19.201 General policy
Source: FAR 19.201 on acquisition.gov
FAR 19.201 mandates that agencies and contractors maximize opportunities for small businesses in federal contracting, with robust oversight and coordination to ensure compliance and fair participation.
Overview
FAR 19.201 establishes the federal government's policy to maximize opportunities for small businesses—including veteran-owned, service-disabled veteran-owned, HUBZone, small disadvantaged, and women-owned small businesses—in both prime contracting and subcontracting. It outlines the responsibilities of agency heads, contracting officers, and the Office of Small and Disadvantaged Business Utilization (OSDBU) to ensure small business participation, compliance with the Small Business Act, and proper oversight. The section details the structure, duties, and reporting requirements of the OSDBU (or Office of Small Business Programs for DoD), the appointment and role of small business specialists, and the need for coordination with the SBA and other agency officials to promote small business involvement and address issues such as contract bundling and consolidation.
Key Rules
- Maximum Opportunities for Small Businesses
- Agencies must provide maximum practicable opportunities for small businesses to participate in federal acquisitions as both prime contractors and subcontractors.
- Agency Responsibilities
- Heads of contracting activities must implement small business programs, ensure staff are knowledgeable, and take actions to increase small business participation.
- Office of Small and Disadvantaged Business Utilization (OSDBU)
- Each agency must have an OSDBU (or equivalent), led by a Director, responsible for compliance with the Small Business Act and reporting directly to agency leadership.
- Small Business Specialist Role
- Specialists must be appointed, involved early in acquisition planning, and coordinate on issues of bundling and consolidation.
- Annual Reviews and Reporting
- Agencies must conduct annual reviews of small business participation, assess bundling/consolidation impacts, and report findings to agency heads and the SBA.
Responsibilities
- Contracting Officers: Coordinate with small business specialists, ensure compliance with small business requirements, and consider set-aside recommendations.
- Contractors: Ensure maximum practicable small business participation, especially in subcontracting, and comply with related reporting and plan requirements.
- Agencies: Maintain an OSDBU, appoint specialists, conduct reviews, and report on small business program effectiveness.
Practical Implications
- This section ensures small businesses have fair access to federal contracting opportunities, requiring agencies to proactively support and monitor participation. Failure to coordinate with small business offices or to properly document and justify bundling/consolidation can lead to compliance issues. Contractors must be aware of these policies to maximize their competitiveness and meet subcontracting obligations.
(a) It is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. Such concerns must also have the maximum practicable opportunity to participate as subcontractors in the contracts awarded by any executive agency, consistent with efficient contract performance. The Small Business Administration (SBA) counsels and assists small business concerns and assists contracting personnel to ensure that a fair proportion of contracts for supplies and services is placed with small business.
(b) Heads of contracting activities are responsible for effectively implementing the small business programs within their activities, including achieving program goals. They are to ensure that contracting and technical personnel maintain knowledge of small business program requirements and take all reasonable action to increase participation in their activities’ contracting processes by these businesses.
