TABLE OF CONTENTS
219.000 Scope of part.
219.001 Definitions.
SUBPART 219.2--POLICIES
219.201 General policy.
219.202 Specific policies.
219.202-1 Encouraging small business participation in acquisitions.
219.202-5 Data collection and reporting requirements.
SUBPART 219.3--DETERMINATION OF STATUS AS A SMALL BUSINESS CONCERN
219.301 Representation by the offeror.
219.302 Protesting a small business representation.
219.302-70 Protesting a small disadvantaged business representation.
219.304 Solicitation provisions.
SUBPART 219.4--COOPERATION WITH THE SMALL BUSINESS ADMINISTRATION
219.401 General.
SUBPART 219.5--SET-ASIDES FOR SMALL BUSINESS
219.501 General.
219.502 Setting aside acquisitions.
219.502-1 Requirements for setting aside acquisitions.
219.502-2 Total set-asides.
219.502-2-70 Total set-asides for small disadvantaged business concerns.
219.502-3 Partial set-asides.
219.502-4 Methods of conducting set-asides.
219.504 Set aside program order of precedence.
219.505 Rejecting Small Business Administration recommendations.
219.506 Withdrawing or modifying set-asides.
219.508 Solicitation provisions and contract clauses.
219.508-70 Solicitation provisions and contract clauses.
SUBPART 219.6--CERTIFICATES OF COMPETENCY
219.602 Procedures.
219.602-1 Referral.
219.602-3 Resolving differences between the agency and the Small Business Administration.
SUBPART 219.7--SUBCONTRACTING WITH SMALL BUSINESS, SMALL DISADVANTAGED BUSINESS AND WOMEN-OWNED SMALL BUSINESS CONCERNS
219.702 Statutory requirements.
219.703 Eligibility requirements for participating in the program.
219.704 Subcontracting plan requirements.
219.705 Responsibilities of the contracting officer under the subcontracting assistance program.
219.705-2 Determining the need for a subcontracting plan.
219.705-4 Reviewing the subcontracting plan.
219.706 Responsibilities of the cognizant administrative contracting officer.
219.708 Solicitation provisions and contract clauses.
SUBPART 219.8--CONTRACTING WITH THE SMALL BUSINESS ADMINISTRATION (THE 8(a) PROGRAM)
[added per DL 98-015, DFARS Case 98-D011 dated/effective, June 19,1998]
[219.800 General.]
219.803 Selecting acquisitions for the 8(a) Program.
219.804 Evaluation, offering, and acceptance.
219.804-1 Agency evaluation.
SUBPART 219.10--SMALL BUSINESS COMPETITIVENESS DEMONSTRATION PROGRAM
219.1005 Applicability.
219.1006 Procedures.
219.1007 Solicitation provisions.
SUBPART 219.70--EVALUATION PREFERENCE FOR SMALL DISADVANTAGED BUSINESS (SDB) CONCERNS
219.7000 Policy.
219.7001 Applicability.
219.7002 Procedures.
219.7003 Solicitation provisions and contract clauses.
SUBPART 219.71--PILOT MENTOR-PROTEGE PROGRAM
219.7100 Scope.
219.7101 Policy.
219.7102 General.
219.7103 Procedures.
219.7103-1 General.
219.7103-2 Contracting officer responsibilities.
219.7104 Developmental assistance costs eligible for reimbursement or credit.
219.7105 Reporting.
SUBPART 219.72--EVALUATION PREFERENCE FOR SMALL DISADVANTAGED BUSINESS (SDB) CONCERNS IN CONSTRUCTION ACQUISITION--TEST PROGRAM
219.7200 Policy
219.7201 Administration of the test program.
219.7202 Applicability.
219.7203 Procedures.
219.7204 Contract clause.
PART 219 SMALL BUSINESS PROGRAMS
219.000 Scope of part.
This part also implements 10 U.S.C. 2323, which sets a goal for DoD for each of fiscal years 1987 through 2000 to--
(1) Award five percent of contract and subcontract dollars to small disadvantaged business (SDB) concerns, historically black colleges and universities (HBCUs), and minority institutions (MIs) (See Part 226 for policy/procedures on HBCU/MIs); and
(2) Maximize the number of such entities in DoD contracting and subcontracting.
219.001 Definitions.
The definition of "small disadvantaged business concern" to be used for DoD contracts is in the provision at 252.219-7000 and is more restrictive than the definition in FAR 19.001.
(a) The DoD will use the Section 8(a) program, small disadvantaged business set asides and evaluation preferences, advance payments, outreach, and technical assistance to meet its five percent goal for contract and subcontract awards to small disadvantaged businesses.
(c)(2) For the defense agencies, the director of the Office of Small and Disadvantaged Business Utilization shall be appointed by, be responsible to, and report directly to the director deputy director of the defense agency.
(7) The responsibility for assigning small business technical advisors is delegated to the head of the contracting activity.
(9) Contracting activity small business specialists perform this function by--
(A) Reviewing and making recommendations for all acquisitions over $10,000, except small business-small purchase set-asides;
(B) Making the review before issue of the solicitation or contract modification and documenting it on DD Form 2579, Small Business Coordination Record;
(C) Referring recommendations which have been rejected by the contracting officer to the Small Business Administration (SBA) procurement center representative. However, in the case of a rejected small disadvantaged business set-aside recommendation or if an SBA representative is not assigned or available, the specialist refers the matter to the specialist's appointing authority.
