Federal Acquisition Regulation: Set-Asides Under Multiple-Award Contracts

Dated: November 21, 2016.

William F. Clark,

Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy.

(b) * * *

(2) * * *

HUBZone contract * * *

(4) Awards based on a reserve for HUBZone small business concerns in a solicitation for a multiple-award contract.

HUBZone order means an order set aside for a HUBZone small business concern under a multiple-award contract, which had been awarded under full and open competition.

(a) Except for commercial item solicitations issued under FAR part 12, insert in solicitations the provision at 52.204-8, Annual Representations and Certifications. The contracting officer shall check the applicable provisions at 52.204-8(c)(2). Use the provision with its Alternate I in solicitations that will result in a multiple-award contract with more than one North American Industry Classification System code assigned; this is authorized for solicitations issued after January 1, 2017 (see 19.102(b)). When the provision at 52.204-7, System for Award Management, is included in the solicitation, do not include the following representations and certifications:

* * *

(12) 52.219-1, Small Business Program Representation (Basic, Alternates I, and II).

(d)(1) The planner shall coordinate the acquisition plan or strategy with the cognizant small business specialist when the strategy contemplates an acquisition meeting the dollar amounts in paragraph (d)(2) of this section unless the contract or order is set-aside, in total or in part, for small business under part 19. * * *

(b) Plan of action. (1) Sources. Indicate the prospective sources of supplies or services that can meet the need. Consider required sources of supplies or services (see Part 8) and sources identifiable through databases including the Governmentwide database of contracts and other procurement instruments intended for use by multiple agencies available at https://www.contractdirectory.gov/contractdirectory/. Include consideration of small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns (see part 19). Also, include consideration of the impact of any bundling that might affect small business participation in the acquisition (see 7.107) (15 U.S.C. 644(e)). When the proposed acquisition strategy involves bundling, identify the incumbent contractors and contracts affected by the bundling. Address the extent and results of the market research and indicate their impact on the various elements of the plan (see part 10).

(b) * * * Ordering activities should rely on the small business representations made by schedule contractors at the contract level (but see section 19.301-2(b)(4) concerning re-representation for an order).

(d) * * *

(2) A small business that is unable to comply with the limitations on subcontracting may be considered nonresponsible (see 52.219-3 Notice of HUBZone Set-Aside or Sole Source Award, 52.219-4 Notice of Price Evaluation Preference for HUBZone Small Business Concerns, 52.219-14 Limitations on Subcontracting, 52.219-27 Notice of Service-Disabled Veteran-Owned Small Business Set-Aside, 52.219-29 Notice of Set-Aside for, or Sole Source Award to, Economically Disadvantaged Women-Owned Small Business Concerns, 52.219-30 Notice of Set-Aside for, or Sole Source Award to, Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program). A small business that has not agreed to comply with the limitations on subcontracting may be considered nonresponsive.

(a) * * *

(3) * * *

(vii) Determine whether the acquisition should utilize any of the small business programs in accordance with part 19; and

(b) * * *

(1) * * *

(vii) Whether the Government's needs can be met by small business concerns that will likely submit a competitive offer at fair market prices (see part 19).

(2) * * *

(ix) Reviewing databases such as the System for Award Management (SAM) and the SBA's Dynamic Small Business Search (DSBS).

(b)(1) Acquisitions of supplies or services that have an anticipated dollar value exceeding $3,500 ($20,000 for acquisitions as described in 13.201(g)(1)) but not exceeding $150,000 ($300,000 for acquisitions described in paragraph (1)(i) of the simplified acquisition threshold definition at 2.101) shall be set aside for small business concerns (see 19.000, 19.203, and subpart 19.5).

An agency cannot create a tiered (or “cascading”) evaluation of offers, as described in 13 CFR 125.2, for multiple-award contracts unless an agency has statutory authority.

(e) See subpart 19.5 for procedures to set aside part or parts of multiple-award contracts for small business; to reserve one or more awards for small business on multiple-award contracts; and to set aside orders for small businesses under multiple-award contracts.

(a) * * *

(10) * * *

(iii) For protests of small business size status for set-aside orders, see 19.302.

(b) * * *

(4) For additional requirements for cost-reimbursement orders, see 16.301-3.

(6) Postaward notices and debriefing of awardees for orders exceeding $5 million. * * *

(9) Small business. The contracting officer should rely on the small business representations at the contract level (but see section 19.301-2(b)(4) for order rerepresentations).

(a) * * *

(10) The use of reserves.

Nonmanufacturer means a concern that furnishes a product it did not manufacture or produce (see 13 CFR 121.406).

(a) Locating size standards and North American Industry Classification System codes. (1) SBA establishes small business size standards on an industry-by-industry basis. Small business size standards and corresponding North American Industry Classification System (NAICS) codes are provided at 13 CFR 121.201. They are also available at http://www.sba.gov/content/table-small-business-size-standards.

(2) NAICS codes are updated by the Office of Management and Budget through its Economic Classification Policy Committee every five years. New NAICS codes are not available for use in Federal contracting until SBA publishes corresponding size standards. NAICS codes are available from the U.S. Census Bureau at http://www.census.gov/eos/www/naics/.

(b) Determining the appropriate NAICS codes for the solicitation. (1) The contracting officer shall determine the appropriate NAICS code by classifying the product or service being acquired in the one industry which best describes the principal purpose of the supply or service being acquired. Primary consideration is given to the industry descriptions in the U.S. NAICS Manual, the product or service descriptions in the solicitation, the relative value and importance of the components of the requirement making up the end item being procured, and the function of the goods or services being purchased. A procurement is usually classified according to the component which accounts for the greatest percentage of contract value.

(2)(i) For solicitations issued on or before January 31, 2017 that will result in multiple-award contracts, the contracting officer shall assign a NAICS code in accordance with paragraph (b)(1) of this section.

(ii) For solicitations issued after January 31, 2017 that will result in multiple-award contracts, the contracting officer shall—

(A) Assign a single NAICS code (and corresponding size standard) which best describes the principal purpose of the acquisition and will also best describe the principal purpose of each subsequent order; or

(B) Divide the acquisition into distinct portions or categories (e.g., Line Item Numbers (LINs), Special Item Numbers (SINs), Sectors, Functional Areas (FAs), or equivalent) and assign each portion or category a single NAICS code and size standard which best describes the principal purpose of the supplies or services to be acquired under that distinct portion or category.

(3)(i) When placing orders under multiple-award contracts whose solicitations were issued on or before January 31, 2017, the contracting officer shall assign the order the same NAICS code and corresponding size standard designated in the contract.

(ii) When placing orders under multiple-award contracts whose solicitations were issued after January 31, 2017, the contracting officer shall—

(A) Assign the order the same NAICS code and corresponding size standard designated in the contract when conditions in (b)(2)(ii)(A) are met; or

(B) Assign the order the NAICS code and corresponding size standard designated for the distinct portion or category designated in the contract when conditions in (b)(2)(ii)(B) are met. If an order covers multiple portions or categories, select the NAICS code and corresponding size standard which best represents the principal purpose of the order.

(4) The contracting officer's designation is final. Appeal procedures can be found in 19.103.

(c) Application of small business size standards to solicitations.

(1) The contracting officer shall apply the size standard in effect on the date the solicitation is issued.

(2) The contracting officer may amend the solicitation and use the new size standard if SBA amends the size standard and it becomes effective before the due date for receipt of initial offers.

(a) The contracting officer's determination is final unless appealed as follows:

(1) An appeal from a contracting officer's NAICS code designation and the applicable size standard shall be served and filed within 10 calendar days after the issuance of the initial solicitation or any amendment affecting the NAICS code or size standard. However, SBA may file a NAICS code appeal at any time before offers are due.

(2) Appeals from a contracting officer's NAICS code designation or applicable size standard may be filed with SBA's Office of Hearings and Appeals (OHA) by—

(i) Any person adversely affected by a NAICS code designation or applicable size standard. However, with respect to a particular sole source 8(a) contract, only the SBA Associate Administrator for Business Development may appeal a NAICS code designation; or

(ii) The Associate or Assistant Director for the SBA program involved, through SBA's Office of General Counsel.

(3) Contracting officers shall advise the public, by amendment to the solicitation, of the existence of a NAICS code appeal (see 5.102(a)(1)). Such notices shall include the procedures and the deadline for interested parties to file and serve arguments concerning the appeal.

(4) SBA's OHA will dismiss summarily an untimely NAICS code appeal.

(5)(i) The appeal petition must be in writing and must be addressed to the Office of Hearings and Appeals, Small Business Administration, Suite 5900, 409 3rd Street SW., Washington, DC 20416.

(ii) There is no required format for the appeal; however, the appeal must include—

(A) The solicitation or contract number and the name, address, email address, and telephone number of the contracting officer;

(B) A full and specific statement as to why the NAICS code designation is allegedly erroneous and argument supporting the allegation; and

(C) The name, address, telephone number, and signature of the appellant or its attorney.

