DoD, GSA, and NASA are issuing a final rule, effective March 30, 2020, that will amend the Federal Acquisition Regulation (FAR) to implement regulatory changes made by the Small Business Administration (SBA). That SBA rule, made pursuant to section 1331 of the Small Business Jobs Act of 2010, provides for partial set-asides and reserves, and for set-asides of orders for small business concerns under multiple- award contracts.
This rule will provide more guidance for contracting officers on how to:
- Set aside part or parts of multiple- award contracts for small business
- Set aside orders under multiple- award contracts, notwithstanding the statutory requirement to provide contract holders fair opportunity to be considered
- Reserve one or more awards for small business on multiple-award contracts that are established through full and open competition (i.e., not totally or partially set aside).
This rule is anticipated to benefit small businesses in several ways, aside from the guidance provided to contracting officers noted above. Those benefits include that:
- Small businesses will no longer have to submit an offer for both the set-aside and non-set-aside portions of a partial set-aside if the contractor is only interested in performing the set-aside portion.
- Contracting officers will now have discretion to require rerepresentation of business size or socioeconomic status for an order under a multiple-award contract. This is expected to help ensure orders are properly awarded to small businesses that have the required size or socioeconomic status, although small businesses that grow may be adversely affected.
- Contracting officers now have the authority to issue orders directly to a small business under a reserve.
- Interested parties may no longer protest sole source awards under the service-disabled veteran-owned small business program. Contractors who win these awards will thus no longer be required to expend resources defending challenges to the award, although interested parties who lose the ability to protest will be adversely affected.
There are numerous other changes about which contractors should be aware:
- More than one NAICS code must now be assigned for multiple-award contracts where a single NAICS code does not describe the principal purpose of both the contract and all orders to be issued under the contract.
- For multiple- award contracts with more than one NAICS code assigned, a contractor must represent its size status for each of those NAICS codes.
- The limitations on subcontracting and the nonmanufacturer rule apply to orders issued directly to one small business concern under a multiple-award contract with reserves.
- The rule will apply to acquisitions at or below the simplified acquisition threshold (SAT) and acquisitions of commercial items, as well as acquisitions for commercially available off-the-shelf (COTS) items.
The above merely highlights a sampling of the significant changes that will be implemented through this new rule, which will amend 48 CFR parts 2, 4, 7, 8, 9, 10, 13, 15, 16, 19, 42 and 52. Contractors of all sizes are advised to determine both new compliance obligations under this rule, as well as opportunities to take advantage of the new guidance for contracting officers.