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

(2) Submit a report to the Contracting of ficer 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.

uring that a fair proportion of Government procurement is placed with small business concerns, or in the interest of assisting eligi. ble 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 Goverment 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 per formance 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 construc tion or service contracts.

(21 (Dame

)..............................

$

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)..........
(c) By the subcontractors (first-tier):

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

-- (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)

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(End of notice)

(43 FR 26006, June 16, 1978)

(e) Notice of total small business set. aside. In procurements involving total set-asides for small business concerns and eligible organizations for the handicapped and handicapped individ uals, 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 solici tation.

§ 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 con cerns 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 contracto for maintenance, repair, and construction) may be partially set aside in ac. cordance 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 por: tion, each of which shall be not less

NOTICE OF TOTAL SMALL BUSINESS SET-ASIDE (a) General. Bids or proposals under this

is procurement are solicited only from (1) small business concerns and (2) eligible or ganizations for the handicapped and handi capped individuals under the Small Business Act. The procurement is to be awarded only to one or more such concerns, organiza tions, 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

than an economic production run or the Nation's full productive capacity, or in reasonable lot. Insofar as practicable, the interest of war or national defense prothe set-aside portion will be such as to

grams, or in the interest of assuring that a make maximum use of small business

fair proportion of Government procurement

is placed with small business concerns, or in capacity. Delivery and other terms ap

the interest of assisting eligible organizaplicable to the set-aside portion of an

tions for the handicapped and handicapped item and those applicable to the non

individuals. set-aside portion of that item shall be (b) Definitions. (1) The term "small busicomparable.

ness concern" means a concern, including its (c) Notice. Invitations for bids or re

affiliates, which is independently owned and quests for proposals involving partial

operated, is not dominant in the field of opset-asides pursuant to this subpart

eration in which it is bidding on Govern

ment contracts, and can further qualify shall contain a notice substantially as

under the criteria set forth in the regulaset forth in this paragraph. The appli

tions of the Small Business Administration cable small business size standard

(13 CFR 121.3-8). In addition to meeting shall be set forth in the schedule.

these criteria, a manufacturer or a regular

dealer submitting bids or proposals in his NOTICE OF PARTIAL SMALL BUSINESS SET

own name must agree to furnish in the perASIDE

formance of the contract end items manu(a) General. A portion of this procure factured or produced in the United States, ment, as identified elsewhere in the Solicita its territories and possessions, Commontion, has been set aside for award only to (1)

wealth of Puerto Rico, the Trust Territory one or more small business concerns and (2) of the Pacific Islands, and the District of eligible organizations for the handicapped Columbia, by small business concerns: Proand handicapped individuals under the vided. That this additional requirement Small Business Act. Negotiations for award does not apply in connection with construcof t his set-aside portion will be conducted tion or service contracts. only with the referenced concerns, organiza (2) The term "labor surplus area" means a tions, and individuals that have submitted geographical area identified by the Departresponsive bids on the non-set-aside portion. ment of Labor as an area of concentrated Negotiations will be conducted in the fol unemployment or underemployment or an lowing order of priority:

area of labor surplus. Group 1. Small business concerns and eli

(3) The term “concern located in a labor gible organizations for the handicapped and

surplus area" means a labor surplus area handicapped individuals which agree to per

concern. form as labor surplus area concerns.

(4) The term "labor surplus area concern" Group 2. Other small business concerns

means a concern that together with its first

tier subcontractors will perform substantial. and eligible organizations for the handicapped and handicapped individuals.

ly in labor surplus areas.

(5) The term “perform substantially in Within each of the above groups, negotia labor surplus areas" means that the costs tions with the members of each group will incurred on account of manufacturing, probe in the order of their bids on the non-set duction, or appropriate services in labor suraside portion, beginning with the lowest re- plus areas exceed 50 percent of the contract sponsive bid. The set-aside shall be awarded price. at the highest unit price awarded on the (c) Agreement. The bidder or offeror non-set-aside portion, adjusted to reflect agrees that, if awarded a contract as a labor transportation and other cost factors which surplus area concern, he will: were considered in evaluating bids on the (1) Perform the contract, or cause it to be non-set-aside portion. However, the Govern- performed, substantially in areas classified ment reserves the right not to consideras labor surplus areas on the date of the sotoken bids or other devices designed to licitation. However, if an area selected by secure an unfair advantage over other bid the bidder or offeror is no longer classified ders eligible for the set-aside portion. The as a labor surplus area at the time of perpartial set-aside of this procurement for formance, he is encouraged to select ansmall business concerns and for eligible or other area for performance which is classiganizations for the handicapped and handi fied at that time as a labor surplus area. capped individuals is based on a determina (2) Submit a report to the Contracting Of. tion by the Contracting Officer, alone or in ficer 30 days after the award of the contract conjunction with a representative of the (if it exceeds $10,000), or such longer time Small Business Administration, that it is in as prescribed by the Contracting Officer, the interest of maintaining or mobilizing which contains the following information.

