Overview
This section prescribes the application of a 10 percent price evaluation preference for HUBZone small business concerns in acquisitions conducted through full and open competition. It ensures that HUBZone firms remain competitive against large businesses by adjusting the evaluated price of non-small business offers.
Key Rules
- Applicability: The preference applies only to full and open competitions and is applied on a line-item or group-item basis.
- Exclusions: The preference cannot be used for Architect-Engineer (A/E) contracts, Multiple Award Schedule (MAS) contracts where all reasonable offers are accepted, or reserved portions of multiple-award contracts.
- The 10% Factor: Contracting officers must add a 10 percent factor to the prices of all offers except those from small business concerns or HUBZone concerns that have not waived the preference.
- Calculation Sequence: Evaluation factors such as transportation costs or rent-free use of government property must be added to the base offer before the 10 percent HUBZone preference is calculated.
- Tie-Breaking: If a HUBZone concern and a large business have equal evaluated prices after the preference is applied, the award must be made to the HUBZone concern.
Practical Implications
- This rule allows a HUBZone firm to win a contract even if its bid is up to 10% higher than a large business's bid, provided the HUBZone firm is the highest-rated offeror after price evaluation.
- Because the 10% factor is not added to offers from other small businesses, the preference effectively levels the playing field against large corporations but does not give a HUBZone firm a price advantage over a standard small business.