(6) The appellant must serve the appeal petition upon—

(i) The contracting officer who assigned the NAICS code to the acquisition; and

(ii) SBA's Office of General Counsel, Associate General Counsel for Procurement Law, 409 3rd Street SW., Washington, DC 20416, facsimile 202-205-6873, or email at OPLService@sba.gov.

(7) Upon receipt of a NAICS code appeal, OHA will notify the contracting officer by a notice and order of the date OHA received the appeal, the docket number, and the Administrative Judge assigned to the case. The contracting officer's response to the appeal, if any, must include argument and evidence (see 13 CFR part 134), and must be received by OHA within 15 calendar days from the date of the docketing notice and order, unless otherwise specified by the Administrative Judge. Upon receipt of OHA's docketing notice and order, the contracting officer must withhold award, unless withholding award is not in the best interests of the Government, and immediately send to OHA an electronic link to or a paper copy of both the original solicitation and all amendments relating to the NAICS code appeal. The contracting officer shall inform OHA of any amendments, actions, or developments concerning the procurement in question.

(8) After close of record, OHA will issue a decision and inform the contracting officer. If OHA's decision is received by the contracting officer before the date the offers are due, the decision shall be final and the solicitation must be amended to reflect the decision, if appropriate. OHA's decision received after the due date of the initial offers shall not apply to the pending solicitation but shall apply to future solicitations of the same products or services.

(b) SBA's regulations concerning appeals of NAICS code designations are found at 13 CFR 121.1101 to 121.1103 and 13 CFR part 134.

(c) * * * For the Department of Defense, in accordance with 10 U.S.C. 144 note, the Office of Small and Disadvantaged Business Utilization has been redesignated as the Office of Small Business Programs. * * *

(3) Be responsible to and report directly to the agency head or the deputy to the agency head (except that for the Department of Defense, the Director of the Office of Small Business Programs reports to the Secretary or the Secretary's designee);

(5) Work with the SBA procurement center representative (PCR) (or, if a PCR is not assigned, see 19.402(a)) to—

(d) Small business specialists shall be appointed and act in accordance with agency regulations.

(1) The contracting activity shall coordinate with the small business specialist as early in the acquisition planning process as practicable, but no later than 30 days before the issuance of a solicitation, or prior to placing an order without a solicitation when the acquisition meets the dollar thresholds set forth at 7.104(d)(2).

(2) The small business specialist shall notify the agency's Director of the Office of Small and Disadvantaged Utilization, and for the Department of Defense, the Director of the Office of Small Business Programs, when the criteria relating to substantial bundling at 7.104(d)(2) are met.

(3) The small business specialist shall coordinate with the contracting activity and the SBA PCR on all determinations and findings required by 7.107 for consolidation or bundling of contract requirements.

In order to further the policy in 19.201(a), contracting officers shall comply with the specific policies listed in this section and shall consider recommendations of the agency Director of the Office of Small and Disadvantaged Business Utilization, or for the Department of Defense, the Director of the Office of Small Business Programs, or the Director's designee, as to whether a particular acquisition should be awarded under subpart 19.5, 19.8, 19.13, 19.14, or 19.15. Agencies shall establish procedures including dollar thresholds for review of acquisitions by the Director or the Director's designee for the purpose of making these recommendations. The contracting officer shall document the contract file whenever the Director's recommendations are not accepted, in accordance with 19.506.

(e)(1) Provide a copy of the proposed acquisition package and other reasonably obtainable information related to the acquisition, to the SBA PCR (or, if a PCR is not assigned, see 19.402(a)) at least 30 days prior to the issuance of the solicitation if—

(a) Before issuing solicitations, make every reasonable effort to find additional small business concerns (see 10.002(b)(2)). This effort should include contacting the agency small business specialist and SBA PCR (or, if a PCR is not assigned, see 19.402(a))

(c) * * *

(1) Require a contractor that represented itself as any of the small business concerns identified in 19.000(a)(3) prior to award of the contract to rerepresent its size and socioeconomic status (i.e., 8(a), small disadvantaged business, HUBZone small business, service-disabled veteran-owned small business, or women-owned small business status); and

(a) To be eligible for award as a small business concern identified in 19.000(a)(3), an offeror is required to represent in good faith—

(1)(i) That it meets the small business size standard corresponding to the North American Industry Classification Systems (NAICS) code identified in the solicitation; or

(ii) For a multiple-award contract where there is more than one NAICS code assigned, that it meets the small business size standard set forth for each distinct portion or category (e.g. Line Item Numbers (LINs), Special Item Numbers (SINs), Sectors, Functional Areas (FAs), or the equivalent) for which it submits an offer. If the small business concern submits an offer for the entire multiple-award contract, it must meet the size standard for each distinct portion or category (e.g. LIN, SIN, Sector, FA, or equivalent); and

(2) The Small Business Administration (SBA) has not issued a written determination stating otherwise pursuant to 13 CFR 121.1009.

(b) An offeror is required to represent its size and socioeconomic status in writing to the contracting officer at the time of initial offer, including offers for Basic Ordering Agreements, and Blanket Purchase Agreements (BPAs), except for BPAs issued under a multiple award schedule contract pursuant to subpart 8.4.

(c) To be eligible for an award under the HUBZone Program (see subpart 19.13), a HUBZone small business concern must represent its size and socioeconomic status at the time of initial offer and at the time of contract award.

(d) Multiple-award contract representations.

(1) A business that represents as a small business concern at the time of its initial offer for the contract is considered a small business concern for each order issued under the contract (but see 19.301-2 for rerepresentations).

(2) A business that represents as a small business concern at the time of its initial offer for a distinct portion or category as set forth in paragraph (a)(2) is considered a small business concern for each order issued under that distinct portion or category (but see 19.301-2 for rerepresentations).

(b) A contractor that represented itself as any of the small business concerns identified in 19.000(a)(3) before contract award is required to rerepresent its size and socioeconomic status for the NAICS code in the contract—

(2) Within 30 days after a merger or acquisition (whether the contractor acquires or is acquired by another company) of the contractor that does not require novation or within 30 days after modification of the contract to include the clause at FAR 52.219-28, Post-Award Small Business Program Rerepresentation, if the merger or acquisition occurred prior to inclusion of this clause in the contract;

(4) If the contracting officer requires contractors to rerepresent their size and socioeconomic status for an order issued under a multiple-award contract.

(c) A contractor is required to rerepresent its size status in accordance with the size standard in effect at the time of its rerepresentation that corresponds to the NAICS code that was initially assigned to the contract. For multiple-award contracts where there is more than one NAICS code assigned, the contractor is required to rerepresent whether it meets the small business size standard set forth for each distinct category or portion (e.g., LINs, SINS, Sectors, FAs, or the equivalent) for which the contractor had previously represented.

(d)(1) Contract rerepresentation. When a contractor rerepresents for a contract that it no longer qualifies as a small business concern identified in 19.000(a)(3) in accordance with FAR 52.219-28, the agency may no longer include the value of options exercised, modifications issued, orders issued, or purchases made under BPAs on that contract in its small business prime contracting goal achievements. When a contractor's rerepresentation for a contract qualifies it as a different small business concern identified in 19.000(a)(3) than what it represented for award, the agency may include the value of options exercised, modifications issued, orders issued, or purchases made under BPAs on that contract in its small business prime contracting goal achievements, consistent with the rerepresentation. Agencies should issue a modification to the contract capturing the rerepresentation and report it to FPDS within 30 days after notification of the rerepresentation.

(2) Rerepresentation for an order. When a contractor rerepresents for an order that it no longer qualifies as a small business concern identified in 19.000(a)(3), the agency cannot include the value of the order in its small business prime contracting goal achievements. When a contractor's rerepresentation for an order qualifies it as a different small business concern identified in 19.000(a)(3) than what it represented for contract award, the agency can include the value of the order in its small business prime contracting goal achievement, consistent with the rerepresentation. A rerepresentation for an order does not change the size or socioeconomic status representation for the contract.

(a)(1) The SBA regulations on small business size and size protests are found at 13 CFR part 121.

(2) An offeror, the contracting officer, SBA, or another interested party may protest the small business representation of an offeror in a specific offer for a contract. However, for competitive 8(a) contracts, the filing of a protest is limited to an offeror, the contracting officer, or the SBA.

(b) Any time after offers are received by the contracting officer, or in the case of bids, opened, the contracting officer may question the small business representation of any offeror in a specific offer by filing a contracting officer's protest (see paragraph (c) of this section).

(d) * * *

(1) * * *

(ii) A protest may be made in writing if it is delivered to the contracting officer by hand, telegram, mail, facsimile, email, express or overnight delivery service or letter postmarked within the 5-day period.

(b)(1) For sole source acquisitions, the contracting officer or SBA may protest the apparently successful offeror's service-disabled veteran-owned small business status. For all other acquisitions, any interested party (see 13 CFR 125.8(b)) may protest the apparently successful offeror's service-disabled veteran-owned small business status.

