cerns.

Group 3. Small business concerns which are not labor surplus area concerns. Within each of the above groups, negotiation for each Item will be conducted with eligible concerns in the order of their bids on the non-set-aside portion, beginning with the lowest responsive bid. However, see (5) below for the method of determining the bid when separate quantities are offered at different prices, (6) below when separate quantities are offered at tie-in prices, and (7) below when all-or-none bids are offered for more than one Item.

(3) Quantity. The quantity of the setaside portion of an Item which may be awarded to an eligible concern shall be as follows:

(1) Where a concern has not specified a quantity of the Item on the Bidder's State

ment of Set-Aside Quantity Desired, the quantity shall be no greater than the quantity of such concern's bid on the non-setaside portion of that Item, less the quantity, if any, of that Item awarded to that concern under the non-set-aside portion.

(11) Where a concern has specified a quantity of the Item on the Bidder's Statement of Set-Aside Quantity Desired, the quantity shall be no greater than the total of the entire non-set-aside portion of the Item and the quantity thereof specified on the Bidder's Statement of Set-Aside Quantity Desired, less the quantity, if any, of that Item awarded to that concern under the non-set-aside portion.

(4) Price. The set-aside portion shall be awarded at the highest unit price awarded on the non-set-aside portion, adjusted to reflect transportation and other cost factors which were considered in evaluating bids on the non-set-aside portion. However, see (6) and (7) below for the highest unit price when the highest award is made as a result of tie-in bids or all-or-none type of qualification.

(5) Separate quantities at different prices. Where a concern has submitted a bid for separate quantities of the non-set-aside portion of an Item at different prices, without conditioning the Government's right to accept one or more such quantities upon its concurrent acceptance of another quantity of the Item, each separate quantity shall be considered as a separate bid for the purpose of determining the eligibility of the concern with respect to the 120-percent limit prescribed in (c) (1) above, and for the purpose of determining under (c) (2) above the standing of that bid in the order of negotiations for the set-aside portion of that Item.

(6) Separate quantities at tie-in prices. Where a concern has submitted a bid for separate quantities of the non-set-aside portion of an Item at different prices, and has conditioned the Government's right to accept any one or more of such quantities upon its concurrent acceptance of another quantity of the Item, the weighted average of the prices for such conditioned quantities shall be considered the unit price for the purpose of determining, with respect to such conditioned quantities, (1) the eligibility of the firm with respect to the 120 percent limit of (c) (1) above, (11) the priority status of the firm under (c) (2) above, and (iii) the highest unit price for awards under (c) (4) above if the highest award on the non-set-aside portion was made on such conditioned bid.

(7) All-or-none bids. Where a concern has submitted an "all-or-none” bid for more than one Item and thereby has conditioned the Government's right to award any item upon its concurrent award of another Item, the unit price for each Item on an "all-ornone" basis shall be considered independent