19.202-1 Encouraging small business participation in acquisitions
Source: FAR 19.202-1 on acquisition.gov
Contracting officers must proactively structure acquisitions and provide justifications to ensure small businesses have equitable opportunities to compete for federal contracts.
Overview
FAR 19.202-1 establishes requirements for contracting officers to ensure small business concerns have a fair opportunity to participate in federal acquisitions. The regulation mandates proactive steps to break down acquisitions, set realistic delivery schedules, and encourage subcontracting, all to maximize small business involvement. It also outlines specific notification and justification procedures when acquisitions may limit small business participation, especially in cases of consolidation or bundling.
Key Rules
- Dividing Acquisitions
- Contracting officers must divide acquisitions into smaller lots when feasible, allowing small businesses to compete for portions of the work.
- Planning for Multiple Small Businesses
- Acquisitions should be structured so that more than one small business can participate, particularly when contract values exceed SBA surety limits.
- Realistic Delivery Schedules
- Delivery schedules must be set to encourage small business participation, consistent with government needs.
- Encouraging Subcontracting
- Prime contractors should be encouraged to subcontract with small businesses.
- Notification and Justification
- For acquisitions likely to exclude small businesses, contracting officers must notify the SBA Procurement Center Representative (PCR) and provide justifications if the acquisition cannot be structured to allow small business participation.
- Documentation of PCR Recommendations
- If a PCR’s recommendation is rejected, the contracting officer must document the rationale and notify the PCR.
Responsibilities
- Contracting Officers: Must structure acquisitions to maximize small business participation, provide required notifications and justifications, and document decisions regarding PCR recommendations.
- Contractors: Should seek subcontracting opportunities with small businesses and be aware of how acquisitions may be divided or scheduled.
- Agencies: Must support oversight and reporting, especially regarding consolidation, bundling, and PCR engagement.
Practical Implications
- This section ensures small businesses are not unfairly excluded from federal contracts by requiring thoughtful acquisition planning and transparency. Failure to comply can result in missed opportunities for small businesses and potential challenges from oversight bodies. Common pitfalls include inadequate market research, insufficient notification to the SBA, and poor documentation of decisions.
Small business concerns shall be afforded an equitable opportunity to compete for all contracts that they can perform to the extent consistent with the Government’s interest. When applicable, the contracting officer shall take the following actions:
(a) Divide proposed acquisitions of supplies and services (except construction) into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement.
(b) Plan acquisitions such that, if practicable, more than one small business concern may perform the work, if the work exceeds the amount for which a surety may be guaranteed by SBA against loss under https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section694&num=0&edition=prelim" target="_blank">15 U.S.C. 694b (see definition of “Applicable Statutory Limit” at https://www.ecfr.gov/current/title-13/section-115.10" target="_blank">13 CFR 115.10).
(c) Ensure that delivery schedules are established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the Government.
(d) Encourage prime contractors to subcontract with small business concerns (see subpart 19.7).
(e)
(1) Provide a copy of the proposed acquisition package and other reasonably obtainable information related to the acquisition to the SBA PCR (or, if a PCR is not assigned, see 19.402(a)) at least 30 days prior to the issuance of the solicitation if—
(i) The proposed acquisition is for supplies or services currently being provided by a small business and the proposed acquisition is of a quantity or estimated dollar value, the magnitude of which makes it unlikely that small businesses can compete for the prime contract;
(ii) The proposed acquisition is for construction and seeks to package or consolidate discrete construction projects and the magnitude of this consolidation makes it unlikely that small businesses can compete for the prime contract;
(iii) The proposed acquisition is for a consolidated or bundled requirement. (See 7.107-5(a) for mandatory 30-day notice requirement to incumbent small business concerns.) The contracting officer shall provide all information relative to the justification for the consolidation or bundling, including the acquisition plan or strategy, and if the acquisition involves substantial bundling, the information identified in 7.107-4. The contracting officer shall also provide the same information to the agency Office of Small and Disadvantaged Business Utilization: or
(iv) The acquisition will be reviewed at the PCR's discretion.
(2) For acquisitions described in paragraph (e)(1)(i) through (iii) of this section, provide a statement explaining why the—
(i) Proposed acquisition cannot be divided into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement;
(ii) Delivery schedules cannot be established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the Government;
(iii) Proposed acquisition cannot be structured so as to make it likely that small businesses can compete for the prime contract;
(iv) Consolidated construction project cannot be acquired as separate discrete projects; or
(v) Consolidation or bundling is necessary and justified.
(3) Process the 30-day notification concurrently with other processing steps required prior to the issuance of the solicitation.
(4) If the contracting officer rejects the SBA PCR’s recommendation made in accordance with 19.402(c)(2), document the basis for the rejection and notify the SBA PCR in accordance with 19.502-8.