(a)(1) * * *

(3) Use the provision with its Alternate II in solicitations that will result in a multiple-award contract with more than one NAICS code assigned. This is authorized for solicitations issued after January 31, 2017 (see 19.102(b)).

(b) The Director of the Office of Small and Disadvantaged Business Utilization serves as the agency focal point for interfacing with SBA. The Director of the Office of Small Business Programs is the agency focal point for the Department of Defense.

(a)(1) The SBA may assign one or more procurement center representatives (PCR) to any contracting activity or contract administration office to carry out SBA policies and programs. Assigned SBA PCRs are required to comply with the contracting agency's directives governing the conduct of contracting personnel and the release of contract information. The SBA must obtain for its PCRs security clearances required by the contracting agency.

(2) If an SBA PCR is not assigned to the procuring activity or contract administration office, contact the SBA Office of Government Contracting Area Office serving the area in which the procuring activity is located for assistance in carrying out SBA policies and programs. See http://www.sba.gov/content/procurement-center-representatives for the location of the SBA office servicing the activity.

(b) Upon their request and subject to applicable acquisition and security regulations, contracting officers shall give SBA PCRs (or, if a PCR is not assigned, see paragraph (a) of this section) access to all reasonably obtainable contract information that is directly pertinent to their official duties.

(c) The duties assigned by SBA to its PCR are set forth at 13 CFR 125.2(b) and include but are not limited to the following:

(a)(1) The purpose of small business set-asides is to award certain acquisitions exclusively to small business concerns. A “set-aside for small business” is the limiting of an acquisition exclusively for participation by small business concerns. A small business set-aside may be open to any of the small business concerns identified at 19.000(a)(3). A small business set-aside of a single acquisition or a class of acquisitions may be total or partial.

(2) The purpose of a small business reserve is to award one or more contracts to any of the small business concerns identified at 19.000(a)(3), under a full and open competition that will result in a multiple-award contract. A small business reserve shall not be used when the acquisition can be set aside, in total or in part.

(b) The contracting officer makes the determination to make a small business set-aside, in total or in part, or a reserve. The Small Business Administration (SBA) PCR (or, if a PCR is not assigned, see 19.402(a)) may make a recommendation to the contracting officer.

(c) The contracting officer shall review acquisitions to determine if they can be set aside, in total or in part, or reserved, for small business, giving consideration to the recommendations of agency personnel in the Office of Small and Disadvantaged Business Utilization, or for the Department of Defense, in the Office of Small Business Programs. Agencies may establish threshold levels for this review depending upon their needs.

(d) At the request of an SBA PCR, (or, if a PCR is not assigned, see 19.402(a)) the contracting officer shall make available for review at the contracting office (to the extent of the SBA representative's security clearance) all proposed acquisitions in excess of the micro-purchase threshold that have not been unilaterally set aside for small business.

(e) To the extent practicable, unilateral determinations initiated by a contracting officer shall be used as the basis for small business set-asides, in total or in part, or reserves, rather than joint determinations by an SBA PCR and a contracting officer.

(f) All solicitations involving set-asides, in total or in part, or reserves, shall] specify the NAICS code(s) and corresponding size standard(s) (see 19.102).

(g) Except as authorized by law, a contract may not be awarded as a result of a small business set-aside if the cost to the awarding agency exceeds the fair market price.

(h) The performance of work requirements (i.e., limitations on subcontracting and the nonmanufacturer rule) apply to small business set-asides, in total or in part, sole source awards made pursuant to subparts 19.8, 19.13, 19.14, and 19.15, and orders that are set aside (see 19.505).

(b) This requirement does not apply to purchases of $3,500 or less ($20,000 or less for acquisitions as described in 13.201(g)(1)), or purchases from required sources under part 8 (e.g., Committee for Purchase From People Who are Blind or Severely Disabled).

(a) Before setting aside an acquisition under this paragraph, refer to 19.203(b). Each acquisition of supplies or services that has an anticipated dollar value exceeding $3,500 ($20,000 for acquisitions as described in 13.201(g)(1)), but not over $150,000 ($300,000 for acquisitions described in paragraph (1)(i) of the Simplified Acquisition Threshold definition at 2.101), shall be set aside for small business unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery. If the contracting officer receives only one acceptable offer from a responsible small business concern in response to a set-aside, the contracting officer should make an award to that firm. If the contracting officer receives no acceptable offers from responsible small business concerns, the set-aside shall be withdrawn and the requirement, if still valid, shall be resolicited on an unrestricted basis. The small business set-aside does not preclude the award of a contract as described in 19.203.

(b) * * *

(1) Offers will be obtained from at least two responsible small business concerns; and

(2) Award will be made at fair market prices. Total small business set-asides shall not be made unless such a reasonable expectation exists (see 19.502-3 for partial set-asides). Although past acquisition history and market research of an item or similar items are always important, these are not the only factors to be considered in determining whether a reasonable expectation exists. In making R&D small business set-asides, there must also be a reasonable expectation of obtaining from small businesses the best scientific and technological sources consistent with the demands of the proposed acquisition for the best mix of cost, performances, and schedules.

(a) The contracting officer shall set aside a portion or portions of an acquisition, except for construction, for exclusive small business participation when—

(1) Market research indicates that a total set-aside is not appropriate (see 19.502-2);

(2) The requirement can be divided into distinct portions or categories (e.g., Line Item Numbers (LINs), Special Item Numbers (SINs), Sectors, Functional Areas (FAs), or equivalent);

(3) The acquisition is not subject to simplified acquisition procedures;

(4) Two or more responsible small business concerns are expected to submit an offer on the set-aside portion or portions of the acquisition at a fair market price;

(5) The specific program eligibility requirements identified in this part apply; and

(6) The solicitation will result in a contract other than a multiple-award contract (see 2.101 for definition of multiple-award contract.

(b) When the contracting officer determines that a requirement is to be partially set aside, the solicitation shall identify which portion or portions are set aside and not set aside.

(c) The contracting officer shall specify in the solicitation how offers shall be submitted with regards to the set-aside and non-set-aside portions.

(d) Offers received from concerns that do not qualify as small business concerns shall be considered nonresponsive and shall be rejected on the set-aside portion of partial set-asides. However, before rejecting an offer otherwise eligible for award because of questions concerning the size representation, an SBA determination must be obtained (see subpart 19.3).

(a) In accordance with section 1331 of Public Law 111-240 (15 U.S.C. 644(r)(1)), the contracting officer may set aside a portion or portions of a multiple-award contract, except for construction, for any of the small business concerns identified at 19.000(a)(3) when—

(1) Market research indicates that a total set-aside is not appropriate (see 19.502-2);

(2) The requirement can be divided into distinct portions or categories (e.g., Line Item Numbers (LINs), Special Item Numbers (SINs), Sectors, Functional Areas (FAs), or equivalent);

(3) The acquisition is not subject to simplified acquisition procedures;

(4) Two or more responsible small business concerns are expected to submit an offer on the set-aside portion or portions of the acquisition at a fair market price; and

(5) The specific program eligibility requirements identified in this part apply.

(b) When the contracting officer determines that a requirement is to be partially set aside, the solicitation shall identify which portion or portions are set aside and not set aside.

(c) The contracting officer shall specify in the solicitation how offers shall be submitted with regards to the set-aside and non-set-aside portions.

(d) Offers received from concerns that do not qualify as small business concerns shall be considered nonresponsive and shall be rejected on the set-aside portion of partial set-asides. However, before rejecting an offer otherwise eligible for award because of questions concerning the size representation, an SBA determination must be obtained (see subpart 19.3).

(a) If the contracting officer rejects a recommendation of the SBA, written notice shall be furnished to the appropriate SBA representative within 5 working days of the contracting officer's receipt of the recommendation.

(a) If, before award of a contract involving a total or partial small business set-aside, the contracting officer considers that award would be detrimental to the public interest (e.g., payment of more than a fair market price), the contracting officer may withdraw the small business set-aside, whether it was unilateral or joint. The contracting officer shall initiate a withdrawal of an individual small business set-aside in total or in part, by giving written notice to the agency small business specialist and the SBA PCR (or, if a PCR is not assigned, see 19.402(a)) stating the reasons. In a similar manner, the contracting officer may modify a unilateral or joint class small business set-aside to withdraw one or more individual acquisitions.

(a) In accordance with section 1331 of Public Law 111-240 (15 U.S.C. 644(r)(3)) and 13 CFR 125.2(e)(4), contracting officers may, at their discretion when conducting multiple-award procurements using full and open competition, reserve one or more contract awards for any of the small business concerns identified in 19.000(a)(3), when market research indicates—

(1) A total set-aside is not feasible because there is no reasonable expectation of receiving offers from at least two responsible small business concerns identified in 19.000(a)(3), at a fair market price that can perform the entire requirement; and

(2) A partial set-aside is not feasible because—

(i) The contracting officer is unable to divide the requirement into distinct portions or categories (e.g. Line Item Numbers (LINs), Special Item Numbers (SINs), Functional Areas (FAs), or other equivalent); or

(ii) There is no reasonable expectation that at least two responsible small business concerns identified in 19.000(a)(3) can perform any portion of the requirement at a fair market price.

