General policy
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.