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Set Aside Orders for Small Business

What You Need To Know

Interim rule for FAR Case 2011-024, effective Nov. 2, 2011, provides agencies with the ability to set aside orders and Blanket Purchase Agreements (BPAs) issued under Multiple Award Schedules (MAS) program.

Before this rule, agencies were prohibited from setting aside orders and BPAs under the MAS program.

Set Asides

Contracting Officers, at their discretion, may set aside orders and BPAs for small business and the following small business subcategories:

  • 8(a) business development participants
  • HUBZone small business
  • Service-disabled veteran-owned small business (SDVOBS)
  • Economically disadvantaged women-owned small business (EDWOSB)
  • Women-owned small business (WOSB) concerns eligible under the Women-Owned Small Business Program

Specific Set-Aside Eligibility Requirements

Contracting officers may only set aside certain orders for 8(a), Women-owned small businesses (WOSB) or Economically disadvantaged women-owned small businesses (EDWOSB). Order limitations:

To Set Aside Orders For…

Orders must…

WOSB/ EDWOSB

Not exceed $6.5 million for manufacturing ($4 million for all other orders) and be within scope of NAICS code industries specified by SBA.

8(a)

Exceed $6.5 million for manufacturing ($4 million for all other orders).

HUBZone/SDVOBS

No limitations.

What steps must an Ordering Contracting Officer take to set aside an order or a BPA under the Schedules Program?

Agencies must take the following four steps:
Step 1 - Perform market research.  Determine if there are small businesses capable of performing the desired work. 

Step 2- Incorporate clauses into Requests for Quotes (RFQs) (until Schedules are modified). GSA Federal Acquisition Service (FAS) is in the process of modifying its existing vehicles to include all appropriate set-asides clauses. Contracting Officers can visit Contracts Online (accessed through gsaelibrary.gsa.gov) to view a listing of the Schedule contracts with their current clauses to see which Schedule contracts have been modified.  Before all FAS contracts have been modified to incorporate set-aside clauses, Contracting Officers shall incorporate the following FAR clauses, if applicable, in all RFQs:

  • 52.219-13 Notice of Set-Aside of Orders (NOV 2011)
  • 52.219-3 Notice of Total HUBZone Set-Aside or Sole Source Award (NOV 2011)
  • 52.219-6 Notice of Total Small Business Set-Aside (NOV 2011)
  • 52.219-14 Limitations on Subcontracting (NOV 2011)
  • 52.219-27 Notice of Total Service-Disabled Veteran-Owned Small Business Set-Aside (NOV 2011)
  • 52.219-29 Notice of Total Set-Aside for Economically Disadvantaged Women-Owned Small Business (EDWOSB) Concerns (NOV 2011)
  • 52.219-30 Notice of Total Set-Aside for Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program (NOV 2011)

Step 3 - Include a statement in the RFQ for an order or BPA that will be set aside.  The Contracting Officer should include the following language in the RFQ: This is a notice that this [insert either “order” or “Blanket Purchase Agreement”] is a total set aside for [insert either “small business concerns” or specify a type of small business concern].  Only quotes submitted by [insert either “small business concerns” or specify a type of small business concern] will be accepted by the Government.  Any quote that is submitted by a contractor that is not [insert either “a small business concern” or specify a type of small business concern] will not be considered for award.

Step 4 - Use the same competition rules as provided in FAR 8.405, except limit consideration only to small businesses.

Size of BPA/Order

Competition Strategy

Any special documentation required?

BPA/Order is over the Micro-purchase Threshold (MPT) but not over the Simplified Acquisition Threshold (SAT)

Agency posts a request-for-quote on E-Buy

No

Agency considers reasonably available information about at least 3 small businesses

No

BPA/Order exceeds the SAT

Agency posts a request-for-quote on E-Buy

No

Agency sends request-for-quote out to enough small businesses to receive quotes from at least three small businesses

No

To learn more about setting-aside orders under MAS, visit  www.gsa.gov/schedulesandsbgoals.

