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Part 19 - Small Business Programs

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Part 19 - Small Business Programs

Part 19 - Small Business Programs

      19.000 Scope of part.

      19.001 Definitions.

      Subpart 19.1 - Size Standards

           19.101 [Reserved]

           19.102 Small business size standards and North American Industry Classification System codes.

           19.103 Appealing the contracting officer's North American Industry Classification System code and size standard determination.

      Subpart 19.2 - Policies

           19.201 General policy.

           19.202 Specific policies.

                19.202-1 Encouraging small business participation in acquisitions.

                19.202-2 Locating small business sources.

                19.202-3 Equal low bids.

                19.202-4 Solicitation.

                19.202-5 Data collection and reporting requirements.

                19.202-6 Determination of fair market price.

           19.203 Relationship among small business programs.

      Subpart 19.3 - Determination of Small Business Size and Status for Small Business Programs

           19.301 Representations and rerepresentations.

                19.301-1 Representation by the offeror.

                19.301-2 Rerepresentation by a contractor that represented itself as a small business concern.

                19.301-3 Rerepresentation by a contractor that represented itself as other than a small business concern.

           19.302 Protesting a small business representation or rerepresentation.

           19.303 [Reserved].

           19.304 Small disadvantaged business status.

           19.305 Reviews and protests of SDB status.

           19.306 Protesting a firm’s status as a HUBZone small business concern.

           19.307 Protesting a firm’s status as a service-disabled veteran-owned small business concern.

           19.308 Protesting a firm’s status as an economically disadvantaged women-owned small business concern or women-owned small business concern eligible under the Women-Owned Small Business Program.

           19.309 Solicitation provisions and contract clauses.

      Subpart 19.4 - Cooperation with the Small Business Administration

           19.401 General.

           19.402 Small Business Administration procurement center representatives.

           19.403 [Reserved].

      Subpart 19.5 Subpart 19.5 - Small Business Total Set-Asides, Partial Set-Asides, and Reserves

           19.501 General.

           19.502 Setting aside acquisitions.

                19.502-1 Requirements for setting aside acquisitions.

                19.502-2 Total small business set-asides.

                19.502-3 Partial set-asides of contracts other than multiple-award contracts.

                19.502-4 Partial set-asides of multiple-award contracts.

                19.502-5 Insufficient reasons for not setting aside an acquisition.

                19.502-6 Setting aside a class of acquisitions for small business.

                19.502-7 Inclusion of Federal Prison Industries, Inc.

                19.502-8 Rejecting Small Business Administration recommendations.

                19.502-9 Withdrawing or modifying small business set-asides.

                19.502-10 Automatic dissolution of a small business set-aside.

           19.503 Reserves.

           19.504 Orders under multiple-award contracts.

           19.505 Limitations on subcontracting and nonmanufacturer rule.

           19.506 Documentation requirements.

           19.507 Solicitation provisions and contract clauses.

      Subpart 19.6 - Certificates of Competency and Determinations of Responsibility

           19.601 General.

           19.602 Procedures.

                19.602-1 Referral.

                19.602-2 Issuing or denying a Certificate of Competency (COC).

                19.602-3 Resolving differences between the agency and the Small Business Administration.

                19.602-4 Awarding the contract.

      Subpart 19.7 - The Small Business Subcontracting Program

           19.701 Definitions.

           19.702 Statutory requirements.

           19.703 Eligibility requirements for participating in the program.

           19.704 Subcontracting plan requirements.

           19.705 Responsibilities of the contracting officer under the subcontracting assistance program.

                19.705-1 General.

                19.705-2 Determining the need for a subcontracting plan.

                19.705-3 Preparing the solicitation.

                19.705-4 Reviewing the subcontracting plan.

                19.705-5 Awards involving subcontracting plans.

                19.705-6 Postaward responsibilities of the contracting officer.

                19.705-7 Compliance with the subcontracting plan.

           19.706 Responsibilities of the cognizant administrative contracting officer.

           19.707 The Small Business Administration’s role in carrying out the program.

           19.708 Contract clauses.

      Subpart 19.8 - Contracting with the Small Business Administration (The 8(a) Program)

           19.800 General.

           19.801 [Reserved]

           19.802 Determining eligibility for the 8(a) program.

           19.803 Selecting acquisitions for the 8(a) Program.

           19.804 Evaluation, offering, and acceptance.

                19.804-1 Agency evaluation.

                19.804-2 Agency offering.

                19.804-3 SBA acceptance.

                19.804-4 Repetitive acquisitions.

                19.804-5 Basic ordering agreements.

                19.804-6 Indefinite delivery contracts.

           19.805 Competitive 8(a).

                19.805-1 General.

                19.805-2 Procedures.

           19.806 Pricing the 8(a) contract.

           19.807 Estimating fair market price.

           19.808 Contract negotiation.

                19.808-1 Sole source.

                19.808-2 Competitive.

           19.809 Preaward considerations.

                19.809-1 Preaward survey.

                19.809-2 Limitations on subcontracting and nonmanufacturer rule.

           19.810 SBA appeals.

           19.811 Preparing the contracts.

                19.811-1 Sole source.

                19.811-2 Competitive.

                19.811-3 Contract clauses.

           19.812 Contract administration.

           19.813 Protesting an 8(a) participant's eligibility or size status.

           19.814 Requesting a formal size determination (8(a) sole source requirements).

           19.815 Release for non-8(a) procurement.

           19.816 Exiting the 8(a) program.

      Subpart 19.9 - [Reserved]

      Subpart 19.10 - [Reserved]

      Subpart 19.11 - [Reserved]

      Subpart 19.12 - [Reserved]

      Subpart 19.13 - Historically Underutilized Business Zone (HUBZone) Program

           19.1301 General.

           19.1302 Applicability.

           19.1303 Status as a HUBZone small business concern.

           19.1304 Exclusions.

           19.1305 HUBZone set-aside procedures.

           19.1306 HUBZone sole source awards.

           19.1307 Price evaluation preference for HUBZone small business concerns.

           19.1308 [Reserved]

           19.1309 Contract clauses.

      Subpart 19.14 - Service-Disabled Veteran-Owned Small Business Procurement Program

           19.1401 General.

           19.1402 Applicability.

           19.1403 Status as a service-disabled veteran-owned small business concern.

           19.1404 Exclusions.

           19.1405 Service-disabled veteran-owned small business set-aside procedures.

           19.1406 Sole source awards to service-disabled veteran-owned small business concerns.

           19.1407 [Reserved]

           19.1408 Contract clauses.

      Subpart 19.15 - Women-Owned Small Business Program.

           19.1500 General.

           19.1501 Definition.

           19.1502 Applicability.

           19.1503 Status.

           19.1504 Exclusions.

           19.1505 Set-aside procedures.

           19.1506 Women-Owned Small Business Program sole source awards.

           19.1507 [Reserved]

           19.1508 Contract clauses.


19.000 Scope of part.

      (a) This part implements the acquisition-related sections of the Small Business Act (15 U.S.C. 631, et seq.), applicable sections of the Armed Services procurement Act (10 U.S.C. 2302, et seq.), 41 U.S.C. 3104, and Executive Order 12138, may 18, 1979. It covers-

           (1) The determination that a concern is eligible for participation in the programs identified in this part;

           (2) The respective roles of executive agencies and the Small Business Administration (SBA) in implementing the programs;

           (3) Setting acquisitions aside, in total or in part, for exclusive competitive participation by small business, 8(a) participants, HUBZone small business concerns, service-disabled veteran-owned small business concerns, and economically disadvantaged women-owned small business (EDWOSB) concerns and women-owned small business (WOSB) concerns eligible under the WOSB Program;

           (4) The certificate of competency program;

           (5) The subcontracting assistance program;

           (6) The "8(a)" business development program (hereafter referred to as 8(a) program), under which agencies contract with the SBA for goods or services to be furnished under a subcontract by a small disadvantaged business concern;

           (7) The use of a price evaluation preference for HUBZone small business concerns;

           (8) The use of veteran-owned small business concerns;

           (9) Sole source awards to HUBZone small business concerns, service-disabled veteran-owned small business concerns, and EDWOSB concerns and WOSB concerns eligible under the WOSB Program; and

           (10) The use of reserves.

      (b) This part, except for subpart  19.6, applies only in the United States or its outlying areas. subpart  19.6 applies worldwide.


19.001 Definitions.

As used in this part-

Concern means any business entity organized for profit (even if its ownership is in the hands of a nonprofit entity) with a place of business located in the United States or its outlying areas and that makes a significant contribution to the U.S. economy through payment of taxes and/or use of American products, material and/or labor, etc. "Concern" includes but is not limited to an individual, partnership, corporation, joint venture, association, or cooperative. For more information, see 13 CFR 121.105.

Fair market price means a price based on reasonable costs under normal competitive conditions and not on lowest possible cost (see 19.202-6).

Industry means all concerns primarily engaged in similar lines of activity, as listed and described in the North American Industry Classification System (NAICS) manual.

Similarly situated entity means a first-tier subcontractor, including an independent contractor, that—

           (1)Has the same small business program status as that which qualified the prime contractor for the award (e.g., for a small business set-aside contract, any small business concern, without regard to socioeconomic status); and

           (2)Is considered small for the size standard under the NAICS code the prime contractor assigned to the subcontract.


Subpart 19.1 - Size Standards


19.101 [Reserved]


19.102 Small business size standards and North American Industry Classification System codes.

      (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 https://www.sba.gov/document/support--table-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 https://www.census.gov/naics/.

      (b) Determining the appropriate NAICS codes for the solicitation.

(1) Unless required to do otherwise by paragraph (b)(2)(ii)(B) of this section, Contracting officers shall assign one NAICS code and corresponding size standard to all solicitations, contracts, and task and delivery orders. The contracting officer shall determine the appropriate NAICS code by classifying the product or service being acquired in the one industry that 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 that accounts for the greatest percentage of contract value.

           (2)

(i) For solicitations issued on or before October 1, 2022, 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 October 1, 2022, that will result in multiple-award contracts, the contracting officer shall

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

                     (B) Divide the acquisition into distinct portions or categories (e.g., Line Item numbers, Special Item Numbers, sectors, functional areas, or equivalent) and assign each portion or category a single NAICS code and size standard that 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 with a single NAICS code, 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 with more than one NAICS code, the contracting officer shall assign the order the NAICS code and corresponding size standard designated in the contract for the distinct portion or category against which the order is placed. If an order covers multiple portions or categories, select the NAICS code and corresponding size standard designated in the contract for the distinct portion or category that best represents the principal purpose of the order.

           (4) The contracting officer's designation is final unless appealed in accordance with the procedures 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.


19.103 Appealing the contracting officer's North American Industry Classification System code and size standard determination.

