(e) Award procedures—(1) Awarding the non-set-aside portion. Awards of the non-set-aside portion shall be made in accordance with normal procurement procedures.

(2) Awarding the set-aside portion. After all awards have been made on the non-set-aside portion, award of the set-aside portion shall be effected by negotiation with eligible concerns as provided in the applicable Notice used. If equal low bids were received on the non-set-aside portion from concerns which are equally eligible for the setaside portion, the concern which is awarded the non-set-aside

portion

(under the equal low bid procedures of § 1-2.407-6) shall have first priority with respect to negotiations for the set-aside portion.

[29 FR 10104, July 24, 1964, as amended at 30 FR 16110, Dec. 28, 1965; 43 FR 26007, June 16, 1978]

§ 1-1.706-7 Automatic dissolution of setasides.

If the entire set-aside portion is not procured by the method set forth in § 1-1.706-5, as to total set-asides, or § 1-1.706-6, as to partial set-asides, the determination referred to in § 1-1.7061 is automatically dissolved as to the unawarded portion of the set-aside, and such unawarded portion may be procured by advertising or negotiation, as appropriate, in accordance with applicable regulations. However, prior to issuing an invitation to bid or a request for proposals following the dis

solution of a small business set-aside, the contracting officer shall review the required delivery schedule for the supplies or services to be resolicited to insure that the delivery schedule is realistic in the light of all relevant factors, including the capabilities of small business concerns.

[34 FR 19075, Dec. 2, 1969]

§ 1-1.706-8 Contract authority.

(a) Joint small business set-asides. Contracts resulting from either total or partial joint small business setasides (see § 1-3.215), whether entered into by conventional negotiation or by Small Business Restricted Advertising, shall cite as legal authority for negotiation section 302(c)(15) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 252(c)(15)), the revised Armed Services Procurement Act of 1947 (10 U.S.C. 2304(a)(17)), or other applicable proper authority, together with section 15 of the Small Business Act.

(b) Unilateral small business setasides. Contracts resulting from unilateral small business set-asides shall cite the applicable legal authority for negotiation (see § 1-3.201).

§ 1-1.706-9 Public and private organizations for the handicapped or handicapped individuals.

(a) Public and private organizations for the handicapped or handicapped individuals may indicate that they are eligible to participate in a small business set-aside by executing the representation which is prescribed by this section.

(b) The representation prescribed by this section shall be included in all solicitations which involve small business set-asides.

PUBLIC OR PRIVATE ORGANIZATIONS FOR THE HANDICAPPED OR HANDICAPPED INDIVIDUALS

(Execute if a small business set-aside is involved and the offeror deems himself to be eligible.)

He is a public or private organization for the handicapped or a handicapped individual, as provided in the Small Business Act, as amended, and the regulations of the Small Business Administration.

The term "public or private organization" is one **** (i) which is organized under the laws of the United States or of any State. 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 services." (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 program.1

§ 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]

§ 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.

(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

the small business concern. The information shall include but not be limited to copies of the invitation for bids or request for proposals, drawings, specifications, preaward surveys, and abstracts of bids.

(c) Nothing in this section shall be construed to prevent a contracting officer from selecting, in the first instance, the source of supply offering the highest competence obtainable or the best scientific approach where such source is needed in certain negotiated procurements of research and development, highly complex equipment, or personal or professional services. However, if a small business concern has been selected on the basis of the highest competence obtainable or best scientific approach and, prior to award, the contracting officer determines that the concern is not responsible and/or is ineligible, he shall follow the procedures in paragraph (a) of this section.

(d) After a contracting officer refers a negative finding regarding the responsibility and/or eligibility of a small business concern to an SBA regional office, the SBA office will notify the contracting officer if it plans to issue a certificate of competency and/or determination of eligibility, or to refer the application to the SBA Central Office, Washington, D.C. Every effort should be made to resolve the differences between SBA and the contracting agency through a complete exchange of preaward information.

(e) If agreement cannot be reached between the SBA regional office and the contracting officer, the contracting officer shall request the SBA regional office to suspend action and to forward the case to the SBA Central Office, Washington, D.C., for review. The SBA Central Office may decline to issue a certificate of competency and inform the contracting officer of this decision, or it may inform the contracting officer and higher authority within the procuring agency of the reasons for SBA's proposed affirmative action. The procuring agency shall notify the SBA Central Office within 10 workdays after receipt of written notification of SBA's proposed

affirmative action whether a formal appeal will be made at the Central Office level. The appeal shall be presented within 10 workdays after the SBA Central Office is notified that an appeal will be made or at such later date as may be agreed upon by SBA and the procuring agency. Following the appeal, the SBA Associate Administrator shall make a determination relative to the certificate of competency action and his determination will be considered final.

