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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

(c) Procedures.
(1) Determining Eligibility:

To be eligible to participate in the LSA set-aside portion of this procurement, a
labor surplus area concem which is also a small business concem (or a small
business concern 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 concer submitting a

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

to secure an unfair advantage over other offerons. (2) Determining Priority for Award: Labor surplus concerns eligible under (1) above will participate in the LSA set-aside in the following order of priority:

Group I. Small business concerns which are also

LSA concerns. A concern in this group
which has received an award on the non
LSA set-aside portion of an item shall
first be requested to offer the same per-
centage of the LSA set-aside portion.
If a percentage of the LSA set-aside
portion of the item remains to be awarded,
a drawing by lot shall determine the order
of priority within this group for

negotiations of the balance of the item. Group 2. Small business concerns which are not

LSA concerns. If a quantity of the item
remains unawarded after negotiations
with concerns in Group 1, the same pro-

cedure shall be followed for Group ?. (3) Determining the LSA set-aside award price:

(i) 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 sei-aside portion. When any one of separate quantities of-
fered on an item cannot be accepted without awarding other quantities of that

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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

item at higher prices, the weighted average price shall be used to determine the
highest unit price for award if the highest award of the non LSA set-aside por.
tion of an item was made on such a conditioned offer. When offers on the non
LSA set-aside portion tie-in two or more items so that an award cannot be made
for a quantity on one item without a concurrent award of a quantity on another
item, such tie-in conditions will be disregarded and the price offered for each
quantity under each item shall be considered separately. 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 concerns 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 product, shall be at'a price which, after application of the evaluation factors used under Buy American procedures for determining eligibility of a foreign end product for award, is equal to the highest award price on the non LSA set-aside portion, adjusted to reflect transportation and

other factors considered in evaluating the offers. (iii) Obtaining Offers and Processing LSA Set-aside Awards.

(A) When an unaccepted low offer is not involved:

if there is no unaccepted low offer meeting the criteria in (B) below,
eligible concerns in the order of priority in (2) above will be requested
to offer on the LSA set-aside quantity at the highest unit price awarded
on the non LSA set-aside portion. Concerns may offer less than the
total LSA set-aside portion. If any part of the LSA set-aside portion is
not taken by eligible concerns, the partial LSA set-aside is automati-
cally dissolved as to the unawarded portion. Such unawarded portion
may be procured by advertising or negotiation, as appropriate, in ac-

cordance with existing regulations.
(B) When an unaccepted low offer is involved:

if(I) a responsive offer is submitted on the non LSA set-aside portion at
a unit price which, when adjusted, is lower than the adjusted highest
unit price awarded on the non LSA set-aside portion, but cannot be ac-
cepted (e.g., because of "all-or-none" or other quantity limitations, or
because the offeror is nonresponsible), and (II) at the time of negotia-
tion for the LSA set-aside portion, the offer could be accepted (1.8.,
because the LSA set-aside quantity is large enough that the quantity
limitations could be complied with, or because the offeror has now

become responsible), then the following procedures shall be followed. Step One. Eligible concerns (in the order of priority in (2) above) will be requested to offer at the adjusted unit price of the unaccepted offer, a quantity of the LSA set-aside portion equal to the quantity of the unaccepted offer.

Step Two. If no eligible concern is willing to take the entire quantity of the unaccepted offer, then all eligible concerns (in the order of priority in (2) above) shall be requested to make offers on any lesser portion at the same price, until either the entire quantity is awarded or all eligible concerns refuse any further portions of such quantity. Step Three.

Case 1. If the unaccepted offer was submitted by a concern not eligible to participate in the LSA set-aside, and if any of the quantity under Step Two is not awarded, then it and all other remaining quantities of the LSA set-aside portion must be withdrawn and resolicited. If the entire

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quantity under Step Two is awarded among eligible concerns, Steps Four, Five and Six are applicable to the remaining LSA set-aside portion.

Case 2. If the unaccepted offer was submitted by a concern eligible to participate in the LSA set-aside, Steps Four, Five and Six are applicable to the remaining LSA set-aside portion regardless of whether any quantity under Step Two is not awarded after all eligible concerns have been afforded an opportunity to offer on the unaccepted quantity. However, the concern which submitted the unaccepted offer shall be eliminated from consideration under Step Four and Step Five, for award at higher prices, unless that concern first accepts a quantity of the LSA set-aside portion equal to the entire quantity of its unaccepted offer at the adjusted price of its offer.

Step Four. In case there is more than one unaccepted offer which meets the conditions of (1) and (II) above, Steps One, Two and Three above shall be applied with respect to the quantities of each such offer in turn, from lowest price to highest.

