The Code of Federal Regulations of the United States of America

procuring activity or his designee. During consideration of such appeal, there shall be a full and free interchange of all pertinent facts between the SBA representative and the procuring activity concerned. Within 1 workday after receipt of a decision from the head of the procuring activity or his designee disapproving a recommended set-aside, the SBA representative may request the contracting officer to suspend action on the procurement pending a further appeal by the SBA Administrator to the head of the agency concerned. SBA shall be allowed 15 workdays after making any such request within which (A) the Administrator of SBA may appeal the decision of the head of the procuring activity (or his designee) to the head of the agency concerned, and (B) to notify the contracting officer of the appeal. If such a notification is not received by the contracting officer within the 15-day period, SBA shall be deemed to have withdrawn its request to suspend action on the procurement and to have refrained from taking an appeal to the head of the agency. Where SBA has appealed to the head of the agency concerned and the contracting officer has been notified of that fact within the 15-day period, the head of the procuring activity shall, in accordance with agency procedures, forward a full justification of his decision through appropriate channels to the head of the agency. The head of the agency shall respond to the appeal by the Administrator of SBA within 30 workdays.

(2) Any procurement action affected by a set-aside recommendation which has been disapproved by the contracting officer and appealed by the SBA representative shall be suspended

pending the decision of the head of the procuring activity or his designee. If the decision sustains the disapproval and if the SBA representative requests further suspension in accordance with (1) of this § 1-1.706-2(a), the suspension shall continue until (i) the SBA appeal is deemed to have been withdrawn (as provided in (1) of this § 1-1.706-2(a)), or (ii) the matter is determined by the head of the agency concerned. Such suspension shall not

apply, however, to any particular procurement action which, as determined by the contracting officer, must, in order to protect the public interest, be initiated without delay and as to which he inserts in the contract file a statement signed by him setting forth the facts and circumstances justifying the determination. The contracting officer shall promptly notify the SBA representative of any procurement action initiated pursuant to the preceding sentence by supplying him with a copy of the justification.

(b) None of the following is, in itself, sufficient cause for not making a setaside:

(1) A large percentage of previous procurements of the item in question has been placed with small business

concerns.

(2) The item to be purchased is on an established planning list under the Industrial Readiness Planning Program, except that a total set-aside shall not be authorized when one or more large business Planned Emergency Producers of the item desire to participate in the procurement.

(3) The item to be purchased is on a Qualified Products List, except that a total set-aside shall not be authorized when the products of one or more large businesses are on the Qualified Products List unless it has been confirmed that none of such large businesses desires to participate in the procurement.

(4) A period of less than 30 days from date of issuance of invitations for bids or requests for proposals is prescribed for the submission of the bids or proposals.

(5) The procurement is classified.

(6) Small business concerns are receiving a fair proportion of the total contracts for property or services.

(7) A class set-aside of the item or service concerned has been made at some other procuring activity.

(8) The item will be described by "brand name or equal."

(c) In approving a proposed class setaside, the contracting officer shall make sure that the set-aside determination (1) specifically identifies the items or services subject thereto; (2) provides that it will, at least once each

year, be reviewed jointly by an SBA representative and the procuring activity to determine whether it should be withdrawn (see § 1-1.706-3 for withdrawal procedures); (3) provides that it does not apply to any individual procurement for which small purchase procedures are to be used; and (4) provides that such class set-aside applies only to the procuring activity making or participating in the set-aside determination. Any class of procurements proposed to be totally set aside shall satisfy the requirements of § 1-1.7065(a). With respect to any class of procurements proposed to be partially set aside, the set-aside determination shall specify that it is not applicable to any individual procurement which is not severable into two or more economic production runs or reasonable lots.

[29 FR 10104, July 24, 1964, as amended at 43 FR 26006, June 16, 1978]

§ 1-1.706-3 Withdrawal or modification of set-asides.

procurement

(a) Each individual governed by a class set-aside shall be carefully reviewed to insure that any changes in the magnitude of anticipated requirements, specifications for the items or services, delivery requirements, or competitive market conditions, since the initial approval of the class set-aside, are not of such material nature as to result in the probable payment of an unreasonable price by the Government or in a change in small business capability.

(b) If, prior to the award of a contract involving an individual or class set-aside for small business, the contracting officer considers the procurement of the set-aside portion from a small business concern would be detrimental to the public interest (e.g., because of unreasonable price), the contracting officer may withdraw either a joint or a unilateral set-aside determination. In the case of (1) a joint setaside determination, or (2) a unilateral set-aside determination where SBA has designated either a resident or a liaison representative for the agency, the contracting officer shall initiate the withdrawal thereof by giving notice, containing the reason therefor,

to the SBA representative (by telephone where liaison representatives are involved). Similarly, a class setaside may be modified so as to withdraw one or more individual procurements therefrom. If the SBA representative does not agree to a withdrawal or modification, the action may be appealed in accordance with the procedures set forth in § 1-1.706-2(a). This procedure is not applicable to automatic dissolutions of set-asides as provided in § 1-1.706-7. In all cases where SBA has not designated either resident or liaison representatives for the agency, the contracting officer shall withdraw a unilateral set-aside determination where he considers that procurement of the set-aside from a small business concern would be detrimental to the public interest (e.g., because of unreasonable price).

