8.405-5 Small business
Source: FAR 8.405-5 on acquisition.gov
FAR 8.405-5 empowers contracting officers to set aside FSS orders and BPAs for small businesses and requires agencies to consider small business status and eligibility when making awards and reporting achievements.
Overview
FAR 8.405-5 outlines how small business considerations apply to orders and Blanket Purchase Agreements (BPAs) placed under Federal Supply Schedules (FSS). While the small business preference programs in FAR Part 19 are not mandatory for FSS orders, contracting officers have the discretion to set aside orders and BPAs for small business concerns. The section also details how agencies can credit small business awards toward their goals, the importance of verifying small business status, and the need to consider socio-economic categories when making awards. Additionally, it encourages preference for small business items when multiple options are available at the same price.
Key Rules
- Discretionary Set-Asides
- Contracting officers may set aside FSS orders and BPAs for small business concerns, including specific socio-economic categories.
- Procedural Requirements
- When setting aside orders or BPAs, follow FSS ordering procedures and ensure compliance with small business program eligibility requirements from Part 19.
- Credit Toward Small Business Goals
- Agencies may count orders placed with small businesses toward their goals if the contractor meets the NAICS size standard for the order.
- Socio-Economic Consideration
- Agencies should consider at least one contractor from each small business socio-economic category, if available, during competition.
- Preference at Equal Price
- For orders above the micro-purchase threshold, preference should be given to small business items when two or more are available at the same delivered price.
Responsibilities
- Contracting Officers: May set aside orders/BPAs for small businesses, must follow FSS and Part 19 procedures, and verify small business status for credit.
- Contractors: Must accurately represent their small business status and meet NAICS size standards for orders.
- Agencies: Should track and report small business awards, and consider socio-economic status in award decisions.
Practical Implications
- This section enables agencies to support small business participation in FSS orders, even though Part 19 is not mandatory.
- It impacts how agencies plan acquisitions, report achievements, and ensure compliance with small business goals.
- Common pitfalls include failing to verify size status at the order level or not considering all eligible small business categories.
(a) Although the preference programs of part 19 are not mandatory in this subpart, in accordance with section 1331 of Public Law 111-240 (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section644(r)&num=0&edition=prelim" target="_blank">15 U.S.C. 644(r))-
(1) Ordering activity contracting officers may, at their discretion-
(i) Set aside orders for any of the small business concerns identified in 19.000(a)(3); and
(ii) Set aside BPAs for any of the small business concerns identified in 19.000(a)(3).
(2) When setting aside orders and BPAs-
(i) Follow the ordering procedures for Federal Supply Schedules at 8.405-1, 8.405-2, and 8.405-3; and
(ii) The specific small business program eligibility requirements identified in part 19 apply.
(b) Orders placed under schedule contracts may be credited toward the ordering activity’s small business goals. For purposes of reporting an order placed with a small business schedule contractor, an ordering agency may only take credit if the awardee meets a size standard that corresponds to the North American Industry Classification System code assigned to the order in accordance with 19.102(b)(3). Ordering activities should rely on the small business representations made by schedule contractors at the contract level (but see 19.301-2(b)(3) concerning rerepresentation for an order).
(c) Ordering activities may consider socio-economic status when identifying contractor(s) for consideration or competition for award of an order or BPA. At a minimum, ordering activities should consider, if available, at least one small business, veteran-owned small business, service disabled veteran-owned small business, HUBZone small business, women-owned small business, or small disadvantaged business schedule contractor(s). GSA Advantage! and Schedules e-Library at http://www.gsa.gov/fas" target="_blank">http://www.gsa.gov/fas contain information on the small business representations of Schedule contractors.
(d) For orders exceeding the micro-purchase threshold, ordering activities should give preference to the items of small business concerns when two or more items at the same delivered price will satisfy the requirement.