(d) Contracting and contract administration activities appoint small business specialists as directed by DoDD 4205.1, DoD Small Business and Small Disadvantaged Business Utilization Programs. Specialists --
(i) Report directly and are responsible only to their appointing authority;
(ii) Make sure that the contracting activity takes the necessary actions to implement small business, historically black college and university/minority institution, and labor surplus area programs;
(iii) Advise and assist contracting, program manager, and requirements personnel on all matters which affect small businesses, historically black colleges and universities or minority institutions, and labor surplus area concerns;
(iv) Aid, counsel, and assist small business, small disadvantaged business, historically black colleges and universities, and minority institutions by providing--
(A) Advice concerning acquisition procedures;
(B) Information regarding proposed acquisitions; and
(C) Instructions on preparation of proposals in the interpretation of standard clauses, representations, and certifications;
(v) Maintain an outreach program (including participation in Government-industry conferences andregional interagency small business councils) designed to locate and develop information on the technical competence of small business, small disadvantaged business concerns, historically black colleges and universities, and minority institutions;
(vi) Ensure that financial assistance, available under existing regulations, is offered and also assist small business concerns in obtaining payments under their contracts, late payment, interest penalties, or information on contractual payment provisions;
(vii) Provide assistance to contracting officers in determining the need for and acceptability of subcontracting plans and assist administrative contracting officers (see 219.706(a)(ii)) in evaluating, monitoring, reviewing, and documenting contract performance to determine compliance with subcontracting plans; and
(viii) Recommend to the appointing authority the activity's small and disadvantaged business program goals, including goal assignments to subordinate contracting offices; monitor the activity's performance against these goals; and recommend action to correct reporting errors/deficiencies.
219.202-1 Encouraging small business participation in acquisitions.
The DoD will maximize the use of small business concerns as planned producers in the Industrial Readiness Planning Program.
219.202-5 Data collection and reporting requirements.
Determine the premium percentage to be entered in Item D4E of the Individual Contract Action Report (DD Form 350), (see 253.204-70), as follows --
(1) For small disadvantaged business or historically black college and university/minority institution set-asides, divide the difference between the fair market price and the award price by the fair market price.
(2) For 219.7000 evaluation preference awards, divide the difference between the low responsive offer and the award price by the low responsive offer.
(3) For 219.502-3 preferential consideration awards, divide the difference between the award price on the non-set-aside portion and the award price on the set-aside portion by the award price on the non-set-aside portion.
(b) Within 60 days after the end of each fiscal year, departments and agencies shall submit the report to the Secretary of Defense, who will report to the SBA on behalf of all DoD departments and agencies. Reports must include-
(i) Justification for failure to meet goals established by the Office of the Secretary of Defense; and
(ii) Planned actions for increasing participation by such firms in future contract awards.
SUBPART 219.3--DETERMINATION OF STATUS AS A SMALL BUSINESS CONCERN
219.301 Representation by the offeror.
(a) A concern must qualify as a small disadvantaged business (SDB) on the date of submission of its initial offer including price to be eligible for--
(i) Award under a small disadvantaged business set-aside;
(ii) Preferential consideration as an SDB under a partial set-aside; or
(iii) An evaluation preference for SDBs.
(b) The contracting officer shall protest an offeror's representation that it is a small disadvantaged business concern when--
(i) There is conflicting evidence;
(ii) The offeror represents that the Small Business Administration previously determined the concern to benon-disadvantaged; or
(iii) The offeror represents its ownership as other than Black American, Hispanic American, Native American (including Indian tribes and Native Hawaiian organizations), Asian Pacific American, or Subcontinent Asian American; unless the offeror represents that--
(A) It currently is in the Section 8(a) program; or
(B) Within the six months preceding submission of its offer, the offeror was determined by the Small Business Administration to be socially and economically disadvantaged, and no circumstances have changed to vary that determination.
219.302 Protesting a small business representation.
219.302-70 Protesting a small disadvantaged business representation.
This section applies to protests of a small business concern's status as socially and economically disadvantaged. Protests of a concern's size are processed under FAR 19.302. Any offeror, the contracting officer, or the Small Business Administration (SBA) may protest a concern's representation of disadvantaged status.
(a) An offeror may protest a concern's representation of disadvantaged status by filing a protest with the contracting officer. The protest--
(1) Must be filed within the times specified in FAR 19.302(d)(1); and
(2) Must contain specific detailed evidence supporting the basis of protest.
(b) The contracting officer or the SBA may protest a concern's representation of disadvantaged status at any time.
(1) If a contracting officer's protest is based on information brought to his/her attention by a party ineligible to protest directly or ineligible to protest under the timeliness standard, the contracting officer must be persuaded by the evidence presented before adopting the grounds for protest as his or her own.
(2) The SBA protests a concern's representation of disadvantaged status by filing directly with its Office of Program Eligibility and notifying the contracting officer.
(c) The contracting officer shall return untimely protests to the protestor. This includes protests filed before bid opening or notification of apparent successful offeror.
(d) Upon receipt of a timely protest, the contracting officer shall withhold award and forward the protest to the SBA Office of Program Eligibility, Office of Minority Small Business and Capitol Ownership Development, 409 3rd Street, S.W., Washington, D.C. 20416. Send SBA--
(1) The protest;
(2) The date the protest was received and a determination of timeliness; and
(3) The date of bid opening or date on which notification of apparent successful offeror was sent to unsuccessful offerors.
(e) Do not withhold award when--
(1) The contracting officer makes a written determination that award must be made to protect the public interest or
(2) The offeror represents that, within the six months preceding submission of its offer, the SBA has determined the concern to be socially and economically disadvantaged; and no circumstances have changed to vary that determination.
(f) The SBA Director, Office of Program Eligibility, will determine the disadvantaged status of the challenged offeror and notify the contracting officer, the challenged offeror, and the protestor. Award may be made on the basis of that determination. The determination is final for purposes of the instant acquisition, unless--
(1) It is appealed; and
(2) The contracting officer receives the appeal decision before award.
(g) If the contracting officer does not receive an SBA determination within 15 working days after the SBA's receipt of the protest, the contracting officer shall presume that the challenged offeror is socially and economically disadvantaged. Do not use the presumption as a basis for award without first inquiring as to when adetermination can be expected and waiting for the determination, unless further delay in award would be disadvantageous to the Government.
