of competency procedure is not applicable to the selection of the source offering the highest competence obtainable or best scientific approach. However, if a small business concern has been selected on the basis of the highest competence obtainable or best scientific approach and, prior to award, the contracting officer determines that the concern is not responsible because of lack of capacity or credit, the certificate of competency procedure is applicable.

(c) If a bid or proposal of a small business concern is to be rejected solely because the contracting officer has determined the concern to be nonresponsible as to capacity or credit, the matter shall be referred to the appropriate SBA field office having the authority to process the referral in the geographical area involved. If required, guidance as to the location of the appropriate SBA field office may be obtained from an SBA representative assigned to the procurement office or the nearest SBA field office. This procedure applies only to proposed awards exceeding $2,500. For proposed awards exceeding $2,500, but not exceeding $10,000, its use is within the discretion of the contracting offcer. A pre-award survey (see §18-1.905) shall be made prior to a determination by a contracting officer that a small business concern is not responsible because of a lack of capacity or credit on a proposed award of more than $10,000. Concurrent referrals of two or more bids or proposals, rejected because of lack of capacity or credit for a proposed award, shall not be made to SBA by the contracting officer. Final processing of a case, including possible issuance of certificate of competency, must be completed by SBA on each referral before the contracting officer may proceed with an additional referral on the proposed award to SBA. If a partial set-aside is involved and the bid of a small business concern on the unreserved portion is to be rejected for lack of capacity or credit and the same small business concern is entitled to consideration on the reserved portion of the set-aside if a certificate of competency is issued by the SBA, the entire quantity of the procurement (reserved and unreserved) for which that small business concern may be entitled, if competent, shall be referred to SBA and the referral papers so noted. The SBA may then certify the small business concern for the max

imum quantity of the procurement for which it is eligible. The award shall be withheld until SBA action concerning issuance of a certificate of competency, or until 15 working days after the SBA is so notified, whichever is earlier, subject to the following:

(1) Under no circumstances will a referral be made to the SBA prior to a determination by the contracting officer that the bid or proposal of the small business concern is responsive. Except for procurements resulting in construction or service contracts, a bid or proposal of an otherwise eligible nonmanufacturer shall not be referred to the SBA for Certificate of Competency action unless such nonmanufacturing meets the definition of small business for preferential treatment purposes as prescribed in § 18–1.701-1(a) (2) (c).

(2) The activity performing the preaward survey shall furnish such survey to the contracting officer. If the contracting officer determines, in accordance with 18-1.904, that the small business concern is not responsible solely by reason of a lack of capacity or credit, he will refer the matter direct to the SBA, or he may notify the pre-award survey activity to refer the matter to the SBA, whichever is the more expeditious (e.g., where the surveying activity is substantially closer to the cognizant SBA office than the procurement office, it may be more expeditious to have the surveying activity refer the matter to the Small Business Administration). A copy of the communication referring the matter to SBA shall be forwarded to the Director of Procurement, NASA Headquarters.

(3) Upon making a determination to refer the matter to the SBA, the contracting officer shall furnish to the SBA, or to the surveying activity, whichever is consistent with the action taken under subparagraph (2) of this paragraph (c) the data prescribed in paragraph (d) of this section. The procurement office that refers the matter to the SBA shall maintain close liaison with the SBA to assure compliance with paragraph (e) of this section. If the procurement office does not hear from the cognizant SBA field office within five working days after the matter has been referred, the procurement office will contact the SBA Office to which the matter was referred to determine whether a certificate of competency is being processed. When, in accordance with subparagraph (2) of

this paragraph (c), the contracting officer has requested the pre-award survey activity to refer the matter to SBA, that activity shall keep the contracting officer advised of significant developments, including the results of any inquiry to the SBA at the end of the five working day period, and any new or additional facts, learned from the SBA, that warrant reversal of the pre-award survey activity's negative finding. The NASA Small Business Advisor identified in § 18-1.704-2 shall be informed by the procuring activity Small Business Specialist, in writing, on a quarterly basis, of all certificate of competency cases initiated during a particular quarter and of the final disposition made on cases during the quarter, including the number and dollar value of certificates of competency issued during the period. The information shall include company name, item being procured, solicitation number, dollar value of the procurement, and the date the case was submitted to SBA. In addition, advice and data will be furnished for all cases where (i) the small business concern elects not to file an application for a certificate of competency, or (ii) SBA declines to issue a certificate of competency, or (iii) the purchasing activity reverses the preaward survey activity's negative finding concerning capacity or credit, withdraws the request for the certificate of competency and makes the award. This reporting requirement shall be included in the Summary of Significant Matters related to the Small Business Program Reports Control No. 10000000029.