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REPORT ON PERFORMANCE IN LABOR SURPLUS solution of a small business set-aside, AREAS

the contracting officer shall review

the required delivery schedule for the (a) Amount of the contract ..

supplies or services to be resolicited to PERFORMANCE IN LABOR SURPLUS AREAS

insure that the delivery schedule is re(b) By the prime contractor:

alistic in the light of all relevant fac(1) (Identity of labor surplus area) ........

tors, including the capabilities of small (2) ......do ......

business concerns. (3) ......do ........ (4) ......do.

(34 FR 19075, Dec. 2, 1969) (c) By the subcontractors (first-tier): (1) (Identity of labor surplus area) .....

§ 1-1.706-8 Contract authority. (2) ......do ......

(a) Joint small business set-asides. (3) .....do .........

Contracts resulting from either total (4) ......do ....... (d) Total of (b) and (c).

or partial joint small business set

asides (see § 1-3.215), whether entered Costs incurred by the Contractor or his first-tier

into by conventional negotiation or by subcontractors on account of production, manufacturing, or appropriate services performed in labor Small Business Restricted Advertising, surplus areas.

shall cite as legal authority for negoti(End of Notice)

ation section 302(c)(15) of the Federal (d) (Reserved)

Property and Administrative Services (e) Award procedures-(1) Awarding

Act of 1949 (41 U.S.C. 252(c)(15)), the

revised Armed Services Procurement the non-set-aside portion. Awards of the non-set-aside portion shall be

Act of 1947 (10 U.S.C. 2304(a)(17)), or made in accordance with normal pro

other applicable proper authority, tocurement procedures.

gether with section 15 of the Small (2) Awarding the set-aside portion.

Business Act. After all awards have been made on

(b) Unilateral small business setthe non-set-aside portion, award of the

asides. Contracts resulting from uniset-aside portion shall be effected by

lateral small business set-asides shall negotiation with eligible concerns as

cite the applicable legal authority for provided in the applicable Notice used.

negotiation (see § 1-3.201). If equal low bids were received on the $ 1-1.706-9 Public and private organizanon-set-aside portion from concerns tions for the handicapped or handi. which are equally eligible for the set

capped individuals. aside portion, the concern which is awarded the non-set-aside portion

(a) Public and private organizations (under the equal low bid procedures of

for the handicapped or handicapped § 1-2.407-6) shall have first priority

individuals may indicate that they are with respect to negotiations for the

eligible to participate in a small busiset-aside portion.

ness set-aside by executing the repre

sentation which is prescribed by this (29 FR 10104, July 24, 1964, as amended at section. 30 FR 16110, Dec. 28, 1965; 43 FR 26007,

(b) The representation prescribed by June 16, 1978)

this section shall be included in all so$ 1-1.706-7 Automatic dissolution of set. licitations which involve small busiasides.

ness set-asides. If the entire set-aside portion is not PUBLIC OR PRIVATE ORGANIZATIONS FOR THE procured by the method set forth in HANDICAPPED OR HANDICAPPED INDIVIDUALS § 1-1.706-5, as to total set-asides, or (Execute if a small business set-aside is in§ 1-1.706-6, as to partial set-asides, the volved and the offeror deems himself to be determination referred to in § 1-1.706 eligible.) 1 is automatically dissolved as to the He is a public or private organization for unawarded portion of the set-aside, the handicapped or a handicapped individuand such unawarded portion may be

al, as provided in the Small Business Act, as procured by advertising or negotiation,

amended, and the regulations of the Small

Business Administration. as appropriate, in accordance with ap

The term “public or private organization" plicable regulations. However, prior to

is one "• • • (i) which is organized under the issuing an invitation to bid or a re- laws of the United States or of any State. quest for proposals following the dis- operated in the interest of handicapped in

dividuals, the net income of which does not inure in whole or in part to the benefit of any shareholder or other individual; (ii) which complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and (iii) which, in the production of commodities and in the provision of services during any fiscal year in which it receives financial assistance under this subsection, employs handicapped individuals for not less than 75 per centum of the man-hours required for the production or provision of the commodities or serv. ices.• • " (15 U.S.C. 636h(1)(A))

The term “handicapped individual" means a "*• . person who has a physical, mental, or emotional impairment, defect, ailment, disease, or disability of a permanent nature which in any way limits the selection of any type of employment for which the person would otherwise by qualified or qualifiable ...." (13 CFR 118.2(f))

(End of Notice)

(43 FR 26008, June 16, 1978)

§ 1-1.707 (Reserved) § 1-1.708 Certificate of competency pro

gram.' § 1-1.708-1 General.

The Small Business Administration is authorized to certify to Government contracting officers the competency (see the Small Business Act (15 U.S.C. 637(b)(7)(A))) and/or to determine the eligibility (under the provision of section 35(a) of the Walsh-Healey Public Contracts Act (41 U.S.C. 35-45) and the Small Business Act (15 U.S.C. 637(b)(7)(B))) of any small business concern or group of such concerns to perform a specific contract (see $ 11.701-7 regarding the definition of certificate of competency). (43 FR 26008, June 16, 1978)

(2) If the bid or proposal is to be rejected. SBA shall be notified of the circumstances so that it may process a certificate of competency or make a determination of eligibility. Notifications to SBA shall be processed as separate actions for a certificate of competency and determination of eligibility. SBA will only review those specific elements of responsibility and eligibility referred by the procuring agency. SBA will presume that the small business concern is responsible and eligible as to all other elements.

