19.1405
Set-aside procedures
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one eligible SDVOSB submits an acceptable offer, the award should be made to that concern; if none, the set-aside is withdrawn and the requirement may be set aside for other small businesses.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.