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SMALL BUSINESSES AND MULTIPLE AWARD CONTRACTS. May 2014. Topics for Discussion. Jobs Act - Overview FAR Interim Final Rule SBA Rule Partial Set Aside Reserves Order Set Aside Limitations on Subcontracting/Nonmanufacturer Documentation, Targets, Ramps 8(a) NAICS Codes Size

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Small businesses and multiple award contracts

SMALL BUSINESSES AND MULTIPLE AWARD CONTRACTS

May 2014


Topics for discussion

Topics for Discussion

  • Jobs Act - Overview

  • FAR Interim Final Rule

  • SBA Rule

  • Partial Set Aside

  • Reserves

  • Order Set Aside

  • Limitations on Subcontracting/Nonmanufacturer

  • Documentation, Targets, Ramps

  • 8(a)

  • NAICS Codes

  • Size

  • Recertification - Changes

  • Bundling and Consolidation


Jobs act overview pub law 111 240

Jobs Act - OverviewPub. Law 111-240

  • Defined Multiple Award Contract(JA §1311)

    • multiple award IDIQ contract entered into under 41 USC 253h-253k

    • any other multiple award IDIQ contract

  • Required guidance that addresses (JA § 1331):

    • set aside of part or parts of a multiple award contract for small business;

    • notwithstanding fair opportunity requirements, set aside of orders placed against multiple award contracts for small businesses; and

    • reserve of one or more contract award(s) for small businesses under full and open competition multiple award procurements.


Far interim final rule 76 fr 68032 nov 2 2011

FAR Interim Final Rule(76 FR 68032, Nov. 2, 2011 )

  • Subpart 19.5 - agencies may:

    • set aside part or parts of a multiple-award contract for SBCs, including set-asides for small business concerns under the 8(a), HUBZone, SDVOSB and the WOSB Programs;

    • set-aside orders placed against multiple-award contracts for SBCs, including small businesses in the 8(a), HUBZone, SDVOSB, and WOSB Programs; and

    • reserve one or more contract awards for SBCs, including small businesses in the 8(a), HUBZone, SDVOSB, and WOSB Programs, under full and open multiple-award procurements.

  • Subpart 8.4 – agencies may set-aside orders and BPAs under the GSA Schedule;

  • Subpart 16.5 - agencies may set-aside orders for SBCs in connection with multiple award contracts and no justification for this exception to fair opportunity required

  • Added 52.219-13 which states that the CO will give notice of which orders, if any, are to be set aside under a multiple award contract


Sba rule

SBA Rule

  • SBA issued a Proposed Rule on May 16, 2012 to

    • implement JA provisions on Multiple Award Contracts and Bundling/Consolidation

    • reorganize part 125 and clarify other SBA regulations

  • SBA issued Final Rule on October 2, 2013, effective December 31, 2013

  • Proposed rule

  • 77 FR 29130

  • Final rule

  • 78 FR 61114


Partial set aside

  • Can the contracting officer partially set-aside different portions or categories for one or more of the various types of small business programs?

  • Yes. For example:

  • CLIN 1: NAICS Code 541611, set-aside for HUBZone small businesses. Only those Contractors awarded contracts under CIN 1 would be eligible to receive a task order solicitation under this CLIN.

  • CLIN 2: NAICS Code 541330, set-aside for Service-Disabled Veteran-Owned small businesses. Only those Contractors awarded contracts under CLIN 2 would be eligible to receive a task order solicitation under this CLIN.

  • CLIN 3: NAICS Code 541712, set-aside for 8(a) Participants under the 8(a) Program. Only those Contractors awarded contracts under CLIN 3 would be eligible to receive a task order solicitation under this CLIN.

  • The specific program eligibility requirements would apply to the set-aside portion. For example, for CLIN 1, the HUBZone program requirements would apply to that CLIN.

  • Would a small business offeror have to submit more than one offer on a partial set-aside?

  • It depends. The small business offeror must submit:

  • one offer that addresses each part of the solicitation for which it wants to compete (partial set-aside, non set-aside); and

  • may choose to submit an offer on the part or parts of the solicitation that have been set-aside and/or on the parts that have not been set-aside.

  • Who can compete for the orders on the partial set-aside?

  • Only awardees under the partial set-aside may compete for an order issued against that part or parts of the multiple award contract that are set-aside and for which they submitted an offer and received an award.

  • Small business awardees may compete against other-than-small businesses for an order issued against the portion of the multiple award contract that has not been partially set-aside if the small business submitted an offer and received a contract award for the non-set-aside portion.

