Where the definition of a small business concern for a given industry, as prescribed by the Small Business Administration and promulgated within the Department of Defense, differs from that set forth in the notice above, the notice shall be appropriately modified to reflect such definition. CODIFICATION: Paragraph (b) was amended in its entirety, 27 F.R. 1690, Feb. 22, 1962. Subsequently, the clause heading and clause subparagraph (d) (2) were further amended, 27 F.R. 11646, Nov. 27, 1962. Prior Amendments 1961: 26 F.R. 2600, Mar. 28; 26 F.R. 5300, June 14. (c) 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 or mere token quantities, the notice set forth below may be used instead of that in paragraph (b) of this section. NOTICE OF LABOR SURPLUS AREA SET-ASIDE (a) General. This procurement has been divided into two parts. All concerns whether labor surplus area concerns 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 (1) by labor surplus area concerns, and (ii) to a limited extent, by small business concerns which do not qualify as labor surplus area concerns. This is called the "set-aside portion" and awards therefor are made in accordance with special procedures set forth in paragraph (c) of this notice. Definitions of the following terms are set forth in paragraph (d) of this notice: (1) Labor Surplus Area. (2) Labor Surplus Area Concern. (b) Non-set-aside portion and award procedure. (1) A bidder which is not a labor surplus area concern or a small business concern shall submit a bid only for the non-setaside portion of the procurement. Award thereof will be made in accordance with customary procedures. (2) A bidder which is a labor surplus area concern or 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 non-set-aside portion of procurement, should submit a bid in the same manner 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 on 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 Set-Aside 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 labor surplus area or 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 labor surplus area or 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 labor surplus area or 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-or-none bids are offered for more than one item. (2) Priorities. Negotiations for the setaside portion will be conducted with such bidders in the following order of priority: Group 1. Persistent labor surplus area which are also small business concerns concerns. Group 5. Small business concerns which are not labor surplus area concerns. Within each of the above groups, negotiations 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 bids. However, see (5) below for the method of determining the bid when separate quantities are offered at different prices and see (6) below when separate quantities are offered at tie-in prices. (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 Statement of Set-Aside Quantity Desired, the quantity shall be no greater than the quantity of such concern's bid on the nonset-aside 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-setaside 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 prices bid for each Item on an "all or-none" basis shall be considered independent unit prices for the purpose of determining the eligibility and priority status of the concern for the set-aside portion of each Item. In no event will a set-aside award be made for an Item to such bidder at a higher unit price than his "all-or-none" unit price bid for the Item on the non-set-aside portion. (d) Definitions. (1) The term "labor surplus area" means a geographical area which is a persistent labor surplus area or a substantial labor surplus area, or both, as defined below: (i) "Persistent Labor Surplus Area" means an area which (A) is classified by the Department of Labor as an "Area of Substantial and Persistent Labor Surplus" (also called "Area of Substantial and Persistent Unemployment") and is listed as such by that Department in conjunction with its publication "Area Labor Market Trends," or (B) is certified as an area of substantial and persistent labor surplus by the Department of Labor pursuant to a request by a prospective contractor. (ii) "Substantial Labor Surplus Area" means an Area which (A) is classified by the Department of Labor as an "Area of Substantial Labor Surplus" (also called “Area of Substantial Unemployment") and which is listed as such by that Department in conjunction with its publication "Area Labor Market Trends," or (B) is certified as an area of substantial labor surplus by the Department of Labor pursuant to a request by a prospective contractor. (2) The term "labor surplus area concern" includes persistent labor surplus area concerns and substantial labor surplus area concerns as defined below: (1) "Persistent labor surplus area concern" means a concern that agrees to perform, or cause to be performed, a substantial proportion of a contract in persistent labor surplus areas. A concern shall be deemed to perform a substantial proportion of a contract in persistent labor surplus areas if the costs that the concern will incur on account of manufacturing or production performed in such areas (by itself or its firsttier subcontractors) amount to more than 50 percent of the contract price. (11) "Substantial labor surplus area concern" means a concern that agrees to perform, or cause to be performed, a substantial proportion of a contract in substantial labor surplus areas. A concern shall be deemed to perform a substantial proportion of a contract in substantial labor surplus areas if the costs that the concern will incur on account of manufacturing or production performed in substantial labor surplus areas or in substantial and persistent labor surplus areas (by itself or its first-tier subcontractors) amount to more than 50 percent of the