to obtain the benefits of research and development in order to maintain and strengthen the competitive free enterprise system and the national economy.

(b) It shall be the duty of the Administration, and it is hereby empowered

(1) To assist small-business concerns to obtain Government contracts for research and development;

(2) To assist small-business concerns to obtain the benefits of research and development performed under Government contracts or at Government expense; and

(3) To provide technical assistance to small-business concerns to accomplish the purposes of this section.

(c) The administration is authorized to consult and cooperate with all Government agencies and to make studies and recommendations to such agencies, and such agencies are authorized and directed to cooperate with the Administration in order to carry out and to accomplish the purposes of this section.

(d) (1) The Administrator is authorized to consult with representatives of smallbusiness concerns with a view to assisting and encouraging such firms to undertake joint programs for research and development carried out through such corporate or other mechanisms as may be most appropriate for the purpose. Such joint programs may, among other things, include the following purposes:

(A) To construct, acquire, or establish laboratories and other facilities for the conduct of research;

(B) To undertake and utilize applied research;

(C) To collect research information related to a particular industry and disseminate it to participating members;

(D) To conduct applied research on a protected, proprietary, and contractual basis with member or nonmember firms, Government agencies, and others;

(E) To prosecute applications for patents and render patent services for participating members; and

(F) To negotiate and grant licenses under patents held under the joint program, and to establish corporations designed to exploit particular patents obtained by it.

(2) The Administrator may, after consultation with the Attorney General and the Chairman of the Federal Trade Commission, and with the prior written approval of the Attorney General, approve any agreement between small-business firms providing for a joint program of research and development, if the Administrator finds that the joint program proposed will maintain and strengthen the free eterprise system and the economy of the Nation. The Administrator or the Attorney General may at any time withdraw his approval of the agreement and the joint program of research and development covered thereby, if he finds that the agreement or the joint program carried on under it is no longer in the best interests

of the competitive free enterprise system and the economy of the Nation. A copy of the statement of any such finding and approval intended to be within the coverage of this subsection, and a copy of any modification or withdrawal of approval, shall be published in the FEDERAL REGISTER. The authority conferred by this subsection on the Administrator shall not be delegated by him.

(3) No act or omission to act pursuant to and within the scope of any joint program for research and development, under an agreement approved by the Administrator under this subsection, shall be construed to be within the prohibitions of the antitrust laws or the Federal Trade Commission Act. Upon publication in the FEDERAL REGISTER Of the notice of withdrawal of his approval of the agreement granted under this subsection, either by the Administrator or by the Attorney General, the provisions of this subsection shall not apply to any subsequent act or omission to act by reason of such agreement or approval.

§ 125.9-1 Procedures.

(a) Small business concerns desiring assistance under the Small Business Administration's research and development programs should contact the nearest SBA field office and give all pertinent information concerning their personnel, facilities and research accomplishments other than proprietary data.

(b) SBA field offices will have available for use and guidance of small concerns, information on technical fields of interest to the Government, and names of the specific offices of Government procurement agencies which are responsible for technical management of various research and development programs of the Government.

§ 125.9-2 Research and development pools; purposes.

Small concerns may form pools through such corporate or other mechanisms deemed most appropriate for the purpose. Joint research and development programs conducted through small business research and development pools may, among other things, include the following purposes:

(a) To construct, acquire, or establish laboratories and other facilities for the conduct of research.

(b) To undertake and utilize applied research.

(c) To collect research information related to a particular industry and disseminate it to participating members.

(d) To conduct applied rearch on a protected, proprietary, and contractual basis with member or nonmember con

cerns, Government agencies, and others. (e) To prosecute applications for patents and render patent services for participating members.

(f) To negotiate and grant licenses under patents held under the joint program, and to establish corporations designed to exploit particular patents obtained by it.

§ 125.9-3 Procedures for organizing a research and development pool.

(a) Concerns desiring to organize a research and development pool will file an application (Form 419) with detailed information to be included, with the local SBA Regional Office.

(b) Upon receipt of the application, the Regional Office will review the application as to its sufficiency and if it is fully completed will refer it to the Administrator for his action.