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

           (1) An appeal of 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 of 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) NAICS code appeals are filed in accordance with 13 CFR 121.1103.

           (6) 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, shall include argument and evidence (see 13 CFR part 134), and shall 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 shall 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.

           (7) 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 shall 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 located at 13 CFR 121.1102 to 121.1103 and 13 CFR part 134.


Subpart 19.2 - Policies


19.201 General policy.

      (a) It is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. Such concerns must also have the maximum practicable opportunity to participate as subcontractors in the contracts awarded by any executive agency, consistent with efficient contract performance. The Small Business Administration (SBA) counsels and assists small business concerns and assists Contracting personnel to ensure that a fair proportion of contracts for supplies and services is placed with small business.

      (b) Heads of Contracting activities are responsible for effectively implementing the small business programs within their activities, including achieving program goals. They are to ensure that Contracting and technical personnel maintain knowledge of small business program requirements and take all reasonable action to increase participation in their activities’ Contracting processes by these businesses.

      (c) The Small Business Act requires each agency with Contracting authority to establish an Office of Small and Disadvantaged Business Utilization (see section 15(k) of the Small Business Act). For the Department of Defense, in accordance with section 904 of Public Law 109-163 (10 U.S.C. 144 note), the Office of Small and Disadvantaged Business Utilization has been redesignated as the Office of Small Business Programs. Management of the office is the responsibility of an officer or employee of the agency who, in carrying out the purposes of the Act—

           (1) Is known as the 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;

           (2)Is appointed by the agency head;

           (3) Is responsible to and reports 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);

           (4)Is responsible for the agency carrying out the functions and duties in sections 8, 15, 31, 36, and 44 of the Small Business Act;

           (5) Works with the SBA procurement center representative (PCR) (or, if a PCR is not assigned, see 19.402(a)) to identify proposed solicitations that involve bundling and work with the agency acquisition officials and SBA to revise the acquisition strategies for such proposed solicitations to increase the probability of participation by small businesses;

           (6)Assists small business concerns in obtaining payments under their contracts, late payment interest penalties, or information on contractual payment provisions;

           (7) Has supervisory authority over agency personnel to the extent that their functions and duties relate to sections 8, 15, 31, 36, and 44 of the Small Business Act;

           (8)Assigns a small business technical advisor to each contracting activity within the agency to which the SBA has assigned a representative (see 19.402)—

                (i)Who is a full-time employee of the contracting activity, well qualified, technically trained, and familiar with the supplies or services contracted for by the activity; and

                (ii)Whose principal duty is to assist the SBA's assigned representative in performing functions and duties relating to sections 8, 15, 31, 36, and 44 of the Small Business Act;

           (9) Cooperates and consults on a regular basis with the SBA in carrying out the agency's functions and duties in sections 8, 15, 31, 36, and 44 of the Small Business Act;

           (10) Makes recommendations in accordance with agency procedures as to whether a particular acquisition should be awarded under subpart 19.5 as a small business set-aside, under subpart 19.8 as a section 8(a) award, under subpart 19.13 as a HUBZone set-aside, under subpart 19.14 as a service-disabled veteran-owned small business set-aside, or under subpart 19.15 as a set-aside for economically disadvantaged women-owned small business (EDWOSB) concerns or women-owned small business (WOSB) concerns eligible under the WOSB Program;

           (11) Conducts annual reviews to assess the—

                (i) Extent to which small businesses are receiving a fair share of Federal procurements, including contract opportunities under the programs administered under the Small Business Act;

                (ii) Adequacy of consolidated or bundled contract documentation and justifications; and

                (iii) Actions taken to mitigate the effects of necessary and justified consolidation or bundling on small businesses.

           (12) Provides a copy of the assessment made under paragraph (c)(11) of this section to the agency head and SBA Administrator;

           (13)Provides to the Chief Acquisition Officer and senior procurement executive advice and comments on acquisition strategies, market research, and justifications related to consolidation of contract requirements;

           (14) When notified by a small business concern prior to the award of a contract that the small business concern believes that a solicitation, request for proposal, or request for quotation unduly restricts the ability of the small business concern to compete for the award–

                (i) Submits the notification by the small business concern to the contracting officer and, if necessary, recommends ways in which the solicitation, request for proposal, or request for quotation may be altered to increase the opportunity for competition; and

                (ii) Informs the advocate for competition of such agency (as established under 41 U.S.C 1705 or 10 U.S.C. 2318) of such notification;

           (15) Ensures agency purchases using the Governmentwide purchase card that are greater than the micro-purchase threshold and less than the simplified acquisition threshold were made in compliance with the Small Business Act and were properly recorded in accordance with subpart  4.6 in the Federal procurement Data System;

           (16) Assists small business contractors and subcontractors in finding resources for education and training on compliance with Contracting regulations;

           (17) Reviews all subcontracting plans required by 19.702(a) to ensure the plan provides maximum practicable opportunity for small business concerns to participate in the performance of the contract; and

           (18) Performs other duties listed at 15 U.S.C. 644(k).

      (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 7.107-4(a)(1). See also 7.104(d).

           (2) The small business specialist shall notify the agency's Director of the Office of Small and Disadvantaged Business Utilization, and for the Department of Defense, the Director of the Office of Small Business Programs, when the criteria relating to substantial bundling at 7.107-4(a)(1) 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.


19.202 Specific policies.

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.


19.202-1 Encouraging small business participation in acquisitions.

Small business concerns shall be afforded an equitable opportunity to compete for all contracts that they can perform to the extent consistent with the Government’s interest. When applicable, the contracting officer shall take the following actions:

      (a) Divide proposed acquisitions of supplies and services (except construction) into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement.

      (b) Plan acquisitions such that, if practicable, more than one small business concern may perform the work, if the work exceeds the amount for which a surety may be guaranteed by SBA against loss under 15 U.S.C.694b.

      (c) Ensure that delivery schedules are established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the Government.

      (d) Encourage prime contractors to subcontract with small business concerns (see subpart  19.7).

      (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—

                (i) The proposed acquisition is for supplies or services currently being provided by a small business and the proposed acquisition is of a quantity or estimated dollar value, the magnitude of which makes it unlikely that small businesses can compete for the prime contract;

                (ii) The proposed acquisition is for construction and seeks to package or consolidate discrete construction projects and the magnitude of this consolidation makes it unlikely that small businesses can compete for the prime contract;

                (iii) The proposed acquisition is for a consolidated or bundled requirement. (See 7.107-5(a) for mandatory 30-day notice requirement to incumbent small business concerns.) The contracting officer shall provide all information relative to the justification for the consolidation or bundling, including the acquisition plan or strategy, and if the acquisition involves substantial bundling, the information identified in 7.107-4. The contracting officer shall also provide the same information to the agency Office of Small and Disadvantaged Business Utilization: or

                (iv) The acquisition will be reviewed at the PCR's discretion.

           (2) For acquisitions described in paragraph (e)(1)(i) through (iii) of this section, provide a statement explaining why the—

                (i) Proposed acquisition cannot be divided into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement;

                (ii) Delivery schedules cannot be established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the Government;

                (iii) Proposed acquisition cannot be structured so as to make it likely that small businesses can compete for the prime contract;

                (iv) Consolidated construction project cannot be acquired as separate discrete projects; or

                (v) Consolidation or bundling is necessary and justified.

           (3) Process the 30-day notification concurrently with other processing steps required prior to the issuance of the solicitation.

           (4) If the contracting officer rejects the SBA PCR’s recommendation made in accordance with 19.402(c)(2), document the basis for the rejection and notify the SBA PCR in accordance with 19.502-8.


19.202-2 Locating small business sources.

The contracting officer shall, to the extent practicable, encourage maximum participation by small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns in acquisitions by taking the following actions:

      (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)).

      (b) Publicize solicitations and contract awards through the Governmentwide point of entry (see subparts  5.2 and 5.3).


19.202-3 Equal low bids.

In the event of equal low bids (see 14.408-6), awards shall be made first to small business concerns which are also labor surplus area concerns, and second to small business concerns which are not also labor surplus area concerns.


19.202-4 Solicitation.

The contracting officer shall encourage maximum response to solicitations by small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns by taking the following actions:

      (a) Allow the maximum amount of time practicable for the submission of offers.

      (b) Furnish specifications, plans, and drawings with solicitations, or furnish information as to where they may be obtained or examined.

      (c) Provide to any small business concern, upon its request, a copy of solicitations with respect to any contract to be let, the name and telephone number of an agency contact to answer questions related to such prospective contract and adequate citations to each major Federal law or agency rule with which such business concern must comply in performing such contract other than laws or agency rules with which the small business must comply when doing business with other than the Government.


19.202-5 Data collection and reporting requirements.

Agencies shall measure the extent of small business participation in their acquisition programs by taking the following actions:

      (a) Require each prospective contractor to represent whether it is a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, women-owned small business, EDWOSB concern, or WOSB concern eligible under the WOSB Program (see the provision at 52.219-1, Small Business Program Representations).

      (b) Accurately measure the extent of participation by small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns in Government acquisitions in terms of the total value of contracts placed during each fiscal year, and report data to the SBA at the end of each fiscal year (see subpart  4.6).

      (c) When the contract includes the clause at 52.219-28, Post Award Small Business Program Rerepresentation, and the conditions in the clause for rerepresenting are met—

           (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, EDWOSB, or WOSB status); and

           (2) Permit a contractor that represented itself as other than a small business concern prior to award to rerepresent its size status.


19.202-6 Determination of fair market price.

      (a) The fair market price shall be the price achieved in accordance with the reasonable price guidelines in 15.404-1(b) for-

           (1) Total and partial small business set-asides, and reserves (see subpart  19.5);

           (2) HUBZone set-asides (see subpart  19.13);

           (3) Contracts utilizing the price evaluation preference for HUBZone small business concerns (see subpart  19.13);

           (4) Service-disabled veteran-owned small business set-asides (see subpart 19.14);

           (5) Set-asides for EDWOSB concerns and WOSB concerns eligible under the WOSB Program (see subpart 19.15).

      (b) For 8(a) contracts, both with respect to meeting the requirement at 19.806(b) and in order to accurately estimate the current fair market price, Contracting officers shall follow the procedures at 19.807.


19.203 Relationship among small business programs.

      (a) There is no order of precedence among the 8(a) Program (subpart 19.8), HUBZone Program (subpart 19.13), Service-Disabled Veteran-Owned Small Business (SDVOSB) procurement Program (subpart 19.14), or the Women-Owned Small Business (WOSB) Program (subpart 19.15).

      (b) At or below the simplified acquisition threshold. For acquisitions of supplies or services that have an anticipated dollar value above the micro-purchase threshold, but at or below the simplified acquisition threshold, the requirement at 19.502-2(a) to set aside acquisitions for small business concerns does not preclude the contracting officer from awarding a contract to a small business under the 8(a) Program, HUBZone Program, SDVOSB Program, or WOSB Program.