(c) A statement supporting any withdrawal or modification of a set-aside shall be made by the procuring activity and retained in the contract file.

[29 FR 10104, July 24, 1964, as amended at 37 FR 1363, Jan. 28, 1972]

§ 1-1.706-4 Reporting for Department of Commerce Procurement Synopsis.

Section 1-1.1003-7 contains special instructions concerning reporting of procurements involving small business set-asides to the Department of Commerce for publication in the "Commerce Business Daily."

§ 1-1.706-5 Total set-asides.

(a) General. The entire amount of an individual procurement or class of procurements shall be set aside either (1) for small business-labor surplus area concerns and eligible organizations for the handicapped and handicapped individuals that agree to perform as labor surplus area concerns, or (2) for small business concerns and eligible organizations for the handicapped and handicapped individuals. However, there must be a reasonable expectation that bids or proposals will be obtained from a sufficient number of responsible concerns, organizations, and individuals so that awards will be made at reasonable prices. Total setasides shall not be made unless such a reasonable expectation exists. In the

absence of such an expectation, a partial set-aside shall be considered pursuant to § 1-1.706-6. Although the past procurement history of the item or similar items is important, it is not the only controlling factor which should be considered in determining whether a reasonable expectation exists.

(b) Authority. Contracts involving total small business set-asides (with or without reference to labor surplus areas) shall be entered into by negotiation either through conventional negotiation or through a special method of procurement known as "Small Business Restricted Advertising." Whenever possible, the small business restricted advertising method (see § 11.701-9) shall be used. Invitations for bids and requests for proposals involving total small business set-asides shall be restricted to small business concerns. Bids received from bidders that do not qualify as (1) small businesslabor surplus area concerns and eligible organizations for the handicapped and handicapped individuals, or (2) small business concerns and eligible organizations for the handicapped and handicapped individuals, shall be considered nonresponsive and shall be rejected.

(c) Records and reports. Executive agencies shall maintain such records of contracts to be performed in labor surplus areas as are necessary to prepare reports required by § 1-16.804-4.

(d) Notice of total small businesslabor surplus area set-asides. In procurements involving total set-asides for small business-labor surplus area concerns and eligible organizations for the handicapped and handicapped individuals, each invitation for bids or request for proposals shall contain the following notice. The applicable small business size standard and product or service classification shall also be set forth in the solicitation.

NOTICE OF TOTAL SMALL BUSINESS-LABOR SURPLUS AREA SET-ASIDE

(a) General. Bids or proposals under this procurement are solicited from (1) small business concerns and (2) eligible organizations for the handicapped and handicapped individuals under the Small Business Act, that agree to perform as labor surplus area concerns. Awards will be made only to one

or more such concerns, organizations, or individuals. This set-aside 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, or in the interest of war or national defense programs, or in the interest of assuring that a fair proportion of Government procurement is placed with small business concerns, or in the interest of assisting eligible organizations for the handicapped and handicapped individuals. Bids or proposals received from others will be considered nonresponsive.

(b) Definition. (1) The term "small business concern" means a concern, including its affiliates, which is independently owned and operated, is not dominant in the field of operation in which it is bidding on Government contracts, and can further qualify under the criteria set forth in the regulations of the Small Business Administration (13 CFR 121.3-8). In addition to meeting these criteria, a manufacturer or a 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 territories and possessions, Commonwealth of Puerto Rico, Trust Territory of the Pacific Islands, and the District of Columbia by small business concerns: Provided, That this additional requirement does not apply in connection with construction or service contracts.

(2) The term "labor surplus area" means a geographical area identified by the Department of Labor as an area of concentrated unemployment or underemployment or an area of labor surplus.

(3) The term "concern located in a labor surplus area" means a labor surplus area

concern.

(4) The term "labor surplus area concern" means a concern that together with its firsttier subcontractors will perform substantially in labor surplus areas.

(5) The term "perform substantially in labor surplus areas" means that the costs incurred on account of manufacturing, production, or appropriate services in labor surplus areas exceed 50 percent of the contract price.

(1) Perform the contract, or cause it to be performed, substantially in areas classified as labor surplus areas on the date of the solicitation. However, if an area selected by the bidder or offeror is no longer classified as a labor surplus area at the time of performance, he is encouraged to select an

other area for performance which is classified at that time as a labor surplus area.

(2) Submit a report to the Contracting Officer 30 days after the award of the contract (if it exceeds $10,000), or such longer time as prescribed by the contracting officer, which contains the following information.

REPORT ON Performance IN LABOR SURPLUS AREAS

(a) Amount of the contract.......

PERFORMANCE IN LABOR SURPLUS AREAS

(b) By the prime contractor:

(1) (Identity of labor surplus
area)'.

(2) (Same)..

(3) (Same)..

(4) (Same)....

(2) (Same)...

(3) (Same)...

(4) (Same)..

(d) Total of (b) and (c)...............

'Costs incurred by the Contractor or his first-tier subcontractors on account of production, manufacturing, or appropriate services performed in labor surplus areas.