(c) On reviewing the application; the Administrator will consult with the Attorney General and the Chairman of the Federal Trade Commission on the application under consideration for approval. Upon receiving the written approval of the Attorney General, the Administrator may approve any agreement between small business concerns providing for a joint program of research and development, if the Administrator finds that the joint program proposed will maintain and strengthen the free enterprise system and the economy of the Nation. A copy of the statement of any such finding and approval shall be published in the FEDERAL REGISTER.

§ 125.9-4 Types of research and development pools.

(a) Incorporated: A pool which has been incorporated by the member firms under the laws of a State.

(b) Unincorporated: A pool in which the activities are directed and controlled by an executive committee, and no action is taken on behalf of the pool without prior authorization or approval of the committee.

[Amdt. 1, 28 F.R. 12311, Nov. 21, 1963] § 125.9-5 Antitrust exemption.

No act or omission to act pursuant to and within the scope of any joint program for research and development, under an agreement approved by the Administrator, under this section, shall be construed to be within the prohibitions of the antitrust laws or the Federal Trade Commission Act. Upon publica

tion in the FEDERAL REGISTER of the notice of withdrawal of the approval of the agreement granted under this subsection, either by the Administrator or by the Attorney General, the provisions of this subsection shall not apply to any subsequent act or omission to act by reason of such agreement or approval. § 125.9-6 Withdrawal of approval of a research and development pool.

The withdrawal of any request or finding hereunder by the Administrator, or the withdrawal by the Attorney General of his approval of the voluntary agreement or program on which the request or finding is based, would cancel any exemptions to the Antitrust Act accruing to the pool under these provisions. A copy of any modification or withdrawal of approval shall be published in the FEDERAL REGISTER.

126.11-3 Types of defense production pools. 126.11-4 Antitrust Exemption.

126.11-5

126.11-6

Withdrawal of Approval of a Small
Business Defense Production
Pool.
Reports.

126.11-7 New members.

AUTHORITY: The provisions of this Part 126 issued under 64 Stat. 798, as amended, secs. 5, 11, 72 Stat. 385, 394; 50 U.S.C. App. 2061, et seq., 15 U.S.C. 634, 640, E.O. 10493; 3 CFR, 1949-1953 Comp.

SOURCE: The provisions of this Part 126 appear at 23 F.R. 10529, Dec. 31, 1958, unless otherwise noted.

§ 126.11 Statutory provisions.

SEC. 11 (a) The President is authorized to consult with representatives of small-business concerns with a view to encouraging the making by such persons with the approval of the President of voluntary agreements and programs to further the objectives of this Act.

(b) No act or omission to act pursuant to this Act which occurs while this Act is in effect, if requested by the President pursuant to a voluntary agreement or program approved under subsection (a) of this section and found by the President to be in the public interest as contributing to the national defense, shall be construed to be within the prohibitions of the antitrust laws or the Federal Trade Commission Act of the United States. A copy of each such request intended to be within the coverage of this section, and any modification or withdrawal thereof, shall be furnished to the Attorney General and the Chairman of the Federal Trade Commission when made, and it shall be published in the FEDERAL REGISTER unless publication thereof would, in the opinion of the President, endanger the national security.

(c) The authority granted in subsection (b) of this section shall be delegated only (1) to an official who shall for the purpose of such delegation be required to be appointed by the President by and with the advice and consent of the Senate, (2) upon the condition that such official consult with the Attorney General and the Chairman of the Federal Trade Commission not less than ten days before making any request or finding thereunder, and (8) upon the condition that such official obtain the approval of the Attorney General to any request thereunder before making the request.

(d) Upon withdrawal of any request or finding hereunder, or upon withdrawal by the Attorney General of his approval of the voluntary agreement or program on which the request or finding is based, the provisions of this section shall not apply to any subsequent act, or omission to act, by reason of such finding or request.

§ 126.11-1 General.

Defense production pools are authorized to enter into defense contracts with the Government and may perform such contracts or assign subcontracts to the members of the pool, or may in the case of an unincorporated pool designate a member as prime contractor. The Secretary of Labor has exempted such pools from the requirement of section 1(a) of the Walsh-Healey Public Contracts Act as to the certification that such pool is a "Manufacturer" or "Regular Dealer” under said Act.

§ 126.11-2 Procedures.

(a) Concerns planning to organize a small business defense production pool will file an application (Form 418) with detailed information to be included, with the SBA Regional Office.