      (c) Above the simplified acquisition threshold. For acquisitions of supplies or services that have an anticipated dollar value exceeding the simplified acquisition threshold definition at 2.101, the contracting officer shall first consider an acquisition for the small business socioeconomic Contracting programs (i.e., 8(a), HUBZone, SDVOSB, or WOSB programs) before considering a small business set-aside (see 19.502-2(b)). However, if a requirement has been accepted by the SBA under the 8(a) Program, it must remain in the 8(a) Program unless the SBA agrees to its release in accordance with 13 CFR parts 124, 125, and 126.

      (d) In determining which socioeconomic program to use for an acquisition, the contracting officer should consider, at a minimum-

           (1) Results of market research that was done to determine if there are socioeconomic firms capable of satisfying the agency’s requirement; and

           (2) Agency progress in fulfilling its small business goals.

      (e) Small business set-asides have priority over acquisitions using full and open competition. See requirements for establishing a small business set-aside at subpart 19.5.


Subpart 19.3 - Determination of Small Business Size and Status for Small Business Programs


19.301 Representations and rerepresentations.


19.301-1 Representation by the offeror.

      (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 System (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 for each distinct portion or category (e.g., Line Item numbers, Special Item Numbers (SINs), sectors, functional areas, 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., line item number, SIN, sector, functional area, 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—

           (1) Basic ordering agreements (see 16.703); and

           (2) Blanket purchase agreements (BPAs) issued pursuant to part  13.

      (c) To be eligible for an award of an order under a basic ordering agreement or a BPA issued pursuant to part  13 as a small business concern identified in 19.000(a)(3), the offeror must be a small business concern identified in 19.000(a)(3) at the time of award of the order.

      (d) To be eligible for an award under the HUBZone Program (see subpart  19.13), a HUBZone small business concern must be a HUBZone small business concern both at the time of initial offer and at the time of contract award.

      (e) 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)(1)(ii) is considered a small business concern for each order issued under that distinct portion or category (but see 19.301-2 for rerepresentations).

      (f) The contracting officer shall accept an offeror’s representation in a specific bid or proposal that it is a small business unless (1) another offeror or interested party challenges the concern’s small business representation or (2) the contracting officer has a reason to question the representation. Challenges of and questions concerning a specific representation shall be referred to the SBA in accordance with 19.302.

      (g) An offeror’s representation that it is a small business is not binding on the SBA. If an offeror’s small business status is challenged, the SBA will evaluate the status of the concern and make a determination, which will be binding on the contracting officer, as to whether the offeror is a small business. A concern cannot become eligible for a specific award by taking action to meet the definition of a small business concern after the SBA has determined that it is not a small business.

      (h) If the SBA determines that the status of a concern as a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, or women-owned small business has been misrepresented in order to obtain a set-aside contract, an 8(a) subcontract, a subcontract that is to be included as part or all of a goal contained in a subcontracting plan, or a prime or subcontract to be awarded as a result, or in furtherance of any other provision of Federal law that specifically references Section 8(d) of the Small Business Act for a definition of program eligibility, the SBA may take action as specified in Sections 16(a) or 16(d) of the Act. If the SBA declines to take action, the agency may initiate the process. The SBA’s regulations on penalties for misrepresentations and false statements are contained in 13 CFR 121.108 for small business, 13 CFR 124.501 for 8(a) small business, 13 CFR 124.1004 for small disadvantaged business, 13 CFR 125.29 for veteran or service-disabled veteran-owned small business, 13 CFR 126.900 for HUBZone small business, and 13 CFR 127.700 for economically disadvantaged women-owned small business concerns and women-owned small business (WOSB) concerns eligible under the WOSB Program.


19.301-2 Rerepresentation by a contractor that represented itself as a small business concern.

      (a) Definition. As used in this subsection-

      Long-term contract means a contract of more than five years in duration, including options. However, the term does not include contracts that exceed five years in duration because the period of performance has been extended for a cumulative period not to exceed six months under the clause at 52.217-8, option to Extend Services, or other appropriate authority.

      (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—

           (1) For the NAICS code(s) in the contract

                (i) Within 30 days after execution of a novation agreement or within 30 days after modification of the contract to include the clause at 52.219-28, Post-Award Small Business Program Rerepresentation, if the novation agreement was executed prior to inclusion of this clause in the contract;

                (ii) 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 52.219-28, Post-Award Small Business Program Rerepresentation, if the merger or acquisition occurred prior to inclusion of this clause in the contract;

                (iii) For long-term contracts–

                     (A) Within 60 to 120 days prior to the end of the fifth year of the contract; and

                     (B) Within 60 to 120 days prior to the date specified in the contract for exercising any option thereafter; or

           (2) For the NAICS code assigned to an order under a multiple-award contract, if the contracting officer requires contractors to rerepresent their size and socioeconomic status for that order.

      (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 its size status for each NAICS code assigned to the contract.

      (d)

(1) contract rerepresentation. After 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 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 a task or delivery order.

(i) 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.

                (ii) A rerepresentation for an order does not change the size or socioeconomic status representation for the contract.

      (e) A change in size status does not change the terms and conditions of the contract. However, the contracting officer may require a subcontracting plan for a contract containing 52.219-9, Small Business Subcontracting Plan, if a prime contractor's size status changes from small to other than small as a result of a size rerepresentation (see 19.705-2(b)(3)).


19.301-3 Rerepresentation by a contractor that represented itself as other than a small business concern.

A contractor that represented itself as other than small before contract award may, but is not required to, rerepresent its size status when-

      (a) The conditions in 19.301-2(b) apply; and

      (b) The contractor qualifies as a small business concern under the applicable size standard in effect at the time of its rerepresentation.


19.302 Protesting a small business representation or rerepresentation.

      (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).

      (c)

(1) Any contracting officer who receives a protest, whether timely or not, or who, as the contracting officer, wishes to protest the small business representation of an offeror, or rerepresentation of a contractor, shall promptly forward the protest to the SBA Government Contracting Area Director at the Government Contracting Area Office serving the area in which the headquarters of the offeror is located.

           (2) The protest, or confirmation if the protest was initiated orally, shall be in writing and shall contain the basis for the protest with specific, detailed evidence to support the allegation that the offeror is not small. The SBA will dismiss any protest that does not contain specific grounds for the protest.

           (3) The protest shall include a referral letter written by the contracting officer with information pertaining to the solicitation. The referral letter must include the following information to allow SBA to determine timeliness and standing:

                (i) The protest and any accompanying materials.

                (ii) A copy of the size self-certification.

                (iii) Identification of the applicable size standard.

                (iv) A copy or an electronic link to the solicitation and any amendments.

                (v) The name, address, telephone number, email address, and fax number of the contracting officer.

                (vi) Identification of the bid opening date or the date of notification provided to unsuccessful offerors.

                (vii) The date the contracting officer received the protest.

                (viii) A complete address and point of contact for the protested concern.

      (d) In order to affect a specific solicitation, a protest must be timely. SBA’s regulations on timeliness are contained in 13 CFR121.1004. SBA’s regulations on timeliness related to protests of disadvantaged status are contained in 13 CFR124, Subpart B.

           (1) To be timely, a protest by any concern or other interested party must be received by the contracting officer (see paragraphs (d)(1)(i) and (ii) of this section) by the close of business of the fifth business day after bid opening (in sealed bid acquisitions) or receipt of the special notification from the contracting officer that identifies the apparently successful offeror (in negotiated acquisitions) (see 15.503(a)(2)).

                (i) A protest may be made orally if it is confirmed in writing and received by the contracting officer within the 5-day period or by letter postmarked no later than 1 business day after the oral protest.

                (ii) A protest may be made in writing if it is delivered to the contracting officer by hand, mail, facsimile, e-mail, express or overnight delivery service.

           (2) Except as provided in paragraph (d)(4) of this section, a protest filed by the contracting officer or SBA is always considered timely whether filed before or after award.

           (3) A protest under a Multiple Award Schedule will be timely if received by SBA at any time prior to the expiration of the contract period, including renewals.

           (4) A protest filed before bid opening, or notification to offerors of the selection of the apparent successful offeror, will be dismissed as premature by SBA.

      (e) Upon receipt of a protest from or forwarded by the contracting office, the SBA will-

           (1) Notify the contracting officer and the protester of the date it was received, and that the size of the concern being challenged is under consideration by the SBA; and

           (2) Furnish to the concern whose representation is being protested a copy of the protest and a blank SBA Form355, Application for Small Business Determination, by certified mail, return receipt requested.

      (f)

(1) Within 15 business days after receipt of a protest or request for a formal size determination or within any extension of time granted by the contracting officer the SBA Area Office will determine the size status of the challenged concern. The SBA Area Office will notify the contracting officer, the protester, and the challenged concern of its decision by a verifiable means, which may include facsimile, electronic mail, or overnight delivery service.

           (2) Award may be made to a protested concern after the SBA Area Office has determined that either the protested concern is an eligible small business or has dismissed all protests against it.

           (3) If SBA’s Office of Hearings and Appeals (OHA) subsequently overturns the Area Office's determination of eligibility or dismissal, and contract award has not been made, the contracting officer may apply the OHA decision to the procurement in question.

      (g)

(1) After receiving a protest involving an offeror being considered for award, the contracting officer shall not award the contract until the SBA has made a size determination or 15 business days have expired since SBA’s receipt of a protest, whichever occurs first; however, award shall not be withheld when the contracting officer determines in writing that an award must be made to protect the public interest.

           (2) If SBA has not made a determination within 15 business days, or within any extension of time granted by the contracting officer, the contracting officer may award the contract after determining in writing that there is an immediate need to award the contract and that waiting until SBA makes its determination will be disadvantageous to the Government.

           (3) SBA may, at its sole discretion, reopen a formal size determination to correct an error or mistake, if it is within the appeal period and no appeal has been filed with OHA or, a final decision has not been rendered by the SBA Area Office or OHA.

           (4) If a protest is received that challenges the small business status of an offeror not being considered for award, the contracting officer is not required to suspend contract action. The contracting officer shall forward the protest to the SBA (see paragraph (c)(1) of this section) with a notation that the concern is not being considered for award, and shall notify the protester of this action.