Partial Set Aside

  • CO sets-aside a portion or portions of an acquisition for small businesses:

    • Market research shows a total set aside is not appropriate - “rule of 2” can’t be met for entire contract;

    • Requirement is severable into smaller, discrete portions or discrete categories (CLIN, SIN, Sector, FA, etc.); and

    • “Rule of two” will be met on set-aside part or parts of the acquisition

  • This is different than how partial set asides are currently done in the FAR

  • Partial set aside for one or more of the various types of small business programs

  • The specific program eligibility requirements would apply to the set-aside portion. For example, for CLIN 3, the 8(a) program requirements would apply to that CLIN (e.g. offer and acceptance at contract level). If CLIN set aside for WOSBs or EDWOSBs, then must be eligible NAICS code.

    • EXAMPLE:

      CLIN 1: NAICS Code 541611, set-aside for HUBZone small businesses. Only those Contractors awarded contracts under CLIN 1 would be eligible to receive a task order solicitation under this CLIN.

      CLIN 2: NAICS Code 541330, set-aside for Service-Disabled Veteran-Owned small businesses. Only those Contractors awarded contracts under CLIN 2 would be eligible to receive a task order solicitation under this CLIN.

      CLIN 3: NAICS Code 541712, set-aside for 8(a) Participants under the 8(a) Program. Only those Contractors awarded contracts under CLIN 3 would be eligible to receive a task order solicitation under this CLIN.


    Partial set aside1

    Partial Set Aside

    The small business offeror:

    • must submit one offer that addresses each part of the solicitation for which it wants to compete (partial set aside, non set aside)

    • may choose to submit an offer on the part or parts of the solicitation that have been set-aside and/or on the parts that have not been set-aside.

    The small business awardee:

    • may compete for an order issued against that part or parts that are set-aside and for which they submitted an offer and received an award

    • may compete for an order against the portion that has not been partially set-aside if the small business submitted an offer and received a contract award for the non-set aside portion

    Offer Submission

    For Contract

    Order Competition


    Reserves

    Reserves

    • Agencies have been “reserving” awards for small businesses for many years - Congress provided specific authority and some framework for this.

    • A CO may reserve one or more contract awards for small business concerns in a full and openly competed multiple award contract when—

      • the requirement is general in nature and cannot be broken into discrete categories at contract award but will be clearly defined when an order is placed; and

        • at least two small business concerns will be able to perform part of the requirement and will submit an offer at a fair market price; or

        • at least one of the small business concerns can perform the entire requirement and will submit an offer at a fair market price; or

        • on a bundled contract, one or more small business concerns with a Small Business Teaming Arrangement will submit an offer at a fair market price.


    Reserves1

    Reserves

    • Offer Submission for Contract:

      • must submit one offer that addresses each part of the solicitation for which it wants to compete (reserve, non reserve); and

      • may choose to submit an offer on the part or parts of the solicitation that have been reserved and/or on the parts that have not been reserved.

    • Order Competition

      • If there are two or more reserved contracts awarded under one or more of SBA’s small business programs, the agency may set-aside orders for those small business concerns pursuant to those programs.

      • If there are two or more contracts awarded under subpart 19.5 to different types of small businesses identified in 19.003(a), the agency may set-aside the orders for all small business awardees that received an award under the reserve.

    • If there is only one contract award to a small business concern, the agency may issue orders directly to that concern for work that it can perform.

    • EXAMPLE: reserve for WOSB, then set aside orders for WOSB; reserve for HUBZone, then set aside orders for HUBZone

    EXAMPLE: reserve one award for 8(a), one for SDVOSB, one for SBCs, then set aside orders for small businesses – this would be considered a small business reserve


    Partial set aside reserve

    Partial Set Aside/Reserve

    • a multiple award CONTRACT is unsuitable in its ENTIRETY for a small business set aside

    • BUT it is determined that SOME requirements of that multiple award contract can be broken down into clearly defined requirements (segments, line items,…etc.) - suitable for a small business set aside AT THE CONTRACT Level

    • those items are identified as a “partial set aside” in the solicitation and small businesses can submit proposals to be awarded a set aside contract

    • small businesses can submit proposals for the unrestricted portion of that contract, the partial set aside portion or both.

    • a partial small business set aside has the set aside requirements (orders to be competed) in place at time of contract award

    • a multiple award CONTRACT is unsuitable in its ENTIRETY for a small business set aside

    • used when contract requirements are NOT clearly defined, AND cannot be broken down individually at the contract level for order competition

    • HOWEVER, CO has determined that the possibility exists to set-aside some orders once defined requirements are determined

    • the contract is competed on an unrestricted basis (Large and Small businesses submit offers for the multiple award contract), the contracting officer notifies all potential offerors in the solicitation of the intent to do a “reserve” of some of the contract awards for small businesses

    • awards are made to both large and small businesses and once a requirement (order) is identified that is suitable for small businesses, that “order” competition may be “set-aside” for small business participation