contract price. (3) A "small business concern" is a concern that (1) is certified as a small business concern by the Small Business Administra tion, or (ii) is independently owned and operated, is not dominant in its field of operation and, with its affiliates, employs 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. (e) Identification of areas of performance. Each bidder desiring to be considered for award as a 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 set-aside 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. (f) Agreement. The bidder agrees that, if awarded a contract as a 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 areas; and that if awarded a contract as a 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. the (g) Token bids. Notwithstanding provisions of this Notice, the Government reserves the right, in determining eligibility or priority for set-aside negotiations, not to consider token bids or other devices designed to secure an unfair advantage over other bidders eligible for the set-aside portion. (h) Instruction for indicating portion of set-aside quantity desired. The quantity of each Item which has been set-aside is set forth on the attached Bidder's Statement of Set-Aside Quantity Desired, which is to be filled in only by labor surplus area concerns and small business concerns, as provided in (b) (2) above. Furthermore, it is to be used by such a bidder only when (1) he has submitted a bid for the entire non-set-aside quantity of an Item, and (2) he desires a total quantity in excess of the non-set-aside quantity thereof. Whether or not a labor surplus concern or small business concern 1961: 26 F.R. 2600, Mar. 28; 26 F.R. 5300, June 14. (d) (1) After the award price for the non-set-aside portion has been determined, negotiations may be conducted for the set-aside portion. Procurement of the set-aside portion shall in all instances be effected by negotiation. with those bidders or offerors who have submitted responsive bids or proposals on the non-set-aside portion at a unit price no greater than 120 percent of the highest award made or to be made on the non-set-aside portion and who are determined to be responsible prospective contractors for the set-aside portion of the procurement. Negotiations shall be conducted in the order of priority indicated in the foregoing notices; provided that, where equal low bids are received on the non-set-aside portion from concerns which are equally eligible for the set-aside portion, the concern which is awarded the non-set-aside portion (under the equal low bid procedures of § 2.407-6 of this chapter) shall have first priority with respect to negotiations for the set-aside portion. The set-aside portion shall be awarded at the highest unit price awarded or to be awarded for the non-set-aside portion. If the entire set-aside portion cannot be awarded by § 1.1002-1 Availability of invitations for bids and requests for proposals at the contracting office. A reasonable number of copies of invitations for bids and requests for proposals, which are required to be publicized in the Commerce Business Daily, including specifications and other pertinent information, shall be maintained at the contracting office. Upon request, prospective contractors not initially solicited may be mailed or otherwise provided copies of such invitations for bids or requests for proposals to the extent they are available. Where a solicitation for proposals has been limited as a result of a determination that only a specified firm or firms possess the capability to meet the requirements of a procurement, requests for proposals shall be mailed or otherwise provided upon request to firms not solicited, but only after advice has been given to the firm making the request as to the reasons for the limited solicitation and the unlikelihood of any other firm being able to qualify for a contract award under the circumstances; but see § 4.205-2 of this chapter. In addition, to the extent that invitations for bids or requests for proposals are available, they shall be provided on a "first come-first served" basis, for pick up at the contracting office, to publishers, trade associations, procurement information services, and other members of the public having a legitimate interest therein; otherwise, the contracting office may limit the availability of such information to perusal at the contracting office (for construction, see § 4.102-1 of this chapter). In determining the "reasonable number" of copies to be maintained, the contracting officer shall consider, among other things, the extent of initial solicitation, reproduction costs, the nature of the procurement, whether access to classified matter is involved, the anticipated requests for copies based upon responses to synopses and other means of publication in previous similar situations, and the fact that publishers and others who disseminate information regarding proposed procurements normally do not require voluminous specifications or drawings. With regard to classified procurements, the foregoing instructions apply to the extent consistent with departmental security instructions and procedures. [28 F.R. 12547, Nov. 23, 1963] § 1.1002-2 Limited availability of certain specifications, plans, and drawings. Where the purchasing acitivity is not in possession of complete sets of specifications, plans, and drawings (as in some procurements of airframes, shipbuilding, or major weapons systems), or the drawings and specifications are classified, or are so voluminous that display and distribution in accordance with §§ 1.1002 through 1.1002-6 is impracticable, the solicitation shall contain notice of this fact and of the locations at which the specifications, plans, or drawings may be examined (see § 1.1203). [28 F.R. 12547, Nov. 23, 1963] § 1.1002-3 Distribution to the Small Business