Overview
FAR 19.504 outlines the authority and procedures for contracting officers to set aside individual task and delivery orders for small business concerns under existing multiple-award contracts. It establishes the rules for discretionary set-asides, the priority of socioeconomic programs, and how orders are handled under total set-asides, partial set-asides, and reserves.
Key Rules
- Discretionary Authority: Under the Small Business Jobs Act of 2010, contracting officers (COs) have the discretion to set aside orders for small businesses, provided the base solicitation and contract state whether such set-asides will be discretionary or mandatory.
- Socioeconomic Hierarchy: For orders exceeding the Simplified Acquisition Threshold (SAT), COs must prioritize socioeconomic programs (8(a), HUBZone, SDVOSB, and WOSB) for consideration before utilizing a general small business set-aside.
- Threshold Flexibility: For orders at or below the SAT, the CO may set aside the order for any category of small business identified in FAR 19.000(a)(3) without the specific hierarchy required for larger orders.
- Partial Set-aside Limitations: In contracts with partial set-asides, competition for orders under the set-aside portion is restricted to the small businesses that were awarded those specific portions.
- Orders under Reserves:
- If two or more small businesses of a specific type hold awards under a "reserve," the CO may set aside an order for that group.
- If only one small business of a specific type exists under the reserve, the CO may issue a direct order to that concern.
Practical Implications
- Strategic Planning: Government agencies can use order-level set-asides as a flexible tool to meet their annual small business and socioeconomic prime contracting goals even after a large multiple-award contract has been established.
- Contractor Competition: Small business contractors must remain aware that holding a multiple-award contract does not guarantee they will only compete against other small businesses unless the CO specifically invokes these set-aside procedures for a particular order.