      (h) An appeal from an SBA size determination may be filed by any concern or other interested party whose protest of the small business representation of another concern has been denied by an SBA Government Contracting Area Director, any concern or other interested party that has been adversely affected by an SBA Government Contracting Area Director’s decision, or the SBA Associate Administrator for the SBA program involved. The appeal must be filed with the Office of Hearings and Appeals, Small Business Administration, Suite 5900, 409 3 rd Street, SW., Washington, DC 20416, within the time limits and in strict accordance with the procedures contained in Subpart C of 13 CFR 134. It is within the discretion of the SBA Judge whether to accept an appeal from a size determination. If a post-award appeal is submitted to OHA within the time limits specified in Subpart C of 13 CFR 134, the contracting officer shall consider suspending contract performance until an SBA Judge decides the appeal. SBA will inform the contracting officer of its ruling on the appeal. SBA’s decision, if received before award, will apply to the pending acquisition. If the contracting officer has made a written determination in accordance with (g)(1) or (2) of this section, the contract has been awarded, the SBA rulings is received after award, and OHA finds the protested concern to be ineligible for award, the contracting officer shall terminate the contract unless termination is not in the best interests of the Government, in keeping with the circumstances described in the written determination. However, the contracting officer shall not exercise any options or award further task or delivery orders.

      (i) SBA will dismiss untimely protests. A protest that is not timely, even though received before award, shall be forwarded to the SBA Government Contracting Area Office (see paragraph (c)(1) of this section), with a notation on it that the protest is not timely. A protest received by a contracting officer after award of a contract shall be forwarded to the SBA Government Contracting Area Office with a notation that award has been made.

      (j) When a concern is found to be other than small under a protest concerning a size status rerepresentation made in accordance with the clause at 52.219-28, Post-Award Small Business Program Rerepresentation, a contracting officer may permit contract performance to continue, issue orders, or exercise option(s), because the contract remains a valid contract.


19.303 [Reserved].


19.304 Small disadvantaged business status.

      (a) The contracting officer may accept an offeror’s representation that it is a small disadvantaged business concern (SDB) concern.

      (b) The provision at 52.219-1, Small Business Program Representations, or 52.212-3(c)(4), offeror Representations and Certifications-Commercial Items, is used to collect SDB data.

      (c) A representation of SDB status on a Federal prime contract will be deemed a misrepresentation of SDB status if the firm does not meet the requirements of 13 CFR 124.1001(b).

      (d) Any person or entity that misrepresents a firm's status as an SDB concern in order to obtain a Contracting opportunity in accordance with section 8(d) of the Small Business Act, ( 15 U.S.C. 637(d)) will be subject to the penalties imposed by section 16(d) of the Small Business Act, ( 15 U.S.C. 645(d)), as well as any other penalty authorized by law.


19.305 Reviews and protests of SDB status.

This section applies to reviews and protests of a small business concern’s SDB status as a prime contractor or subcontractor.

      (a) SBA may initiate the review of SDB status on any firm that has represented itself to be an SDB on a prime contract or subcontract to a Federal prime contract whenever it receives credible information calling into question the SDB status of the firm.

      (b) Requests for an SBA review of SDB status may be forwarded to the Small Business Administration, Assistant Administrator for SDBCE, 409 Third Street, SW, Washington, DC 20416.

      (c) An SBA review of a subcontractor’s SDB status differs from a formal protest. Protests of a small business concern’s SDB status as a subcontractor are processed under 19.703(e). Protests of a concern’s size as a prime contractor are processed under 19.302. Protests of a concern’s size as a subcontractor are processed under 19.703(b).


19.306 Protesting a firm’s status as a HUBZone small business concern.

      (a) Definition. As used in this section-

      Interested party has the meaning given in 13 CFR 126.103.

      (b)

(1) An offeror that is an Interested party, the contracting officer, or the SBA may protest the apparently successful offeror’s status as a qualified historically underutilized business zone (HUBZone) small business concern (see 13 CFR 126.800).

           (2) SBA’s protest regulations are found in subpart H "Protests" at 13 CFR 126.800 through 126.805.

      (c) Protests relating to small business size status are subject to the procedures of 19.302. An Interested party seeking to protest both the small business size and HUBZone status of an apparent successful offeror shall file two separate protests. Protests relating to small business size status for the acquisition and the HUBZone qualifying requirements will be processed concurrently by SBA.

      (d) All protests must be in writing and must state all specific grounds for the protest.

           (1) SBA will consider protests challenging the status of a concern if the protest presents evidence that-

                (i) The concern is not a qualified HUBZone small business concern as described at 13 CFR 126.103 and 13 CFR 126.200;

                (ii) The principal office is not located in a HUBZone; or

                (iii) At least 35 percent of the employees do not reside in a HUBZone.

           (2) Assertions that a protested concern is not a qualified HUBZone small business concern, without setting forth specific facts or allegations, will not be considered by SBA (see 13 CFR 126.801(b)).

      (e) Protest by an Interested party.

(1) An Interested party shall submit its protest to the contracting officer-

                (i) For sealed bids-

                     (A) By the close of business on the fifth business day after bid opening; or

                     (B) By the close of business on the fifth business day from the date of identification of the apparent successful offeror, if the price evaluation preference was not applied at the time of bid opening; or

                (ii) For negotiated acquisitions, by the close of business on the fifth business day after notification by the contracting officer of the apparently successful offeror.

           (2) Any protest received after the designated time limits is untimely, unless it is from the contracting officer or SBA.

      (f)

(1) The contracting officer shall forward all protests to SBA. The protests are to be submitted to the Director, HUBZone Program, U.S. Small Business Administration, 409 Third Street, SW, Washington, DC 20416 or by fax to 202-205-7167, Attn: HUBZone Small Business Status Protest.

           (2) The protest shall include a referral letter written by the contracting officer with information pertaining to the solicitation. The referral letter must include the following information to allow SBA to determine timeliness and standing:

                (i) The solicitation number (or an electronic link to or a paper copy of the solicitation).

                (ii) The name, address, telephone number, fax number, and email address, of the contracting officer.

                (iii) The type of HUBZone contract.

                (iv) Whether the procurement was conducted using full and open competition with a HUBZone price evaluation preference, and whether the protester’s opportunity for award was affected by the preference.

                (v) If a HUBZone set-aside, whether the protester submitted an offer.

                (vi) Whether the protested concern was the apparent successful offeror.

                (vii) Whether the procurement was conducted using sealed bid or negotiated procedures.

                (viii) The bid opening date, if applicable. If a price evaluation preference was applied after the bid opening date, also provide the date of identification of the apparent successful offeror.

                (ix) The date the contracting officer received the protest.

                (x) Whether a contract has been awarded.

      (g) SBA will notify the protester and the contracting officer of the date SBA received the protest.

      (h) Before SBA decision.

(1) After receiving a protest involving the apparent successful offeror’s status as a HUBZone small business concern, the contracting officer shall either-

                (i) Withhold award of the contract until SBA determines the status of the protested concern; or

                (ii) Award the contract after receipt of the protest but before SBA issues its decision if the contracting officer determines in writing that an award must be made to protect the public interest.

           (2) SBA will determine the merits of the status protest within 15 business days after receipt of a protest, or within any extension of time granted by the contracting officer.

           (3) If SBA does not issue its determination within 15 business days, or within any extension of time granted, the contracting officer may award the contract after determining in writing that there is an immediate need to award the contract and that waiting until SBA makes its determination will be disadvantageous to the Government. This determination shall be provided to the SBA’s HUBZone Program Director.

      (i) After SBA decision. The HUBZone Program Director will notify the contracting officer, the protester, and the protested concern of the SBA determination. The determination is effective immediately and is final unless overturned on appeal by SBA’s Associate Administrator, Office of Government Contracting and Business Development (AA/GCBD).

           (1) If the contracting officer has withheld contract award and SBA has determined that the protested concern is an eligible HUBZone or dismissed all protests against the protested concern, the contracting officer may award the contract to the protested concern. If AA/GCBD subsequently overturns the decision of the HUBZone Program Director, the contracting officer may apply the AA/GCBD decision to the procurement in question.

           (2) If the contracting officer has withheld award and the HUBZone Program Director has determined that the protested concern is ineligible, and a timely AA/GCBD appeal has not been filed, then the contracting officer shall not award the contract to the protested concern.

           (3) If the contracting officer has made a written determination in accordance with (h)(1)(ii) or (h)(3) of this section, awarded the contract, and the HUBZone Program Director’s ruling sustaining the protest is received after award-

                (i) The contracting officer shall terminate the contract, unless the contracting officer has made a written determination that termination is not in the best interests of the Government. However, the contracting officer shall not exercise any options or award further task or delivery orders under the contract;

                (ii) The contracting officer shall update the Federal procurement Data System to reflect the final decision of the HUBZone Program Director if no appeal is filed; and

                (iii) The concern’s designation as a certified HUBZone small business concern will be removed by SBA from the Dynamic Small Business Database. The concern shall not submit an offer as a HUBZone small business concern, until SBA issues a decision that the ineligibility is resolved.

           (4) If the contracting officer has made a written determination in accordance with (h)(1)(ii) or (h)(3) of this section, awarded the contract, SBA has sustained the protest and determined that the concern is not a HUBZone small business, and a timely AA/GCBD appeal has been filed, then the contracting officer shall consider whether performance can be suspended until an AA/GCBD decision is rendered.

           (5) If AA/GCBD affirms the decision of the HUBZone Program Director, finding the protested concern is ineligible, and contract award has occurred-

                (i) The contracting officer shall terminate the contract, unless the contracting officer has made a written determination that termination is not in the best interest of the Government. However, the contracting officer shall not exercise any options or award further task or delivery orders.

                (ii) The contracting officer shall update the FPDS to reflect the AA/GCBD decision; and

                (iii) The SBA will remove the concern’s designation as a certified HUBZone small business concern. The concern shall not submit an offer as a HUBZone small business concern until SBA issues a decision that the ineligibility is resolved or AA/GCBD finds the concern is eligible on appeal.

           (6) A concern found to be ineligible during a HUBZone status protest is precluded from applying for HUBZone certification for 90 calendar days from the date of the SBA final decision.

      (j) Appeals of HUBZone status determinations. The protested HUBZone small business concern, the protester, or the contracting officer may file appeals of protest determinations with SBA’s AA/GC&BD. The AA/GC&BD must receive the appeal no later than 5 business days after the date of receipt of the protest determination. SBA will dismiss any untimely appeal.

      (k) The appeal must be in writing. The appeal must identify the protest determination being appealed and must set forth a full and specific statement as to why the decision is erroneous or what significant fact the HUBZone Program Director failed to consider.

      (l)

(1) The party appealing the decision must provide notice of the appeal to-

                (i) The contracting officer;

                (ii) HUBZone Program Director, U.S. Small Business Administration, 409 Third Street, SW., Washington, DC 20416 or by fax to 202-205-7167; and

                (iii) The protested HUBZone small business concern or the original protester, as appropriate.

           (2) SBA will not consider additional information or changed circumstances that were not disclosed at the time of the Director/HUB’s decision or that are based on disagreement with the findings and conclusions contained in the determination.