Step Five. Eligible concerns in the order of priority in (2) above will be requested to offer, at the highest unit price awarded on the non LSA set-aside portion on any quantity of the LSA setaside portion, remaining after Steps One, Two, Three and Four have been completed.

Step Six. If the entire LSA set-aside portion is not taken by eligible concerns pursuant to Steps One through Five above, the partial LSA set-aside is automatically dissolved as to the unawarded portion and such unawarded portion may be procured by advertising or negotiation as ap propriate, in accordance with existing regulations. (4) Determining the LSA Set-Aside Quantity:

(i) The maximum quantity of an item which may be awarded to any eligible con

cern shall be determined by applying the percentage of the total non LSA setaside portion of an item on which an offer was made to the total quantity of the

LSA set-aside portion of that item. (ii) If a concem offers on two or more items on the non LSA 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 LSA set-aside portion of the items affected will be determined by applying the percent of the total quantities of these items on the non LSA set-aside portion that could have been awarded to the total of these items on the LSA set-aside

portion. (iii) Notwithstanding the foregoing, if the entire LSA 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 LSA 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 priority groups in turn, to dispose of any balance of the item

still remaining. (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 LSA 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 area 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 Concern" 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 concern.

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

(End of clause)

7-2003.5 Notice of LSA Set-Asides. In accordance with 1-804.2(b)(1) or (2), insert the clause in (a) or (b) below.

(a)

NOTICE OF LABOR SURPLUS AREA SET-ASIDE (1978 JUN)

(a) General. Part of this procurement, identified in the Schedule as the "set-aside portion," has been set aside for preferential award to one or more labor surplus area (LSA) concerns, and, to a limited extent, to other business concerns which do not qualify as LSA concerns. Award of the set-aside portion will be made after awards have been made on the non-set-aside portion. (b) Procedures. (1) Determining Eligibility.

(A) To be eligible to participate in the set-aside portion of this procure

ment, a concern must submit a responsive offer on the non-set-aside

portion.

(B) The Government reserves the right not to award to any concern sub

mitting a token offer on the non-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 and other business concerns eligible under (1) above will participate in the set-aside in the following order of priority:

Group 1. LSA concerns which are also small business concerns.

Group 2. Other LSA concerns.

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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

Group 3. Small business concerns which are not LSA concerns.

Group 4. Other business concerns which are not LSA concerns. Within each of the above groups, offers on the set-aside portion will be requested from concerns in the order of their offers on the non-set-aside portion, beginning with the lowest responsive offer. Concerns may offer less than the total set-aside portion. (3) Determining the Set-Aside Award Price.

(A) General Rule.

Subject to the exceptions listed in (B) and (C) below, awards under the set-aside shall be made at the highest unit price for each item awarded on the non-set-aside, adjusted to reflect transportation, rent free use of Government property and other cost factors considered in evaluating bids on the non-set-aside portion. The set-aside award price shall be subject to the same discount terms used in the evaluation of the highest

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

(i) When the highest award price on the non-set-aside is

established by an award for a foreign end product, the award price for the set-aside portion shall be the award price on the non-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 set-aside to concerns offering foreign end products in which case the general

rule applies. (ii) Award under the set-aside to a concern offering a foreign end

product when the highest award price on the non-set-aside
portion is established by a domestic source end product shall
be at a price which, after application of the evaluation factors
used under Buy American procedures for determining eligi-
bility of a foreign end product for award, is equal to the
highest award price on the non-set-aside portion, adjusted to
reflect transportation and other factors considered in evaluat-

ing the offers.
(C) Obtaining Offers and Processing Set-Aside Awards.

(i) When an unaccepted low offer is not involved:

if there is no unaccepted low offer meeting the criteria in (ii)
below, eligible concerns in the order of priority in (2) above
will be requested to offer on the set-aside quantity at the
highest unit price awarded on the non-set-aside portion. Con-
cerns may offer less than the total set-aside portion, provided
that if any part of the set-aside portion is not taken by eligible
concerns in the first 3 groups, awards will be made in Group 4
at prices no higher than the lowest price awarded on the non-

set-aside portion.
(ii) When an unaccepted low offer is involved:

if (1) a responsive offer is submitted on the non-set-aside por-
tion at a unit price which, when adjusted, is lower than the ad-
justed highest unit price awarded on the non-set-aside portion,
but cannot be accepted (e.g., because of “all-or-none," or
other quantity limitations, or because the bidder is nonrespon-
sible), and (II) at the time of negotiation for the set-aside por-
tion, the offer could be accepted (e.g., because the set-aside
quantity is large enough that the quantity limitations could be
complied with, or because the bidder has now become respon-
sible), then the following procedures shall be followed:

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ARMED SERVICES PROCUREMENT REGULATION

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