(b) A reserve will result in one of the following—

(1) One or more contract awards to any one or more types of small business concerns identified in 19.000(a)(3); or

(2) In the case of a solicitation of a bundled requirement that will result in a multiple-award contract, an award to one or more small businesses with a Small Business Teaming Arrangement.

(c) The specific program eligibility requirements identified in this part apply.

(d) The limitation on subcontracting and the nonmanufacturer rule do not apply to reserves at the contract level, but shall apply to orders that are set aside (see 19.505).

(a) In accordance with section 1331 of Public Law 111-240 (15 U.S.C. 644(r)(2)), contracting officers may, at their discretion, set aside orders placed under multiple-award contracts for any of the small business concerns identified in 19.000(a)(3).

(b) Orders under partial set-aside contracts.

(1) Only small business concerns awarded contracts for the portion(s) or category(s) that were set aside under the solicitation for the multiple-award contract may compete for orders issued under those portion(s) or category(s).

(2) Small business awardees may compete against other-than-small business awardees for an order issued under the portion of the multiple-award contract that was not set aside, if the small business received a contract award for the non-set-aside portion.

(c) Orders under reserves.

(1) The contracting officer may set aside orders for any of the small business concerns identified in 19.000(a)(3) when there are two or more contract awards for that type of small business concern; or

(2) The contracting officer may issue orders directly to one small business concern for work that it can perform when there is only one contract award to any one type of small business concern identified in 19.000(a)(3).

(3) Small business awardees may compete against other-than-small business awardees for an order that is not set aside if the small business received a contract award for the supplies or services being ordered.

(d) Orders under Full and Open contracts.

(1) The contracting officer shall state in the solicitation and resulting contract whether order set-asides will be discretionary or mandatory when the conditions in 19.502-2 are met at the time of order set-aside, and the specific program eligibility requirements, as applicable, are also then met.

(2) Below $150,000. When setting aside an order below $150,000, the contracting officer may set aside for any of the small businesses identified in 19.000(a)(3).

(3) Above $150,000. When setting aside an order above $150,000, the contracting officer shall first consider setting aside the order for the small business socioeconomic programs (i.e., 8(a), HUBZone, service-disabled veteran-owned small business (SDVOSB), and Women-Owned Small Business (WOSB)) before considering a small business set-aside.

(4) The contracting officer shall comply with the specific program eligibility requirements identified in this part in addition to the ordering procedures for a multiple-award contract. For orders placed under the Federal Supply Schedules Program, see 8.405-5. For orders placed under all other multiple-award contracts, see 16.505.

(a) Limitation on subcontracting. To be awarded a contract or order under a set-aside, the small business concern is required to perform:

(1) For services (except construction), at least 50 percent of the cost incurred for personnel with its own employees.

(2) For supplies or products (other than a procurement from a nonmanufacturer of such supplies or products), at least 50 percent of the cost of manufacturing the supplies or products (not including the costs of materials).

(3) For general construction, at least 15 percent of the cost (not including the costs of materials) with its own employees.

(4) For construction by special trade contractors, at least 25 percent of the cost (not including the cost of materials) with its own employees.

(b) Compliance period. A small business contractor is required to comply with the limitation on subcontracting—

(1) For a contract that has been set aside, by the end of the base term and then by the end of each subsequent option period. However, the contracting officer may instead require the contractor to comply with the limitation on subcontracting by the end of the performance period for each order issued under the contract; and

(2) For an order set aside under a contract as described in 8.405-5 and 16.505(b)(2)(i)(F), by the end of the performance period for the order.

(c) Nonmanufacturer Rule. (1) To be awarded a set-aside contract or order for supplies as a nonmanufacturer, a contractor is required—

(i) To provide the end item of a small business manufacturer, that has been manufactured or produced in the United States or its outlying areas (but see 19.1308(e)(1)(i) for HUBZone contracts and HUBZone orders);

(ii) To not exceed 500 employees;

(iii) To be primarily engaged in the retail or wholesale trade and normally sell the type of item being supplied; and

(iv) To take ownership or possession of the item(s) with its personnel, equipment or facilities in a manner consistent with industry practice.

(2) In addition to the requirements set forth in (c)(1) of this section, when the end item being acquired is a kit of supplies or other goods, 50 percent of the total value of the components of the kit shall be manufactured in the United States or its outlying areas by small business concerns. Where the Government has specified an item for the kit which is not produced by U.S. small business concerns, such items shall be excluded from the 50 percent calculation. See 13 CFR 121.406(c) for further information regarding nonmanufacturer kit assemblers.

(3) For size determination purposes, there can be only one manufacturer of the end product being acquired. For the purposes of the nonmanufacturer rule, the manufacturer of the end product being acquired is the concern that transforms raw materials and/or miscellaneous parts or components into the end product. Firms which only minimally alter the item being procured do not qualify as manufacturers of the end item, such as firms that add substances, parts, or components to an existing end item to modify its performance will not be considered the end item manufacturer, where those identical modifications can be performed by and are available from the manufacturer of the existing end item. See 13 CFR 121.406 for further information regarding manufacturers.

(4) Waiver of nonmanufacturer rule. (i) The SBA may grant an individual or a class waiver so that a nonmanufacturer does not have to furnish the product of a small business (but see 19.1308(e)(2)).

(A) Class waiver. SBA may waive the performance of work requirement for nonmanufacturers when SBA has determined that there are no small business manufacturers or processors in the Federal market for a particular class of products. This type of waiver is known as a class waiver and would apply to an acquisition for a specific product (or a product in a class of products). Contracting officers and other interested parties may request that the SBA issue a waiver of the nonmanufacturer rule, for a particular class of products.

(B) Individual waiver. The contracting officer may also request a waiver for an individual acquisition because no known domestic small business manufacturers or processors can reasonably be expected to offer a product meeting the requirements of the solicitation. The type of waiver is known as an individual waiver and would apply only to a specific acquisition.

(ii) Requests for waivers shall be sent via email to nmrwaivers@sba.gov or by mail to the—

Director for Government Contracting

United States Small Business Administration

Mail Code 6700

409 Third Street SW.

Washington, DC 20416.

(iii) For the most current listing of class waivers, contact the SBA Office of Government Contracting or go to http://www.sba.gov/content/class-waivers.

(5) Exception to the nonmanufacturer rule. The SBA provides for an exception to the nonmanufacturer rule when—

(i) The procurement of supplies or a manufactured end product—

(A) Is processed under simplified acquisition procedures (see part 13); or

(B) Is for an order set aside for any of the small business concerns identified in 19.000(a)(3), placed under a full and openly competed multiple-award contract;

(ii) The cost is not anticipated to exceed $25,000; and

(iii) The offeror supplies an end product that is manufactured or produced in the United States.

(d) The contracting officer shall document a small business contractor's compliance with the limitation on subcontracting as part of its performance evaluation in accordance with the procedures set forth in 42.1502.

(a)(1) The contracting officer shall document the rationale when a contract is not set aside for small business in accordance with 19.502-2.

(2) The contracting officer shall document the rationale when a multiple-award contract is not partially set aside, not reserved, and does not allow for setting aside of orders, when these authorities could have been used.

(b) If applicable, the documentation shall include the rationale for not accepting the recommendations made by the agency Director of Small and Disadvantaged Business Utilization, or, for the Department of Defense, the Director of the Office of Small Business Programs, or the Director's designee, as to whether a particular acquisition should be awarded under subparts 19.5, 19.8, 19.13, 19.14, or 19.15.

(c) Documentation is not required if a contract award is anticipated to a small business under subparts 19.5, 19.8, 19.13, 19.14, or 19.15.

(c) The contracting officer shall insert the clause at 52.219-6, Notice of Total Small Business Set-Aside, in solicitations and contracts involving total small business set-asides. This includes multiple-award contracts when orders may be set aside for any of the small business concerns identified in 19.000(a)(3), as described in 8.405-5 and 16.505(b)(2)(i)(F). Use the clause at 52.219-6 with its Alternate I when including FPI in the competition in accordance with 19.502-7.

(d) The contracting officer shall insert the clause at 52.219-7, Notice of Partial Small Business Set-Aside, in solicitations and contracts involving partial small business set-asides. This includes part or parts of multiple-award contracts, including those described in 38.101. Use the clause at 52.219-7 with its Alternate I when including FPI in the competition in accordance with 19.502-7.