Advisory Service Center. A copy of each unclassified invitation for bids issued in the United States, a copy of each unclassified request for proposals, and a copy of each letter solicitation (including all documents affixed to the invitation for bid, request for proposal, or letter of solicitation, except copies of drawings and specifications) issued in the United States and required to be publicized in the Commerce Business Daily, and a copy of every amendment to each such invitation for bids or request for proposals, shall be sent directly, on the date issued, to the Small Business Advisory Service Center, Small Business Administration, 811 Vermont Avenue NW., Washington, D.C., 20416. This center is maintained to provide information to all persons having an interest in Government procurement opportunities. [28 F.R. 12547, Nov. 23, 1963] § 1.1002-4 Displaying in public place. A copy of each solicitation for an unclassified procurement in excess of $2,500 shall be displayed at the contracting office, and, if appropriate, at some additional public place (other than the Small Business Advisory Service Center) from the date issued until seven days after bids or proposals have been opened. [28 F.R. 12547, Nov. 23, 1963] § 1.1002-5 Information releases to newspapers and trade journals. A brief announcement of the proposed purchase may be made available to newspapers, trade journals, and magazines for publication without cost to the Government. [28 F.R. 12547, Nov. 23, 1963] offer substantial subcontracting possibilities, shall be urged to accept the following clause: LABOR SURPLUS AREA SUBCONTRACTING PROGRAM (FEB. 1962) (a) The Contractor agrees to establish and conduct a program which will encourage labor surplus area concerns to compete for subcontracts within their capabilities. this connection, the Contractor shall: In (1) Designate a liaison officer who will (1) maintain liaison with duly authorized representatives of the Government on labor surplus area matters, (ii) supervise compliance with the "Utilization of Concerns in Labor Surplus Areas" clause, (iii) administer the Contractor's Labor Surplus Area Subcontracting Program; (2) Provide adequate and timely consideration of the potentialities of labor surplus area concerns in all "make-or-buy" decisions; (3) Assure that labor surplus area concerns will have an equitable opportunity to compete for subcontracts, particularly by arranging solicitations, time for the preparation of bids, quantities, specifications, and delivery schedules so as to facilitate the participation of labor surplus area concerns; (4) Maintain records showing procedures which have been adopted to comply with the policies set forth in this clause; and (5) Include the "Utilization of Concerns in Labor Surplus Areas" clause in subcontracts which offer substantial labor surplus area subcontracting opportunities. (b) A "labor surplus area concern" is a concern which will perform, or cause to be performed, a substantial proportion of any contract awarded to it in "Areas of Substantial and Persistent Labor Surplus" or in "Areas of Substantial Labor Surplus," as designated by the Department of Labor. A concern shall be deemed to perform a substantial proportion of a contract in a labor surplus area if the costs that the concern will incur on account of manufacturing or production (by itself or its first-tier subcontractors) in such areas amount to more than 50 percent of the price of such contract. (c) The Contractor further agrees, with respect to any subcontract hereunder which is in excess of $500,000 and which contains the clause entitled "Utilization of Concerns in Labor Surplus Areas," that he will insert provisions in the subcontract which will conform substantially to the language of this clause, including this paragraph (c), and that he will furnish the names of such subcontractors to the Contracting Officer. [27 F.R. 3445, Apr. 11, 1962] § 1.805-4 Responsibility for reviewing subcontracting program. Only one Department shall be responsible for reviewing a contractor's labor Surplus Area Subcontracting Program. Departmental responsibility shall be assigned and carried out in accordance with § 1.707-4. [27 F.R. 3445, Apr. 11, 1962] Subpart 1-Responsible Prospective Contractors § 1.903-1 Except General standards. in as otherwise provided §§ 1.903 to 1.903-4, a prospective contractor must: (a) Have adequate financial resources, or the ability to obtain such resources as required during performance of the contract (see Defense Contract Financing Regulations, Subpart B, Part 163 of this chapter, and any amendments thereto; see also §§ 1.903-3 and 1.905-2; and for SBA certificates of competency, § 1.705-6); (b) Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing business commitments, commercial as well as governmental (for SBA certificates of competency, see § 1.705-6); (c) Have a satisfactory record of performance (Contractors who are seriously delinquent in current contract performance, when the number of contracts and the extent of delinquencies of each are considered, shall, in the absence of evidence to the contrary or circumstances properly beyond the control of the contractor, be presumed to be unable to fulfill this requirement; see §§ 1.905-2 and 1.905-4(d)). (d) Have a satisfactory record of integrity; (e) Appear to be able to conform to the requirements of the standard nondiscrimination clause (see § 12.802 of this chapter); and (f) Be otherwise qualified and eligible to receive an award under applicable laws and regulations; e.g., Subpart F, Part 12 of this chapter. [27 F.R. 11646, Nov. 27, 1962] Subpart J-Publicizing Procurement Actions § 1.1002 Dissemination of information relating to invitations for bids and requests for proposals. [28 F.R. 12547, Nov. 23, 1963] Prior Amendments 1962: 27 F.R. 6121, June 29; 27 F.R. 11646, Nov. 27. |