(4) A referral need not be made to the SBA if the contracting officer, with the approval of the Procurement Officer, certifies in writing that the award must be made without delay, includes such certificate and supporting documentation in the contract file, and promptly furnishes a copy to the SBA. Contracting officers shall, immediately upon receipt of sufficient information, make a determination concerning the responsibility of the low responsive prospective small business contractor. If a contracting officer makes a determination of nonresponsibility, and if only capacity or credit considerations are involved, he shall promptly refer to SBA for Certificate of Competency consideration unless he executes a documented certificate of urgency indicating the specific reasons why an award must be made without the de

lay incident to referral to SBA. Referral of a case to SBA or execution of a certificate of urgency shall not be deferred pending investigation and determination of the responsibility of other offerors.

(5) A referral need not be made to the SBA if a contracting officer determines a small business concern nonresponsible pursuant to § 18-1.903-1(e) and such determination is approved by the head of the installation or his designee.

(6) A determination by a contracting officer that a small business concern is not responsible pursuant to § 18-1.903-1 (c) and (d), must be supported by substantial evidence documented in the contract files. These factors of responsibility are not covered by the certificate of competency procedure, but are for determination by the contracting officer, and approval by the Procurement Officer or his designee. Concurrent with the contracting officer's submission of such determination of nonresponsibility to the Procurement Officer or his designee for approval, the contracting officer shall transmit a copy of the documentation supporting the determination that a small business concern is not responsible for reasons other than deficiencies in capacity or credit to the appropriate SBA Regional Office and to the Director of Procurement, Attention: Small Business Advisor. The documentation transmitted to the SBA shall include: two copies of the solicitation, and one copy of the preaward survey findings, pertinent technical and financial information, the abstract of bids, if available, and other pertinent information which supported the contracting officer's determination of nonresponsibility for reasons other than capacity and credit. The appropriate SBA regional office receiving the documentation shall, within five working days, notify the contracting officer in writing of the SBA's intent to appeal to the head of the procuring activity or his designee with information and recommendations which would materially bear on any approval action being considered by the Procurement Officer or his designee. Within ten working days of the SBA's written notification to the contracting officer, the SBA shall present to the Procurement Officer or his designee the appeal in writing. Such appeal shall contain the basis for the SBA position, and include statements from the small business concern as to tenacity, integrity and perserverance and how deficiencies

noted in the contracting officer's determination have been or will be eliminated. After consideration of the appeal, the decision by the Procurement Officer or his designee shall be final. If the contracting officer does not receive notification within five working days specified above that the SBA intends to appeal, it shall be deemed that the SBA does not intend to file such an appeal. The procedures of subparagraph (4) of this paragraph (c) apply if the award must be made without delay.

(d) It is the policy of NASA to endeavor to reach agreement with the SBA regarding the lack of capacity or credit of a small business concern. To assist the SBA and to assure that it has the benefit of the views of NASA, the SBA shall be furnished three copies of the solicitation, one copy of the pertinent drawings and specifications, the pre-award survey findings, pertinent technical and financial information, and, if available, the abstract of bids.

(e) SBA field offices will notify the contracting officer of each case where they plan to issue a certificate of competency, or are submitting a case to SBA, Washington, D.C., for approval prior to issuance of a certificate of competency, and to provide the contracting officer or his designated representative with a brief written statement citing the reasons for SBA's proposed affirmative action. Prior to final SBA action, the contracting officer will be afforded an opportunity to meet or communicate with SBA field office representatives and furnish to them new or additional information on the case. Copies of significant data developed by SBA that are pertinent to the case will be made available, upon request, to the contracting officer, or his representative, at such meeting or through correspondence. SBA case files may be examined at the meeting and pertinent notes taken by the contracting officer or his representative, but such files will not be released outside of SBA. Personnel from a procurement office, who participated in a pre-award survey of the prospective contractor shall be prepared to discuss with the SBA the basis for the pre-award findings. Every effort should be made to resolve any differences between the SBA and the NASA through a complete exchange of pre-award information developed by each agency.

