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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

Step Six. If the entire set-aside portion is not taken by eligible small business concerns pursuant to Steps One through Five above, the partial set-aside is automatically dissolved as to the unawarded portion and such unawarded portion may be procured by advertising or negotiation as appropriate, in accordance with existing regulations.

(4) Determining the Set-Aside Quantity.
(A) The maximum quantity of an item which may be awarded to any eligi-

ble small business concem shall be determined by applying the percent-
age of the total non-set-aside portion of an item on which an offer was

made to the total quantity of the set-aside portion of that item. (B) If a concern offers on two or more items on the non-set-aside portion,

but conditions its offer in such a manner that the total of all these quantities may not be awarded, or offers a quantity which, at the option of the Government, may be applied to one or more items, the overall maximum which can be offered on the set-aside portion of the items affected will be determined by applying the percentage of the total quantities of these items on the non-set-aside portion that could have been

awarded to the total of these items on the set-aside portion. (C) Notwithstanding the foregoing, if the entire set-aside portion of an item

is not awarded after completion of the above steps, then the unawarded balance shall be offered to those concerns who were previously awarded quantities on the set-aside portion but who were prevented from accepting additional quantities because of the quantity limitations stated above. The unawarded quantity will first be offered to that concern in the first priority which has received the largest quantity of the item. If two or more offerors in the first priority received an identical quantity, a drawing by lot shall determine their priority. If a balance still remains, this procedure shall be repeated with the offerors in each of the original groups in turn, to dispose of any balance of the item still

remaining. (c) Definitions.

(1) A "small business concern" is a concern, including its affiliates, which is indepen

dently owned and operated, is not dominant in the field of operation in which it is making an offer on Government contracts, and can further qualify under the criteria set forth in the regulations of the Small Business Administration (CFR Title 13, Section 121.3–8). In addition to meeting these criteria, a manufacturer or a regular dealer submitting offers in his own name must agree to furnish in the performance of the contract, end items manufactured or produced by small business concerns; provided, that this additional requirement does not apply in connection with construction or service contracts.

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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

(2) Labor Surplus Area. The term "labor

surplus area" means a geographic area
which at the time of award is classified
as such by the Secretary of Labor in
the Department of Labor "Listing of
Eligible Labor Surplus Areas Under
Defense Manpower Policy 4A and
Executive Order 10582".
Labor Surplus Area Concerns. The term
"labor surplus area concern" means a
concern that agrees to perform or cause
to be performed a substantial proportion
of a contract in labor surplus areas.
A concern shall be deemed to perform a
substantial proportion of a contract in
labor surplus areas if the aggregate
costs that will be incurred by the
concern or its first tier subcontractors
on account of manufacturing or produc-
tion performed in labor surplus areas
amount to more than 50% of the contract

price. (d) Agreement. The offeror agrees that if awarded a contract as a small business LSA concern under the set-aside portion of this procurement, he will perform or cause to be performed a substantial proportion of the contract in areas classified at the time of award or at the time of performance of the contract as LSA.

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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

(e) Identification of Areas of Performance. Each offeror desiring to be considered for award as a LSA concern on the set-aside portion of this procurement shall identify in Section B of his offer the geographical areas in which he proposes to perform, or cause to be performed, a substantial proportion of the contract. If the Department of Labor classification of any such arca changes after the offeror has submitted his offer, the offeror may change the areas in which he proposes to perform, provided that he so notifies the Contracting Officer before award of the LSA set-aside portion.

Such offerors are instructed to insert in the clause entitled “Eligibility for Preference as a Labor Surplus Area Concer" in Section B of the solicitation, the address(es) where costs incurred on account of manufacturing or production (by offeror or first tier subcontractor) will amount to more than fifty percent (50%) of the contract price,

CAUTION: Failure to list the location of manufacture or production and the percentage of cost to be incurred at each location in the space provided in the clause entitled "Eligibility for Preference as a Labor Surplus Area Concern" set forth in Section B of the solicitation will preclude consideration of the offeror as a LSA concem.

(f) Requirements Contract. Only one award will be made for each item or sub-item of the nonset-aside portion and only one award will be made for each item or sub-item of the set-aside portion. For the purpose of equitably distributing orders in accordance with this “Notice of Partial Small Business Set-Aside," the Government will apportion the quantities to be ordered as equally as possible between the non-set-aside Contractor and the set-aside Contractor to whom the awards are made.

