Overview
This section prescribes the mandatory procedures and criteria a contracting officer must follow when restricting competition to Service-Disabled Veteran-Owned Small Business (SDVOSB) concerns, emphasizing the priority of set-asides over sole-source awards. It specifically addresses the "Rule of Two," certification verification requirements effective in 2024, and the SBA's right to appeal set-aside decisions.
Key Rules
- Order of Precedence: Contracting officers must consider SDVOSB set-asides before SDVOSB sole-source awards or general small business set-asides, subject to the requirements of FAR 19.203.
- The "Rule of Two": A set-aside is permitted above the micro-purchase threshold if the contracting officer has a reasonable expectation that at least two eligible SDVOSBs will submit offers and the award will be made at a fair market price.
- Certification Requirements: As of January 1, 2024, offerors must be certified by the SBA and designated in SAM.gov as an SDVOSB (or have a qualifying pending application submitted by December 31, 2023) to be eligible for award; those who fail this check must be removed from consideration.
- Single Offer Handling: If only one acceptable SDVOSB offer is received, the contracting officer should still make the award to that concern rather than canceling the solicitation.
- Withdrawal Procedure: If no acceptable SDVOSB offers are received, the set-aside must be withdrawn and the requirement should be considered for a general small business set-aside.
- SBA Appeal Process: If the SBA Procurement Center Representative (PCR) disagrees with a decision not to set aside a requirement, they may appeal to the Head of the Contracting Activity (HCA), whose decision is final.
Practical Implications
- Verification Rigor: Contractors can no longer rely on self-certification for SDVOSB set-asides; they must proactively maintain SBA certification to remain eligible for award.
- Market Research Criticality: Agency market research must be sufficiently documented to support the "Rule of Two," as this determination dictates whether the acquisition stays within the SDVOSB program or is opened to broader small business competition.