(h) An SBA determination may be appealed by--
(1) The interested party whose protest has been denied;
(2) The concern whose status was protested; or
(3) The contracting officer.
The appeal must be filed with the SBA's Associate Administrator for Minority Small Business and Capital Ownership Development within five working days after receipt of the determination. If the contracting officer receives the SBA's decision on the appeal before award, the decision shall apply to the instant acquisition. If the decision is received after award, it will apply to future acquisitions.
219.304 Solicitation provisions.
(b) Use the provision at 252.219-7000, Small Disadvantaged Business Concern Representation (DoD Contracts) instead of the provision at FAR 52.219-2, Small Disadvantaged Business Concern Representation.
SUBPART 219.4--COOPERATION WITH THE SMALL BUSINESS ADMINISTRATION
(b) The contracting activity small business specialist is the primary activity focal point for interface with the SBA.
SUBPART 219.5--SET-ASIDES FOR SMALL BUSINESS
(g) This repetitive set-aside procedure applies to DoD.
[See AFAC 92-50, B1]
(S-70) When a product or service has been acquired successfully by a contracting office as a small disadvantaged business set-aside, all future requirements of that office for that product or service shall be acquired as small disadvantaged business set-asides, except those--
(1) Processed under small purchase procedures; or
(2) For which the contracting officer determines there is no reasonable expectation that the criteria for a small disadvantaged business set-aside can be met (see 219.502-2-70(a)).
219.502 Setting aside acquisitions.
219.502-1 Requirements for setting aside acquisitions.
Do not set aside acquisitions for--
(1) Supplies which were developed and financed, in whole or in part, by Canadian sources under the U.S.-Canadian Defense Development Sharing Program; or
(2) Architect-engineer services for military construction or family housing projects of $85,000 or more (10 U.S.C. 2855), including indefinite delivery and indefinite quantity contracts if the value of all anticipated orders is expected to total $85,000 or more.
(a) Unless the contracting officer determines that the criteria for set-aside cannot be met, set aside for small business concerns acquisitions for--
(i) Construction, including maintenance and repairs, under $2 million;
(ii) Dredging under $1 million; and
(iii) Architect-engineer services for military construction or family housing projects under $85,000.
[See AFAC 92-50, B1]
219.502-2-70 Total set-asides for small disadvantaged business concerns.
(a) Except as provided in paragraph (b)and (c), the contracting officer shall set aside an acquisition for small disadvantaged businesses when there is a reasonable expectation that --
(1) Offers will be received from at least two responsible small disadvantaged business (SDB) concerns who--
(i) Can comply with the FAR 52.219-14 limitations on subcontracting; or
(ii) In the case of an SDB regular dealer owned by an Indian tribe, including an Alaska Native Corporation, will provide the supplies of a small business for contracts awarded during fiscal year 1994, as provided in Section 8051 of Pub. L. 103-139; or]
(iii) In the case of other SDB regular dealers, will provide the supplies of SDBs (except as provided in Alternate I of the clause at 252.219-7002, Notice of Small Disadvantaged Business Set-Aside).
(2) Award will be made at not more than ten percent above fair market price; and
(3) Scientific and/or technological talent consistent with the demands of the acquisition will be offered.
(b) Do not set aside acquisitions for SDBs when--
(1) The product or service has been successfully acquired as a small business set-aside (see FAR 19.501(g));
(2) The acquisition is for construction, including maintenance and repairs, and is under $2 million, or is for dredging under $1 million;
(3) The acquisition is for architect-engineer services or construction design for military construction projects, without regard to dollar value;
(4) The acquisition is reserved for the 8(a) program;
(5) The acquisition is processed under small purchase procedures; or
(6) The acquisition is for commissary or exchange resale items.
(c) Pursuant to 10 U.S.C. 2323(g), the Office of Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition & Technology), is responsible for determining whether use of small disadvantaged business (SDB) set-asides has caused a particular industry category to bear a disproportionate share of the contracts awarded by a particular contracting activity to achieve its SDB goal. Upon making a determination that a particular industry is bearing a disproportionate share, the OUSD(A&T) SADBU shall limit the use of total SDB set-asides in the affected industry category, at the contracting activity. This limitation shall not apply to solicitations that already had been synopsized as SDB set-asides. Forward requests for a determination through agency channels to OUSD(A&T) SADBU and include--
(1) The standard industrial (SIC) code(s) affected;
(2) Supporting information to justify the request, including dollars and percentages by the contracting activity, under the affected SIC code(s) for the previous two fiscal years and current fiscal year to date for--
(i) Total awards;
(ii) Total awards to small businesses;
(iii) Total awards to SDBs; and
(iv) Awards to SDBs under the SDB set-aside program.
219.502-3 Partial set-asides.
When a portion of an acquisition is to be set aside for small business concerns, except acquisitions for commissary or exchange resale, the contracting officer shall give small disadvantaged business concerns preferential consideration by using the procedures in 252.219-7001, Notice of Partial Small Business Set-Aside with Preferential Consideration for Small Disadvantaged Business (SDB) Concerns.
[See AFAC 92-50, B1]
219.502-4 Methods of conducting set-asides.
(b) Offers on a small disadvantaged business (SDB) set-aside from concerns that do not qualify as SDB concerns shall be considered nonresponsive and shall be rejected.
219.504 Set-aside order of precedence.
(b) The order of precedence for DoD is (except see 219.803(c) and 226.71]):
[See AFAC 92-50, B1]
(i) Total set-aside for small disadvantaged business concerns;
(ii) Total set-aside for small business concerns;
(iii) Partial set-aside for small business concerns with preferential consideration for small disadvantaged business concerns.
219.505 Rejecting Small Business Administration recommendations.
(b) The designee shall be at a level no lower than chief of the contracting office.
