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the action sought by the appellant. Following receipt of the appeal by the SBA Size Appeals Board, the appeal will be handled and the decision thereon will be rendered in accordance with the procedures set forth in paragraph (f) of this $ 1-1.703-2.

(36 FR 16656, Sept. 25, 1971, as amended at 39 FR 35658, Oct. 3, 1974; 43 FR 26005, June 16, 1978)

cured on the same solicitation, an appropriate small business size standard shall be established for each product or service. Both the classification and the applicable size standard (number of employees, average annual receipts, etc.), pursuant to g 1-1.701, shall be set forth in each solicitation in excess of $10,000 and in each solicitation of $10,000 or less which is a small business set-aside. The contracting officer's determination shall be final unless appealed in the manner prescribed in paragraph (h) of this section.

(h) A written appeal from a product or service classification determination made by a contracting officer may be taken: (1) Not less than 10 working days before the bid opening date or closing date for submitting proposals or quotations when the bid opening date or closing date for the submission of proposals or quotations is more than 30 calendar days after the issuance of the invitation for bids or requests for proposals or quotations,

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81-1.705-2 SBA representatives.

SBA may assign one or more representatives (hereinafter referred to as “SBA representatives") on a full. or part-time basis to any procuring activity for the purpose of carrying out SBA responsibilities under the Small Business Act. SBA representatives will comply with agency directives concerning the conduct of procurement personnel and instructions concerning release of procurement information.

(2) Not less than 5 working days before the bid opening date or closing date for submitting proposals or quotations when the bid opening date or closing date for the submission of proposals or quotations is 30 calendar days or less after the issuance of the invitation for bids or request for proposals or quotations. The appeal shall be addressed to the Chairman, Size Appeals Board, Small Business Administration, Washington, DC 20416. No particular form is prescribed for the notice of appeal. However, the appellant shall submit to the SBA Size Appeals Board an original and four leg. ible copies of such notice of appeal and, to avoid time-consuming corre. spondence, the notice of appeal should include the following information: (i) The character of the determination from which the appeal is taken and its date; (ii) the number and date of the invitation for bids or request for proposals or quotations, and the name and address of the contracting officer; (iii) a concise and direct statement of the reasons why the determination of the contracting officer is alleged to be erroneous; (iv) documentary evidence to support such allegations; and (v)

§ 1-1.705-3 Screening of procurements.

(a) Individual set-asides. SBA representatives (cleared for security where classified procurements are to be screened) shall, upon request, promptly be afforded an opportunity at the procuring activity to review all proposed procurements if it is anticipated that the resulting contract or contracts will exceed $2,500 unless in the case of procurements which are not expected to exceed $10,000, the head of the procuring activity determines that such review would unduly delay the procurement process. A copy of the determination and the justification therefor shall be furnished to the action with SBA concerning certificates of competency.



SBA representative. Where it is anticipated that the resulting contract or contracts will exceed $2,500, such SBA representatives shall, upon request, promptly be afforded an opportunity to make recommendations concerning proposed procurements, including that they be exclusively or partially set aside for small business concerns. The contracting officer shall afford the SBA representative an opportunity to recommend appropriate names of small business concerns for inclusion in lists of bidders for firms to be solicited in connection with current and future procurements.

(b) Class set-asides. SBA representatives shall be afforded an opportunity to make recommendations that current and future procurements, or portions thereof, of selected items or services, or groups of like items or services, shall be set aside as provided in § 11.706, for exclusive small business participation. Such set-asides, when approved by the contracting officer, shall be known as class set-asides. Concurrence in a class set-aside shall not be dependent upon the existence of a current procurement if future procurements can be clearly foreseen.

$ 1-1.705-7 Performance of contract by

SBA. In accordance with the Small Business Act (15 U.S.C. 637(a)), in any case in which the Administrator of SBA certifies to the head of the procuring agency concerned that SBA is competent to perform any specific contract, the contracting officer is authorized, in his discretion, to award the contract to SBA upon such terms and conditions, consistent with applicable procurement regulations, as may be agreed upon between SBA and the contracting officer. The policies and procedures governing the award of such contracts are set forth in $ 11.713. (37 FR 1037, Jan. 22, 1972)

1-1.706 Procurement set-asides for small


§ 1-1.705-4 Access to information.