      (m) The AA/GCBD will make its decision within 5 business days of the receipt of the appeal, if practicable, and will base its decision only on the information and documentation in the protest record as supplemented by the appeal. SBA will provide a copy of the decision to the contracting officer, the protester, and the protested HUBZone small business concern. The SBA decision, if received before award, will apply to the pending acquisition. The AA/GCBD’s decision is the final decision.

      (n) The AA/GC&BD will make its decision within 5 business days of the receipt of the appeal, if practicable, and will base its decision only on the information and documentation in the protest record as supplemented by the appeal. SBA will provide a copy of the decision to the contracting officer, the protester, and the protested HUBZone small business concern. The SBA decision, if received before award, will apply to the pending acquisition. SBA rulings received after award will not apply to that acquisition. The AA/GC&BD’s decision is the final decision.


19.307 Protesting a firm’s status as a service-disabled veteran-owned small business concern.

      (a) [Reserved]

      (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 may protest the apparently successful offeror’s service-disabled veteran-owned small business status.

           (2) SBA’s protest regulations are found in subpart D "Protests" at 13 CFR 125.24 through 125.28.

      (c) Protests relating to small business size status are subject to the procedures of 19.302. An interested party seeking to protest both the small business size and service-disabled veteran-owned small business status of an apparent successful offeror shall file two separate protests.

      (d) All protests must be in writing and must state all specific grounds for the protest.

           (1) SBA will consider protests challenging the service disabled veteran-owned status or the ownership and control of a concern if-

                (i) For status protests, the protester presents evidence supporting the contention that the owner(s) cannot provide documentation from the Department of Veterans Affairs, Department of Defense determinations, or the U.S. National Archives and Records Administration to show that they meet the definition of "service-disabled veteran" or "service disabled veteran with a permanent and severe disability" as set forth in 13 CFR 125.8; or

                (ii) For ownership and control protests, the protester presents evidence that the concern is not 51 percent owned and controlled by one or more service-disabled veterans. In the case of a veteran with a permanent and severe disability, the protester presents evidence that the concern is not controlled by the veteran, spouse, or permanent caregiver of such veteran.

           (2) Assertions that a protested concern is not a Service-disabled veteran-owned small business concern, without setting forth specific facts or allegations, will not be considered by SBA (see 13 CFR 125.25(b)).

      (e) Protest by an interested party.

(1) An offeror shall submit its protest to the contracting officer

                (i) To be received by close of business on the fifth business day after bid opening (in sealed bid acquisitions); or

                (ii) To be received by close of business on the fifth business day after notification by the contracting officer of the apparently successful offeror for negotiated acquisitions).

           (2) Any protest received after the designated time limits is untimely, unless it is from the contracting officer or SBA.

      (f)

(1) The contracting officer shall forward all protests to SBA. The protests are to be submitted to SBA’s Director, Office of Government Contracting, U.S. Small Business Administration, 409 Third Street, SW, Washington, DC 20416 or by fax to 202-205-6390, Attn: Service-Disabled Veteran Status Protest.

           (2) The protest shall include a referral letter written by the contracting officer with information pertaining to the solicitation. The referral letter must include the following information to allow SBA to determine timeliness and standing:

                (i) The solicitation number (or an electronic link to or a paper copy of the solicitation).

                (ii) The name, address, telephone number, fax number, and email address of the contracting officer.

                (iii) Whether the contract was sole-source or set-aside.

                (iv) Whether the protestor submitted an offer.

                (v) Whether the protested concern was the apparent successful offeror.

                (vi) When the protested concern submitted its offer.

                (vii) Whether the acquisition was conducted using sealed bid or negotiated procedures.

                (viii) The bid opening date, if applicable.

                (ix) The date the contracting officer received the protest.

                (x) The date the protestor received notification about the apparent successful offeror, if applicable.

                (xi) Whether a contract has been awarded.

      (g) SBA will notify the protester and the contracting officer of the date SBA received the protest.

      (h) Before SBA decision.

(1) After receiving a protest involving the apparent successful offeror's status as a Service-disabled veteran-owned small business concern, the contracting officer shall either-

                (i) Withhold award of the contract until SBA determines the status of the protested concern; or

                (ii) Award the contract after receipt of the protest but before SBA issues its decision if the contracting officer determines in writing that an award must be made to protect the public interest.

           (2) SBA will determine the merits of the status protest within 15 business days after receipt of a protest, or within any extension of time granted by the contracting officer.

           (3) If SBA does not issue its determination within 15 business days, or within any extension of time that is granted, the contracting officer may award the contract after determining in writing that there is an immediate need to award the contract and that waiting until SBA makes its determination will be disadvantageous to the government. This determination shall be provided to the SBA's Director, Office of Government Contracting and a copy shall be included in the contract file.

      (i) After SBA decision. SBA will notify the contracting officer, the protester, and the protested concern of its determination. The determination is effective immediately and is final unless overturned on appeal by SBA’s Office of Hearings and Appeals (OHA) pursuant to 13 CFR part 134.

           (1) If the contracting officer has withheld contract award and SBA has determined that the protested concern is an eligible SDVOSB or dismissed all protests against the protested concern, the contracting officer may award the contract to the protested concern. If OHA subsequently overturns the SBA Director for Government Contracting’s determination or dismissal, the contracting officer may apply the OHA decision to the procurement in question.

           (2) If the contracting officer has withheld contract award, SBA has sustained the protest and determined that the concern is not an SDVOSB, and no OHA appeal has been filed, then the contracting officer shall not award the contract to the protested concern.

           (3) If the contracting officer has made a written determination in accordance with (h)(1)(ii) or (h)(3) of this section, the contract has been awarded, and SBA’s ruling sustaining the protest is received after award-

                (i) The contracting officer shall terminate the contract, unless the contracting officer has made a written determination that termination is not in the best interests of the Government. However, the contracting officer shall not exercise any options or award further task or delivery orders;

                (ii) The contracting officer shall update the FPDS to reflect the final SBA decision; and

                (iii) The concern must remove its designation in the System for Award Management (SAM) as a SDVOSB concern, and shall not submit an offer as a SDVOSB concern, until SBA issues a decision that the ineligibility is resolved.

           (4) If the contracting officer has made a written determination in accordance with (h)(1)(ii) or (h)(3) of this section and awarded the contract to the protested firm, SBA has sustained the protest and determined that the concern is not a SDVOSB, and a timely OHA appeal has been filed, then the contracting officer shall consider whether performance can be suspended until an OHA decision is rendered.

           (5) If OHA affirms the SBA Director for Government Contracting’s determination finding the protested concern is ineligible-

                (i) The contracting officer shall terminate the contract unless the contracting officer has made a written determination that it is not in the best interest of the Government. However, the contracting officer shall not exercise any options or award further task or delivery orders;

                (ii) The contracting officer shall update the FPDS to reflect OHA’s decision; and

                (iii) The concern shall remove its designation in SAM as a SDVOSB concern, until SBA issues a decision that the ineligibility is resolved or OHA finds the concern is eligible on appeal.

           (6) A concern found to be ineligible may not submit future offers as an SDVOSB concern until the concern demonstrates to SBA’s satisfaction that it has overcome the reason for the protest and SBA issues a decision to this effect.

      (j) Appeals of SDVOSB status determinations. The protested SDVOSB small business concern, the protester, or the contracting officer may file appeals of protest determinations to OHA. OHA must receive the appeal no later than 10 business days after the date of receipt of the protest determination. SBA will dismiss an untimely appeal. See Subpart E "Rules of Practice for Appeals From Service-Disabled Veteran Owned Small Business Concerns Protests" at 13 CFR 134.501 through 134.515 for SBA’s appeals regulations.

      (k) The appeal must be in writing. The appeal must identify the protest determination being appealed and must set forth a full and specific statement as to why the SDVOSB protest determination is alleged to be based on a clear error of fact or law, together with an argument supporting such allegation.

      (l) The party appealing the decision must provide notice of the appeal to-

           (1) The contracting officer;

           (2) Director, Office of Government Contracting, U.S. Small Business Administration, 409 Third Street, SW., Washington, DC 20416, facsimile 202-205-6390;

           (3) The protested SDVOSB concern or the original protester, as appropriate; and

           (4) Associate General Counsel for procurement Law, U.S. Small Business Administration, 409 Third Street, SW., Washington, DC 20416, facsimile 202-205-6873, or e-mail at OPLService@sba.gov.

      (m) OHA will make its decision within 15 business days of the receipt of the appeal, if practicable. SBA will provide a copy of the decision to the contracting officer, the protester, and the protested SDVOSB small business concern. The OHA decision regarding the status of the concern is final and is binding on the parties.


19.308 Protesting a firm’s status as an economically disadvantaged women-owned small business concern or women-owned small business concern eligible under the Women-Owned Small Business Program.

      (a) Definition. Interested party, as used in this section, has the meaning given in 13 CFR 127.102.

      (b)

(1) For sole source acquisitions, the contracting officer or SBA may protest the offeror’s status as an Economically disadvantaged women-owned small business (EDWOSB) concern or as a WOSB concern eligible under the WOSB Program. For all other acquisitions, an interested party (see 13 CFR 127.102) may protest the apparent successful offeror’s EDWOSB or WOSB status.

           (2) SBA’s protest regulations are found in subpart F "Protests" at 13 CFR 127.600 through 127.605.

      (c) Protests relating to small business size status are subject to the procedures of 19.302. An interested party seeking to protest both the small business size and WOSB or EDWOSB status of an apparent successful offeror shall file two separate protests.

      (d) All protests shall be in writing and must state all specific grounds for the protest.

           (1) SBA will consider protests challenging the status of a concern if-

                (i) The protest presents evidence that the concern is not at least 51 percent owned and controlled by one or more women who are United States citizens; or

                (ii) The protest presents evidence that the concern is not at least 51 percent owned and controlled by one or more economically disadvantaged women, when it is in connection with an EDWOSB contract.

           (2) SBA shall consider protests by a contracting officer when the apparent successful offeror has failed to provide all of the required documents, as set forth in 19.1503(c).

           (3) Assertions that a protested concern is not a EDWOSB or WOSB concern eligible under the WOSB Program, without setting forth specific facts or allegations, will not be considered by SBA (see 13 CFR 127.603(a)).

      (e) Protest by an interested party.

           (1) An offeror shall submit its protest to the contracting officer-

                (i) To be received by the close of business by the fifth business day after bid opening (in sealed bid acquisitions); or

                (ii) To be received by the close of business by the fifth business day after notification by the contracting officer of the apparent successful offeror (in negotiated acquisitions).

           (2) Any protest received after the designated time limit is untimely, unless it is from the contracting officer or SBA.

