19.502-9 Withdrawing or modifying small business set-asides
Source: FAR 19.502-9 on acquisition.gov
Contracting officers may withdraw or modify small business set-asides before award if it is not in the public interest, but must document and notify all relevant parties.
Overview
FAR 19.502-9 outlines the procedures for withdrawing or modifying small business set-asides before contract award. This section allows contracting officers to withdraw or modify a total or partial small business set-aside if awarding the contract would be detrimental to the public interest, such as when the price is not fair and reasonable. The process requires written notification to the agency small business specialist and the SBA Procurement Center Representative (PCR), and, if there is disagreement, referral to the SBA PCR for review. All actions must be documented in the contract file.
Key Rules
- Withdrawal or Modification of Set-Asides
- Contracting officers may withdraw or modify small business set-asides if award is not in the public interest (e.g., price is above fair market value).
- Notification Requirement
- Written notice must be provided to the agency small business specialist and the SBA PCR, stating the reasons for withdrawal or modification.
- Disagreement Resolution
- If the small business specialist disagrees, the case must be referred to the SBA PCR for review.
- Documentation
- A written statement supporting the withdrawal or modification must be included in the contract file.
Responsibilities
- Contracting Officers: Assess public interest, provide written notice, refer disagreements, and document decisions.
- Contractors: Be aware that set-asides can be withdrawn or modified before award if not in the public interest.
- Agencies: Ensure oversight through small business specialists and SBA PCR involvement.
Practical Implications
- This section ensures that small business set-asides are only maintained when they serve the public interest and are economically justified.
- Contractors should recognize that set-asides are not guaranteed until award and may be withdrawn for valid reasons.
- Proper documentation and communication are critical to compliance and transparency.
(a) If, before award of a contract involving a total or partial small business set-aside, the contracting officer considers that award would be detrimental to the public interest (e.g., payment of more than a fair market price), the contracting officer may withdraw the small business set-aside, whether it was unilateral or joint. The contracting officer shall initiate a withdrawal of an individual total or partial small business set-aside, by giving written notice to the agency small business specialist and the SBA PCR (or, if a PCR is not assigned, see 19.402(a)) stating the reasons. In a similar manner, the contracting officer may modify a unilateral or joint class small business set-aside to withdraw one or more individual acquisitions.
(b) If the agency small business specialist does not agree to a withdrawal or modification, the case shall be promptly referred to the SBA PCR (or, if a PCR is not assigned, see 19.402(a)) for review.
(c) The contracting officer shall prepare a written statement supporting any withdrawal or modification of a small business set-aside and include it in the contract file.