(End of clause)

7-2003.4 Notice of Combined Small Business-LSA Set-Asides. In accordance with 1-706.7(d)(1) or (2), insert the clause in (a) or (b) below.

(a)

NOTICE OF COMBINED SMALL BUSINESS-LABOR SURPLUS AREA SET-ASIDE
(1978 JUN)
(a) General.

(1) Offers under this procurement are solicited from small business concerns only and the 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, in the interest of war or national defense programs, or in the interest of assuring that a fair proportion of the Government procurement is placed with small business concerns. Offers received from firms which are not small business concerns shall be considered nonresponsive and shall be rejected.

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(2) Part of this procurement, identified in the solicitation as the “labor surplus area (LSA) set-aside portion," has been further set aside for award only to one or more LSA concerns, which are also small business concerns, and, to a limited extent, to small business concerns which do not qualify as LSA concerns. Award of the LSA set- aside portion will be made after awards have been made on the non LSA set-aside portion. (b) Definitions.

(1) A "small business concern" is a concern, including its affiliates, which is independently owned and operated, is not dominant in the field of operation in which it is making an offer on Government contracts, and can further qualify under the criteria set forth in the regulations of the Small Business Administration (CFR Title 13, Section 121.3–8). In addition to meeting these criteria, a manufacturer or a regular dealer submitting offers in his own name must agree to furnish in the performance of the contract, end items manufactured or produced by small business concerns; provided, that this additional requirement does not apply in connection with construction or service contracts. (2) Labor Surplus Area. The term "labor

surplus area" means a geographic area
which at the time of award is classified
as such by the Secretary of Labor in
the Department of Labor "Listing of
Eligible Labor Surplus Areas Under
Defense Manpower Policy 4A and
Executive Order 10582".
Labor Surplus Area Concerns. The term
"labor surplus area concern" means a
concern that agrees to perform or cause
to be performed a substantial proportion
of a contract in labor surplus areas.
A concern shall be deemed to perform a
substantial proportion of a contract in
labor surplus areas if the aggregate
costs that will be incurred by the
concern or its first tier subcontractors
on account of manufacturing or produc-
tion performed in labor surplus areas
amount to more than 50% of the contract
price.

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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

(c) Procedures.
(1) Determining Eligibility:

(i) To be eligible to participate in the LSA set-aside portion of this procurement, a

labor surplus area concern which is also a small business concem (or a small business concem to the extent indicated below) must submit a responsive offer

on the non LSA set-aside portion. (ii) The Government reserves the right not to award to any concem submitting a

token offer on the non LSA set-aside portion or attempting by any other device

to secure an unfair advantage over other offerors. (2) Determining Priority for Award: Labor surplus concerns which are also small business concerns and other small business concerns eligible under (1) above will participate in the setaside in the following order of priority:

Group 1. Small business concerns which are

also labor surplus area (LSA)

concerns. Group 2. Small business concerns which are

not labor surplus area (LSA)

concerns. Within each of the above groups, offers on the LSA set-aside portion will be requested from concerns in the order of their offers on the non LSA set-aside portion, beginning with the lowest responsive offer. Concerns may offer less than the total LSA set-aside portion. (3) Determining the LSA set-aside award price:

(1) General Rule. Subject to the exceptions listed in (ii) and (iii) below, awards

under the LSA set-aside shall be made at the highest unit price for each item
awarded on the non LSA set-aside, adjusted to reflect transportation, rent free
use of Government property and other cost factors considered in evaluating of
fers on the non LSA set-aside portion. The LSA set-aside award price shall be
subject to the same discount terms used in the evaluation of the highest non LSA

set-aside award price.
(ii) Award Price Involving Foreign End Products (see ASPR Section VI).

(A) When the highest award price on the non LSA set-aside is established

by an award for a foreign end product, the award price for the LSA setaside portion shall be the award price on the non LSA set-aside as adjusted in evaluating the offer submitting the foreign end product for award under applicable Buy American procedures, except for awards on the LSA set-aside to concerms offering foreign end products, in

which case the general rule applies. (B) Award under the LSA set-aside to a concern offering a foreign end

product, when the highest award price on the non LSA set-aside portion is established by an award to a firm offering a domestic source end

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