[See AFAC 92-50, B1]
219.506 Withdrawing or modifying set-asides.
(a) Do not withdraw small disadvantaged business set-asides for reasons of price reasonableness unless the low responsive responsible offer exceeds fair market price by more than ten percent.
219.508 Solicitation provisions and contract clauses.
(d) Use the clause at 252.219-7001, Notice of Partial Small Business Set-Aside with Preferential Consideration for Small Disadvantaged Business Concerns, instead of the clause in FAR 52.219-7, Notice of Partial Small Business Set-Aside. Use the clause with its Alternate I when the contracting officer determines that there are no small disadvantaged business manufacturers that can meet the requirements of the solicitation.
[See AFAC 92-50, B1]
(e) Use the clause at 52.219-14, Limitations on Subcontracting, also in small disadvantaged business set-asides.
[See AFAC 92-50, B1]
219.508-70 Solicitation provisions and contract clauses.
Use the clause at 252.219-7002, Notice of Small Disadvantaged Business Set-Aside, in solicitations and contracts for small disadvantaged business set-asides. Use the clause with its Alternate I when the contracting officer determines that there are no small disadvantaged business manufacturers that can meet the requirements of the solicitation.
SUBPART 219.6--CERTIFICATES OF COMPETENCY
219.602-1 Referral.
When making a nonresponsibility determination on a small business concern, the contracting officer shall notify the contracting activity's small business specialist.
219.602-3 Resolving differences between the agency and the Small Business Administration.
(c)(i) If the contracting officer believes the agency should appeal, the contracting officer shall immediately inform the departmental director of the Office of Small and Disadvantaged Business Utilization, and send the director, through departmental channels--
(A) A request for appeal, summarizing the issues. The request must be sent to arrive within five working days after receipt of the SBA Headquarters' written position.
(B) An appeal file, documenting the contracting activity's position. The file must be sent to arrive within five working days after transmission of the request.
(ii) The departmental director will determine whether the agency will appeal and will notify the SBA of the agency's intent.
SUBPART 219.7--SUBCONTRACTING WITH SMALL BUSINESS, SMALL
DISADVANTAGED BUSINESS AND WOMEN-OWNED
SMALL BUSINESS CONCERNS
[Revised per DL 98-006, DFARS case 97-D323, Effective 26 Mar]
219.702 Statutory requirements.
(a) Section 834 of Pub. L. 101-189, as amended, requires the DoD to establish a test program to determine whether comprehensive subcontracting plans on a corporate, division, or plant-wide basis will reduce administrative burdens while enhancing subcontracting opportunities for small and small disadvantaged business concerns.
(i) The test program--
(A) Will be conducted--
(1) From October 1, 1990, through September 30,[2000];
(2) In accordance with the DoD test plan, "Test Program for Negotiation of Comprehensive Small Business Subcontracting Plans;" and
(3) By the military departments and [defense] agencies through specifically designated contracting activities; and
(B) Permits contractors selected [for participation in the test program] by the designated contracting activities to--
(1) Negotiate plant, division, or company-wide comprehensive subcontracting plans instead of individual contract subcontracting plans; and
(2) Use the comprehensive plans[when performing any] DoD contract [or subcontract that] require[s] a subcontracting plan.
(ii) [During the test period,] comprehensive subcontracting plans will--
(A) Be negotiated on an annual basis by the designated contracting activities;
(B) Be incorporated by the contractors' cognizant contract administration activity into all of the contractors' active DoD contracts [that] require a plan;
(C) Be used by all DoD contracting officers in contracts, which require a plan, awarded the selected contractors during the test period; and
(D) Not be subject to application of liquidated damages during the period of the test program (section 402, Pub. L. 101-574).
219.703 Eligibility requirements for participating in the program.
(a) Qualified nonprofit agencies for the blind and other severely disabled, that have been approved by the Committee for Purchase from People Who Are Blind or Severely Disabled under the Javits-Wagner-O'Day Act (41 U.S.C. 46-48), are eligible to participate in the program as a result of 10 U.S.C. 2410d and Section 9077 of Pub. L. 102-396 and similar sections in subsequent Defense appropriations acts. Under this authority, subcontracts awarded to such entities may be counted toward the prime contractor's small business subcontracting goal through fiscal year 1999.
(2) (A) To be eligible as an SDB subcontractor, a concern must meet the definition in the provision at 252.219-7000, Small Disadvantaged Business Concern Representation (DoD Contracts).
(B) To be eligible as a historically black college or university or minority institution subcontractor, such entity must meet the definition in the clause at 252.219-7003, Small Business and Small Disadvantaged Business Subcontracting Plan (DoD Contracts).
(b) A contractor may also rely on the written representation as to status of--
(i) A historically black college or university or minority institution; or
(ii) A qualified nonprofit agency for the blind and other severely handicapped approved by the Committee for Purchase from the Blind and Other Severely Handicapped.
219.704 Subcontracting plan requirements.
(a)(1) The goal for use of small disadvantaged business concerns shall include subcontracts with historically black colleges and universities and minority institutions (see Subpart 226.70), in addition to subcontracts with small disadvantaged business concerns. Subcontracts with historically black colleges and universities and minority institutions do not have to be included in the small disadvantaged business goal in commercial items subcontracting plans.
(4) In those subcontracting plans wich specifically identify small, small disadvantaged and women-owned small businesses, prime contractors shall notify the administrative contracting officer of any substitutions of firms that are not small, small disadvantaged, or women-owned small business for the firms listed in the subcontracting plan. Notifications shall be in writing, and shall occur within a reasonable period of time after award of the subcontract. Contractor-specified formats shall be acceptable.
219.705 Responsibilities of the contracting officer under the subcontracting assistance program.
219.705-2 Determining the need for a subcontracting plan.
(d) See 205.207(d) for unique DoD requirements.
