SMALL_BUSINESS_QUESTIONS_AND_ANSWERS.doc

GSA NEW ENGLAND ELECTRICITY PROCUREMENT

SOLICITATION GS-00P-13-BSD-0969

SMALL BUSINESS QUESTIONS AND ANSWERS

FROM 07/31/13 TELECONFERENCE AND EMAILS

QUESTIONS AND ANSWERS

Why wasn’t the procurement set-aside for small businesses?

The Federal Acquisition Regulation (FAR) requires in Subpart 19.5 that the Contracting Officer consider setting aside acquisitions for small businesses when appropriate. The FAR at Subpart 19.5 provides the guidance for setting aside an acquisition. Specifically, the FAR at Subpart 19.502-2(b) states:

(b) Before setting aside an acquisition under this paragraph, refer to 19.203(c). The contracting officer shall set aside any acquisition over $150,000 for small business participation when there is a reasonable expectation that:

(1) Offers will be obtained from at least two responsible small business concerns offering the products of different small business concerns (see paragraph (c) of this section); and

(2) Award will be made at fair market prices. Total small business set-asides shall not be made unless such a reasonable expectation exists (see 19.502-3 as to partial set-asides). Although past acquisition history of an item or similar items is always important, it is not the only factor to be considered in determining whether a reasonable expectation exists.

Paragraph 19.203(c) states that:

For small business set-asides other than for construction or services, any concern proposing to furnish a product that it did not itself manufacture must furnish the product of a small business manufacturer unless the SBA has granted either a waiver or exception to the nonmanufacturer rule (see 19.102(f)) The Small Business Administration has an extensive discussion of the nonmanufacturer rule on its website (http://www.sba.gov/category/navigation-structure/contracting/contracting-officials/non-manufacturer-waivers). The NAICS code for this procurement is 221112 and electric supply is classified as a supply and is subject to the nonmanufacturing rule. The size standard for this NAICS code is 4 million MWhs of annual sales. GSA also notes that the electric supply NAICS code of 221112 is not on the nonmanufacturer waiver list.

Based on the policy outlined above and the specifics of the electric supply industry in the eastern U.S. and New England, GSA’s Contracting Officer determined that there was not a reasonable expectation that offers would be received from two (2) or more technically qualified small businesses offering electric supply that either (1) the offering firm manufactured themselves or (2) was manufactured by another small business concern. Based on that determination, the procurement was not set-aside for small businesses.