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.

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.

127.15-2 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 sec. 15, 72 Stat. 395; 15 U.S.C. 644.

SOURCE: The provisions of this Part 127 contained in Revision 1, 28 F.R. 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.

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 (i) 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 involving 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.

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 as small business concerns, are rejected as nonresponsive.

§ 127.15-4 Participation by small business concerns in Government procurement or disposal programs. Small business concerns desiring to avail themselves of the set-aside program should (a) determine which Government purchasing or disposal offices are most likely to buy items which they can supply or which disposal offices dispose of property which they desire to purchase, (b) request placement on the bidders lists maintained by such offices, and (c) bid competitively on these procurements and disposals. Information concerning counsel and guidance in connection with contracting with the Government, furnished by SBA, is set forth under § 124.8-4.

PART 128-GRANTS FOR SMALL BUSINESS RESEARCH

SOURCE: The provisions of this Part 128 contained in Revision 1, 24 F.R. 7063, Sept. 1, 1959, unless otherwise noted. § 128.7 Statutory provision.

SEC. 7(d). The Administration also is empowered to make grants to any State Government, or any agency thereof, State chartered development credit or finance corporations, land-grant colleges and universities, and colleges and schools of business, engineering, commerce, or agriculture for studies, research and counseling concerning the managing, financing, and operation of small-business enterprises and technical and statistical information necessary thereto in order to carry out the purposes of section 8(b) (1) by coordinating such information with existing information facilities within the State and by making such information available to State and local agencies. Only one such grant shall be made within any one State in any one year, and no such grant shall exceed an aggregate amount of $40,000. Such grants shall be made from the fund established in the Treasury by section 602(b) of the Small Business Investment Act of 1958. § 128.7-1 (a) The regulations in this part govern the issuance of grants by the Small Business Administration for studies, research and counseling concerning the managing, financing and operation of small business enterprises authorized by section 7(d) of the Small Business Act, as amended.

Scope.

(b) Under section 7(d) of the Act, the Small Business Administration is authorized to make grants to finance the development and gathering of information relating to managing, financing and operation of small business enterprises. This information will be used to provide managerial aids to small business in accordance with the provisions of section 8(b)(1) of the Small Business Act, as amended. (See § 124.8 of this chapter.) This information will be coordinated with informational facilities within the States and made available to State and local agencies. § 128.7-2 Definitions.

As used in this part:

(a) "Act" means the Small Business Act (Pub. Law 85-536), as amended (Pub. Law 85-699).

(b) "Administrator" means the Administrator of SBA.

(c) "Application" means a written request for a grant on SBA Form 459. (d) "Counseling" means consulting and advising with SBA for the purpose of developing information concerning the managing, financing and operation

of small business enterprises, such information to be channeled through SBA for the use of national, state and local agencies and institutions listed in section 8(b)(1) of the Small Business Act.

(e) "Director" means the Director of the Office of Management and Research Assistance.

(f) "Grant" means a grant authorized under section 7(d) of the Act.

(g) "Grant Agreement" means the agreement contained in SBA Form 459 and any other conditions of the grant. (h) "Grantee" means an institution to which a grant has been made.

(i) "Institution" means any State government or any agency thereof, any State chartered development credit or financial corporation, any college, any university, and any school of business, engineering, commerce or agriculture, either public or private.

(j) "Project" means a proposal, or its components when two or more areas of research are involved, and any amendments thereto, approved by SBA.

(k) "Project Director" means the person assigned by an institution to supervise and be responsible for a research program under a grant.

(1) "Proposal" means a research program, which may include "studies," submitted by an institution in its application for a grant under section 7(d) of the Act.

(m) "Research" means research, studies, and counseling which will result in information to be distributed by SBA, acting as a clearinghouse, to national, state, and local agencies and institutions listed in section 8(b) (1) of the Act. Research includes basic and secondary investigations.

(n) "SBA" means the Small Business Administration.

(o) "Small business concern" or "Small business enterprise" means a business concern which would qualify as a small business, as defined by SBA in Part 121 of this chapter.

(p) "State" means the several States, the Territories and possessions of the United States, the Commonwealth of Puerto Rico and the District of Columbia.

(q) "State government or agency thereof" means departments, divisions or other designated organizations controlled and operated by the State including State government corporations.

(r) "Studies" means brief investigations of the economic background or

The

(b) The Management Research Advisory Council is an advisory group established to examine and make recommendations with respect to the merits of an application for a grant and to furnish advice on the grant program. function of said Council is purely advisory. The members of the Council are selected and appointed by the Administrator and serve at his pleasure and without compensation.

(c) All recommendations of the Management Research Advisory Council are submitted to the Administrator, who, in his discretion, shall determine which proposals shall be approved and which suggestions shall be put into practice.

§ 128.7-4 Who is eligible for a grant.

Any State government or any agency thereof, any State chartered development credit or finance corporation, any university, any college and any school of business, engineering, commerce or agriculture, either public or private, is eligible to receive a grant.

§ 128.7-5 Purpose of a grant.

(a) A grant will be made by SBA only to finance research concerning the managing, financing and operation of small business enterprises to develop information or techniques which can be used by public or private organizations to aid small business enterprises, or to develop information which improves knowledge of the economy through research on the small business sector.

(b) No proposal nor portion of a proposal will be approved if its primary purpose is to provide information to be used to urge industry and trade located in one State to move to another.

Application for a grant.

(a) Applications (SBA Form 459) and instructions (SBA Form 459A) are available at SBA field offices and at the SBA Washington, D.C. office.

If

(b) An application may be initiated by any institution described in § 128.7-6. Prior to submission, the application and the proposal to perform research under the grant contained therein, may be discussed informally with SBA staff members. When appropriate, SBA staff members may suggest a new proposal or modification of a proposal submitted. two or more institutions within a State desire to cooperate in carrying out proposals, such combined proposals may be considered. However, only one grant may be authorized. Therefore, the application must designate which of the cooperating institutions is to be the grantee. This institution will be responsible to SBA for carrying out the project in its entirety and SBA will not be obligated in any way to any institution other than the grantee.

(c) Applications must be received by SBA on or before the 31st day of October of the fiscal year for which the grant is requested. Applications received after that date will not be considered.

(d) Six copies of the application shall be submitted to the Director, Office of Management and Research Assistance, Small Business Administration, Washington, D.C., 20416. Applications received by SBA will not be returned to the applicant.

§ 128.7-8 Method of evaluating and selecting an application.