    Partial Set Aside

    Reserve


    Order set asides

    Order Set Asides

    • Discretion to set aside orders against F&O competed multiple award contracts

    • Applies to GSA Schedule Contracts

    • Insert 52.219-13 in RFP and contract stating that agency “preserves” right to set-aside orders


    Small businesses and multiple award contracts

    Comparing Partial Set Asides, Reserves and Order Set Asides


    Limitations on subcontracting nonmanufacturer rule

    Limitations on Subcontracting/Nonmanufacturer Rule

    • LOS and NMR apply

      • Full or partial set aside, reserve or set aside of orders

    • Compliance Period

      • Full or partial set aside: base term and each subsequent option period

        • HOWEVER, CO may require concern to perform the LOS or NMR for each order

      • Reserve or order set aside under F&O: term of order

    • Exceptions to NMR

      • Order is set aside against F&O contract and value is ≤$25,000, offeror does not have to provide product of SB but product must be manufactured or produced in US and offeror must meet size requirements


    Documentation targets ramps

    Documentation, Targets, Ramps

    • Although partial set aside, reserves and set aside of orders on F&O contract are discretionary, CO must document why he/she did not use these authorities

    • CO may set targets in contract with a reserve that estimate $ value or % of total contract to be awarded to small businesses

    • CO may use on ramps and off ramps to ensure sufficient SBs on contract

      • Discretion of CO to move a business from one portion of contract to another (e.g., move from set aside to non set aside)


    Small businesses and multiple award contracts

    8(a)

    • Offer and acceptance at contract level

      • Except for orders set aside or issued sole source against a F&O competed contract

    • May sole source an order to an 8(a) against a multiple award contract that has been set aside, partially set aside or reserved for 8(a) IF

      • the $ thresholds are met on the order

      • offer and acceptance to 8(a) program on order

    • Offer and acceptance not required on reserve contract where orders will be competed amongst all SBC awardees


    Naics codes contracts

    NAICS Codes - Contracts

    • Every solicitation, contract and order must contain at least one NAICS code and corresponding size standard.

    • Solicitations and contracts that will result in multiple awards of contracts may contain +1 NAICS code and size standard:

      • acquisition requires more than one item and allows offers to be submitted on any or all of the items

      • GSA Schedule Contract with multiple SINs and multiple NAICS codes

    EXAMPLE:

    CLIN 1: NAICS Code 541611. Only those Contractors awarded contracts under CLIN 1 would be eligible to receive a task order solicitation under this CLIN.

    CLIN 2: NAICS Code 541330. Only those Contractors awarded contracts under CLIN 2 would be eligible to receive a task order solicitation under this CLIN.

    CLIN 3: NAICS Code 541712. Only those Contractors awarded contracts under CLIN 3 would be eligible to receive a task order solicitation under this CLIN.


    Naics codes orders

    NAICS Codes - Orders

    • CO must assign a single NAICS code and corresponding size standard for each order issued under a multiple award contract

    • If single award contract, or multiple award contract with one NAICS and size standard, then all orders will have that NAICS and size standard.

    • If Multiple Award Contract with multiple NAICS codes, the CO must select the NAICS code and corresponding size standard from the contract that best describes the principle purpose of each order.

    • If order is issued against the GSA Schedule with multiple SINs, CO must select the single NAICS code within the SIN that best represents the acquisition for the order.


    Small businesses and multiple award contracts

    Size

    • Determining size for a contract

      • Date the concern submits its initial offer (or other formal response to a solicitation), which includes price

      • If multiple award contract

        • date the concern submits its offer for each discrete category (e.g., CLIN, SIN, Sector, FA or equivalent) for which it represents it is small

        • date the concern submits its offer for entire contract (and will determine whether they meet the size standard for every discrete category (CLIN, SIN, Sector, FA or equivalent))

    • Determining size for an order

      • Date the concern submits its offer for the contract (see above)

        • If business was small for the underlying contract for the same NAICS code and size standard as that assigned to the order, it is small for the order

        • If business was small for a discrete category on the underlying contract, it is small for each order issued against that category with the same NAICS code and corresponding size standard

      • Or date of recertification if requested or required by CO for the order


    Recertification changes

    Recertification – Changes

    • Recert required from

      • both the acquired and acquiring business

      • JV when one or more parties to JV has been acquired, merged or is acquiring business

    • If set aside, partial set aside or reserve of a multiple award contract and business recertifies as other than small, new orders are not considered awards to SBs

    • Size recert rule now applies to HUBZone, SDVOSB and WOSB programs for status purposes

    Example:

    SDVOSB at time of offer for contract, then SDVOSB for life of contract and orders, unless recertification (novation, merger, acquisition, +5 years (and then options) or at contracting officer’s discretion for orders).


    Bundling v consolidation

    Bundling v. Consolidation


    Small businesses and multiple award contracts

    Questions?

    Thank you!


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