(e) The contracting officer shall insert the clause at 52.219-14, Limitations on Subcontracting, in solicitations and contracts for supplies, services, and construction, if any portion of the requirement is to be set aside for small business and the contract amount is expected to exceed $150,000. This includes multiple-award contracts when orders may be set aside for small business concerns, as described in 8.405-5 and 16.505(b)(2)(i)(F). For contracts that are set aside, the contracting officer shall indicate in paragraph (d) of the clause whether compliance with the limitations on subcontracting is required at the contract or order level.

(f)(1) The contracting officer shall insert the clause at 52.219-13, Notice of Set-Aside of Orders, in all solicitations for multiple-award contracts under which orders may be set aside for any of the small business concerns identified in 19.000(a)(3), and all contracts awarded from such solicitations.

(2) The contracting officer shall insert the clause at 52.219-13 with its Alternate I in all full and open solicitations and contracts for multiple-award contracts without reserves, under which orders will be set aside for any of the small business concerns identified in 19.000(a)(3) if the conditions in 19.502-2 are met at the time of order set-aside, and the specific program eligibility requirements, as applicable, are also then met.

(g) The contracting officer shall insert the clause at 52.219-XX Notice of Small Business Reserve, in solicitations and contracts involving multiple-award contracts that have reserves.

(h)(1) The contracting officer shall insert the clause at 52.219-YY, Nonmanufacturer Rule, in solicitations and contracts when the item being acquired has been assigned a manufacturing or supply NAICS code, and any portion of the requirement is set-aside for any of the small business concerns identified in 19.000(a)(3) (with the exception of HUBZone small business concerns) including multiple-award contracts that provide for the set-aside of orders to small business concerns, or is awarded on a sole-source basis in accordance with subparts 19.8 and 19.14. The clause shall not be used when the Small Business Administration has determined that there are no small business manufacturers of the product or end items and has waived the nonmanufacturer rule (see 19.505(c)(4)).

(2) The clause at 52.219-YY with its Alternate I shall be used in solicitations and contracts that have been set-aside or awarded on a sole-source basis to HUBZone small business concerns, including multiple-award contracts that provide for the set-aside of orders as described in 8.405-5 and 16.505(b)(2)(i)(F).

(f) For the purpose of receiving a COC on an unrestricted acquisition, a small business nonmanufacturer may furnish any domestically produced or manufactured product.

(b) * * * Where SBA issues a COC, the contracting officer may decide not to award to that offeror for reasons unrelated to responsibility.

(a) After completing its evaluation, the agency shall notify the SBA of the extent of its plans to place 8(a) contracts with the SBA for specific quantities of items or work, including 8(a) contracts that are reserved in accordance with 19.503.

(a) Separate offers and acceptances are not required for individual orders under multiple-award contracts that have been set aside for exclusive competition among 8(a) contractors, and the individual order is to be competed among all 8(a) contract holders. SBA's acceptance of the original contract is valid for the term of the contract.

(b) Sole source orders. The contracting officer may issue an order as a sole source when—

(1) The multiple-award contract was set aside for exclusive competition among 8(a) participants;

(2) The order has an estimated value less than or equal to the dollar thresholds set forth at 19.805-1(a)(2);

(3) The offering and acceptance procedures at 19.804-2 and 19.804-3 are followed.

The contracting officer should request a preaward survey of the 8(a) contractor whenever considered useful. If the results of the preaward survey or other information available to the contracting officer raise substantial doubt as to the firm's ability to perform, the contracting officer shall refer the matter to SBA for Certificate of Competency consideration under subpart 19.6.

(a) Limitation on subcontracting. To be awarded a contract or order under the 8(a) program, the 8(a) participant is required to perform—

(1) For services (except construction), at least 50 percent of the cost incurred for personnel with its own employees;

(2) For supplies or products (other than a procurement from a nonmanufacturer of such supplies or products), at least 50 percent of the cost of manufacturing the supplies or products (not including the costs of materials);

(3) For general construction, at least 15 percent of the cost with its own employees (not including the costs of materials); and

(4) For construction by special trade contractors, at least 25 percent of the cost with its own employees (not including the cost of materials).

(b) Compliance period. An 8(a) contractor is required to comply with the limitation on subcontracting—

(1) For a contract under the 8(a) program, by the end of the base term and then by the end of each subsequent option period. However, the contracting officer may instead require the contractor to comply with the limitation on subcontracting by the end of the performance period for each order issued under the contract; and

(2) For an order set aside under the 8(a) program as described in 8.405-5 and 16.505(b)(2)(i)(F), by the end of the performance period for the order.

(c) The applicable SBA District Director may waive the provisions in paragraph (b)(1) requiring a participant to comply with the limitation on subcontracting for each period of performance or for each order. Instead, the District Director may permit the participant to subcontract in excess of the limitations on subcontracting where the District Director makes a written determination that larger amounts of subcontracting are essential during certain stages of performance.

(1) The 8(a) participant is required to provide the SBA District Director written assurance that the participant will ultimately comply with the requirements of this section prior to contract completion. The contracting officer shall review and concur with the written assurance before submission to the SBA District Director.

(2) The contracting officer does not have the authority to waive the provisions of this section requiring a participant to comply with the limitation on subcontracting for each period of performance or order, even if the agency has a Partnership Agreement with SBA.

(3) Where the participant does not ultimately comply with the performance of work requirements by the end of the contract, SBA will not grant future waivers for the participant.

(d) Nonmanufacturer Rule. See 19.505(c) for application of the nonmanufacturer rule, inclusive of waivers and exceptions to the nonmanufacturer rule.

(e) The contracting officer shall document an 8(a) participant's compliance with the limitation on subcontracting as part of its performance evaluation in accordance with the procedures set forth in 42.1502.

(d) The contracting officer shall insert the clause at 52.219-18, Notification of Competition Limited to Eligible 8(a) Concerns, in competitive solicitations and contracts when the acquisition is accomplished using the procedures of 19.805. The clause at 52.219-18 with its Alternate I shall be used when competition is to be limited to 8(a) concerns within one or more specific SBA districts pursuant to 19.804-2.

(e) See 19.507(e) regarding the limitations on subcontracting and 19.507(h) regarding the nonmanufacturer rule to any contract or order resulting from this subpart.

(a) * * *

(3) Where the solicitation has been reserved for any of the small business concerns identified in 19.000(a)(3).

(a) See 13 CFR 125.1 for definitions of terms used in paragraph (b) of this section.

(b) Limitation on subcontracting. To be awarded a contract or order that was set aside or awarded on a sole source basis to a HUBZone small business concern, the HUBZone small business concern is required—

(1) For services (except construction), to spend at least 50 percent of the cost of performance incurred for personnel on its own employees or on the employees of other HUBZone small business concerns;

(2) For supplies or products (other than a procurement from a nonmanufacturer of such supplies or products), to spend at least 50 percent of the cost of manufacturing, excluding the cost of materials, on performing the contract in a HUBZone.

(3) For general construction—

(i) To spend at least 15 percent of the cost of performance incurred for personnel on its own employees; and

(ii) To spend at least 50 percent of the cost of performance incurred for personnel on its own employees or on a combination of its own employees and employees of HUBZone small business concern subcontractors.

(4) For construction by special trade contractors—

(i) To spend at least 25 percent of the cost of contract performance incurred for personnel on its own employees; and

(ii) To spend at least 50 percent of the cost of the contract incurred for personnel on its own employees or on a combination of its own employees and employees of HUBZone small business concern subcontractors.

(c) Before issuing a solicitation for general construction or construction by special trade contractors, the contracting officer shall determine if at least two HUBZone small business concerns can spend at least 50 percent of the cost of contract performance to be incurred for personnel on their own employees or subcontract employees of other HUBZone small business concerns. If the contracting officer is unable to make this determination, he or she may waive the 50 percent requirement; however, the HUBzone small business concern is still required to meet the cost incurred for personnel requirements in paragraphs (b)(3)(i) and (b)(4)(i).

(d) Compliance period. A HUBZone small business contractor is required to comply with the limitation on subcontracting—

(1) For a contract that has been set aside or awarded on a sole source basis to a HUBZone small business concern, by the end of the base term and then by the end of each subsequent option period. However, the contracting officer may instead require the contractor to comply with the limitation on subcontracting by the end of the performance period for each order issued under the contract; and

(2) For an order set aside for HUBZone small business concerns as described in 8.405-5 and 16.505(b)(2)(i)(F), by the end of the performance period for the order.

(e) Nonmanufacturer rule. (1) To be awarded a set-aside contract or order for supplies as a nonmanufacturer, a contractor is required—

(i) To provide the end item of a HUBZone small business manufacturer, that has been manufactured or produced in the United States or its outlying areas;

(ii) Not to exceed 500 employees;

(iii) To be primarily engaged in the retail or wholesale trade and normally sell the type of item being supplied; and

(iv) To take ownership or possession of the item(s) with its personnel, equipment or facilities in a manner consistent with industry practice.