(3) If a partial set-aside is involved and the bid of a small business concern on the unreserved portion is to be rejected and the concern is entitled to consideration on the reserved portion, the matter shall be referred to SBA in terms of the entire quantity of the procurement for which that concern may be entitled. SBA may issue a certificate of competency to the small business concern regarding the entire quanity that may be awarded under the procurement or that quantity which the SBA feels the small business concern is able to produce.

(4) When a certificate of competency is involved the award shall be withheld pending the issuance of a certificate or the expiration of 15 workdays after SBA is notified. This time limit may be extended upon agreement between SBA and the procuring agency.

(5) If referral to SBA involves only competency and SBA has not issued a certificate of competency within 15 workdays, the contracting officer may conclude that SBA has no objection to his determination of nonresponsibility and he may proceed to make an award.

(6) When a determination of eligibility is involved, the award shall be withheld pending a determination of eligibility by SBA or the Department of Labor or a determination of ineligibility by the Department of Labor.

(b) To assist SBA in determining the responsibility and/or eligibility of a small business concern involved in a specific solicitation, the contracting officer (at the time of notification) shall provide SBA with sufficient copies of all pertinent technical and financial information with respect to

§ 1-1.708-2 Applicability and procedure.

(a)(1) A small business concern may have submitted an otherwise acceptable bid or proposal. However, the contracting officer may determine that the concern lacks elements of responsibility or is ineligible as a manufacturer or regular dealer.

'For a document relating to this section, see Appendix-Temporary Regulations appearing at the end of Chapter 1.

the small business concern. The infor- affirmative action whether a formal mation shall include but not be limited appeal will be made at the Central to copies of the invitation for bids or Office level. The appeal shall be prerequest for proposals, drawings, speci- sented within 10 workdays after the fications, preaward surveys, and ab- SBA Central Office is notified that an stracts of bids.

appeal will be made or at such later (c) Nothing in this section shall be date as may be agreed upon by SBA construed to prevent a contracting of and the procuring agency. Following ficer from selecting, in the first in the appeal, the SBA Associate Adminstance, the source of supply offering istrator shall make a determination the highest competence obtainable or relative to the certificate of competenthe best scientific approach where cy action and his determination will be such source is needed in certain nego- considered final. tiated procurements of research and development, highly complex equip

(30 FR 9591, July 31, 1965, as amended at 38 ment, or personal or professional serv.

FR 26913, Sept. 27, 1973; 43 FR 26008, June

16, 1978) ices. However, if a small business concern has been selected on the basis of

$ 1-1.708-3 Conclusiveness of certificates the highest competence obtainable or

of competency and determinations of best scientific approach and, prior to

eligibility. award, the contracting officer determines that the concern is not responsi SBA certificates of competency and ble and/or is ineligible, he shall follow determinations of eligibility are conthe procedures in paragraph (a) of clusive with respect to prospective this section.

small business contractors (see Small (d) After a contracting officer refers Business Act (15 U.S.C. 637(b)(7)(C)). a negative finding regarding the re- Procuring agencies are directed to sponsibility and/or eligibility of a award contracts without requiring small business concern to an SBA re- small business concerns to meet any gional office, the SBA office will other requirements of responsibility or notify the contracting officer if it eligibility. plans to issue a certificate of competency and/or determination of eligibil. (43 FR 26009, June 16, 1978) ity, or to refer the application to the

8 1-1.709 Records and reports. SBA Central Office, Washington, D.C. Every effort should be made to resolve Executive agencies shall maintain the differences between SBA and the records of the value of procurement contracting agency through a com- contracts placed with small business plete exchange of preaward informa concerns. Accordingly, each procuring tion.

activity shall, in soliciting bids, or pro(e) If agreement cannot be reached posals, request from any bidder or ofbetween the SBA regional office and feror any information needed to deterthe contracting officer, the contract. mine whether the bidder or offeror is ing officer shall request the SBA re- a small business concern (when Standgional office to suspend action and to ard Forms 18, 19-B, and 33 are used, forward the case to the SBA Central this information is available from the Office, Washington, D.C., for review. small business representation included The SBA Central Office may decline

on these forms). Agencies shall sumto issue a certificate of competency

marize and report such procurement and inform the contracting officer of data on Standard Form 37 (Report on this decision, or it may inform the con

Procurement by Civilian Executive tracting officer and higher authority

Agencies) in accordance with $ 1within the procuring agency of the

16.804. reasons for SBA's proposed affirmative action. The procuring agency (31 FR 5880, Apr. 16, 1966) shall notify the SBA Central Office within 10 workdays after receipt of written notification of SBA's proposed

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