19.1307 Price evaluation preference for HUBZone small business concerns
Source: FAR 19.1307 on acquisition.gov
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.
(a) The price evaluation preference for HUBZone small business concerns shall be used in acquisitions conducted using full and open competition. The preference shall not be used-
(1) Where price is not a selection factor so that a price evaluation preference would not be considered (e.g., Architect/Engineer acquisitions);
(2) Where all fair and reasonable offers are accepted (e.g., the award of multiple award schedule contracts); or
(3) For the reserved portion of a solicitation for a multiple-award contract (see 19.503).
(b) The contracting officer shall give offers from HUBZone small business concerns a price evaluation preference by adding a factor of 10 percent to all offers, except-
(1) Offers from HUBZone small business concerns that have not waived the evaluation preference; or
(2) Otherwise successful offers from small business concerns.
(c) The factor of 10 percent shall be applied on a line item basis or to any group of items on which award may be made. Other evaluation factors, such as transportation costs or rent-free use of Government property, shall be added to the offer to establish the base offer before adding the factor of 10 percent.
(d) When the two highest rated offerors are a HUBZone small business concern and a large business, and the evaluated offer of the HUBZone small business concern is equal to the evaluated offer of the large business after considering the price evaluation preference, the contracting officer shall award the contract to the HUBZone small business concern.