19.503 Reserves
Source: FAR 19.503 on acquisition.gov
FAR 19.503 allows contracting officers to reserve awards for small businesses in multiple-award procurements when set-asides are not feasible, ensuring continued small business participation.
Overview
FAR 19.503 outlines the use of "reserves" in multiple-award procurements to promote small business participation when a total or partial set-aside is not feasible. Contracting officers may reserve one or more contract awards for small business concerns if market research shows that neither a total nor partial set-aside is practical. The regulation details when reserves are appropriate, the types of awards that can result, and clarifies that certain small business program rules (like limitations on subcontracting and the nonmanufacturer rule) apply at the order level, not the contract level. This section ensures small businesses have opportunities in competitive procurements that might otherwise be inaccessible due to the nature or size of the requirement.
Key Rules
- Discretionary Use of Reserves
- Contracting officers may reserve awards for small businesses in multiple-award, full and open competitions if set-asides are not feasible based on market research.
- Conditions for Reserve
- Reserves are used when there is no reasonable expectation of receiving competitive offers from at least two responsible small businesses for the entire or any portion of the requirement.
- Types of Awards
- Reserves can result in awards to one or more small business types, or to small businesses with teaming arrangements in bundled requirements.
- Program Eligibility
- All specific small business program eligibility requirements still apply.
- Subcontracting and Nonmanufacturer Rule
- These rules do not apply at the contract level for reserves, but do apply at the order level when set aside or issued directly to a small business.
Responsibilities
- Contracting Officers: Must conduct market research, determine feasibility of set-asides, and apply reserves appropriately; ensure compliance with program eligibility and order-level rules.
- Contractors: Must meet eligibility requirements for small business programs and comply with order-level subcontracting and nonmanufacturer rules.
- Agencies: Oversee proper application of reserves and ensure small business participation is maximized where feasible.
Practical Implications
- This section provides a mechanism to ensure small business participation in large or complex procurements where set-asides are not possible.
- Contractors should be aware that even if a contract is not set aside, opportunities may exist through reserves.
- Common pitfalls include misunderstanding when reserves are appropriate and failing to comply with order-level requirements.
(a) In accordance with section 1331 of the Small Business Jobs Act of 2010 (https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section644&num=0&edition=prelim" target="_blank">15 U.S.C. 644(r)(3)) and https://www.govinfo.gov/content/pkg/CFR-2024-title13-vol1/xml/CFR-2024-title13-vol1-sec125-2.xml" target="_blank">13 CFR 125.2(e)(4), contracting officers may, at their discretion when conducting multiple-award procurements using full and open competition, reserve one or more contract awards for any of the small business concerns identified in 19.000(a)(3), when market research indicates—
(1) A total set-aside is not feasible because there is no reasonable expectation of receiving offers that are competitive in terms of fair market prices, quality, and delivery from at least two responsible small business concerns identified in 19.000(a)(3), that can perform the entire requirement; and
(2) A partial set-aside is not feasible because—
(i) The contracting officer is unable to divide the requirement into distinct portions; or
(ii) There is no reasonable expectation that at least two responsible small business concerns identified in 19.000(a)(3) can perform any portion of the requirement competitively in terms of fair market price, quality, and delivery.
(b) A reserve will result in one of the following:
(1) One or more contract awards to any one or more types of small business concerns identified in 19.000(a)(3).
(2) In the case of a solicitation of a bundled requirement that will result in a multiple-award contract, an award to one or more small businesses with a Small Business Teaming Arrangement.
(c) The specific program eligibility requirements identified in this part apply.
(d) The limitations on subcontracting and the nonmanufacturer rule (see 19.505) do not apply to reserves at the contract level, but shall apply to orders that are set aside or issued directly to one small business concern under 19.504(c)(1)(ii).