      (f)

(1) The contracting officer shall forward all protests to SBA. The protests are to be submitted to SBA’s Director for Government Contracting, U.S. Small Business Administration, 409 Third Street, SW., Washington, DC 20416 or by fax to 202-205-6390, Attn: Women-owned Small Business Status Protest.

           (2) The protest shall include a referral letter written by the contracting officer with information pertaining to the solicitation. The referral letter must include the following information to allow SBA to determine timeliness and standing:

                (i) The solicitation number or electronic link to or a paper copy of the solicitation.

                (ii) The name, address, telephone number, email address, and facsimile number of the contracting officer.

                (iii) Whether the protestor submitted an offer.

                (iv) Whether the protested concern was the apparent successful offeror.

                (v) When the protested concern submitted its offer.

                (vi) Whether the acquisition was conducted using sealed bid or negotiated procedures.

                (vii) The bid opening date, if applicable.

                (viii) The date the contracting officer received the protest.

                (ix) The date the protestor received notification about the apparent successful offeror, if applicable.

                (x) Whether a contract has been awarded.

      (g) SBA will notify the protester and the contracting officer of the date SBA received the protest.

      (h) Before SBA decision.

(1) After receiving a protest involving the apparent successful offeror’s status as an EDWOSB or WOSB concern eligible under the WOSB Program, the contracting officer shall either-

                (i) Withhold award of the contract until SBA determines the status of the protested concern; or

                (ii) Award the contract after receipt of the protest but before SBA issues its decision if the contracting officer determines in writing that an award must be made to protect the public interest.

           (2) SBA will determine the merits of the status protest within 15 business days after receipt of a protest, or within any extension of that time granted by the contracting officer.

           (3) If SBA does not issue its determination within 15 business days, or within any extension of time granted, the contracting officer may award the contract after determining in writing that there is an immediate need to award the contract and that waiting until SBA makes its determination will be disadvantageous to the Government. This determination shall be provided to the SBA Director for Government Contracting and a copy shall be included in the contract file.

      (i) After SBA decision. SBA will notify the contracting officer, the protester, and the protested concern of its determination. The determination is effective immediately and is final unless overturned on appeal by SBA’s Office of Hearings and Appeals (OHA) pursuant to 13 CFR part 134.

           (1) If the contracting officer has withheld contract award and SBA has denied or dismissed the protest, the contracting officer may award the contract to the protested concern. If OHA subsequently overturns the SBA Director for Government Contracting’s determination or dismissal, the contracting officer may apply the OHA decision to the procurement in question.

           (2) If the contracting officer has withheld contract award, SBA has sustained the protest and determined that the concern is not eligible under the WOSB Program, and no OHA appeal has been filed, then the contracting officer shall not award the contract to the protested concern.

           (3) If the contracting officer has made a written determination in accordance with (h)(1)(ii) or (h)(3) of this section, awarded the contract, and SBA’s ruling is received after award, and no OHA appeal has been filed, then-

                (i) The contracting officer shall terminate the contract, unless the contracting officer has made a written determination that termination is not in the best interests of the Government. However, the contracting officer shall not exercise any options or award further task or delivery orders;

                (ii) The contracting officer shall update the FPDS to reflect the final SBA decision; and

                (iii) The concern must remove its designation in SAM as an EDWOSB or WOSB concern eligible under the WOSB Program, and shall not submit an offer as an EDWOSB concern or WOSB concern eligible under the WOSB Program, until SBA issues a decision that the ineligibility is resolved.

           (4) If the contracting officer has made a written determination in accordance with (h)(1)(ii) or (h)(3) of this section, contract award has occurred, SBA has sustained the protest and determined that the concern is not eligible under the WOSB Program, and a timely OHA appeal has been filed, then the contracting officer shall consider whether performance can be suspended until an OHA decision is rendered.

           (5) If OHA affirms the SBA Director for Government Contracting’s determination finding the protested concern is ineligible, then-

                (i) The contracting officer shall terminate the contract, unless the contracting officer has made a written determination that termination is not in the best interests of the Government. However, the contracting officer shall not exercise any options or award further task or delivery orders;

                (ii) The contracting officer shall update the FPDS to reflect OHA’s decision; and

                (iii) The concern must remove its designation in SAM as an EDWOSB or WOSB concern eligible under the WOSB Program, and shall not submit an offer as an EDWOSB concern or WOSB concern eligible under the WOSB Program, until SBA issues a decision that the ineligibility is resolved or OHA finds the concern is eligible on appeal.

      (j) Appeals of EDWOSB or WOSB concerns eligible under the WOSB Program status determinations.

(1) The protested EDWOSB concern or WOSB concern eligible under the WOSB program, the protester, or the contracting officer may file an appeal of a WOSB or EDWOSB status protest determination with OHA.

           (2) OHA must receive the appeal no later than 10 business days after the date of receipt of the protest determination. SBA will dismiss an untimely appeal.

           (3) See subpart G "Rules of Practice for Appeals From Women-Owned Small Business Concerns (WOSB) and Economically Disadvantaged WOSB Concern (EDWOSB) Protests" at 13 CFR 134.701 through 134.715 for SBA’s appeals regulations.

      (k) The appeal must be in writing. The appeal must identify the protest determination being appealed and must set forth a full and specific statement as to why the EDWOSB concern or WOSB concern eligible under the WOSB program protest determination is alleged to be based on a clear error of fact or law, together with an argument supporting such allegation.

      (l) The party appealing the decision must provide notice of the appeal to-

           (1) The contracting officer;

           (2) Director, Office of Government Contracting, U.S. Small Business Administration, 409 Third Street, SW., Washington, DC 20416, facsimile 202-205-6390;

           (3) The protested EDWOSB concern or WOSB concern eligible under the WOSB program, or the original protester, as appropriate; and

           (4) SBA’s Office of General Counsel, Associate General Counsel for procurement Law, U.S. Small Business Administration, 409 Third Street, SW., Washington, DC 20416, facsimile 202-205-6873, or e-mail at OPLService@sba.gov.

      (m) OHA will make its decision within 15 business days of the receipt of the appeal, if practicable. SBA will provide a copy of the decision to the contracting officer, the protester, and the protested EDWOSB concern or WOSB concern eligible under the WOSB program. The OHA decision is the final agency decision and is binding on the parties.


19.309 Solicitation provisions and contract clauses.

      (a)

(1) Insert the provision at 52.219-1, Small Business Program Representations, in solicitations exceeding the micro-purchase threshold when the contract will be performed in the United States or its outlying areas.

           (2) Use the provision with its Alternate I in solicitations issued by DoD, NASA, or the Coast Guard.

           (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 October 1, 2022 (see 19.102(b)).

      (b) When Contracting by sealed bidding, insert the provision at 52.219-2, Equal Low Bids, in solicitations when the contract will be performed in the United States or its outlyingareas.

      (c)

(1) Insert the clause at 52.219-28, Post-Award Small Business Program Rerepresentation, in solicitations and contracts exceeding the micro-purchase threshold when the contract will be performed in the United States or its outlying areas.

           (2) Use the clause with its Alternate I in solicitations and the resulting multiple-award contracts with more than one NAICS code. This is authorized for solicitations issued after October 1, 2022 (see 19.102(b)).


Subpart 19.4 - Cooperation with the Small Business Administration


19.401 General.

      (a) The Small Business Act is the authority under which the Small Business Administration (SBA) and agencies consult and cooperate with each other in formulating policies to ensure that small business interests will be recognized and protected.

      (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.


19.402 Small Business Administration procurement center representatives.

      (a)

(1) The SBA may assign one or more procurement center representatives (PCRs) 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 https://www.sba.gov/?federal-contracting/?counseling-help/?procurement-center-representative-directory 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:

           (1) Reviewing proposed acquisitions to recommend–

                (i) The set-aside or sole-source award to a small business of selected acquisitions;

                (ii) New qualified small business sources, including veteran-owned small, service-disabled veteran-owned small, HUBZone small, small disadvantaged, economically disadvantaged women-owned small, and women-owned small eligible under the Women-Owned Small Business Program; 

                (iii) Breakout of discrete components, items, and requirements for competitive acquisitions; and

                (iv) Ways to improve competition.

           (2) Reviewing proposed acquisition packages provided in accordance with 19.202-1(e). If the SBA procurement center representative (or, if a procurement center representative is not assigned, see paragraph (a) of this section) believes that the acquisition, as proposed, makes it unlikely that small businesses can compete for the prime contract, the representative shall recommend any Alternate Contracting method that the representative reasonably believes will increase small business prime Contracting opportunities. The recommendation shall be made to the contracting officer within 15 days after receipt of the package.

           (3) Recommending concerns for inclusion on a list of concerns to be solicited in a specific acquisition.

           (4) Appealing to the chief of the contracting office any contracting officer’s determination not to solicit a concern recommended by the SBA for a particular acquisition, when not doing so results in no small business being solicited.

           (5) Conducting periodic reviews of the contracting activity to which assigned to ascertain whether it is complying with the small business policies in this regulation.

           (6) Sponsoring and participating in conferences and training designed to increase small business participation in the Contracting activities of the office.

           (7) Appealing a contracting officer's rejection of PCR's recommendation. Such appeal must be in writing and shall be filed and processed in accordance with the appeal procedures set out in 19.502-8.


19.403 [Reserved].


Subpart 19.5 Subpart 19.5 - Small Business Total Set-Asides, Partial Set-Asides, and Reserves


19.501 General.

      (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 small business reserves is to award one or more multiple-award contracts to any of the small business concerns identified at 19.000(a)(3), under a full and open competition. 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) procurement center representative (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) any proposed acquisition in excess of the micro-purchase threshold.

      (e) 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).

      (f) 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.

      (g) For the applicability of the limitations on subcontracting and the nonmanufacturer rule, see 19.505.


19.502 Setting aside acquisitions.


19.502-1 Requirements for setting aside acquisitions.

      (a) The contracting officer shall set aside an individual acquisition or class of acquisitions for competition among small businesses when-

           (1) It is determined to be in the interest of maintaining or mobilizing the Nation’s full productive capacity, war or national defense programs; or

           (2) Assuring that a fair proportion of Government contracts in each industry is placed with small business concerns; and the circumstances described in 19.502-2 or 19.502-3(a) exist.

      (b) The requirement in paragraph (a) of this section does not apply to purchases at or below the micro-purchase threshold, or purchases from required sources under part  8(e.g., Committee for Purchase From People Who are Blind or Severely Disabled).


19.502-2 Total small business set-asides.

      (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 above the micro-purchase threshold, but not over the simplified acquisition threshold, 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) Before setting aside an acquisition under this paragraph, refer to 19.203(c). The contracting officer shall set aside any acquisition over the simplified acquisition threshold for small business participation when there is a reasonable expectation that-

           (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 research and development 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.

           


19.502-3 Partial set-asides of contracts other than multiple-award contracts.