 

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Comments

jorozier

Based on the fiair opportunity provisions discussed in FAR 8.405-3(c)(2)(ii)(A) and FAR 8.405-3(c)(2)(iii)(A)(1) , GSA's position is that we cannot set-aside orders under "non-set-aside BPA's";  however,

FAR 13.303-5(c) states, " The existence of a BPA does not justify purchasing from only one source or avoiding small business set-asides. The requirements of 13.003(b) and Subpart 19.5 also apply to each order." (emphasis mine)

The Interim Rule published in the Federal Register Nov 2011 states, "This interim rule amends- FAR subpart 8.4 to make clear that order set-asides may be used in connection with the placement of orders and blanket purchase agreements under Federal Supply Schedules... FAR subpart 38.1 to add a reference to FAR 8.405-5 to make clear that order set-asides may be used in connection with the placement of orders and blanket purchase agreements under Federal Supply Schedules."

There is also a Proposed SBA Rule published May 2012 which states, "the interim rule makes clear that set-asides may be used in connection with the placement of orders under multiple award contracts, notwithstanding the requirement to provide each contract holder a fair opportunity to be considered, and further makes clear that order set-asides may be used in connection with the placement of orders and blanket purchase agreements under Multiple Award Schedule contracts... This clarification is consistent with the interim FAR rule which, as explained above, states (at FAR 8.405-5(a)) that order set-asides may be used in connection with the placement of orders and BPAs under MAS contracts."

Is the GSA FAQ still correct? 

www.gsa.gov/portal/content/200549#6

Are we still prohibited from setting aside orders under "non-set-aside BPA's" ?

MAS Blogger

Hi Sarah.

We are offering another Small Biz webinar on the 16th (Thursday), and you can register here for that: http://interact.gsa.gov/gsa-event/webinar-gsa-schedules-and-utilization-small-business-4

We currently only post the first offering of a webinar topic, and since this topic is frequently used topic, you can find the first webinar on this topic here: http://www.youtube.com/playlist?list=PL5A4B5E1F315B4D9D&feature=plcp.  Mark Lee also did a presentation on Schedules and Small Biz at the 2012 Expo, which can be viewed here: http://www.youtube.com/playlist?list=PL1AA62A7ABB8CFD9A&feature=plcp

Lastly, when we get the same question multiple times, we post the Q&A here, on the Small Business Set Aside FAQs page: http://www.gsa.gov/portal/content/113371.  We also have this Small Business Utlization page: http://www.gsa.gov/portal/content/202261

Please let us know if we can provide any additional information!

sara h marcheggiani

 

I notice that you have another GSA/SB Set Aside webinar scheduled for tomorrow -  have the previous Q&a's been posted yet?  Thanks

MAS Blogger

Schedule solicitations list multiple NAICS codes under a single SIN when multiple industries describe the scope of work to be performed under that SIN. Many firms propose under multiple SINs in their offer. 

However, in accordance with the FAR and the SBA Regulations, only a single NAICS code is assigned to any given Schedule contract, regardless of the number of SINs awarded under that Schedule contract. The single NAICS code assigned to the contract is the NAICS code that best describes the principal nature of the product or service being acquired under that contract.  Business size under that contract is then determined in accordance with the size standard associated with that single NAICS code. All Schedule orders under a specific Schedule contract will reflect that single NAICS code assigned to the contract and the size assigned to the contract (reference 13 C.F.R. § 121.404(g)(3)(iv)). So buyers should not be concerned with what NAICS code to assign to Schedule orders.

 

jorozier

Typically on a GSA order a buyer will select the applicable SIN.  Within a given GSA SIN you will find multiple NAICS codes.  SBA and backed by GAO protest history, requires the selection of a single NAICS for every buy.  Do we just select a SIN then further select our NAICS resulting in an extremely limited pool of pential bidders?  Is further restriction within a SIN even allowable other as a set-aside?

MAS Blogger

All members of a contractor team arrangement (CTA) have to be small (or whatever sub-set the order is set-aside for) for the CTA to be eligible for that order. Include a statement in the RFQ for an order or BPA that will be set aside.  The contracting officer should include the following language in the RFQ: 

“This is a notice that this order is a total set-aside for [insert either “small business concerns” or specify a subset of small business concern]. Only quotes submitted by [insert either “small business concerns” or specify a subset of small business concern] will be accepted by the Government. Any quote that is submitted by a contractor that is not [insert either “a small business concern” or specify a subset of small business concern] will not be considered for award.”

 

bjohnson

Are Small Businesses (SBs)required to perform 51% of the work on an order set-aside for SB?  Not sure if GSA Schedules are looked at as a unit, and if a SB would be able to subcontract out more than 50% of the work if they have other orders/work running thought the schedule.   