(b) Upon receipt of an application, the Regional Office will review it as to

sufficiency and if it is fully completed will refer it to the Administrator for his action.

(c) Upon receipt of the application, the Administrator will forward a copy to the Attorney General and the Chairman of the Federal Trade Commission and request consultation with them.

(d) Upon completing the consultation and upon a finding by the Administrator that the action is in the public interest as contributing to the national defense, the Administrator will request written approval of the Attorney General.

(e) Upon receipt of approval by the Attorney General, the Administrator notifies the pool and each applicant that the plan has been approved and asks each to participate in the pool's operation.

(f) The pool may commence operations upon its written acceptance and each member thereof may participate as a pool member upon their written acceptances transmitted to the Administrator. The Administrator will publish in the FEDERAL REGISTER copies of his approval and findings unless in his opinion the publication would endanger the national security.

§ 126.11-3 Types of defense production pools.

(a) Incorporated: A pool which has been incorporated by the member firms under the laws of a State.

(b) Unincorporated: A pool in which the activities are directed and controlled by an executive committee, and no action is taken on behalf of the pool without prior authorization or approval of the committee.

[Amdt. 1, 28 F.R. 12312, Nov. 21, 1963]

§ 126.11-4 Antitrust exemption.

No act or omission to act, if requested by the Administrator pursuant to approval of a voluntary agreement or program and found by the Administrator to be in the public interest as contributing to the national defense, shall be construed to be within the prohibition of the antitrust laws of the Federal Trade Commission Act of the United States. A copy of each such request intended to be within the coverage of this section, and any notification or withdrawal thereof, shall be furnished to the Attorney General and the Chairman of the Federal Trade Commission when made.

§ 126.11-5 Withdrawal of approval of a small business defense production pool.

The withdrawal of any request or finding hereunder by the Administrator, or the withdrawal by the Attorney General of his approval of the voluntary agreement or program on which the request or finding is based, would cancel any exemptions to the Antitrust laws granted under these provisions. A copy of any modification or withdrawal of approval shall be published in the FEDERAL REGISTER unless publication thereof would, in the opinion of the Administrator, endanger the national security.

§ 126.11-6 Reports.

Approved small business defense production pools will furnish periodic reports to SBA. These reports will indicate whether they are seeking defense contracts or actively producing as defense prime or subcontractors. They will also include the number and value of prime and subcontracts obtained since operations were begun, and any changes in address or management. § 126.11-7

New members.

All small business defense production pools must agree to admit new members upon equitable terms and permit existing members to withdraw from the organization.

PART 127-JOINT SET-ASIDES

Sec. 127.15

127.15-1 127.15-2

Statutory provisions. General.

Precedures for the set-aside of Government purchases. 127.15-3 Procedures for the set-aside of Government sales.

127.15 4 Participation of small business concerns in Government procurement and disposal program. AUTHORITY: The provisions of this Part 127 issued under secs. 5, 15, 72 Stat. 385, 395; 15 U.S.C. 634, 644.

SOURCE: The provisions of this Part 127 contained in Revision 1, 28 FR. 13545, Dec. 14, 1963, unless otherwise noted.

§ 127.15 Statutory provisions.

SEC. 15. To effectuate the purposes of this Act, small business concerns within the meaning of this Act shall receive any award or contract or any part thereof, and be awarded any contract for the sale of Government property, as to which it is determined by the Administration and the contracting procurement or disposal agency (1) to be in

the interest of maintaining or mobilizing the Nation's full productive capacity, (2) to be in the interest of war or national defense programs, (3) to be in the interest of assuring that a fair proportion of the total purchases and contracts for property and services for the Government are placed with small business concerns, or (4) to be in the interest of assuring that a fair proportion of the total sales of Government property be made to small business concerns; but nothing contained in this Act shall be construed to change any preferences or priorities established by law with respect to the sale of electrical power or other property by the Government or any agency thereof. These determinations may be made for individual awards or contracts or for classes of awards or contracts. Whenever the Administration and the contracting procurement agency fail to agree, the matter shall be submitted for determination to the Secretary or the Head of the appropriate department or agency by the Administrator.

Set-asides are made by the Government for the purchase of property and services including, but not limited to, contracts for maintenance, repair, construction, research and development, and for the disposal of real and personal property, including timber, minerals and strategic materials.