[30 FR 9591, July 31, 1965, as amended at 38 FR 26913, Sept. 27, 1973; 43 FR 26008, June 16, 1978]

§ 1-1.708-3 Conclusiveness of certificates of competency and determinations of eligibility.

SBA certificates of competency and determinations of eligibility are conclusive with respect to prospective small business contractors (see Small Business Act (15 U.S.C. 637(b)(7)(C)). Procuring agencies are directed to award contracts without requiring small business concerns to meet any other requirements of responsibility or eligibility.

[43 FR 26009, June 16, 1978]

§ 1-1.709 Records and reports.

Executive agencies shall maintain records of the value of procurement contracts placed with small business concerns. Accordingly, each procuring activity shall, in soliciting bids, or proposals, request from any bidder or offeror any information needed to determine whether the bidder or offeror is a small business concern (when Standard Forms 18, 19-B, and 33 are used, this information is available from the small business representation included on these forms). Agencies shall summarize and report such procurement data on Standard Form 37 (Report on Procurement by Civilian Executive Agencies) in accordance with § 116.804.

[31 FR 5880, Apr. 16, 1966]

§ 1-1.710 Subcontracting with small busi

ness concerns.

§ 1-1.710-1 General.

(a) It is the policy of the Government to enable small business concerns to be considered fairly as subcontractors and suppliers to contractors performing work or rendering services as prime contractors or subcontractors under Government procurement contracts, and to assure that prime contractors and subcontractors having small business subcontracting programs will consult through the appropriate procuring agency with the Small Business Administration when requested by SBA. However, the Small Business Administration is not authorized to prescribe the extent to which any contractor or subcontractor shall subcontract or specify the concerns to which subcontracts shall be granted, and is not vested with authority respecting the administration of individual prime contracts or subcontracts. (See § 1-1.805 for subcontracting policies with respect to labor surplus area concerns.)

(b) This § 1-1.710 sets forth the program for furtherance of this policy and, together with Subpart 1-3.9, prescribes the contract clauses and procedures for use in carrying out the small business subcontracting program.

(c) As used in this Subpart 1-1.7, the term subcontractor includes a supplier and applies at any level of performance of the contract; and the term subcontract includes a purchase order.

(d) To carry out more effectively the Government's policy objectives stated in paragraph (a) of this section, prime contractors and subcontractors having small business subcontracting programs must be informed of (1) the Government's evaluation of their efforts in carrying out an effective small business subcontracting program, (2) any specifically noted deficiencies in their small business subcontracting programs, and (3) any areas of outstanding achievement where they may have exceeded contractual requirements. Any evaluation and remarks to the contractor, including areas of suggested improvement and areas where the contractor has exceeded contrac

tual requirements, must be documented.

[29 FR 10104, July 24, 1964, as amended at 36 FR 3117, Feb. 18, 1971]

§ 1-1.710-2 Small business subcontracting program.

The Government's small business subcontracting program requires Government prime contractors to assume an affirmative obligation with respect to subcontracting with small business concerns. In contracts which range from $10,000 to $500,000, the contractor undertakes the obligation of accomplishing the maximum amount of small business subcontracting which is consistent with the efficient performance of the contract. This undertaking is set forth in the contract clause prescribed in § 1-1.710-3(a). In contracts which may exceed $500,000, the contractor is required, pursuant to the clause set forth in § 1-1.710-3(b), to undertake a number of specific responsibilities designed to assure that small business concerns are considered fairly in the subcontracting role and to impose similar responsibilities on major subcontractors. (The liaison officer required by the latter clause may also serve as liaison officer for labor surplus area and minority business enterprise matters.)

[40 FR 44137, Sept. 25, 1975]

§ 1-1.710-3 Required clauses.

(a) The Utilization of Small Business Concerns clause, set forth in this § 11.710-3, shall be included in all contracts in amounts which may exceed $10,000 except (1) contracts which, including all subcontracts thereunder, are to be performed entirely outside the United States, its possessions, and Puerto Rico, and (2) contracts for services which are personal in nature.