[End of notice]

(e) Notice of total small business setaside. In procurements involving total set-asides for small business concerns and eligible organizations for the handicapped and handicapped individuals, each invitation for bids or request for proposals shall contain the notice prescribed by this paragraph (e). The applicable small business size standard and product or service classification shall be set forth in the solicitation.

NOTICE OF TOTAL SMALL BUSINESS SET-ASIDE

(a) General. Bids or proposals under this procurement are solicited only from (1) small business concerns and (2) eligible organizations for the handicapped and handicapped individuals under the Small Business Act. The procurement is to be awarded only to one or more such concerns, organizations, or individuals. 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, or in the interest of war or national defense programs, or in the interest of as

uring that a fair proportion of Government procurement is placed with small business concerns, or in the interest of assisting eligible organizations for the handicapped and handicapped individuals. Bids or proposals received from others will be considered nonresponsive.

(b) Definitions. The term "small business concern" means a concern, including its affiliates, which is independently owned and operated, is not dominant in the field of operation in which it is bidding on Government contracts, and can further qualify under the criteria set forth in the regulations of the Small Business Administration (13 CFR 121.3-8). In addition to meeting these criteria, a manufacturer or a 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 territories and possessions, Commonwealth of Puerto Rico, the Trust Territory of the Pacific Islands, and the District of Columbia, by small business concerns: Provided, That this additional requirement does not apply in connection with construction or service contracts.

[End of notice]

[43 FR 26006, June 16, 1978]

§ 1-1.706-6 Partial set-asides.

(a) General. Subject to the conditions set forth in § 1-1.706-1, a portion of a procurement shall be set aside for exclusive small business participation where

(1) The procurement is not appropriate for total set-aside pursuant to § 11.706-5;

(2) The procurement is severable into two or more economic production runs or reasonable lots; and

(3) One or more small business concerns are expected to have the technical competence and productive capacity to furnish a severable portion of the procurement at a reasonable price.

Similarly, a class of procurements (including but not limited to contracts for maintenance, repair, and construction) may be partially set aside in accordance with § 1-1.706-2(c).

(b) Dividing the procurement. Where a portion of a procurement is to be set aside for small business pursuant to (a) of this § 1-1.706-6, the procurement shall be divided into a setaside portion and a non-set-aside portion, each of which shall be not less

than an economic production run or reasonable lot. Insofar as practicable, the set-aside portion will be such as to make maximum use of small business capacity. Delivery and other terms applicable to the set-aside portion of an item and those applicable to the nonset-aside portion of that item shall be comparable.

(c) Notice. Invitations for bids or requests for proposals involving partial set-asides pursuant to this subpart shall contain a notice substantially as set forth in this paragraph. The applicable small business size standard shall be set forth in the schedule.

NOTICE OF PARTIAL SMALL BUSINESS SET-
ASIDE

(a) General. A portion of this procurement, as identified elsewhere in the Solicitation, has been set aside for award only to (1) one or more small business concerns and (2) eligible organizations for the handicapped and handicapped individuals under the Small Business Act. Negotiations for award of this set-aside portion will be conducted only with the referenced concerns, organizations, and individuals that have submitted responsive bids on the non-set-aside portion. Negotiations will be conducted in the following order of priority:

Group 1. Small business concerns and eligible organizations for the handicapped and handicapped individuals which agree to perform as labor surplus area concerns.

Group 2. Other small business concerns and eligible organizations for the handicapped and handicapped individuals.

Within each of the above groups, negotiations with the members of each group will be in the order of their bids on the non-setaside portion, beginning with the lowest responsive bid. The set-aside 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, the Government reserves the right not to consider token bids or other devices designed to secure an unfair advantage over other bidders eligible for the set-aside portion. The partial set-aside of this procurement for small business concerns and for eligible organizations for the handicapped and handicapped individuals 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, or in the interest of war or national defense programs, or in the interest of assuring that a fair proportion of Government procurement is placed with small business concerns, or in the interest of assisting eligible organizations for the handicapped and handicapped individuals.

(b) Definitions. (1) The term "small business concern" means a concern, including its affiliates, which is independently owned and operated, is not dominant in the field of operation in which it is bidding on Government contracts, and can further qualify under the criteria set forth in the regulations of the Small Business Administration (13 CFR 121.3-8). In addition to meeting these criteria, a manufacturer or a 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 territories and possessions, Commonwealth of Puerto Rico, the Trust Territory of the Pacific Islands, and the District of Columbia, by small business concerns: Provided, That this additional requirement does not apply in connection with construction or service contracts.

(2) The term "labor surplus area" means a geographical area identified by the Department of Labor as an area of concentrated unemployment or underemployment or an area of labor surplus.

(3) The term "concern located in a labor surplus area" means a labor surplus area concern.

(4) The term "labor surplus area concern" means a concern that together with its firsttier subcontractors will perform substantially in labor surplus areas.

(2) Submit a report to the Contracting Officer 30 days after the award of the contract (if it exceeds $10,000), or such longer time as prescribed by the Contracting Officer, which contains the following information.

« Previous Continue »

Books