52.219-4
Notice of Price Evaluation Preference for HUBZone Small Business Concerns
FAR 52.219-4 gives HUBZone small businesses a 10% price evaluation advantage, but requires strict compliance with waiver and joint venture performance rules to benefit from the preference.
Overview
FAR 52.219-4 establishes a price evaluation preference for HUBZone (Historically Underutilized Business Zone) small business concerns in federal contracting. The clause requires contracting officers to add a 10% price evaluation factor to offers from non-HUBZone and non-small business concerns, thereby giving HUBZone small businesses a competitive advantage during source selection. The preference does not apply to offers from HUBZone small businesses that waive the preference or to otherwise successful small business offers. The clause also sets requirements for HUBZone joint ventures regarding the percentage of work performed by HUBZone members.
Key Rules
- 10% Price Evaluation Factor
- A 10% price factor is added to all offers except those from HUBZone small businesses (not waiving the preference) and otherwise successful small businesses.
- Application of Factor
- The 10% factor is applied on a line item or group basis, after other evaluation factors.
- Award in Case of Tie
- If the top two offers are from a HUBZone small business and a large business and are equal after applying the preference, the HUBZone small business wins.
- Waiver Option
- HUBZone small businesses can elect to waive the preference, in which case the 10% factor is applied to their offer.
- Joint Venture Requirement
- HUBZone joint ventures must ensure at least 40% of the contract work is performed by HUBZone small business parties, excluding administrative functions.
Responsibilities
- Contracting Officers: Must apply the 10% evaluation factor as prescribed and verify joint venture compliance.
- Contractors: Must indicate if they waive the preference and, for joint ventures, ensure 40% of work is performed by HUBZone members.
- Agencies: Oversee compliance with evaluation and performance requirements.
Practical Implications
- This clause incentivizes participation by HUBZone small businesses and can affect award outcomes.
- Contractors must carefully consider whether to waive the preference and ensure compliance in joint ventures.
- Misunderstanding the application of the 10% factor or joint venture requirements can lead to disqualification or protest.