Overview
FAR Subpart 9.7 outlines the regulations for contracting with "pools"—groups of businesses that associate to jointly perform defense production or research and development (R&D) contracts. It defines the legal requirements for these pools and provides guidance to Contracting Officers on how to treat pool-based offers, verify their status, and handle individual pool members.
Key Rules
- Definition of a Pool: A pool must be associated for defense or R&D purposes, have a formal governing agreement, and be approved by either the Small Business Administration (SBA) or a designated official under the Defense Production Act of 1950.
- Treatment as a Contractor: Generally, a pool is treated the same as any other prospective contractor, provided it meets the definition and procedural requirements.
- Submission Requirements: An offer must be submitted in the pool’s name or by a member explicitly stating the offer is on behalf of the pool.
- Small Business Preferences: Only pools approved by the SBA under the Small Business Act are entitled to small business preferences and privileges. Pools approved strictly under the Defense Production Act do not receive these benefits.
- Unincorporated Pools: If a pool is not incorporated, every participating member must provide a certified power of attorney authorizing an agent to sign the offer or contract.
- Independent Bidding Restrictions: A pool member cannot submit an individual offer if they are already participating in a competing offer submitted by the pool for the same requirement.
Responsibilities
- Contracting Officers (COs):
- Must verify the approved status of a pool with the SBA District Office or the relevant approving agency.
- Must document the contract file to confirm that verification took place.
- Must collect and attach certified copies of powers of attorney for all members of unincorporated pools to the government's copy of the contract.
- Must evaluate the "responsibility" (under FAR Subpart 9.1) of a pool member if they bid independently, taking the pool agreement into account.
- Pool Members:
- Must provide powers of attorney if the pool is unincorporated.
- Must ensure they do not create a conflict by participating in both a pool bid and an independent bid for the same contract.
Practical Implications
- Resource Scaling: This subpart allows smaller firms or specialized R&D entities to aggregate their technical and financial resources to compete for large-scale defense projects that would be beyond the capacity of a single member.
- Administrative Due Diligence: For the government, contracting with pools involves a higher administrative burden, specifically regarding the verification of SBA/DPA status and the management of multiple powers of attorney for unincorporated groups.
- Strategic Bidding: Contractors must be careful with their bidding strategy; joining a pool bid effectively locks that member out of competing individually for the same contract, preventing "two bites at the apple" and ensuring fair competition.
- Nuanced Small Business Status: Not all joint ventures or pools are equal in the eyes of the FAR. A pool's "Small Business" status is entirely dependent on which authority (SBA vs. DPA) granted its approval, which significantly impacts its eligibility for set-asides.