      (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;

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

           (4) Two or more responsible small business concerns are reasonably expected to submit offers on the set-aside portion or portions of the acquisition that are competitive in terms of fair market prices, quality, and delivery;

           (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 regard 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).


19.502-4 Partial set-asides of multiple-award contracts.

      (a) In accordance with section 1331 of the Small Business Jobs Act of 2010 ( 15 U.S.C. 644(r)(1)), Contracting officers may, at their discretion, 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;

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

           (4) Two or more responsible small business concerns are reasonably expected to submit an offer on the set-aside portion or portions of the acquisition that are competitive in terms of fair market prices, quality, and delivery; 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 regard 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).


19.502-5 Insufficient reasons for not setting aside an acquisition.

None of the following is, in itself, sufficient cause for not setting aside an acquisition:

      (a) A large percentage of previous contracts for the required item(s) has been placed with small business concerns.

      (b) The item is on an established planning list under the Industrial Readiness Planning Program. However, a total small business set-aside shall not be made when the list contains a large business Planned Emergency Producer of the item(s) who has conveyed a desire to supply some or all of the required items.

      (c) The item is on a Qualified products List. However, a total small business set-aside shall not be made if the list contains the products of large businesses unless none of the large businesses desire to participate in the acquisition.

      (d) A period of less than 30 days is available for receipt of offers.

      (e) The acquisition is classified.

      (f) Small business concerns are already receiving a fair proportion of the agency’s contracts for supplies and services.

      (g) A class small business set-aside of the item or service has been made by another contracting activity.

      (h) A "brand name or equal" product description will be used in the solicitation.


19.502-6 Setting aside a class of acquisitions for small business.

      (a) A class of acquisitions of selected products or services, or a portion of the acquisitions, may be set aside for exclusive participation by small business concerns if individual acquisitions in the class will meet the criteria in 19.502-1, 19.502-2, or 19.502-3(a). The determination to make a class small business set-aside shall not depend on the existence of a current acquisition if future acquisitions can be clearly foreseen.

      (b) The determination to set aside a class of acquisitions for small business may be either unilateral or joint.

      (c) Each class small business set-aside determination shall be in writing and must-

           (1) Specifically identify the product(s) and service(s) it covers;

           (2) Provide that the set-aside does not apply to any acquisition automatically set aside under 19.502-2(a).

           (3) Provide that the set-aside applies only to the (named) contracting office(s) making the determination; and

           (4) Provide that the set-aside does not apply to any individual acquisition if the requirement is not severable into two or more economic production runs or reasonable lots, in the case of a partial class set-aside.

      (d) The contracting officer shall review each individual acquisition arising under a class small business set-aside to identify any changes in the magnitude of requirements, specifications, delivery requirements, or competitive market conditions that have occurred since the initial approval of the class set-aside. If there are any changes of such a material nature as to result in probable payment of more than a fair market price by the Government or in a change in the capability of small business concerns to satisfy the requirements, the contracting officer may withdraw or modify (see 19.502-9(a)) the unilateral or joint set-aside by giving written notice to the SBA PCR (or, if a PCR is not assigned, see 19.402(a)) stating the reasons.


19.502-7 Inclusion of Federal Prison Industries, Inc.

When using competitive procedures in accordance with 8.602(a)(4), agencies shall include Federal Prison Industries, Inc. (FPI), in the solicitation process and consider a timely offer from FPI.


19.502-8 Rejecting Small Business Administration recommendations.

      (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.

      (b) The SBA PCR (or, if a PCR is not assigned, see 19.402(a)) may appeal the contracting officer's rejection to the head of the contracting activity within 2 working days after receiving the notice (except see 19.1305(d), 19.1405(d), and 19.1505(g)). The head of the contracting activity  shall render a decision in writing, and provide it to the SBA representative within 7 working days. Pending issuance of a decision to the SBA representative, the contracting officer shall suspend action on the acquisition.

      (c) If the head of the contracting activity agrees that the contracting officer’s rejection was appropriate-

           (1) Within 2 working days, the SBA procurement center representative (or, if a procurement center representative is not assigned, see 19.402(a)) may request the contracting officer to suspend action on the acquisition until the SBA Administrator appeals to the agency head (see paragraph (f) of this section); and

           (2) The SBA must be allowed 15 working days after making such a written request, within which the Administrator of SBA–

                (i) may appeal to the Secretary of the Department concerned; and

                (ii) must notify the contracting officer whether the further appeal has, in fact, been taken. If notification is not received by the contracting officer within the 15-day period, it is deemed that the SBA request to suspend the contract action has been withdrawn and that an appeal to the Secretary was not taken.

      (d) When the contracting officer has been notified within the 15-day period that the SBA has appealed to the agency head, the head of the contracting activity (or designee) shall forward justification for its decision to the agency head. The contracting officer shall suspend contract action until notification is received that the SBA appeal has been settled.

      (e) The agency head shall reply to the SBA within 30 working days after receiving the appeal. The decision of the agency head shall be final.

      (f) A request to suspend action on an acquisition need not be honored if the contracting officer determines that proceeding to contract award and performance is in the public interest. The contracting officer shall include in the contract file a statement of the facts justifying the determination, and shall promptly notify the SBA representative of the determination and provide a copy of the justification.


19.502-9 Withdrawing or modifying small business set-asides.

      (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 total or partial small business set-aside, 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.

      (b) If the agency small business specialist does not agree to a withdrawal or modification, the case shall be promptly referred to the SBA PCR (or, if a PCR is not assigned, see 19.402(a)) for review.

      (c) The contracting officer shall prepare a written statement supporting any withdrawal or modification of a small business set-aside and include it in the contract file.


19.502-10 Automatic dissolution of a small business set-aside.

      (a) If a small business set-aside acquisition or portion of an acquisition is not awarded, the unilateral or joint determination to set the acquisition aside is automatically dissolved for the unawarded portion of the set-aside. The required supplies and/or services for which no award was made may be acquired by sealed bidding or negotiation, as appropriate.

      (b) Before issuing a solicitation for the items called for in a small business set-aside that was dissolved, the contracting officer shall ensure that the delivery schedule is realistic in the light of all relevant factors, including the capabilities of small business concerns.


19.503 Reserves.

      (a) In accordance with section 1331 of the Small Business Jobs Act of 2010 (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 that are competitive in terms of fair market prices, quality, and delivery from at least two responsible small business concerns identified in 19.000(a)(3), 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

                (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 competitively in terms of fair market price, quality, and delivery.

      (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).

           (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 limitations on subcontracting and the nonmanufacturer rule (see 19.505) do not apply to reserves at the contract level, but shall apply to orders that are set aside or issued directly to one small business concern under 19.504(c)(1)(ii).


19.504 Orders under multiple-award contracts.

      (a) General. In accordance with section 1331 of the Small Business Jobs Act of 2010 ( 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).

           (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) When setting aside an order at or below the simplified acquisition threshold, the contracting officer may set aside the order for any of the small business concerns identified in 19.000(a)(3).

           (3) When setting aside an order above the simplified acquisition threshold, the contracting officer shall first consider setting aside the order for the small business socioeconomic Contracting programs (i.e., 8(a), HUBZone, service-disabled veteran-owned small business, and women-owned small business) 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).

      (b) Orders under partial set-aside contracts.

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

                (i) 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

                (ii) 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).

           (2) 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.


19.505 Limitations on subcontracting and nonmanufacturer rule.

      (a) Applicability.

(1)This section applies to small business set-asides above the simplified acquisition threshold and orders issued directly to a small business in accordance with 19.504(c)(1)(ii) above the simplified acquisition threshold.

           (2)This section applies, regardless of dollar value, to the following awards under subparts 19.8, 19.13, 19.14, or 19.15:

                (i)Contracts that are set aside.

                (ii)Contracts that are awarded on a sole-source basis.

                (iii)Orders that are set-aside as described in 8.405-5 and 16.505(b)(2)(i)(F).

                (iv)Orders that are issued directly in accordance with 19.504(c)(1)(ii).

                (v)Contracts that use the HUBZone price evaluation preference to award to a HUBZone small business concern unless the concern waived the evaluation preference.

      (b)

(1) Limitations on subcontracting. A small business concern subject to the limitations on subcontracting is required to comply with the following:

                (i)For a contract or order assigned a North American Industry Classification System (NAICS) code for services (except construction), the concern will not pay more than 50 percent of the amount paid by the Government for contract performance to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the concern's 50 percent subcontract amount that cannot be exceeded. When a contract includes both services and supplies, the 50 percent limitation shall apply only to the service portion of the contract.

                (ii)For a contract or order assigned a NAICS code for supplies or products (other than a procurement from a nonmanufacturer of such supplies or products), the concern will not pay more than 50 percent of the amount paid by the Government for contract performance, excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the concern's 50 percent subcontract amount that cannot be exceeded. When a contract includes both supplies and services, the 50 percent limitation shall apply only to the supply portion of the contract.

                (iii)For a contract or order assigned a NAICS code for general construction, the concern will not pay more than 85 percent of the amount paid by the Government for contract performance, excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the concern's 85 percent subcontract amount that cannot be exceeded.

                (iv)For a contract or order assigned a NAICS code for construction by special trade contractors, the concern will not pay more than 75 percent of the amount paid by the Government for contract performance, excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the concern’s 75 percent subcontract amount that cannot be exceeded.

           (2) Compliance period. A small business contractor subject to the limitations on subcontracting is required to comply with the limitations on subcontracting—

                (i)For a contract that has been set aside, either by the end of the base term 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, at the contracting officer's discretion; and

                (ii)For an order set aside under a contract as described in 19.504(a), (b), or (c)(1)(i) or an order issued in accordance with 19.504(c)(1)(ii), by the end of the performance period for the order.

      (c) Nonmanufacturer rule. The nonmanufacturer rule applies to nonmanufacturers in accordance with paragraph (c)(1) of this section and to kit assemblers who are nonmanufacturers in accordance with paragraph (c)(2) of this section.

           (1) Nonmanufacturers. Any concern, including a supplier, that is awarded a contract or order subject to the nonmanufacturer rule, other than a construction or service acquisition, but proposes to furnish an end item that it did not itself manufacture, process, or produce (i.e., a “nonmanufacturer”), is required to—

                (i)Provide an end item that a small business has manufactured, processed, or produced in the United States or its outlying areas (see paragraph (c)(3) of this section for determining the manufacturer of an end item);

                (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; for example, providing storage, transportation, or delivery.

           (2) Kit assemblers. When the end item being acquired is a kit of supplies

                (i)The offeror may not exceed 500 employees; and

                (ii)At least 50 percent of the total cost of the components of the kit shall be manufactured, processed, or produced in the United States or its outlying areas by business concerns that are small under the size standards for the NAICS codes of the components of the kit.