(2) There are no class waivers or waivers to the nonmanufacturer rule for individual solicitations for HUBZone contracts and HUBZone orders.

(3) For HUBZone contracts and HUBZone orders at or below $25,000 in total value, a HUBZone small business concern may supply the end item of any manufacturer, including a large business, so long as the product acquired is manufactured or produced in the United States.

(f) The contracting officer shall document a HUBZone contractor's compliance with the limitation on subcontracting as part of its performance evaluation in accordance with the procedures set forth in 42.1502.

(a)(1) The contracting officer shall insert the clause 52.219-3, Notice of HUBZone Set-Aside or Sole Source Award, in solicitations and contracts for acquisitions that are set aside or awarded on a sole source basis to, HUBZone small business concerns under 19.1305 or 19.1306. This includes multiple-award contracts when orders may be set aside for HUBZone small business concerns as described in 8.405-5 and 16.505(b)(2)(i)(F).

(2) The contracting officer shall use the clause with its Alternate I to waive the 50 percent requirement if the conditions at 19.1308(c) apply.

(b)(1) The contracting officer shall insert the clause at FAR 52.219-4, Notice of Price Evaluation Preference for HUBZone Small Business Concerns, in solicitations and contracts for acquisitions conducted using full and open competition.

(2) The contracting officer shall use the clause with its Alternate I to waive the 50 percent requirement if the conditions at 19.1308(c) apply.

(c) For use of clause 52.219-YY, Nonmanufacturer Rule, see the prescription at 19.507(h)(2).

(d) Any service-disabled veteran-owned small business concern (nonmanufacturer) is required to meet the requirements in 19.1407(c) to receive a benefit under this program.

(a) Limitation on subcontracting. To be awarded a contract or order under an SDVOSB set-aside or a contract as an SDVOSB sole source, the SDVOSB concern is required to—

(1) For services (except construction), spend at least 50 percent of the cost incurred for personnel on its own employees or the employees of other SDVOSBs;

(2) For supplies or products (other than a procurement from a nonmanufacturer of such supplies or products), spend at least 50 percent of the cost of manufacturing the supplies or products (not including the costs of materials) on itself or by other SDVOSBs;

(3) For general construction, spend at least 15 percent of the cost (not including the costs of materials) incurred for personnel on its own employees or the employees of other SDVOSBs; or

(4) For construction by special trade contractors, incur at least 25 percent of the cost (not including the cost of materials) incurred for personnel on its own employees or the employees of other SDVOSBs.

(b) Compliance period. An SDVOSB contractor is required to comply with the limitation on subcontracting—

(1) For a contract that has been set aside or awarded on a sole source basis to an SDVOSB concern, by the end of the base term and then by the end of each subsequent option period. However, the contracting officer may instead require the contractor to comply with the limitation on subcontracting by the end of the performance period for each order issued under the contract; and

(2) For an order set aside for SDVOSB contractor as described in 8.405-5 and 16.505(b)(2)(i)(F), by the end of the performance period for the order.

(c) Nonmanufacturer rule. See 19.505(c) for application of the nonmanufacturer rule, inclusive of waivers and exceptions to the nonmanufacturer rule.

(d) The contracting officer shall document an SDVOSB contractor's compliance with the limitation on subcontracting as part of its performance evaluation in accordance with the procedures set forth in 42.1502.

* * * For contracts that are set-aside, the contracting officer shall indicate in paragraph (e) of the clause whether compliance with the limitations on subcontracting is required at the contract level or order level.

(a) Limitation on subcontracting. To be awarded a contract or order that is set aside for an EDWOSB or for a WOSB eligible under the WOSB Program, the contractor is required to perform—

(1) For services (except construction), at least 50 percent of the cost incurred for personnel with its own employees;

(2) For supplies or products (other than a procurement from a nonmanufacturer of such supplies or products), at least 50 percent of the cost of manufacturing the supplies or products (not including the costs of materials);

(3) For general construction, at least 15 percent of the cost with its own employees (not including the costs of materials); or

(4) For construction by special trade contractors, at least 25 percent of the cost with its own employees (not including the cost of materials).

(b) Compliance period. An EDWOSB or WOSB is required to comply with the limitation on subcontracting—

(1) For a contract that has been set aside, by the end of the base term and then by the end of each subsequent option period. However, the contracting officer may instead require the contractor to comply with the limitation on subcontracting by the end of the performance period for each order issued under the contract; and

(2) For an order set aside as described in 8.405-5 and 16.505(b)(2)(i)(F), by the end of the performance period for the order.

(c) Nonmanufacturer rule. See 19.505(c) for application of the nonmanufacturer rule, inclusive of waivers and exceptions to the nonmanufacturer rule.

(d) The contracting officer shall document an EDWOSB or WOSB contractor's compliance with the limitation on subcontracting as part of its performance evaluation in accordance with the procedures set forth in 42.1502.

(a) * * *

(2) For contracts that are set aside, the contracting officer shall indicate in paragraph (e) of the clause whether compliance with the limitations on subcontracting is required at the contract level or order level.

(b) * * *

(2) For contracts that are set aside, the contracting officer shall indicate in paragraph (e) of the clause whether compliance with the limitations on subcontracting is required at the contract level or order level.

(b) * * *

(2) * * *

(vi) Other (as applicable) (e.g., compliance with limitation on subcontracting, late or nonpayment to subcontractors, trafficking violations, tax delinquency, failure to report in accordance with contract terms and conditions, defective cost or pricing data, terminations, suspension and debarments).

Annual Representations and Certifications (Date)

(c)(1) * * *

(x) 52.219-1, Small Business Program Representations (Basic, Alternates I and II). This provision applies to solicitations when the contract will be performed in the United States or its outlying areas.

(C) The provision with its Alternate II applies to solicitations that will result in a multiple-award contract with more than one NAICS code assigned.

Alternate I (DATE). As prescribed in 4.1202(a), substitute the following paragraph (a) for paragraph (a) of the basic provision:

(a)(1) The North American Industry Classification System (NAICS) codes and corresponding size standards for this acquisition are as follows; the categories or portions these NAICS codes are assigned to are specified elsewhere in the solicitation:

[Contracting Officer to insert NAICS codes and size standards].

(2) The small business size standard for a concern which submits an offer in its own name, other than on a construction or service contract, but which proposes to furnish a product which it did not itself manufacture (i.e. nonmanufacturer), is 500 employees.

Instructions to Offerors—Commercial Items (Date)

(a) North American Industry Classification System (NAICS) code and small business size standard. The NAICS code(s) and small business size standard(s) for this acquisition appear elsewhere in the solicitation. However, the small business size standard for a concern which submits an offer in its own name, but which proposes to furnish an item which it did not itself manufacture, is 500 employees.

Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items (Date)

(b) * * *

_(11)(i) 52.219-3, Notice of HUBZone Set-Aside or Sole-Source Award (DATE) (15 U.S.C. 657a).

_(ii) Alternate I (DATE) of 52.219-3.

_(12)(i) 52.219-4, Notice of Price Evaluation Preference for HUBZone Small Business Concerns (DATE) (if the offeror elects to waive the preference, it shall so indicate in its offer) (15 U.S.C. 657a).

_(ii) Alternate I (DATE) of 52.219-4.

_(14)(i) 52.219-6, Notice of Total Small Business Set-Aside (DATE) (15 U.S.C. 644).

_(ii) Alternate I (DATE).

_(15)(i) 52.219-7, Notice of Partial Small Business Set-Aside (DATE) (15 U.S.C. 644).

_(ii) Alternate I (DATE) of 52.219-7.

_(19) 52.219-14, Limitations on Subcontracting (DATE) (15 U.S.C. 637(a)(14)).

_(21) 52.219-27, Notice of Service-Disabled Veteran-Owned Small Business Set-Aside (DATE) (15 U.S.C. 657 f).

_(22) 52.219-28, Post Award Small Business Program Rerepresentation (DATE) (15 U.S.C. 632(a)(2)).

_(23) 52.219-29, Notice of Set-Aside for, or Sole Source Award to, Economically Disadvantaged Women-Owned Small Business (EDWOSB) Concerns (DATE) (15 U.S.C. 637(m)).

_(24) 52.219-30, Notice of Set-Aside for, or Sole Source Award to, Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program (DATE) (15 U.S.C. 637(m)).

_(25) 52.219-XX, Notice of Small Business Reserve (DATE) (15 U.S.C. 644(r)).

_(26) 52.219-YY, Nonmanufacturer Rule (DATE) (15 U.S.C. 637(a)(17)).

_(i) Alternate I (DATE) of 52.219-YY.

Small Business Program Rerepresentations (Date)

(b) * * *

(3) The small business size standard for a concern which submits an offer in its own name, other than on a construction or service contract, but which proposes to furnish a product which it did not itself manufacture i.e. nonmanufacturer, is 500 employees.