219.705-4 Reviewing the subcontracting plan.
(d) Challenge any subcontracting plan that does not contain positive goals and consider the extent to which an offeror plans to use competition restricted to small disadvantaged business concerns, historically black colleges and universities, or minority institutions. A small disadvantaged business goal of less than five percent must be approved two levels above the contracting officer.
219.706 Responsibilities of the cognizant administrative contracting officer.
(a) (i) The contract administration office also is responsible for reviewing, evaluating, and approving master subcontracting plans.
(ii) The small business specialist supports the administrative contracting officer in evaluating a contractor's performance and compliance with its subcontracting plan.
219.708 Solicitation provisions and contract clauses.
(b)(1)(A) Use the clause at 252.219-7003, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (DoD Contracts), in solicitations and contracts that contain the clause at FAR 52.219-9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan.
(B) In contracts with contractors which have comprehensive subcontracting plans approved under the test program described in 219.702(a), use the clause at 252.219-7004, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (Test Program), instead of the clauses at 252.219-7003, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (DoD Contracts), and FAR 52.219-9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan.
(2) In contracts with contractors which have comprehensive subcontracting plans approved under the testprogram described in 219.702(a), do not use the clause at FAR 52.219-16, Liquidated Damages - Small Business Subcontracting Plan.
(c)(1) Do not use the clause at FAR 52.219-10, Incentive Subcontracting Program for Small and Small Disadvantaged Business Concerns.
(A) When contracting by negotiation, use the clause at 252.219-7005, Incentive for Subcontracting with Small Businesses, Small Disadvantaged Businesses, Historically Black Colleges and Universities, and Minority Institutions, in all solicitations and contracts that contain the clause at FAR 52.219-9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan. Incentives for exceeding SDB subcontracting goals shall be paid only if an SDB subcontracting goal was exceeded as a result of actual subcontract awards to SDBs, and not as a result of developmental assistance credit under the Pilot Mentor-Protege Program (see Subpart 219.71).
(B) Use the clause at 252.219-7005 with its Alternate I when, in the judgement of the contracting officer, inclusion of an incentive is necessary to increase subcontracting opportunities for other small businesses.
(C) Determine the percentage to be negotiated and used in the clause by considering the type and extent of effort required to exceed the goal, for example --
(1) Unique outreach programs;
(2) Use of small disadvantaged businesses,historically black colleges and universities, and minority institutions in nontraditional areas;
(3) Technical assistance to qualify or assist these entities; and
(4) Proximity of subcontractors to the prime.
(D) Do not use the clauses at 252.219-7005 and FAR 52.219-10 in contracts with contractors which have comprehensive subcontracting plans approved under the test program described in 219.702(a).
(c)(2) For negotiated acquisitions of $10 million or more, the contracting officer may use an award fee provision instead of the incentive provision required by (c)(1)(A). When an award fee provision is used, do not use the clauses at 252.219-7005, Incentive for Subcontracting with Small Businesses, Small Disadvantaged Businesses, Historically Black Colleges and Universities, and Minority Institutions, and FAR 52.219-10, Incentive Subcontracting Program for Small and Small Disadvantaged Business Concerns. Do not use award fee provisions in contracts with contractors which have comprehensive subcontracting plans approved under the test program described in 219.702(a).
SUBPART 219.8--CONTRACTING WITH THE SMALL BUSINESS ADMINISTRATION
(THE 8(a) PROGRAM)
[added per DL 98-015, DFARS Case 98-D011 dated/effective, June 19,1998]
[
219.800 General.
(a) By Memorandum of Understanding (MOU) dated May 6, 1998, between the Small Business Administration (SBA) and the Department of Defense (DoD), the SBA delegated to the Under Secretary of Defense for Acquisition and Technology its authority under paragraph 8(a)(1)(A) of the Small Business Act (5 U.S.C. 637(a)) to enter into 8(a) prime contracts, and its authority under paragraph 8(a)(1)(B) of the Small Business Act to award the performance of those contracts to eligible 8(a) Program participants. Consistent with the provisions of this subpart, this authority is hereby redelegated to DoD contracting officers within the United States, its territories and possessions, Puerto Rico, the Trust Territory of the Pacific Islands, and the District of Columbia, to the extent that it is consistent with any dollar or other restrictions established in individual warrants. This authority is being delegated and redelegated on a pilot test basis and shall expire on May 5, 2001. Notwithstanding this MOU, contracting officers may elect to award the contract pursuant to the provisions of FAR subpart 19.8.
(b) Awards under the MOU may be awarded directly to the 8(a) participant on either a sole source or competitive basis.
(c) Contracts awarded under the MOU may be awarded directly to the 8(a) participant. An SBA signature on the contract is not required.]
219.803 Selecting acquisitions for the 8(a) Program.
(b) Contracting activities should respond to SBA requests for contract support within 30 calendar days after receipt.
(c) Before considering the set-aside order of precedence in 219.504(b), review the acquisition for offering under the 8(a) Program.
219.804 Evaluation, offering, and acceptance.
219.804-1 Agency evaluation.
When SBA asks for a requirement for the 8(a) Program, offer the requirement if appropriate, and do not use the small disadvantaged business set-aside procedure. If an acquisition, other than a repetitive acquisition (as described in FAR 19.804-4), was synopsized using either of the notices in 205.207(d)(i) or (ii) before receipt of the SBA request, the request does not have to be honored.
(f) The 8(a) firms should be offered the opportunity to give a technical presentation.
[added per DL 98-015, DFARS Case 98-D011 dated/effective, June 19,1998]
[
219.804-2 Agency offering.
