[Enclosure No. 3] Contracts awarded to small business firms as a result of set-asides DSA began operations Jan. 1, 1962. It is taking over the procurement of certain common use supplies from the 3 military departments. [Enclosure No. 4] Q. What are the criteria and guidelines which determine a small business set-aside procurement, including: (a) Personnel contributing to and responsible for such determination; (b) Feasibility of component breakout for this purpose? A. Criteria for small business set-aside procurement is set forth in Armed Services Procurement Regulations 1-706. Additionally, the Army, as well as the other military departments in compliance with agreements reached between the Administrator, SBA, and the Secretary of Defense, have set-aside on an automatic basis proposed procurements for construction (i.e., new construction, repairs, and utilities) estimated to cost between $2,500 and $500,000. Of course, many construction projects in excess of $500,000 have been set aside for exclusive small business participation under criteria prescribed in ASPR. The Army, pursuant to policy set forth in Army Procurement Procedures 1-706.51, has established a policy in the supply contract area (i.e., other than construction) that proposed procurements between $2,500 and $50,000 will be considered first for a labor surplus set aside and then for a small business set aside. (a) Within the Army 68 specialists are employed as small business and labor surplus advisers with a primary duty to screen procurements and otherwise insure small business enterprise receives an equitable opportunity to compete in Army procurement programs. These full-time personnel are assigned at major procurement activities where the bulk of dollars for Army purchases are awarded. At every other echelon within the Army where there is a purchasing mission, some individual, usually with the background of a contracting officer, is designated to insure that the interest of small business is protected. Appointments of small business and labor surplus advisers, full or part time, are accomplished by the head of the procuring activity. The functions of the small business and labor surplus adviser in the Army are covered by general guidance set forth in Army Procurement Procedure 1-704.50. (b) A constant effort, consistent with DOD cost-reduction program objectives, as well as the overriding consideration for a well-equipped combat force, is maintained to breakout components of major items to enhance small business participation and broaden the competitive structure of Army procurement programs. Publications describing several of the approaches to this program are available to industry. [Enclosure No. 5] Q. What are the techniques or procedures by which the agency screens and monitors its procurement actions to determine: (a) Feasibility of small business set-asides; (b) Availability of small business for bidding; (c) Validity of the failure to invite small business to bid; (d) Validity of the failure to award procurement to small business; A. Armed Services Procurement Regulations, section I, part 7, as supplemented by Army Procurement Procedures 1-701 and 1-702, set forth ample guidelines to insure that small business receives an equitable opportunity to participate in Army procurements. All procurement activities within the Army have been repeatedly advised of the necessity for a healthy small business community in the economic growth and defense effort of the Nation. The Assistant Secretary of the Army (Installations and Logistics), his Deputy for Logistics, and the Army Small Business Adviser have lent personal attention through visits to major procurement installations and activities, as well as by correspondence, to insure these objectives are considered. For example, the Army Small Business Adviser publishes a periodic information bulletin which is geared toward keeping field personnel appraised of new policies, procedures, and general information helpful to small business representatives who contact their offices (enclosure No. 1). Within the Army we have a form DA Form 1877 "Presolicitation Data on Proposed Procurement Action" (APP 1-752) (enclosure No. 2). This form is a summary of the proposed purchase prior to its being offered to the businessman. (Currently, consideration is being given to revision of this form to make it more meaningful in the light of existing procurement policy.) It is worthy of note that the Assistant Secretary of the Army (Installations and Logistics) and the Director, Procurement Technical Assistance, Small Business Administration, have an agreement whereby this form is made available to field representatives of SBA in order that such representatives may further screen our purchases and offer additional sources. The form is prepared on procurements of $50,000 and over. Small business does very well below that figure. The objective of this exchange of information with SBA is to establish beyond a doubt that the Army welcomes all assistance that SBA can offer to increase our competitive posture. With respect to rejection of small business bidders, the regulations are quite specific in this regard; i.e., ASPR 1-705.6, The complete interchange of information between procuring offices and SBA has resulted in a reduction of issuance of COC's in fiscal year 1963 to 68 from 133 in fiscal year 1962. The emphasis and consideration which has been placed in this area alone is reflected in a recent memorandum published by the Director of Procurement, Office of the Assistant Secretary of the Army (Installations and Logistics) to the Army Materiel Command and the Chief of Engineers. (The memorandum referred to follows.) HEADQUARTERS, DEPARTMENT OF THE ARMY, OFFICE OF THE ASSISTANT SECRETARY, Washington, D.C., October 2, 1963. Memorandum for: Commanding General, U.S. Army Materiel Command, Chief of Engineers. Subject: Certificates of competency. I am pleased to learn that the issuance of certificates of competency applicable to Army procurements have been reduced from a total of 133 issued during fiscal year 1962 to 68 in fiscal year 1963. This progress can be attributed to our continued efforts toward overall improvement of procurement practices. While there probably will always be some disagreement between contracting officers and the Small Business Administration with respect to the capacity and credit of some prospective contractors, perhaps we can find ways to further reduce the number of instances in which COC's are necessary, particularly in contracts of $25,000 or less. The COC process is costly in time and personnel to both the Government and the contractor. I firmly believe that good preaward surveys conducted by Army personnel, plus a complete exchange of information between our purchasing offices and representatives of SBA at the local level, will do much to reduce the number of instances in which COC's are necessary. I am sure that you will continue your progress in this area and in other areas designed to increase the effectivenes of our procurement policies and procedures. By direction of the Assistant Secretary of the Army (Installation and Logis tics): JAMES A. RICHARDSON III, Major General, USA, |