UTILIZATION OF SMALL BUSINESS CONCERNS

(a) It is the policy of the Government as declared by the Congress that a fair proportion of the purchases and contracts for supplies and services for the Government be placed with small business concerns.

(b) The Contractor agrees to accomplish the maximum amount of subcontracting to small business concerns that the Contractor finds to be consistent with the efficient performance of this contract.

[End of Clause]

(b) The Small Business Subcontracting Program clause, set forth in this § 1-1.710-3, shall be included in all contracts which may exceed $500,000, which contain the clause required by § 1-1.710-3 (a) and which, in the opinion of the procuring activity, offer substantial subcontracting possibilities. Furthermore, prime contractors who are to be awarded contracts which may not exceed $500,000, but which, in the opinion of the procuring activity, offer substantial subcontracting possibilities, shall be urged to accept this clause.

SMALL BUSINESS SUBCONTRACTING PROGRAM

(a) The Contractor agrees to establish and conduct a small business subcontracting program which will enable small business concerns to be considered fairly as subcontractors and suppliers under this contract. In this connection, the Contractor shall

(1) Designate a liaison officer who will (i) maintain liaison with the Government on small business matters, (ii) supervise compli ance with the Utilization of Small Business Concerns clause, and (iii) administer the Contractor's "Small Business Subcontracting Program."

(2) Provide adequate and timely consideration of the potentialities of small business concerns in all “make-or-buy" decisions.

(3) Assure that small business concerns will have an equitable opportunity to compete for subcontracts, particularly by arranging solicitations, time for the preparation of bids, quantities, specifications, and delivery schedules so as to facilitate the participation of small business concerns. Where the Contractor's lists of potential small business subcontractors are excessively long, reasonable effort shall be made to give all such small business concerns an opportunity to compete over a period of time.

(4) Maintain records showing (i) whether each prospective subcontractor is a small business concern, (ii) procedures which have been adopted to comply with the policies set forth in this clause, and (iii) with respect to the letting of any subcontract (including purchase orders) exceeding $10,000, information substantially as follows:

(A) Whether the award went to large or small business.

(B) Whether less than three or more than two small business firms were solicited.

(C) The reason for nonsolicitation of small business if such was the case.

(D) The reason for small business failure to receive the award if such was the case when small business was solicited.

The records maintained in accordance with (iii) above may be in such form as the Contractor may determine, and the information shall be summarized quarterly and submitted by the purchasing department of each individual plant or division to the Contractor's cognizant small business liaison officer. Such quarterly summaries will be considered to be management records only and need not be submitted routinely to the Government; however, records maintained pursuant to this clause will be kept available for review by the Government until the expiration of 1 year after the award of this contract, or for such longer period as may be required by any other clause of this contract or by applicable law or regulation.

(5) Notify the Contracting Officer before soliciting bids or quotations on any subcontract (including purchase orders) in excess of $10,000 if (i) no small business concern is to be solicited, and (ii) the Contracting Officer's consent to the subcontract (or ratification) is required by a "Subcontracts" clause in this contract. Such notice will state the Contractor's reasons for nonsolicitation of small business concerns, and will be given as early in the procurement cycle as possible so that the Contracting Officer may give SBA timely notice to permit SBA a reasonable period to suggest potentially qualified small business concerns through the Contracting Officer. In no case will the procurement action be held up when to do so would, in the Contractor's judgment, delay performance under the contract.

(6) Include the Utilization of Small Business Concerns clause in subcontracts which offer substantial small business subcontracting opportunities.

(7) Cooperate with the Contracting Officer in any studies and surveys of the Contractor's subcontracting procedures and practices that the Contracting Officer may from time to time conduct.

(8) Submit quarterly reports of subcontracting to small business concerns on either Optional Form 61, Small Business Subcontracting Program Quarterly Report of Participating Large Company on Subcontract Commitments to Small Business Concerns. or such other form as may be specified in the contract. Except as otherwise provided in this contract, the reporting requirements of this subparagraph (8) do not apply to small business contractors, small business subcontractors, educational and nonprofit institutions, and contractors or subcontractors for standard commercial items.

(b) A "small business concern" is a concern that meets the pertinent criteria established by the Small Business Administration and set forth in § 1-1.701 of the Federal Procurement Regulations.

(c) The Contractor agrees that, in the event he fails to comply with his contrac