Total small business set-asides
FAR 19.502-2 requires most federal acquisitions above the micro-purchase threshold to be set aside for small businesses unless there is no reasonable expectation of competitive offers from at least two responsible small businesses.
Overview
FAR 19.502-2 establishes the requirements for total small business set-asides for federal acquisitions. It mandates that acquisitions of supplies or services above the micro-purchase threshold and up to the simplified acquisition threshold must be set aside exclusively for small businesses, unless the contracting officer determines there is not a reasonable expectation of receiving competitive offers from at least two responsible small businesses. For acquisitions above the simplified acquisition threshold, a total small business set-aside is required only if there is a reasonable expectation of receiving offers from at least two responsible small businesses at fair market prices. The regulation also outlines procedures if only one or no acceptable small business offers are received, and emphasizes the importance of market research and acquisition history, especially for research and development procurements.
Key Rules
- Mandatory Set-Asides for Certain Dollar Ranges
- Acquisitions above the micro-purchase threshold but not exceeding the simplified acquisition threshold must be set aside for small businesses unless competition is not expected.
- Set-Asides Above the Simplified Acquisition Threshold
- For acquisitions above the simplified acquisition threshold, set-asides are only required if there is a reasonable expectation of at least two competitive small business offers at fair market prices.
- Award Procedures
- If only one acceptable small business offer is received, award may be made to that firm; if none, the set-aside is withdrawn and the requirement may be resolicited unrestricted.
- Market Research and Past History
- Contracting officers must consider market research and past acquisition history, but these are not the only factors in determining reasonable expectation of competition.
- Special Considerations for R&D
- For research and development, there must be a reasonable expectation of obtaining the best scientific and technological sources from small businesses.
Responsibilities
- Contracting Officers: Must conduct market research, determine reasonable expectation of competition, set aside acquisitions as required, and follow procedures for award or withdrawal of set-asides.
- Contractors: Small businesses must submit competitive offers to benefit from set-asides.
- Agencies: Ensure oversight of set-aside determinations and compliance with small business participation goals.
Practical Implications
- This section ensures small businesses have fair access to federal contracts, especially for acquisitions below the simplified acquisition threshold.
- Contracting officers must document their market research and rationale for set-aside decisions.
- Failure to properly set aside or document exceptions can result in protests or compliance issues.