(1) For requirements processed under the MOU cited in 219.80 (but see paragraph (2) of this subsection for procedures related to purchase orders that do not exceed the simplified acquisition threshold), the notification to the SBA shall clearly indicate that the requirement is being processed under the MOU. All notifications should be submitted in writing, using facsimile or electronic mail, when possible, and shall specify that--
(i) Under the MOU, an SBA acceptance or rejection of the offering is required within 5 working days of receipt of the offering; and
(ii) (A) For sole source requirements, an SBA acceptance shall include a size verification and a determination of the 8(a) firm's eligibility, and, upon acceptance, the contracting officer will solicit a proposal, conduct negotiations, and make award directly to the 8(a) firm; or
(B) For competitive requirements, upon acceptance, the contracting officer will solicit offers, conduct source selection, and, upon receipt of an eligibility verification, award a contract directly to the selected 8(a) firm.
(2) Under the MOU cited in 219.800, no separate agency offering or SBA acceptance is needed for requirements that are issued under purchase orders that do not exceed the simplified acquisition threshold. After an 8(a) contractor has been identified, the contracting officer shall establish the prices, terms, and conditions with the 8(a) contractor and shall prepare a purchase order consistent with the procedures in part 213 and FAR part 13, including the applicable clauses required by this subpart. No later than the day that the purchase order is provided to the 8(a) contractor, the contracting officer shall provide to the cognizant SBA Business Opportunity Specialist, using facsimile or electronic mail--
(i) A copy of the purchase order; and
(ii) A notice stating that the purchase order is being processed under the MOU. The notice also shall indicate that the 8(a) contractor will be deemed eligible for award and will automatically begin work under the purchase order unless, within 2 working days after SBA's receipt of the purchase order, the 8(a) contractor and the contracting officer are notified that the 8(a) contractor is ineligible for award.
219.804-3 SBA acceptance.
For requirements processed under the MOU cited in 219.800, SBA's acceptance is required within 5 working days (but see 219.804-2(2) for purchase orders that do not exceed the simplified acquisition threshold).
219.805-2 Procedures.
(c) For requirements processed under the MOU cited in 219.800--
(i) For sealed bid and negotiated acquisitions, the SBA will determine the eligibility of the firms and will advise the contracting officer within 2 working days after its receipt of a request for an eligibility determination; and
(ii) For negotiated acquisitions, the contracting officer may submit a request for an eligibility determination on as many as three of the most highly rated offerors.
219.806 Pricing the 8(a) contract.
For requirements processed under the MOU cited in 219.800--
(1) The contracting officer shall obtain cost or pricing data from the 8(a) contractor, if required by FAR subpart 15.4; and
(2) SBA concurrence in the negotiated price is not required. However, except for purchase orders not exceeding the simplified acquisition threshold, the contracting officer shall notify the SBA prior to withdrawing a requirement from the 8(a) Program due to failure to agree on price or other terms and conditions.
219.808 Contract negotiations.
219.808-1 Sole source.
For requirements processed under the MOU cited in 219.800--
(1) The agency may negotiate directly with the 8(a) contractor. The contracting officer is responsible for initiating negotiations;
(2) The 8(a) contractor is responsible for negotiating within the time established by the contracting officer;
(3) If the 8(a) contractor does not negotiate within the established time and the agency cannot allow additional time, the contracting officer may, after notifying the SBA, proceed with the acquisition from other sources;
(4) If requested by the 8(a) contractor, the SBA may participate in negotiations; and
(5) SBA approval of the contract is not required.
219.811 Preparing the contracts.
(a) Awards under the MOU cited in 219.800 may be made directly to the 8(a) contractor and, except as provided in paragraph (b) of this subsection and in 219.811-3, award documents shall be prepared in accordance with procedures established for non-8(a) contracts, using any otherwise authorized award forms. The ``Issued by'' block shall identify the awarding DoD contracting office. The contractor's name and address shall be that of the 8(a) participant.
(b) Use the following alternative procedures for direct awards made under the MOU cited in 219.800:
(i) Cite 10 U.S.C. 2304(c)(5) as the authority for use of other than full and open competition;
(ii) Include the clause at 252.219-7009, which allows for direct award to the 8(a) contractor, and identify the cognizant SBA district office for the 8(a) contractor;
(iii) No SBA contract number is required; and
(iv) Do not require an SBA signature on the award document.
219.811-2 Competitive.
Awards made under the MOU cited in 219.800 shall be prepared in accordance with 219.811-1.
219.811-3 Contract clauses.
(1) Use the clause at 252.219-7009, Section 8(a) Direct Award, instead of the clauses at FAR 52.219-11, Special 8(a) Contract Conditions, FAR 52.219-12, Special 8(a) Subcontract Conditions, and FAR 52.219-17, Section 8(a) Award, in solicitations and contracts processed in accordance with the MOU cited in 219.800.
(2) Use the clause at FAR 52.219-18, Notification of Competition Limited to Eligible 8(a) Concerns, with 252.219-7010, Alternate A, in solicitations and contracts processed in accordance with the MOU cited in 219.800.
(3) Use the clause at 252.219-7011, Notification to Delay Performance, in solicitations and purchase orders issued in accordance with 219.804-2(2).
219.812 Contract administration.
(d) Awards under the MOU cited in 219.800 are subject to Section 407 of Pub. L. 100-656. These contracts include the clause at 252.219- 7009, Section 8(a) Direct Award, which requires the 8(a) contractor to notify the SBA and the contracting officer when ownership of the firm is being transferred.]
SUBPART 219.10--SMALL BUSINESS COMPETITIVENESS
DEMONSTRATION PROGRAM
(a)(3) (A) Architect-engineering services in support of military construction projects or military family housing projects are exempt from the Small Business Competitiveness Demonstration Program, except for the emerging small business (ESB) set-aside requirements. Accordingly, these shall--
(1) Be reviewed for possible award under the 8(a) program regardless of dollar value.
(2) Not be set-aside for small business or small disadvantaged business if the estimated value is $85,000 or more (including indefinite delivery-indefinite quantity contracts if the value of all anticipated orders exceeds $85,000).
