Contracting Cone

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Ordering under the Federal Supply Schedule
Acquisition of Commercial Products and Commercial Services
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Procurement for Experiments
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Contract Type Matrix

Small Business Set-Asides
FAR 19.104 

Set-asides reserve an acquisition, or a portion of an acquisition, exclusively for participation by eligible small business concerns. Under RFO FAR Part 19, small business set-asides are addressed at FAR 19.104, including total small business set-asides at FAR 19.104-1 and partial small business set-asides at FAR 19.104-2.

Qualifying small business and socioeconomic program categories include:

  • Small Business Set-Asides — FAR 19.104
  • HUBZone Program — FAR 19.105
  • Service-Disabled Veteran-Owned Small Business Program — FAR 19.106
  • Women-Owned Small Business Program — FAR 19.107
  • 8(a) Program — FAR 19.108
  • Set-asides of orders under multiple-award contracts — FAR 19.111-2

Contracting officers must set aside contracts valued above the micro-purchase threshold for small business when there is a reasonable expectation of receiving offers from two or more responsible small business concerns and award can be made at fair market prices, considering quality and delivery. The contracting officer must document the reason when a contract is not set aside for small business as required.

Socioeconomic set-asides and sole-source awards may be considered under the HUBZone, SDVOSB, WOSB, and 8(a) programs when the applicable program requirements are met. RFO FAR Part 19 also recognizes set-asides of task orders and delivery orders under multiple-award contracts.

    Common Applications

    • Supplies and services
    • Defense business systems
    • Mission solutions and technologies
    • IT software, products, and services
    • Research and development
    • Advisory and assistance services
    • Engineering services
    • Special studies
    • Order-level set-asides under multiple-award contracts

     

    Pros

    Cons
    Helps provide maximum practicable opportunities for small business participation. Market research is needed to confirm capable small businesses and fair market pricing.
    Supports agency small business and socioeconomic goals. Some small businesses may have limited capacity for large, complex, or highly integrated requirements.
    Can promote innovation, flexibility, and industrial base growth. Some small businesses may not have approved business systems or accounting systems needed for certain contract types.
    Set-asides can be applied to total acquisitions, partial acquisitions, and eligible orders under multiple-award contracts. Incorrect set-aside decisions can create protest, eligibility, or performance risk.

    Restrictions

    • Contracts above the micro-purchase threshold must be set aside for small business when the contracting officer has a reasonable expectation of receiving offers from two or more responsible small business concerns at fair market prices, considering quality and delivery.
    • The set-aside requirement does not apply to purchases at or below the micro-purchase threshold or purchases from required sources under FAR Part 8.
      Partial set-asides may be used when a total set-aside is not appropriate, the requirement can be divided into distinct portions, and the other RFO FAR 19.104-2 conditions are met.
    • Socioeconomic program set-asides must satisfy the specific eligibility and procedural requirements for the applicable program.
      Contracts may not be awarded as small business or socioeconomic set-asides if the cost to the agency exceeds fair market price.
    • For set-asides of orders under multiple-award contracts, use FAR 19.111-2.

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