(c) The Small Business Act requires each agency with contracting authority to establish an Office of Small and Disadvantaged Business Utilization (see section 15(k) of the Small Business Act). For the Department of Defense, in accordance with section 904 of https://www.govinfo.gov/content/pkg/PLAW-109publ163/html/PLAW-109publ163.htm" target="_blank">Public Law 109-163 (https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section144&num=0&edition=prelim" target="_blank">10 U.S.C. 144 note), the Office of Small and Disadvantaged Business Utilization has been redesignated as the Office of Small Business Programs. Management of the office is the responsibility of an officer or employee of the agency who, in carrying out the purposes of the Act—
(1) Is known as the Director of the Office of Small and Disadvantaged Business Utilization, or for the Department of Defense, the Director of the Office of Small Business Programs;
(2)Is appointed by the agency head;
(3) Is responsible to and reports directly to the agency head or the deputy to the agency head (except that for the Department of Defense, the Director of the Office of Small Business Programs reports to the Secretary or the Secretary’s designee);
(4)Is responsible for the agency carrying out the functions and duties in sections 8, 15, 31, 36, and 44 of the Small Business Act;
(5) Works with the SBA procurement center representative (PCR) (or, if a PCR is not assigned, see 19.402(a)) to identify proposed solicitations that involve bundling and work with the agency acquisition officials and SBA to revise the acquisition strategies for such proposed solicitations to increase the probability of participation by small businesses;
(6)Assists small business concerns in obtaining payments under their contracts, late payment interest penalties, or information on contractual payment provisions;
(7) Has supervisory authority over agency personnel to the extent that their functions and duties relate to sections 8, 15, 31, 36, and 44 of the Small Business Act;
(8)Assigns a small business technical advisor to each contracting activity within the agency to which the SBA has assigned a representative (see 19.402)—
(i)Who is a full-time employee of the contracting activity, well qualified, technically trained, and familiar with the supplies or services contracted for by the activity; and
(ii)Whose principal duty is to assist the SBA's assigned representative in performing functions and duties relating to sections 8, 15, 31, 36, and 44 of the Small Business Act;
(9) Cooperates and consults on a regular basis with the SBA in carrying out the agency's functions and duties in sections 8, 15, 31, 36, and 44 of the Small Business Act;
(10) Makes recommendations in accordance with agency procedures as to whether a particular acquisition should be awarded under subpart 19.5 as a small business set-aside, under subpart 19.8 as a section 8(a) award, under subpart 19.13 as a HUBZone set-aside, under subpart 19.14 as a set-aside service-disabled veteran-owned small business (SDVOSB) concerns eligible under the SDVOSB Program, or under subpart 19.15 as a set-aside for economically disadvantaged women-owned small business (EDWOSB) concerns or women-owned small business (WOSB) concerns eligible under the WOSB Program;
(11) Conducts annual reviews to assess the—
(i) Extent to which small businesses are receiving a fair share of Federal procurements, including contract opportunities under the programs administered under the Small Business Act;
(ii) Adequacy of consolidated or bundled contract documentation and justifications; and
(iii) Actions taken to mitigate the effects of necessary and justified consolidation or bundling on small businesses.
(12) Provides a copy of the assessment made under paragraph (c)(11) of this section to the Agency Head and SBA Administrator;
(13)Provides to the chief acquisition officer and senior procurement executive advice and comments on acquisition strategies, market research, and justifications related to consolidation of contract requirements;
(14) When notified by a small business concern prior to the award of a contract that the small business concern believes that a solicitation, request for proposal, or request for quotation unduly restricts the ability of the small business concern to compete for the award–
(i) Submits the notification by the small business concern to the contracting officer and, if necessary, recommends ways in which the solicitation, request for proposal, or request for quotation may be altered to increase the opportunity for competition; and
(ii) Informs the advocate for competition of such agency (as established under 41 U.S.C 1705 or https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section3249&num=0&edition=prelim" target="_blank">10 U.S.C. 3249) of such notification;
(15) Ensures agency purchases using the Governmentwide purchase card that are greater than the micro-purchase threshold and less than the simplified acquisition threshold were made in compliance with the Small Business Act and were properly recorded in accordance with subpart 4.6 in the Federal Procurement Data System;
(16) Assists small business contractors and subcontractors in finding resources for education and training on compliance with contracting regulations;
(17) Reviews all subcontracting plans required by 19.702(a) to ensure the plan provides maximum practicable opportunity for small business concerns to participate in the performance of the contract; and
(18) Performs other duties listed at http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section644(k)&num=0&edition=prelim" target="_blank">15 U.S.C. 644(k).
(d) Small business specialists shall be appointed and act in accordance with agency regulations.
(1) The contracting activity shall coordinate with the small business specialist as early in the acquisition planning process as practicable, but no later than 30 days before the issuance of a solicitation, or prior to placing an order without a solicitation when the acquisition meets the dollar thresholds set forth at 7.107-4(a)(1). See also 7.104(d).
(2) The small business specialist shall notify the agency's Director of the Office of Small and Disadvantaged Business Utilization, and for the Department of Defense, the Director of the Office of Small Business Programs, when the criteria relating to substantial bundling at 7.107-4(a)(1) are met.
(3) The small business specialist shall coordinate with the contracting activity and the SBA PCR on all determinations and findings required by 7.107 for consolidation or bundling of contract requirements.