(f) One of the following courses of action shall be taken subsequent to discussions or a meeting between representa

tives of the contracting officer and SBA field offices:

(1) If the new and additional facts presented by the SBA field office representatives so warrant, the negative determination as to capacity and credit of the apparent low bidder or offeror shall be reversed, the referral to SBA shall be withdrawn, and the contract award shall be made without the necessity for issuance of a certificate of competency by SBA. The contracting officer shall promptly inform the SBA field office of his intention to take such action and the anticipated date of contract award.

(2) If agreement cannot be reached between the SBA field office and the contracting officer and substantial doubt still exists as to the ability of the contractor to perform, the contracting officer shall request the SBA field office to suspend action to permit referral of the case to the Director of Procurement for review and possible appeal to SBA Headquarters. The contracting officer shall forward through channels on an expedited basis a complete case file to the Director of Procurement with a request that the case be considered for appeal to SBA Headquarters. This file will include the data specified in paragraph (d) of this section, SBA's rationale for proposing affirmative certificate of competency action, and the contracting officer's comments thereon. Procurement action shall be suspended until the contracting officer is informed by the Director of Procurement of the final decision in the case. If the Director of Procurement concludes that the request for certificate of competency action should be withdrawn and a contract awarded without benefit of a certificate of competency, the contracting officer will be so informed and provided written instructions on how to proceed with the procurement. If the Director of Procurement, agrees with the recommended appeal action of the contracting officer, he will request the SBA Associate Administrator for Procurement and Management Assistance, Washington, D.C., to review the proposed affirmative certificate of competency action of the SBA field office. If SBA, Washington, D.C., does not concur with the proposed affirmative certificate of competency action of its field office, it shall so inform the Director of Procurement. If SBA, Washington, D.C., concurs with the affirmative certificate of competency action proposed by the SBA field office, it shall so inform the

Director of Procurement, giving reasons for its position. Within 10 working days after receipt of such notice, or such longer time as may be agreed upon, the Director of Procurement will inform the SBA Headquarters whether or not a formal appeal will be made. Such appeal will be presented to SBA Headquarters within 10 working days after the SBA has been informed that an appeal will be made, or at such longer time as may be agreed upon. The 15 day period referred to in paragraph (c) of this section shall be automatically suspended when the contracting officer requests SBA to suspend action and to forward the request to SBA Headquarters for review in accordance with this paragraph. Following an appeal, the determination made by the SBA Associate Administrator relative to certificate of competency action shall be considered final and not subject to further appeal by NASA.

(3) If agreement cannot be reached between the contracting officer and the SBA field office, the contracting officer may conclude it would not be practicable to appeal the case to the Washington SBA level nor would it be appropriate to withdraw his request for certificate of competency action. In that case, the contracting officer shall inform the SBA field office that it must issue a certificate of competency as a prerequisite to contract award. However, such action shall not be taken by the contracting officer without prior approval from the Procurement Officer.

(g) If an SBA field office fails to give a contracting officer the opportunity to refer a proposed affirmative certificate of competency action to the Director of Procurement for review and possible appeal, appeal action described in paragraph (f) of this section may be taken by the contracting officer subsequent to the issuance of a certificate of competency if he has substantial doubt as to the ability of the contractor to perform.

(h) When the contracting officer has questioned only one of the general standards of responsibility (e.g., capacity) of a small business offeror, but the SBA has declined to issue a certificate of competency, due to its findings on concerning the offeror's capability to perform under a different standard of responsibility (e.g., credit) the responsible SBA office will inform the contracting officer of the basis for its decision. The information furnished by SBA to the contracting of

ficer will generally consist of a copy of the letter sent to the offeror in question explaining why SBA declines to issue a certificate of competency. This information will be considered by the contracting officer in making an award of the procurement.

[39 FR 13083, Apr. 11, 1974]

§ 18-1.705-5 Contracting with the Small Business Administration.

(a) Authority. When the Small Business Administration (SBA) certifies to the NASA contracting officer, in accordance with Section 8(a) of the Small Business Act (15 U.S.C. 637(a)) that the SBA is competent to perform a specific contract, the contracting officer is authorized, in his discretion, to award the contract to the SBA.

