Federal Acquisition Regulation: Small Business Participation on Certain Multiple-Award Contracts

DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION <CFR>48 CFR Parts 1, 7, 12, 16, 19, and 52</CFR> <DEPDOC>[FAR Case 2023-011, Docket No. FAR-2023-0011, Sequence No. 1]</DEPDOC> <RIN>RIN 9000-AO59</RIN> <SUBJECT>Federal Acquisition Regulation: Small Business Participation on Certain Multiple-Award Contracts</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to issue policy on small business participation on certain multiple-award contracts. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Interested parties should submit written comments to the Regulatory Secretariat Division at the address shown below on or before March 17, 2025, to be considered in the formation of the final rule. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Submit comments in response to FAR Case 2023-011 to the Federal eRulemaking portal at <E T="03">https://www.regulations.gov</E> by searching for “FAR Case 2023-011”. Select the link “Comment Now” that corresponds with “FAR Case 2023-011”. Follow the instructions provided on the “Comment Now” screen. Please include your name, company name (if any), and “FAR Case 2023-011” on your attached document. If your comment cannot be submitted using <E T="03">https://www.regulations.gov,</E> call or email the points of contact in the <E T="02">FOR FURTHER INFORMATION CONTACT</E> section of this document for alternate instructions. <E T="03">Instructions:</E> Please submit comments only and cite “FAR Case 2023-011” in all correspondence related to this case. Comments received generally will be posted without change to <E T="03">https://www.regulations.gov,</E> including any personal and/or business confidential information provided. Public comments may be submitted as an individual, as an organization, or anonymously (see frequently asked questions at <E T="03">https://www.regulations.gov/faq</E> ). To confirm receipt of your comment(s), please check <E T="03">https://www.regulations.gov,</E> approximately two to three days after submission to verify posting. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> For clarification of content, contact Ms. Carrie Moore, Procurement Analyst, at 571-300-5917 or by email at <E T="03">carrie.moore@gsa.gov.</E> For information pertaining to status, publication schedules, or alternate instructions for submitting comments if <E T="03">https://www.regulations.gov</E> cannot be used, contact the Regulatory Secretariat Division at 202-501-4755 or <E T="03">GSARegSec@gsa.gov.</E> Please cite FAR Case 2023-011. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> DoD, GSA, and NASA are proposing to revise the FAR to issue policy to update market research, acquisition planning, small business specialist coordination, and the use of set-asides during the award of, and placement of orders against, certain multiple-award contracts. This proposed rule implements recommendations of the Office of Federal Procurement Policy (OFPP) in its memorandum entitled, Increasing Small Business Participation on Multiple Award Contracts, dated January 25, 2024. This policy would expand the use of small business set-asides for orders against multiple-award contracts; increase coordination with the cognizant small business specialist and the Small Business Administration (SBA) procurement center representative (PCR) during acquisition planning for multiple-award contracts and when placing orders against multiple-award contracts, and provide additional criteria to consider or address in documentation provided to the cognizant small business specialist and PCR. This proposed rule is being published in conjunction with an SBA proposed rule regarding, “Assuring a Fair Proportion of Government Purchases are Awarded to Small Business Concerns,” to help the public and the acquisition workforce better understand how the two rules will implement the policy. This proposed rule would impact both acquisition planning and order placement, as discussed below. <HD SOURCE="HD2">A. Acquisition Planning</HD> To increase small business opportunities when developing acquisition strategies for multiple-award contracts, this proposed rule would increase and enhance small business documentation requirements and facilitate greater coordination and communication between agencies and their cognizant small business specialists during the acquisition planning process. Currently, agencies coordinate acquisitions with their respective Office of Small and Disadvantaged Business Utilization (OSDBU), or the Office of Small Business Programs (OSBP), for recommendations as to whether the acquisition should be set aside or reserved for small business concerns, in accordance with agency procedures. This proposed rule is intended to increase OSDBU and OSBP insight into acquisition planning for multiple-award contracts by requiring agencies, when contemplating the issuance of such a contract, to consider totally or partially setting aside the acquisition for small business or including a small business reserve. If a set-aside or reserve for small business is not planned, the agency would be required to document the reason, including any pertinent market research, for this decision in its acquisition strategy or plan, and coordinate the reason with the agency's cognizant small business specialist. (See FAR 7.105(b)(1)(iii)(A)). In addition, when an acquisition is anticipated to meet or exceed the dollar threshold for substantial bundling at FAR 7.107-4(a)(1), the acquisition planner is currently required at FAR 7.104(d) to coordinate the acquisition with the agency's cognizant small business specialist. This coordination provides the specialist with insight into any decision to not set aside the acquisition for small business concerns, as well as an opportunity to ensure the acquisition is structured to maximize small business competition and award opportunities. This proposed rule would incorporate a higher level of coordination into the current process by requiring the agency's cognizant small business specialist to notify the PCR, if the acquisition plan involves a multiple-award contract that meets or exceeds the agency's respective threshold for substantial bundling and the number of small business contract awardees is anticipated to be less than 30 percent of all contract awardees. This higher-level coordination is proposed to reinforce careful consideration of small business equities on multiple-award contracts and increase the probability of participation by small business. Finally, this proposed rule would also require agencies to consider the use of on-ramps when planning for the award of a long-term, multiple-award contract. On-ramps are a tool used with multiple-award contracts to permit large and small businesses to be added as awardees during the period of performance of the contract. To encourage the continued participation of small business concerns on long-term ( <E T="03">i.e.,</E> more than five years in duration, including options, see 19.301-2(a)) multiple-award contracts, this proposed rule would require acquisition planners to discuss the use of on-ramps for these contracts in the acquisition plan. (See 7.105 (b)(1)(iii)(B)). If no on-ramps are planned for the contract but small businesses are expected to enter the market after the award of the contract, and the work anticipated under the contract is sufficient to provide meaningful opportunities for additional contract awardees, the planner would be required to explain in the acquisition plan why on-ramps will not be included in the contract. <HD SOURCE="HD2">B. Orders Against Multiple-Award Contracts</HD> In accordance with 15 U.S.C. 644(r), contracting officers have the discretion to decide whether to set aside an order against a multiple-award contract. To increase small business opportunities and maximize their participation under multiple-award contracts, this proposed rule would require contracting officers to exercise their discretion to set aside an order for small business if the contracting officer determines that, under an applicable multiple-award contract, there is a reasonable expectation of obtaining offers from two or more responsible small business contract awardees that are competitive in terms of fair market price, quality, capability, ability to comply with the delivery or performance schedule, and past performance. (See FAR 16.505(b)(1)(i)(C).) This set-aside requirement for the contracting officer to exercise their discretion would not apply to orders against the Federal Supply Schedule (FSS), or when an exception to fair opportunity or an agency-specific exception applies to the order (See FAR 16.505(a)(14)). This proposed rule would permit agencies to establish procedures for contracting officers to exercise agency-specific exceptions. However, agencies must coordinate their procedures for granting those exceptions with their OSDBU or OSBP, as well as SBA, and make the procedures publicly available. The establishment of these procedures and their coordination with SBA and the agency OSDU or OSBP is not a requirement for their review and approval, as approval remains entirely within the discretion of the agency establishing the procedures. This proposed rule would also clarify that the set-aside requirement applies to existing contracts only to the extent that doing so is consistent with the ordering procedures of the contract and there is adequate time remaining on the contract to permit a small business concern to fully perform o ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 59k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━