Price evaluation preference for HUBZone small business concerns
A 10 percent price evaluation preference must be applied to HUBZone small business concerns in full and open competition, giving them a competitive edge unless specific exceptions apply.
Overview
FAR 19.1307 establishes the procedures for applying a price evaluation preference for HUBZone small business concerns in acquisitions conducted under full and open competition. The regulation mandates that, with certain exceptions, contracting officers must apply a 10 percent price evaluation preference to offers from HUBZone small businesses, thereby enhancing their competitiveness against large businesses. The preference does not apply in acquisitions where price is not a selection factor, where all fair and reasonable offers are accepted, or for reserved portions of multiple-award contracts. The 10 percent factor is applied after other evaluation factors are considered, and if a HUBZone small business and a large business are tied after applying the preference, the contract must be awarded to the HUBZone small business concern.
Key Rules
- Applicability of Preference
- The 10 percent price evaluation preference is used in full and open competition, except in specified circumstances (e.g., A/E acquisitions, multiple award schedules, reserved portions of multiple-award contracts).
- Calculation of Preference
- The 10 percent factor is added to all offers except those from HUBZone small businesses not waiving the preference and otherwise successful small business offers.
- Application Method
- The preference is applied on a line item or group basis, after adding other evaluation factors to the base offer.
- Award in Case of Tie
- If a HUBZone small business and a large business are tied after applying the preference, the HUBZone small business receives the award.
Responsibilities
- Contracting Officers: Must correctly apply the 10 percent preference, ensure exceptions are observed, and award to HUBZone small businesses in case of a tie with a large business.
- Contractors: Should understand how the preference affects their competitive position and ensure proper self-identification as a HUBZone small business.
- Agencies: Must oversee compliance with preference application and document evaluation decisions.
Practical Implications
- This section exists to promote HUBZone small business participation in federal contracting by leveling the playing field against large businesses.
- Contractors should be aware of when the preference applies and how it impacts evaluations.
- Common pitfalls include misapplying the preference in ineligible acquisitions or failing to document evaluation procedures.