(b) Policy. It is the policy of NASA to enter into contracts with the SBA to foster or assist in the establishment or the growth of small business concerns as designated by the SBA so that these concerns may become self-sustaining, competitive entities within a reasonable period of time. The SBA is empowered to arrange for the performance of such contracts by negotiating or otherwise letting contracts to small business concerns or others.

(c) Procedures-(1) Supplies, services and research and development. (i) In contracts for supplies, services and research and development, it is the stated policy of the SBA to contract with only those small firms which have submitted a written business plan specifically outlining a reasonable approach to the attainment of the policy objectives of paragraph (b) of this section. This business plan, if approved by the SBA, will be the basis for NASA's consideration of participation in a Section 8(a) program for the firm. In the execution of this policy, the SBA will furnish to the Director of Procurement, NASA Headquarters or to the Procurement Officer of a particular NASA installation, when the requested procurement is of a local nature, its request for a commitment to support the approved plan. SBA requests addressed to NASA Headquarters will be coordinated with appropriate installations.

(ii) The SBA request for a commitment to support the approved plan will show at least the following information:

(a) The background and ownership of the firm;

(b) How and when the firm is expected to become a self-sustaining, competitive entity;

(c) The extent to which procurement assistance is needed and an identification of the requirements sought from NASA (the identification of the supplies or services which the SBA may require in connection with a small firm's business plan will be developed by the SBA representatives. This may be accomplished through liaison with appropriate procurement offices either before or after the SBA's approval of a small firm's business plan as the SBA may elect. Small business specialists and minority business specialists at NASA installations shall cooperate and assist the SBA representatives in developing identifying information for the requirements being sought from the procurement office. To the extent possible, identifying information furnished by the SBA will be definitive and include purchase descriptions and Federal stock numbers. The Small business specialist or the minority business specialist shall, when practicable and feasible, arrange for such additional assistance as may be required from procurement, technical and supply management officials in order that the development of the identifying information may be meaningful. Current and future requirements of a small firm's business plan, if identified in meaningful terms will enable NASA to relate the items to present and future procurement requirements); and

(d) if the firm is currently in existence, the present production capacity and related facilities and how any additional facilities needed will be provided.

(iii) In addition to considering specific requests for commitments to support the business plans submitted by the SBA in subparagraph (1) (i) of this paragraph (c), the NASA small business specialist or other responsible individuals shall review and evaluate, on a continuing basis, all procurement requirements to determine their suitability for referral to the SBA for 8(a) consideration. Upon completion of such evaluation, a recommendation concerning award to the SBA will be made to the contracting officer. In the event the contracting officer disagrees with the recommendation, the procedure set forth in § 18-1.706-3(f) shall apply. In these evaluations consideration shall be given to:

(a) Availability of qualified prospective 8(a) contractors;

(b) Estimated total quantities of the identified items planned for procurement in the current fiscal year and, to the extent known, future fiscal years;

(c) Required monthly rates of production and delivery schedules;

(d) Items of similar complexity and nature if there are no known requirements of the specifically identified items;

(e) Problems encountered in prior production of the items either by the proposed contractor or other contractors; (f) Impact if slippage in delivery oc

curs;

(g) Impact if items were procured historically by small business or labor surplus area set-aside; and

(h) Any other information concerning the items or the proposed contractor which is pertinent to the evaluation of the requested commitments.

(iv) After the SBA requested commitments have been evaluated or a specific procurement has been designated as suitable for 8(a) contracting, the cognizant contracting officer shall notify the SBA and the Director of Procurement, NASA Headquarters (Attention: Small Business Advisor). The notification will include the extent to which a Section 8(a) contract may be placed with the SBA and the time frame within which the prime and subcontract actions must be completed in order to satisfy NASA's requirements. This notification represents a firm commitment by NASA to negotiate with the SBA: Provided, That there is no material change in requirements, availability of funds, or other pertinent factors. In the notification to the SBA, the installation should also establish a time limit (generally not less than 30 working days after receipt of notification) within which the SBA must establish contract with the installation and initiate negotiations of the Section 8(a) contract. If negotiations with the installation procurement office have not been initiated by the SBA within the time indicated, the procurement office will notify the Director of Procurement, NASA Headquarters (Attention: Small Business Advisor) of the intent to proceed with the procurement without further regard to the Section 8(a) procedures, unless additional time is requested by the SBA and such additional time can be granted considering the urgency of the requirement.

(v) It will be the responsibility of the SBA to provide written certification, as