Alternate II (DATE). As prescribed in 19.309(a)(3), substitute the following paragraphs (b) and (c)(1) for paragraphs (b) and (c)(1) of the basic provision:

(b)(1) The North American Industry Classification System (NAICS) codes and corresponding size standards for this acquisition are as follows; the categories or portions these NAICS codes are assigned to are specified elsewhere in the solicitation:

[Contracting Officer to insert NAICS codes and size standards].

(2) The small business size standard for a concern which submits an offer in its own name, other than on a construction or service contract, but which proposes to furnish a product which it did not itself manufacture (i.e. nonmanufacturer), is 500 employees.

(c) Representations.

(1) The offeror shall represent its small business size status for each one of the NAICS codes assigned to this acquisition under which it is submitting an offer.

As prescribed in 19.1309(a)(1), insert the following clause:

Notice of HUBZone Set-Aside or Sole Source Award (Date)

(a) Definition. See 13 CFR 125.1 and 126.103 for definitions of terms used in the clause.

(d) Limitation on subcontracting. The Contractor shall spend—

(1) For services (except construction), at least 50 percent of the cost of contract performance incurred for personnel on its own employees or employees of other HUBZone small business concerns;

(2) For supplies (other than acquisition from a nonmanufacturer of the supplies), at least 50 percent of the cost of manufacturing, excluding the cost of materials, in a HUBZone;

(3) For general construction—

(i) At least 15 percent of the cost of contract performance incurred for personnel on its own employees;

(ii) At least 50 percent of the cost of the contract performance incurred for personnel on its own employees or on a combination of its own employees and employees of HUBZone small business concern subcontractors; and

(iii) No more than 50 percent of the cost of contract performance incurred for personnel on concerns that are not HUBZone small business concerns; or

(4) For construction by special trade contractors—

(i) At least 25 percent of the cost of contract performance incurred for personnel on its own employees;

(ii) At least 50 percent of the cost of the contract performance incurred for personnel on its own employees or on a combination of its own employees and employees of HUBZone small business concern subcontractors;

(iii) No more than 50 percent of the cost of contract performance to be incurred for personnel on concerns that are not HUBZone small business concerns.

(e) A HUBZone small business contractor shall comply with the limitation on subcontracting as follows:

(1) For contracts, in accordance with (b)(1) and (2) of this clause—

[Contracting Officer check as appropriate.]

_By the end of the base term of the contract and then by the end of each subsequent option period; or

_By the end of the performance period for each order issued under the contract.

(2) For set-aside orders, in accordance with (b)(3) of this clause, by the end of the performance period for the order.

(f) A HUBZone joint venture agrees that, in the performance of the contract, the applicable percentage specified in paragraph (c) of this clause shall be performed by the aggregate of the HUBZone small business participants.

Alternate I (DATE). As prescribed in 19.1309(a)(2), substitute the following paragraphs (d)(3) and (d)(4) for paragraphs (d)(3) and (d)(4) of the basic clause:

(3) For general construction, at least 15 percent of the cost of the contract performance to be incurred for personnel shall be spent on the concern's employees; or

(4) For specialty trade construction, at least 25 percent of the cost of the contract performance to be incurred for personnel shall be spent on the concern's employees.

As prescribed in 19.1309(b)(1), insert the following clause:

Notice of Price Evaluation for HUBZone Small Business Concerns (Date)

(a) Definition. See 13 CFR 126.103 for definition of HUBZone.

(b) * * *

(1) * * *

(iii) Where the solicitation has been reserved for a HUBZone small business concern.

(d) Limitation on subcontracting. The Contractor shall spend—

(1) For services (except construction), at least 50 percent of the cost of personnel for contract performance on its own employees or employees of other HUBZone small business concerns;

(2) For supplies (other than acquisition from a nonmanufacturer of the supplies), at least 50 percent of the cost of manufacturing, excluding the cost of materials, in a HUBZone;

(3) For general construction—

(i) At least 15 percent of the cost of contract performance to be incurred for personnel on its own employees;

(ii) At least 50 percent of the cost of the contract performance to be incurred for personnel on its own employees or on a combination of its own employees and employees of HUBZone small business concern subcontractors; and

(iii) No more than 50 percent of the cost of contract performance to be incurred for personnel on concerns that are not HUBZone small business concerns; or

(4) For construction by special trade contractors—

(i) At least 25 percent of the cost of contract performance to be incurred for on its own employees;

(ii) At least 50 percent of the cost of the contract performance to be incurred for personnel on its own employees or on a combination of its own employees and employees of HUBZone small business concern subcontractors;

(iii) No more than 50 percent of the cost of contract performance to be incurred for personnel on concerns that are not HUBZone small business concerns.

(End of clause)

Alternate I (DATE). As prescribed in 19.1309(b)(2), substitute the following paragraphs (d)(3) and (d)(4) for paragraphs (d)(3) and (d)(4) of the basic clause:

(3) For general construction, at least 15 percent of the cost of the contract performance to be incurred for personnel on its own employees; or

(4) For construction by special trade contractors, at least 25 percent of the cost of the contract performance to be incurred for personnel on its own employees.

As prescribed in 19.507(c), insert the following clause:

Notice of Total Business Set-Aside (Date)

Alternate I (DATE). As prescribed in 19.507(c), substitute the following paragraph (c) for paragraph (c) of the basic clause: * * *

As prescribed in 19.507(d), insert the following clause:

Notice of Partial Small Business Set-Aside (Date)

(b) Applicability. This clause applies only to contracts that have been partially set aside for small business concerns.

(c) General. (1) A portion of this requirement, identified elsewhere in this solicitation, has been set aside for award to one or more small business concerns identified in 19.000(a)(3). Offers received from concerns that do not qualify as small business concerns shall be considered nonresponsive and shall be rejected on the set-aside portion of the requirement.

(2) Small business concerns may submit offers and compete for the non-set-aside portion and the set-aside portion.

(d) The Offeror shall—

[Contracting Officer check as appropriate.]

_Submit a separate offer for each portion of the solicitation for which it wants to compete (i.e. set-aside portion, non-set-aside portion, or both); or

_Submit one offer to include all portions for which it wants to compete.

(e) Partial set-asides of multiple-award contracts.

(1) Small business concerns will not compete against other-than-small business concerns for any order issued under the part or parts of the multiple-award contract that are set aside.

(2) Small business concerns may compete for orders issued under the part or parts of the multiple-award contract that are not set aside, if the small business concern received a contract award for the non-set-aside portion.

(End of Clause)

Alternate I (DATE). As prescribed in 19.507(d), add the following paragraph (f) to the basic clause:

(f) Notwithstanding paragraph (c) of this clause, offers from Federal Prison Industries, Inc., will be solicited and considered for both the set-aside and non-set-aside portion of this requirement.

As prescribed in 19.507(f)(1), insert the following clause:

Notice of Set-Aside of Orders (Date)

(a) The contracting officer may set aside orders to the small business concerns identified in 19.000(a)(3).

Alternate I (Date). As prescribed in 19.507(f)(2), substitute the following paragraph (a) for paragraph (a) of the basic clause:

(a) The contracting officer will set aside orders to the small business concerns identified in 19.000(a)(3) when the conditions of FAR 19.502-2 and the specific program eligibility requirements are met, as applicable.

As prescribed in 19.507(e), insert the following clause:

Limitations on Subcontracting (Date)

(c) Limitation on subcontracting. By submission of an offer and execution of a contract, the Offeror/Contractor agrees that in performance of the contract in the case of a contract for—

(d) The Contractor shall comply with the limitation on subcontracting as follows:

(1) For contracts, in accordance with (b)(1) and (2) of this clause—

[Contracting Officer check as appropriate.]

_By the end of the base term of the contract and then by the end of each subsequent option period; or

_By the end of the performance period for each order issued under the contract.

(2) For set-aside orders, in accordance with (b)(3) of this clause, by the end of the performance period for the order.

(End of clause)

Notification of Competition Limited to Eligible 8(a) Concerns (Date)

(d) The___[insert name of SBA's contractor] shall notify the___ [insert name of contracting agency] Contracting Officer in writing immediately upon entering an agreement (either oral or written) to transfer all or part of its stock.

(End of clause)

As prescribed in 19.1408, insert the following clause:

Notice of Service-Disabled Veteran-Owned Small Business Set-Aside (Date)

(d) Limitation on subcontracting. * * *

(e) A service-disabled veteran-owned small business concern shall comply with the limitation on subcontracting as follows:

(1) For contracts, in accordance with (b)(1) and (2) of this clause—

[Contracting Officer check as appropriate.]

_By the end of the base term of the contract and then by the end of each subsequent option period; or

_By the end of the performance period for each order issued under the contract.

(2) For set-aside orders, in accordance with (b)(3) of this clause, by the end of the performance period for the order.

