Tag Archives: small business set-asides

Set-Aside Decision Need Not Consider Compliance with Limitation on Subcontracting

Posted on by

Before deciding whether to set-aside a solicitation for small businesses under FAR 19.502-2, should the contracting officer first determine whether those small business will be able to provide the needed services while, at the same time, complying with the limitation on subcontracting?

No, according to a recent GAO bid protest decision. Instead, an agency’s determination whether a small business will comply with the limitation on subcontracting should be made as part of its award decision (following the evaluation of proposals), not during its initial set-aside determination.

Continue reading →

SBA Final Rule: Small Business Mentor-Protégé JV Agreement Requirements

Posted on by

On Friday, Steven wrote about the framework of the new SBA small business mentor-protégé program. As part of this significant program addition, SBA’s final rule includes details about the requirements a small business joint venture must satisfy in order to be qualified to perform a small business set-aside. This post will briefly discuss those requirements.

Continue reading →

GAO: Protester Must Show Awardee’s “Specific Exception” to Subcontracting Limitation

Posted on by

A protester challenging an awardee’s compliance with the FAR’s limitation on subcontracting faces an uphill battle.

As explained in a recent GAO bid protest decision, an offeror’s compliance with the limitation on subcontracting is presumed; a protester, therefore, must present specific evidence demonstrating that the awardee will not comply with the limitation. In many cases–especially when the solicitation does not require offerors to provide a breakdown of costs of the work performed by the prime and its subcontractors–such evidence may be next to impossible to obtain.

Continue reading →

Small Business Set-Asides: Two Small Manufacturers Required

Posted on by

When an agency acquires manufactured products or supplies, the agency need not set aside the solicitation for small businesses under the FAR’s “rule of two” unless the agency has a reasonable expectation of receiving offers from small businesses offering the products of two or more small manufacturers.

A recent GAO bid protest decision highlights a little-known provision of the FAR, which provides that the “rule of two” does not apply to acquisitions for manufactured products over $150,000 where two or more small business nonmanufacturers are likely to submit offers, but the small business nonmanufacturers will not offer the products of two or more small business manufacturers.

Continue reading →

Nonmanufacturer Rule Violation Leads To Default Termination

Posted on by

A procuring agency appropriately terminated a small business set-aside contract for default when the SBA determined, after contract award, that the prime contractor was not complying with the nonmanufacturer rule.

A recent decision of the Armed Service Board of Contract Appeals involved a very interesting factual situation, in which the small business in question told the SBA that it planned to perform the contract in compliance with the nonmanufacturer rule, but then failed to do so.  This failure, according to the ASBCA, justified a default termination.

Continue reading →

GAO: Rule of Two Not Satisfied Where Businesses Do Not Manufacture Products

Posted on by

Where an agency buys manufactured goods, the FAR’s Rule of Two is satisfied when two or small business manufacturers of the end products exist. It is not enough, as GAO recently held, for two or more small business distributors of manufactured products to exist.

Continue reading →

GAO: Rule Of Two Analysis Not Required For Exercise Of “In Scope” Options

Posted on by

The Small Business Act envisions that small businesses will be awarded a “fair proportion” of government contracts. To meet this goal, the FAR instructs agencies to set aside for small businesses acquisitions over $150,000 if there is a reasonable expectation that offers will be received from at least two responsible small businesses, at fair market prices.

While the Rule of Two is powerful, it does not extend to all procurement actions. A recent GAO case illustrates an important exception to the Rule of Two. In Walker Development & Trading Group—Reconsideration, B-411246.2 (Sept. 14, 2015), the GAO held that an agency need not conduct a Rule of Two analysis before exercising an option in accordance with the terms of an existing contract.

Continue reading →