19.1405 Set-aside procedures
Source: FAR 19.1405 on acquisition.gov
Contracting officers must prioritize SDVOSB set-asides, verify certification status, and follow strict procedures to ensure only eligible SDVOSBs compete for and receive awards.
Overview
FAR 19.1405 outlines the procedures for setting aside federal acquisitions for Service-Disabled Veteran-Owned Small Business (SDVOSB) concerns. It details when and how contracting officers must consider SDVOSB set-asides, the eligibility requirements for offerors, and the steps to follow if only one or no eligible SDVOSB offers are received. The section also addresses the appeals process if the Small Business Administration (SBA) disagrees with a contracting officer’s decision not to set aside an acquisition for SDVOSBs. The regulation ensures that SDVOSBs have fair opportunities to compete for federal contracts, while also establishing clear compliance and verification steps for contracting officers.
Key Rules
- Precedence and Market Research
- Contracting officers must comply with FAR 19.203 and conduct market research to determine if two or more eligible SDVOSBs are likely to submit offers at fair market prices before setting aside an acquisition.
- Eligibility Verification
- Effective January 1, 2024, only SDVOSBs certified by SBA in SAM, or those with pending certification applications submitted by December 31, 2023, are eligible for award consideration.
- Award Procedures
- If only one eligible SDVOSB submits an acceptable offer, the award should be made to that concern; if none, the set-aside is withdrawn and the requirement may be set aside for other small businesses.
- SBA Appeals Process
- If SBA intends to appeal a rejection of its set-aside recommendation, it must notify the contracting officer within 5 working days, and the contracting officer must suspend action unless urgent circumstances exist. The appeal process has strict timelines and the head of the contracting activity’s decision is final.
Responsibilities
- Contracting Officers: Must conduct market research, verify SDVOSB eligibility, follow set-aside and award procedures, and comply with SBA appeal timelines.
- Contractors: Must ensure SDVOSB certification in SAM or have a pending application by the deadline to be eligible for award.
- Agencies: Must respond to SBA appeals and ensure oversight of the set-aside process.
Practical Implications
- This section ensures SDVOSBs have priority consideration for certain federal contracts, but only if they are properly certified and market research supports competition. Contracting officers must be diligent in verifying eligibility and following procedural steps, especially with new certification requirements. Failure to comply can result in delays, appeals, or loss of contracting opportunities for SDVOSBs.
(a) The contracting officer-
(1) Shall comply with 19.203 before deciding to set aside an acquisition under the SDVOSB Program;
(2) May set-aside acquisitions exceeding the micro-purchase threshold for competition restricted to SDVOSB concerns when the requirements of paragraph (b) of this section can be satisfied; and
(3) Shall consider SDVOSB set-asides before considering SDVOSB sole source awards (see 19.1406) or small business set-asides (see subpart 19.5).
(b) A contracting officer may restrict competition to SDVOSB concerns eligible under the SDVOSB Program if there is a reasonable expectation based on market research that—
(1) Two or more SDVOSB concerns eligible under the SDVOSB Program will submit offers; and
(2) Award will be made at a fair market price.
(c) Effective January 1, 2024, the contracting officer shall—
(1) Verify that offers received are eligible for consideration for award by checking if the offeror—
(i) Is designated in SAM as an SDVOSB concern certified by SBA; or
(ii) Has represented that it is an SDVOSB concern in SAM and submitted an application for certification to SBA on or before December 31, 2023. Pending applications for certification are in the SBA Veteran Small Business Certification database at https://veterans.certify.sba.gov" target="_blank">https://veterans.certify.sba.gov;
(2) Proceed with the offer evaluation, if the offeror meets the criteria in paragraph (c)(1)(i) or (ii) of this section; or
(3) Remove the offeror from consideration, if the offeror does not meet the criteria in paragraph (c)(1)(i) or (ii) of this section, as the offeror is not eligible for award.
(d) If the contracting officer receives only one acceptable offer from an SDVOSB concern eligible under the SDVOSB Program in response to a set-aside, the contracting officer should make an award to that concern. If the contracting officer receives no acceptable offers from SDVOSB concerns eligible under the SDVOSB Program, the SDVOSB set-aside shall be withdrawn and the requirement, if still valid, set aside for small business concerns, as appropriate (see 19.203).
(e) The procedures at 19.202-1 and, except for acquisitions not exceeding the simplified acquisition threshold, at 19.402 apply to this section. When the SBA intends to appeal a contracting officer’s decision to reject a recommendation of the SBA procurement center representative (or, if a procurement center representative is not assigned, see 19.402(a)) to set aside an acquisition for competition restricted to SDVOSB concerns, the SBA procurement center representative shall notify the contracting officer, in writing, of its intent within 5 working days of receiving the contracting officer’s notice of rejection. Upon receipt of notice of SBA’s intent to appeal, the contracting officer shall suspend action on the acquisition unless the head of the contracting activity makes a written determination that urgent and compelling circumstances, which significantly affect the interests of the Government, exist. Within 15 working days of SBA’s notification to the contracting officer, SBA shall file its formal appeal with the head of the contracting activity, or that agency may consider the appeal withdrawn. The head of the contracting activity shall reply to SBA within 15 working days of receiving the appeal. The decision of the head of the contracting activity shall be final.