Upon request, and subject to applicable security regulations, SBA representatives shall be given access to available or reasonably obtainable information, including technical data (including drawings and specifications), procurement history, bidders lists, and planned requirements immediately upon receipt by the procuring activity. The SBA representative will be furnished such other available or reasonably obtainable information as may be required for the SBA referral program.

§ 1-1.706-1 General.

(a) Purpose. The purpose of small business set-asides is to increase sm business participation in Government procurement. The order in which the various kinds of set-asides are to be made is provided by the priorities set forth in the Small Business Act (15 U.S.C. 644(e));

(1) Concerns which are small business con: cerns and which are located in a labor surplus area, on the basis of a total set-aside.

(2) Concerns which are small business concerns on the basis of a total set-aside.

(3) Concerns which are small business con. cerns and which are located in a labor surplus area, on the basis of a partial set-aside.

(4) Concerns which are small business concerns, on the basis of a partial set-aside.

(5) Concerns which will perform as labor surplus area concerns, on the basis of a total set-aside. (See § 1-1.804-1.)

(b) Applicability. This section is applicable to small business set-aside programs of executive agencies in connection with all procurement of property and services, maintenance, repair and construction, and research and development..

(c) Implementation. Any individual procurement or class of procurements shall be set aside entirely for small business-labor surplus area concerns,

§ 1-1.705-5 Joint small business set-asides.

The policies and procedures for joint small business set-asides, set forth in § 1-1.706, were developed cooperatively with the SBA and Government procurement agencies.

§ 1-1.705-6 Certificates of competency.

Section 1-1.708 prescribes policies and procedures governing cooperative

for small business concerns, and cerns cannot be made. (See § 1-1.706(during fiscal year 1978) for public and 6.) private organizations for the handi (v) Totally for labor surplus area capped and handicapped individuals concerns where a partial set-aside for eligible for assistance, as provided in small business concerns cannot be the Small Business Act (15 U.S.C. made. (See § 1-1.804.) 636(h)(1)). In the alternative, an ap (2) If it is determined that the propropriate part of the procurement curement cannot be set aside in acshall be set aside for the exclusive par

cordance with any of the set-aside priticipation of the referenced concerns, orities in paragraph (e)(1) of this organizations, and individuals. Set- section, the procurement may be made asides shall be effected when it is de- without regard to those priorities. termined to be in the interest of main. (f) Record of contract actions. The taining or mobilizing the Nation's full

record of contract actions (see § 1productive capacity, or to be in the in

1.313) shall set forth the factual basis terest of war or national defense pro

for the contracting officer's decision grams, or to be in the interest of assur

regarding the type of set-aside selected ing that a fair proportion of Govern or the decision not to make a set-aside. ment procurement is placed with small

(g) Small purchases. Small purbusiness concerns. Determinations

chases; i.e., purchases under $10,000 shall be made: (1) Unilaterally by a

subject to small purchase procedures, contracting officer, or (2) jointly by an shall be identified as smau busi SBA representative and a contracting

small purchase set-asides for small officer, upon initiation by either business concerns as provided in §§ 1party.

3.602 and 1-3.603-3. (d) Initiation of set-asides. Insofar as practicable, unilateral determina

(29 FR 10104, July 24, 1964, as amended at

33 FR 10393, July 20, 1968; 43 FR 26006, tions initiated by a contracting officer

June 16, 1978; 45 FR 55722, Aug. 21, 1980; 47 of a procuring agency shall be used as

FR 33694, Aug. 4, 1982) the basis for small business set-asides rather than joint determinations by $ 1-1.706-2 Review of SBA set-aside proan SBA representative and a contract

posals. ing officer. This, however, does not

(a)(1) When an SBA representative preclude SBA from initiating with an

has recommended that all, or a poragency a proposal for a joint determination set-aside.

tion, of an individual procurement or

class of procurements be set aside for (e) Set-aside priorities. (1) The set

small business-labor surplus area conaside priorities in paragraph (a) of this

cerns or for small business concerns, section shall be followed in determin

the contracting officer (or other desiging the type of set-aside to be em

nated representative of the procureployed. Individual procurements shall

ment agency) shall promptly either: (i) be reviewed by the contracting officer

Concur in the recommendation or (ii) to determine if they can be set aside:

disapprove the recommendation, stat(i) Totally for small business-labor

ing in writing his reasons for disapsurplus area concerns (see § 1-1.706

proval. The SBA representative shall 5(a)).