Post-Award Small Business Program Rerepesentation (Date)

(g) If the Contractor does not have representations and certifications in SAM, or does not have a representation in SAM for the NAICS code applicable to this contract, the Contractor is required to complete the following rerepresentation and submit it to the contracting office, along with the contract number and the date on which the rerepresentation was completed:

(1) The Contractor represents that it □ is, □ is not a small business concern under NAICS Code___assigned to contract number___.

(2) [Complete only if the Contractor rerepresented itself as a small business concern in paragraph (g)(1) of this clause.] The Contractor rerepresents that it □ is, □ is not, a small disadvantaged business concern as defined in 13 CFR 124.1002.

(3) [Complete only if the Contractor rerepresented itself as a small business concern in paragraph (g)(1) of this clause.] The Contractor rerepresents that it □ is, □ is not a women-owned small business concern.

(4) Women-owned small business (WOSB) concern eligible under the WOSB Program. [Complete only if the Contractor rerepresented itself as a women-owned small business concern in paragraph (g)(3) of this clause.] The Contractor rerepresents that—

(i) It □ is, □ is not a WOSB concern eligible under the WOSB Program, has provided all the required documents to the WOSB Repository, and no change in circumstances or adverse decisions have been issued that affects its eligibility; and

(ii) It □ is, □ is not a joint venture that complies with the requirements of 13 CFR part 127, and the rerepresentation in paragraph (g)(4)(i) of this clause is accurate for each WOSB concern eligible under the WOSB Program participating in the joint venture. [The Contractor shall enter the name or names of the WOSB concern eligible under the WOSB Program and other small businesses that are participating in the joint venture: ___] Each WOSB concern eligible under the WOSB Program participating in the joint venture shall submit a separate signed copy of the WOSB rerepresentation.

(5) Economically disadvantaged women-owned small business (EDWOSB) concern. [Complete only if the Contractor rerepresented itself as a women-owned small business concern eligible under the WOSB Program in (g)(4) of this clause.] The Contractor represents that—

(i) It □ is, □ is not an EDWOSB concern eligible under the WOSB Program, has provided all the required documents to the WOSB Repository, and no change in circumstances or adverse decisions have been issued that affects its eligibility; and

(ii) It □ is, □ is not a joint venture that complies with the requirements of 13 CFR part 127, and the rerepresentation in paragraph (g)(5)(i) of this clause is accurate for each EDWOSB concern participating in the joint venture. [The Contractor shall enter the name or names of the EDWOSB concern and other small businesses that are participating in the joint venture:___.] Each EDWOSB concern participating in the joint venture shall submit a separate signed copy of the EDWOSB rerepresentation.

(6) [Complete only if the Contractor rerepresented itself as a small business concern in paragraph (g)(1) of this provision.] The Contractor rerepresents as part of its offer that it □ is, □ is not a veteran-owned small business concern.

(7) [Complete only if the Contractor rerepresented itself as a veteran-owned small business concern in paragraph (g)(6) of this clause.] The Contractor rerepresents that it □ is, □ is not a service-disabled veteran-owned small business concern.

(8) [Complete only if the Contractor rerepresented itself as a small business concern in paragraph (g)(1) of this clause.] The Contractor represents that—

(i) It □ is, □ is not a HUBZone small business concern listed, on the date of this rerepresentation, on the List of Qualified HUBZone Small Business Concerns maintained by the Small Business Administration, and no material changes in ownership and control, principal office, or HUBZone employee percentage have occurred since it was certified in accordance with 13 CFR part 126; and

(ii) It □ is, □ is not a HUBZone joint venture that complies with the requirements of 13 CFR part 126, and the rerepresentation in paragraph (g)(8)(i) of this clause is accurate for each HUBZone small business concern participating in the HUBZone joint venture. [The Contractor shall enter the names of each of the HUBZone small business concerns participating in the HUBZone joint venture: ___] Each HUBZone small business concern participating in the HUBZone joint venture shall submit a separate signed copy of the HUBZone rerepresentation.

[Contractor to sign and date and insert authorized signer's name and title.]

(h) If the Contractor represented that it was a small business concern prior to award of this contract, the Contractor shall rerepresent its size and socioeconomic status according to paragraph (e) of this clause or, if applicable, paragraph (g) of this clause, when the contracting officer explicitly requires it for an order issued under a multiple-award contract.

(End of clause)

As prescribed in 19.1508(a), insert the following clause:

Notice of Set-Aside for, or Sole Source Award to, Economically Disadvantaged Women-Owned Small Business Concerns (Date)

(d) Limitation on subcontracting. * * *

(e) An EDWOSB concern shall comply with the limitation on subcontracting as follows:

(1) For contracts, in accordance with (b)(1) and (2) of this clause—

[Contracting Officer check as appropriate.]

_By the end of the base term of the contract and then by the end of each subsequent option period; or

_By the end of the performance period for each order issued under the contract.

(2) For set-aside orders, in accordance with (b)(3) of this clause, by the end of the performance period for the order.

As prescribed in 19.1508(b), insert the following clause:

Notice of Set-Aside for, or Sole Source Award to, Economically Disadvantaged Women-Owned Small Business Concerns Eligible Under The Women-Owned Small Business Program (Date)

(d) Limitation on subcontracting. * * *

(e) A WOSB concern eligible under the WOSB Program shall comply with the limitation on subcontracting as follows:

(1) For contracts, in accordance with (b)(1) and (2) of this clause—

[Contracting Officer check as appropriate.]

_By the end of the base term of the contract and then by the end of each subsequent option period; or

_By the end of the performance period for each order issued under the contract.

(2) For set-aside orders, in accordance with (b)(3) of this clause, by the end of the performance period for the order.

As prescribed in 19.507(g), insert the following clause:

Notice of Small Business Reserve (Date)

(a) Applicability. This clause applies only to contracts that have been reserved for any of the small business concerns identified at 19.000(a)(3). The small business program eligibility requirements apply.

(b) General. (1) This solicitation contains a reserve for one or more small business concerns identified at 19.000(a)(3) and the applicable small business program.

(2) The small business concern(s) eligible for participation in the reserve shall submit one offer to include all portions of the solicitation for which consideration for award is wanted. Award of the contract will be based on criteria identified elsewhere in the solicitation.

(c) If there are two or more contract awards to small businesses as a result of the reserve, the Contracting Officer may, at his or her discretion, set aside an order or orders for the small business concerns identified in 19.000(a)(3) and the applicable small business program, that were awarded contracts under a reserve, provided the requirements of 19.502-2(b) are met.

(d) If there is only one contract award to a small business as a result of the reserve, the Contracting Officer may, at his or her discretion, issue an order or orders directly to the small business concern.

(End of clause)

As prescribed in 19.507(h)(1), insert the following clause:

Nonmanufacturer Rule (DATE)

(a) This clause does not apply to the unrestricted portion of a partial set-aside.

(b) Applicability. This clause applies to contracts that have been set aside, in total or in part, or orders under multiple-award contracts as described in 8.405-5 and 16.505(b)(2)(i)(F) that have been set aside, for any of the small business concerns identified in 19.000(a)(3).

(c)(1) The contractor shall—

(i)(A) Provide the end item of a small business manufacturer, that has been manufactured or produced in the United States or its outlying areas; or

(B) If this procurement is an order as described in 8.405-5 or 16.505(b)(2)(i)(F) or processed under simplified acquisition procedures (see part 13), and the total amount does not exceed $25,000, provide the end item of any domestic manufacturer;

(ii) Not exceed 500 employees;

(iii) Be primarily engaged in the retail or wholesale trade and normally sell the type of item being supplied; and

(iv) Take ownership or possession of the item(s) with its personnel, equipment or facilities in a manner consistent with industry practice.

(2) In addition to the requirements set forth in (c)(1) of this clause, when the end item being acquired is a kit of supplies or other goods, 50 percent of the total value of the components of the kit shall be manufactured in the United States or its outlying areas by small business concerns. Where the Government has specified an item for the kit which is not produced by U.S. small business concerns, such items shall be excluded from the 50 percent calculation. See 13 CFR 121.406(c) for further information regarding nonmanufacturers.

(3) For size determination purposes, there can be only one manufacturer of the end product being acquired. For the purposes of the nonmanufacturer rule, the manufacturer of the end product being acquired is the concern that transforms raw materials and/or miscellaneous parts or components into the end product. Firms which only minimally alter the item being procured do not qualify as manufacturers of the end item, such as firms that add substances, parts, or components to an existing end item to modify its performance will not be considered the end item manufacturer, where those identical modifications can be performed by and are available from the manufacturer of the existing end item. See 13 CFR 121.406 for further information regarding manufacturers.

(End of clause)

Alternate I (DATE). As prescribed in 19.507(h)(2), substitute the following paragraph in place of paragraph (c)(1)(i)(A) of the basic clause:

(i)(A) Provide the end item of a HUBZone small business manufacturer, that has been manufactured or produced in the United States or its outlying areas; or

[FR Doc. 2016-28432 Filed 12-5-16; 8:45 am]

BILLING CODE 6820-EP-P