MAS Blogger

Hi @illich and @LBowman

Please visit our FAQ page on the Schedules Portal: http://gsa.gov/portal/content/113371

 

Q&A #15 references 8(a) credits

Q&A #16 references the non-manufacturer rule

illich

If there is a GSA SB set aside for supplies, must the SB awardee(s) supply items manufactured only by small businesses IAW 52.219-6 (assuming Alt I is not applicable) Notice of Total Small Business Set-Aside (NOV 2011)?  Does it matter whether the GSA SB set aside is to only GSA schedule holders or full and open to all qualified SB contractors?

LBowman

Question: with the new authority to do set-asides under MAS, including a set-aside for 8(a) firms, will agencies get credit toward SBA Goals when awarding a contract to an 8(a) firm under the GSA FSS? Previously, only contracts under 8(a) Stars were able to get SBA credit.

FPA-Advocacy

What you need to know:

Interim rule for FAR Case 2011-024 fails to acknowledge the fact that the the original FAR  8.4 exemption was not based on any statutes and was inconsistent with applicable laws and regulations as stated by SBA on their historic 2007 ruling, “according to statute and regulations, small business set asides are mandatory for acquisitions valued from $3,000 to $150,000  and take priority over GSA Schedule contracts. This interpretation is consistent with the declared and unambiguous intent of Congress as it relates to Federal procurement and small businesses.”  

The assumption, therefore, whether or not to make 'discretionary' and not 'mandatory,' a GSA Schedule order between $3,000 and $150,000 is still under debate.  Regardless, the one thing CO/KO must do is to allow the SBA PCR community to become involved in the small business coordination of ALL GSA Schedule contracts, especially those between $3,000 and $150,000. (no exeptions.) End-users and program staff have used the current loophole to circumvent the regulations and offer preferential treatment to established suppliers most of which are large businesses.

The incorporation of Clauses into Request for Quotes (RFQ), as described in Step #2, should extend beyond the items identified to include ALL references on the FAR  that protect the rights small businesses:

* Accelerated Payment (upon presentation of docuement) for disadvantaged budiness

* Fast Payment (within 15 days) for ALL small businesses

* Brand-name or equal (to prevent unfair justifications and implement OFPP guidance, - http://bit.ly/d9lWVB)

* Teaming arrangement (to allow simpler SBA sanctioned agreements) that are different than the GSA CTA

The CO/KO must consider other procurement vehicles, including the FedBid reverse auction - besides eBuy - which has allowed set-asides on the GSA Schedule for years.  

 

Skip Derick

Please post on Interact the "official" GSA position concerning the use of CTA's with Large Businesses when the Schedule Task Order is Set-Aside for Small Business. In other words, can a Small Business establish a CTA with a Large Business on a Small Business Set-Aside Task Order if the Small Business will perform 51% of the work.

HeatherR

Hi Skip,

GSA addresses this question on the Small Business Set Aside FAQ page, #13. http://www.gsa.gov/portal/content/113371

"How do set-asides apply to Contractor Team Arrangements (CTAs)? For example, if an order is set-aside for small business, do all members of the CTA have to be small to be eligible for that order or can only the team lead be small?

All members of the CTA have to be small (or whatever sub-set the order is set-aside for) to be eligible for that order."

akinder8668

Quick question - Do you know if contractors will be able to protest the CO/KOs decision not to set-aside projects under GSA schedules?  

The interim rule also mentioned something about a modification needing to be done to the base contract to allow for this? Will GSA contracting officers modify their base contracts to allow for this or is the allowance automatic under the new set-aside rule?

ChristopherZelig
  • Service-disabled veteran-owned small business (SDVOBS)
  • Economically disadvantaged women-owned small business (EDWOSB)

Great

 

Profit Sense Innovations Reviews

MAS Blogger

 

 

FAR 8.405-5(a)(1) provides COs with the discretionary authority to set-aside Schedule BPAs and orders. This means that they are not required to set-aside BPAs or orders. So while a contractor may protest a CO's decision to not set-aside an order (in accordance with FAR 8.404(e)), FAR 8.405-5(a)(1) makes it clear that the decision to set-aside an order or BPA is discretionary on the part of the CO.

To address the second question, FAS is in the process of modifying all Schedule contracts to include the appropriate clauses for set-asides.  In the meantime, agencies can still set-aside Schedule orders, as long as they remember to incorporate the appropriate clauses into the RFQ.  All relevant clauses are listed in Step 2 of the article above.

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