(3) Be considered for ESB set-aside if the estimated value is both less than the emerging small business reserve amount and less than $85,000.
(4) Be considered for small business set-aside (but not SDB set-aside) if the estimated value is less than $85,000, regardless of whether small business set-asides for other architect-engineer services are prohibited under the Small Business Competitiveness Demonstration Program, when an ESB set-aside is not appropriate.
(B) All requirements of the Small Business Competitiveness Demonstration Program apply to architect-engineer services in support of other than military construction projects or military housing projects, which otherwise meet the criteria at FAR 19.1005(a)(3).
(b) The targeted industry categories for DoD are:
Standard Industrial Classification (SIC) SIC Code
(1) Pharmaceutical preparations 2834
(2) Ammunition, except for small arms 3483
(3) Ordnance and accessories, not elsewhere classified 3489
(4) Turbines and turbine generator sets 3511
(5) Aircraft engines and engine parts 3724
(6) Guided missiles and space vehicles 3761
(7) Space vehicle equipment, NEC 3769
(8) Tanks and tank components 3795
(9) Search and navigation equipment 3812
(10) Communication services, NEC 4899
(b) (1) During the period when small business set-asides cannot be considered for acquisitions in the four designated industry groups--
(A) The restrictions at 219.502-2-70(b)(1), and (2) do not apply and the acquisitions shall be considered for small disadvantaged business set-asides; and
(B) The evaluation preference at 219.70 shall not be used. However, note the test program at 219.72 for construction acquisitions.
(2) The Director, Small and Disadvantaged Business Utilization, Office of the Deputy Under Secretary of Defense (International & Commercial Programs), will determine whether reinstatement of small business set-asides are necessary to meet the agency goal and will recommend reinstatement to the Director, Defense Procurement. Military departments and defense agencies shall not reinstate small business set-asides unless directed by the Director, Defense Procurement.
(d) Reporting requirements are at 204.670-9.
219.1007 Solicitation provisions.
Do not use the clause at 252.219-7006, Notice of Evaluation Preference for Small Disadvantaged Business Concerns, in solicitations or contracts for the four designated industry groups.
SUBPART 219.70--EVALUATION PREFERENCE FOR SMALL
DISADVANTAGED BUSINESS (SDB) CONCERNS
219.7000 Policy.
Offers from small disadvantaged business concerns shall be given an evaluation preference in accordance with this subpart.
(a) The evaluation preference shall be used in competitive acquisitions except as provided in paragraph (b) of this section and in 219.1006(b)(1)(B).
(b) Do not use the evaluation preference in acquisitions which--
(1) Use small purchase procedures;
(2) Are set-aside for small disadvantaged businesses;
(3) Are set-aside for small businesses;
(4) Are for commissary or exchange resale; or
(5) Are for long distance telecommunications services.
(a) Give offers from small disadvantaged business concerns a preference in evaluation by adding a factor of ten percent to the price of all offers, except--
(1) Offers from small disadvantaged business concerns, which have not waived the evaluation preference;
(2) Offers from historically black colleges and universities or minority institutions, which have not waived the evaluation preference;
(3) Otherwise successful offers of--
(i) Eligible products under the Trade Agreements Act when the acquisition equals or exceeds the dollar threshold in FAR 25.402; or
(ii) Qualifying country end products (see the definition in 225.101); and
(4) Offers where application of the factor would be inconsistent with a Memorandum of Understanding or other international agreement with a foreign government.
(b) Apply the factor on a line item by line item basis or apply it to any group of items on which award may be made. Add other evaluation factors such as transportation costs or rent-free use of Government facilities to the offers before applying the ten percent factor.
(c) Do not evaluate offers using the preference when it would cause award to be made at a price which exceeds fair market price by more than ten percent.
(d) In partial small business set-asides, use the evaluation preference procedures set forth in the clause at 252.219-7001, Notice of Partial Small Business Set-Aside with Preferential Consideration for Small Disadvantaged Business Concerns, instead of the procedures in paragraphs (a) through (c) of this section.
219.7003 Solicitation provisions and contract clauses.
Use the clause at 252.219-7006, Notice of Evaluation Preference for Small Disadvantaged Business Concerns, in solicitations and contracts involving the evaluation preference, except those which include the clause at 252.219-7001, Notice of Partial Small Business Set-Aside with Preferential Consideration for Small Disadvantaged Business Concerns. Use the clause with its Alternate I when the contracting officer determines that there are no small disadvantaged business manufacturers that can meet the requirements of the solicitation.
SUBPART 219.71--PILOT MENTOR-PROTEGE PROGRAM
219.7100 Scope.
This subpart implements the Pilot Mentor-Protege Program established under section 831 of the National Defense Authorization Act for Fiscal Year 1991, Public Law 101-510, as amended. The purpose of the Program is to provide incentives for DoD contractors to assist small disadvantaged businesses in enhancing their capabilities and to increase participation of such firms in Government and commercial contracts. Qualified organizations employing the severely disabled, as defined in section 8064A of Public Law 102-172, are also eligible to participate as protege firms.
219.7101 Policy.
Dod policy and procedures for implementation of the Program are contained in Appendix I, Policy and Procedures for the DoD Pilot Mentor-Protege Program.
219.7102 General.
The program includes--
(a) Mentor firms, which are prime contractors with at least one active subcontracting plan negotiated under FAR subpart 19.7.
(b) Protege firms, which are small disadvantaged business (SDB) concerns or qualified organizations employing the severely disabled, eligible For receipt of Federal contracts and selected by the mentor firm.
(c) Mentor-protege agreements, which establish a developmental assistance program for a protege firm.