§ 127.15-2 Procedures for the set-aside of Government purchases.

(a) Government procurement setasides. (1) Under agreements with Federal agencies, representatives of SBA are assigned to the major Federal procurement installations to screen purchase requirements for possible small business set-asides. Set-asides are made in accordance with provisions set forth in the Armed Service Procurement Regulation (for Military agencies), and in the Federal Procurement Regulations (for civilian agencies of the Government). Pursuant to such regulations, the set-aside program operates as follows at installations to which SBA representatives are assigned:

(2) When a procurement or a class of procurements meets one or more of the statutory criteria and there are sufficient numbers of small business concerns considered capable of furnishing the property or services at fair and reasonable prices, SBA representatives recommend small business set-asides. Set-asides may be for entire procurements (called total set-asides) or for portions thereof (called partial set-asides). If the procurement officer does not agree to the

set-asides, the SBA representative may carry the disagreement to the Head of the local installation. Where the SBA representative and the Head of the procurement installation disagree, the matter may be submitted by the Administrator of SBA to the Secretary or Head of the procuring department or agency for final determination.

(3) In a total set-aside, the entire procurement is restricted to small business concerns and bids or quotations by large firms are rejected as nonresponsive. It is SBA policy to request total set-asides when there is 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.

(4) In a partial set-aside, only a portion of the procurement is restricted to small business concerns. It is SBA policy to request partial set-asides when (1) the procurement is not appropriate for total set-aside, (ii) the procurement is severable into two or more economic production runs or reasonable lots, and (iii) two or more small business concerns are expected to have the technical competency and productive capacity to furnish a severable portion of the item being purchased by the Government at a reasonable price. Where appropriate, partial set-asides will be requested when only one small concern is expected to have the technical competency and productive capacity to furnish a severable portion of the procurement and conditions in subdivisions (i) and (ii) of this subparagraph, are present. Insofar as practicable, the set-aside portion requested shall be such as to make the maximum use of small business capacity.

(b) Withdrawal of set-asides. If prior to award, the contracting officer considers that a jointly made set-aside would be detrimental to the public interest (e.g., because of unreasonable price), the contracting officer initiates a request to the SBA representatives for withdrawal of the joint set-aside. If the SBA representative does not agree to the proposed withdrawal, the representative may carry the disagreement to the Head of the procuring activity. If the SBA representative and the Head of the activity disagree, the matter may be appealed by the Administrator of SBA to the Secretary or Head of the department or agency whose decision is final.

(c) Awards on procurements partially set aside. (1) In partial set-asides in

volving Government procurement, negotiations for award of the set-aside portion are conducted by the purchasing officer with responsible small firms who submit responsive bids or proposals on the unreserved portion within 120 percent of the highest unit price awarded on the unreserved portion. Such negotiations are conducted with small business concerns in the following order of priority:

Group 1. Small business concerns which are also persistent surplus area concerns; Group 2. Small business concerns which are also substantial labor surplus area concerns;

Group 3. Small business concerns which are not labor surplus area concerns. Within each of the groups, negotiations are in the order of the bids on the non-set-aside portion, beginning with the lowest responsive bid.

§ 127.15-3

Procedures for the set-aside of Government sales.

(a) Property sales or disposal setasides. Under agreements with Federal agencies, SBA assigns representatives to cover major property sales and disposal installations in the regions to screen inventory or proposed sales of real, personal, and mixed property, including timber, minerals and strategic materials for possible set-asides.

(1) SBA representatives review includes cost factors and proposed sales methods for the purpose of assuring that a fair proportion of the property for sale or disposal is made available for purchase by small business firms, taking into consideration statutory or regulatory preferences and priorities. When SBA representatives determine that there is a sufficient number of small business firms capable of competing for the purchase of such property at fair and reasonable prices, the SBA representatives recommend small business set-asides. If the disposal officer does not agree to the set-asides, the SBA representative may avail himself of an appeal procedure similar to that described in §127.15-2 (a) (2). Further, if the disposal officer initiates a request for withdrawal of the set-aside (e.g., because of unreasonable price or other reasons), the SBA representative shall use the appeal procedure referenced above if he does not agree after the matter has been discussed with the disposal officer's supervisor.

(2) Bids or quotations on any setaside property by firms not qualifying