be allowed 2 workdays to appeal any (ii) Totally for small business con such disapproval to the head of the cerns where a total set-aside for small procuring activity or his designee. business-labor surplus area concerns During consideration of such appeal, cannot be made (see § 1-1.706-5(a)). there shall be a full and free inter

(iii) Partially for small business- change of all pertinent facts between labor surplus area concerns where a the SBA representative and the prototal set-aside for small business con curing activity concerned. Within 1 cerns cannot be made. (See § 1-1.706 workday after receipt of a decision 6.)

from the head of the procuring activi(iv) Partially for small business con ty or his designee disapproving a reccerns where a partial set-aside for ommended set-aside, the SBA represmall business-labor surplus area con- sentative may request the contracting officer to suspend action on the pro- the preceding sentence by supplying curement pending a further appeal by him with a copy of the justification. the SBA Administrator to the head of (b) None of the following is, in itself, the agency concerned. SBA shall be al sufficient cause for not making a setlowed 15 workdays after making any aside: such request within which (A) the Ad (1) A large percentage of previous ministrator of SBA may appeal the de procurements of the item in question cision of the head of the procuring ac has been placed with small business tivity (or his designee) to the head of concerns. the agency concerned, and (B) to (2) The item to be purchased is on notify the contracting officer of the an established planning list under the appeal. If such a notification is not re- Industrial Readiness Planning Proceived by the contracting officer gram, except that a total set-aside within the 15-day period, SBA shall be shall not be authorized when one or deemed to have withdrawn its request more large business Planned Emergento suspend action on the procurement cy Producers of the item desire to parand to have refrained from taking an ticipate in the procurement. appeal to the head of the agency. (3) The item to be purchased is on a Where SBA has appealed to the head Qualified Products List, except that a of the agency concerned and the con- total set-aside shall not be authorized tracting officer has been notified of when the products of one or more that fact within the 15-day period, the large businesses are on the Qualified head of the procuring activity shall, in Products List unless it has been conaccordance with agency procedures, firmed that none of such large busiforward a full justification of his deci nesses desires to participate in the prosion through appropriate channels to curement. the head of the agency. The head of (4) A period of less than 30 days the agency shall respond to the appeal from date of issuance of invitations for by the Administrator of SBA within 30 bids or requests for proposals is preworkdays.

scribed for the submission of the bids (2) Any procurement action affected or proposals. by a set-aside recommendation which (5) The procurement is classified. has been disapproved by the contract- (6) Small business concerns are reing officer and appealed by the SBA ceiving a fair proportion of the total representative shall be suspended contracts for property or services. pending the decision of the head of (7) A class set-aside of the item or the procuring activity or his designee. service concerned has been made at If the decision sustains the disapprov- some other procuring activity. al and if the SBA representative (8) The item will be described by requests further suspension in accord “brand name or equal." ance with (1) of this § 1-1.706-2(a), the (c) In approving a proposed class setsuspension shall continue until: (i) aside, the contracting officer shall The SBA appeal is deemed to have make sure that the set-aside determibeen withdrawn (as provided in (1) of nation: (1) Specifically identifies the this § 1-1.706-2(a)), or (ii) the matter items or services subject thereto; (2) is determined by the head of the provides that it will, at least once each agency concerned. Such suspension year, be reviewed jointly by an SBA shall not apply, however, to any par- representative and the procuring acticular procurement action which, as tivity to determine whether it should determined by the contracting officer, be withdrawn (see § 1-1.706-3 for withmust, in order to protect the public in drawal procedures); (3) provides that terest, be initiated without delay and it does not apply to any individual proas to which he inserts in the contract curement for which small purchase file a statement signed by him setting procedures are to be used; and (4) proforth the facts and circumstances jus- vides that such class set-aside applies tifying the determination. The con only to the procuring activity making tracting officer shall promptly notify or participating in the set-aside deterthe SBA representative of any pro- mination. Any class of procurements curement action initiated pursuant to 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)

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."

§ 1-1.706-3 Withdrawal or modification of

set-asides. (a) Each individual procurement 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 detri. mental to the public interest (e.g., because of unreasonable price), the contracting officer may withdraw either a joint or a unilateral set-aside determi. nation. 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 with: draw one or more individual procurements therefrom. If the SBA representative does not agree to a with drawal 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

§ 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 nego

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