           (3) Identification of manufacturers. For the purposes of applying the nonmanufacturer rule, the manufacturer, processor, or producer is the concern that manufactures, processes, or produces an end item with its own facilities (i.e., transforms raw materials, miscellaneous parts, or components into the end item being acquired). See 13 CFR 121.406(b)(2).

           (4) Waiver of nonmanufacturer rule.

(i)The SBA may grant an individual or a class waiver to the nonmanufacturer rule to allow a nonmanufacturer to provide an end item of an other than small business without regard to the place of manufacture, processing, or production.

                     (A) Class waiver. An agency may request that SBA waive the requirement at paragraph (c)(1)(i) or (c)(2)(ii) of this section for a specific product or class of products. See 13 CFR 121.1202 for an explanation of when SBA will issue a class waiver.

                     (B) Individual waiver. The contracting officer may also request a waiver of the requirements at paragraph (c)(1)(i) or (c)(2)(ii) of this section for an individual acquisition once the contracting officer determines through market research that no known small business manufacturers, processors, or producers in the United States or its outlying areas can reasonably be expected to offer an end item meeting the requirements of the solicitation. This type of waiver is known as an individual waiver and would apply only to a specific acquisition.

                (ii) Waiver requests. Requests for waivers shall include the content specified at 13 CFR 121.1204 and shall be sent via email to nmrwaivers@sba.gov or by mail to the—Director, Office of Government Contracting, Small Business Administration, 409 Third Street SW, Washington, DC 20416.

                (iii) List of class waivers. For the most current listing of class waivers, contact the SBA Office of Government Contracting or go to https://www.sba.gov/document/support-non-manufacturer-rule-class-waiver-list.

                (iv) Notification of waiver. The contracting officer shall provide potential offerors with written notification of any class or individual waiver in the solicitation. If providing the notification after solicitation issuance, the contracting officer shall provide potential offerors a reasonable amount of additional time to respond to the solicitation.

           (5)Multiple-item acquisitions.

(i)If at least 50 percent of the estimated contract value is composed of items that are manufactured, processed, or produced by small business concerns, then a waiver of the nonmanufacturer rule is not required. There is no requirement that each item acquired in a multiple-item acquisition be manufactured, processed, or produced by a small business in the United States or its outlying areas.

                (ii)If more than 50 percent of the estimated acquisition cost is composed of items manufactured, processed, or produced by other than small business concerns, then a waiver is required. SBA may grant an individual waiver for one or more items in an acquisition in order to ensure that at least 50 percent of the cost of the items to be supplied by the nonmanufacturer comes from small business manufacturers, processors, and producers in the United States or its outlying areas or are subject to a waiver.

                (iii)If a small business offeror is both a manufacturer of item(s) and a nonmanufacturer of other item(s) for an acquisition, the contracting officer shall apply the manufacturer size standard.


19.506 Documentation requirements.

      (a)

(1) The contracting officer shall document the rationale when a contract is not totally 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 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 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 subpart 19.5, 19.8, 19.13, 19.14, or 19.15.


19.507 Solicitation provisions and contract clauses.

      (a) [Reserved]

      (b) [Reserved]

      (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—

           (1)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 the simplified acquisition threshold, and in any solicitations and contracts that are set aside or awarded on a sole-source basis in accordance with subparts 19.8, 19.13, 19.14, or 19.15, regardless of dollar value. 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), and when orders may be issued directly to a small business concern as described in 19.504(c)(1)(ii). For contracts that are set aside, the contracting officer shall indicate in paragraph (f) of the clause whether compliance with the limitations on subcontracting is required at the contract or order level;

           (2) Using the HUBZone price evaluation preference. However, if the prospective contractor waived the use of the price evaluation preference, or is an other than small business, do not insert the clause in the resultant contract.

      (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 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)

(1) The contracting officer shall insert the provision at 52.219-31, Notice of Small Business Reserve, in solicitations for multiple-award contracts that have reserves.

           (2) The contracting officer shall insert the clause at 52.219-32 Orders Issued Directly Under Small Business Reserves, in solicitations and the resulting multiple-award contracts that have reserves.

      (h)

(1) The contracting officer shall insert the clause at 52.219-33, Nonmanufacturer Rule, in solicitations and contracts (including multiple-award contracts when orders may be set aside for small business concerns as described in 8.405-5 and 19.505(b)(2)(i)(F), and when orders may be issued directly to a small business concern as described in 19.504(c)(1)(ii), when—

                (i)the item being acquired has been assigned a manufacturing or supply NAICS code, and–

                (ii)

(A)Any portion of the requirement is to be-

                          (1)Set aside for small business and is expected to exceed the simplified acquisition threshold; or

                          (2)Set aside or awarded on a sole-source basis in accordance with subparts 19.8, 19.13, 19.14, or 19.15, regardless of dollar value; or

                     (B)Using the HUBZone price evaluation preference. However, if the prospective contractor waived the use of the price evaluation preference, or is an other than small business, do not insert the clause in the resultant contract.

           (2)The contracting officer shall not insert the clause at 52.219-33 when the Small Business Administration has waived the nonmanufacturer rule (see 19.505(c)(4)).


Subpart 19.6 - Certificates of Competency and Determinations of Responsibility


19.601 General.

      (a) A Certificate of Competency (COC) is the certificate issued by the Small Business Administration (SBA) stating that the holder is responsible (with respect to all elements of responsibility, including, but not limited to, capability, competency, capacity, credit, integrity, perseverance, tenacity, and limitations on subcontracting) for the purpose of receiving and performing a specific Government contract.

      (b) The COC program empowers the Small Business Administration (SBA) to certify to Government Contracting officers as to all elements of responsibility of any small business concern to receive and perform a specific Government contract. The COC program does not extend to questions concerning regulatory requirements imposed and enforced by other Federal agencies.

      (c) The COC program is applicable to all Government acquisitions. A contracting officer shall, upon determining an apparent successful small business offeror to be nonresponsible, refer that small business to the SBA for a possible COC, even if the next acceptable offer is also from a small business.

      (d) When a solicitation requires a small business to adhere to the limitations on subcontracting, a contracting officer’s finding that a small business cannot comply with the limitation shall be treated as an element of responsibility and shall be subject to the COC process. When a solicitation requires a small business to adhere to the definition of a nonmanufacturer, a contracting officer’s determination that the small business does not comply shall be processed in accordance with subpart  19.3.

      (e) Contracting officers, including those located overseas, are required to comply with this subpart for U.S. small business concerns.

      (f) For the purpose of receiving a COC on an unrestricted acquisition, a small business nonmanufacturer may furnish any end item produced or manufactured in the United States or its outlying areas.


19.602 Procedures.


19.602-1 Referral.

      (a) Upon determining and documenting that an apparent successful small business offeror lacks certain elements of responsibility (including, but not limited to, capability, competency, capacity, credit, integrity, perseverance, tenacity, and limitations on subcontracting, but for sureties see 28.101-3(f) and 28.203-1(e)), the contracting officer shall-

           (1) Withhold contract award (see 19.602-3); and

           (2) Refer the matter to the cognizant SBA Government Contracting Area Office (Area Office) serving the area in which the headquarters of the offeror is located, in accordance with agency procedures, except that referral is not necessary if the small business concern-

                (i) Is determined to be unqualified and ineligible because it does not meet the standard in 9.104-1(g), provided, that the determination is approved by the chief of the contracting office; or

                (ii) Is suspended or debarred under Executive Order 11246 or subpart  9.4.

      (b) If a partial set-aside is involved, the contracting officer shall refer to the SBA the entire quantity to which the concern may be entitled, if responsible.

      (c) The referral shall include-

           (1) A notice that a small business concern has been determined to be nonresponsible, specifying the elements of responsibility the contracting officer found lacking; and

           (2) If applicable, a copy of the following:

                (i) solicitation.

                (ii) Final offer submitted by the concern whose responsibility is at issue for the procurement.

                (iii) Abstract of bids or the contracting officer’s price negotiation memorandum.

                (iv) Preaward survey.

                (v) Technical Data package (including drawings, specifications and statement of work).

                (vi) Any other justification and documentation used to arrive at the nonresponsibility determination.

      (d) For any single acquisition, the contracting officer shall make only one referral at a time regarding a determination of nonresponsibility.

      (e) contract award shall be withheld by the contracting officer for a period of 15 business days (or longer if agreed to by the SBA and the contracting officer) following receipt by the appropriate SBA Area Office of a referral that includes all required documentation.


19.602-2 Issuing or denying a Certificate of Competency (COC).

Within 15 business days (or a longer period agreed to by the SBA and the Contracting agency) after receiving a notice that a small business concern lacks certain elements of responsibility, the SBA Area Office will take the following actions:

      (a) Inform the small business concern of the contracting officer’s determination and offer it an opportunity to apply to the SBA for a COC. (A concern wishing to apply for a COC should notify the SBA Area Office serving the geographical area in which the headquarters of the offeror is located.)

      (b) Upon timely receipt of a complete and acceptable application, elect to visit the applicant’s facility to review its responsibility.

           (1) The COC review process is not limited to the areas of nonresponsibility cited by the contracting officer.

           (2) The SBA may, at its discretion, independently evaluate the COC applicant for all elements of responsibility, but may presume responsibility exists as to elements other than those cited as deficient.

      (c) Consider denying a COC for reasons of nonresponsibility not originally cited by the contracting officer.

      (d) When the Area Director determines that a COC is warranted (for contracts valued at $25,000,000 or less), notify the contracting officer and provide the following options:

           (1) Accept the Area Director’s decision to issue a COC and award the contract to the concern. The COC issuance letter will then be sent, including as an attachment a detailed rationale for the decision; or

           (2) Ask the Area Director to suspend the case for one or more of the following purposes:

                (i) To permit the SBA to forward a detailed rationale for the decision to the contracting officer for review within a specified period of time.

                (ii) To afford the contracting officer the opportunity to meet with the Area Office to review all documentation contained in the case file and to attempt to resolve any issues.

                (iii) To submit any information to the SBA Area Office that the contracting officer believes the SBA did not consider (at which time, the SBA Area Office will establish a new suspense date mutually agreeable to the contracting officer and the SBA).

                (iv) To permit resolution of an appeal by the Contracting agency to SBA Headquarters under 19.602-3. However, there is no contracting officer’s appeal when the Area Office proposes to issue a COC valued at $100,000 or less.

      (e) At the completion of the process, notify the concern and the contracting officer that the COC is denied or is being issued.

      (f) Refer recommendations for issuing a COC on contracts greater than $25,000,000 to SBA Headquarters.


19.602-3 Resolving differences between the agency and the Small Business Administration.

      (a) COCs valued between $100,000 and $25,000,000.

(1) When disagreements arise about a concern’s ability to perform, the