(d) Incentives, which may be provided to mentor firms by the DoD including:
(1) Reimbursement for developmental assistance costs through--
(i) A separate contract;
(ii) A separately priced contract line item on a DoD contract; or
(iii) Inclusion of program costs in indirect expense pools;
(2) Credit toward SDB subcontracting goals, established under a subcontracting plan negotiated under FAR subpart 19.7, for developmental assistance costs which are either reimbursed through indirect expense pools or are not reimbursed; or
(3) A combination of reimbursement and credit.
219.7103-1 General.
The procedures for application, acceptance, and participation in the program are in Appendix I, Policy and Procedures for the DoD Pilot Mentor-Protege Program. The Director of Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition and Technology) approves contractors as mentor firms, approves mentor-protege agreements, and forwards approved mentor-protege agreements to the contracting officer when program funding is available through a DoD Program Manager.
219.7103-2 Contracting officer responsibilities.
Contracting officers shall--
(a) Negotiate an advance agreement on the treatment of developmental assistance costs for credit, reimbursement, or both, if the mentor firm proposes such an agreement, or delegate authority to negotiate to the administrative contracting officer (see FAR 31.109).
(b) Modify (without consideration) applicable contract(s) to incorporate the clause at 252.232-7005, Reimbursement of Subcontractor Advance Payments-DoD Pilot Mentor-Protege Program, when advance payments are provided by a mentor firm to a protege firm under the Program and the mentor firm requests reimbursement of advance payments.
(c) Modify (without consideration) applicable contract(s) to incorporate other than customary progress payments for small disadvantaged businesses in accordance with FAR 32.504(c) if such payments are provided by a mentor firm to a protege firm and the mentor firm requests reimbursement.
(d) Modify applicable contract(s) to establish a contract line item for reimbursement of developmental assistance costs--
(1) When funds have been made available for that purpose by a DoD program manager; and
(2) The contractor has an approved mentor-protege agreement.
(e) Advise contractors of reporting requirements in Appendix I.
219.7104 Developmental assistance costs eligible for reimbursement or credit.
(a) Developmental assistance provided under an approved mentor-protege agreement is distinct from, and shall not duplicate, any effort that is the normal and expected product of the award and administration of the mentor firm's subcontracts. Costs associated with the latter shall be accumulated and charged in accordance with the contractor's approved accounting practices. Mentor firm costs which are eligible for reimbursement are set forth in Appendix I.
(b) Before incurring any costs under the Program, mentor firms need to establish the accounting treatment of developmental assistance costs eligible for reimbursement or credit. Advance agreements are encouraged. To be eligible for reimbursement under the Program, costs must be incurred before October 1, 2000.
(c) If the mentor firm is suspended or debarred while performing under an approved mentor-protege agreement, the mentor firm may not be reimbursed or credited for developmental assistance costs incurred more than 30 days after the imposition of the suspension or debarment.
(d) Developmental assistance costs incurred by a mentor firm before October 1, 2000, that are eligible for crediting under the Program may be credited towards subcontracting plan goals as set forth in Appendix I.
219.7105 Reporting.
Mentor firms shall report on the progress made under active mentor-protege agreements semi-annually as indicated in Section I-III of Appendix I.
SUBPART 219.72--EVALUATION PREFERENCE FOR SMALL DISADVANTAGED
BUSINESS (SDB) CONCERNS IN CONSTRUCTION
ACQUISITIONS--TEST PROGRAM
219.7200 Policy.
DoD policy is to ensure that, during this test program, offers from small disadvantaged business (SDB) concerns shall be given an evaluation preference in construction acquisitions.
219.7201 Administration of the test program.
The test program will be conducted over a 36-month period. The test program will be conducted by all DoD contracting activities that award construction contracts. The focal point for the test program is the Director, Small and Disadvantaged Business Utilization (SADBU), Office of the Deputy Under Secretary of Defense (International and Commercial Programs). The military departments and defense agencies shall submit status reports to the Director, SADBU. The first status report shall be submitted 18 months after initiation of the test program; the second status report shall be submitted 36 months after initiation of the test program. These reports shall specify the impact of the evaluation preference over each of the reporting periods of the test program, and shall provide recommendations with respect to continuation and/or modification of the evaluation preference.
(a) The evaluation preference shall be used in competitive acquisitions for construction (see definition in FAR Subpart 36.1) when work is to be performed inside the United States, its territories or possessions, Puerto Rico, the Trust Territory of the Pacific Islands, or the District of Columbia.
(b) Do not use the evaluation preference in acquisitions which--
(1) Are less than or equal to the simplified acquisition threshold;
(2) Are set aside for small businesses; or
(3) Are awarded under section 8(a) procedures.
(c) The evaluation preference need not be applied when the head of the contracting activity determines that the evaluation preference is having a disproportionate impact on non-SDB concerns or non-disadvantaged small business concerns.
(a) Solicitations that require bonding shall require offerors to separately state bond costs in the offer. Bond costs include the costs of bid, performance, and payment bonds.
(b) Evaluate total offers. If the apparently successful offeror is an SDB concern, no preference-based evaluation is required under this subpart.
(c) If the apparently successful offeror is not an SDB concern, evaluate offers excluding bond costs. If, after excluding bond costs, the apparently successful offeror is an SDB concern, add bond costs back to all offers, and give offers from SDB concerns a preference in evaluation by adding a factor of 10 percent to the total price of all offers, except--
(1) Offers from SDBs which have not waived the evaluation preference; and
(2) Offers from historically black colleges and universities or minority institutions, which have not waived the evaluation preference.
(d) When using the procedures in 236.303-70, Additive or deductive items, the evaluation preference in this subpartshall be applied.
219.7204 Contract clause.
Use the clause at 252.219-7008, Notice of Evaluation Preference for Small Disadvantaged Business Concerns--Construction Acquisitions--Test Program, in all solicitations--
(1) That involve the evaluation preference of this subpart; and
(2) Where work is to be performed inside the United States, its territories or possessions, Puerto Rico, the Trust Territory of the Pacific Islands, or the District of Columbia.