This post was written by Gunjan Talati.
Earlier this month, the government issued an interim rule amending the Federal Acquisition Regulation (FAR) to implement set-aside requirements of the Small Business Jobs Act of 2010. The Small Business Jobs Act amended the Small Business Act to require the government to set aside parts of a multiple-award contract for small businesses; set aside orders placed against multiple-award contracts for small businesses; and reserve one or more contract awards for small businesses under full and open multiple-award procurements.
The interim rule attempts to implement these requirements through additions and revisions to a number of FAR parts and subparts:
• FAR Subpart 8.4—Federal Supply Schedules: The interim rule revises this subpart to clarify that even though the set-aside requirements of FAR Part 19—Small Business Programs—are not mandatory for procurements under Federal Supply Schedules, the ordering activity is allowed, at its discretion, to set aside orders and Blanket Purchase Agreements, or BPAs, for small businesses
• FAR Subpart 12.2—Special Requirements for the Acquisition of Commercial items: The interim rule also clarifies that agencies can set aside orders under multiple-award contracts for the acquisition of commercial items
• FAR Subpart 16.5—Indefinite-Delivery Contracts: The interim rule revision acknowledges that set-asides can be used for orders under multiple-award contracts
• FAR Part 19—Small Business Programs: The interim rule adds a new section that allows agencies to use set-asides under multiple-award contracts and reserve one or more contract awards under multiple-award contracts for small businesses
• FAR Subpart 38.1—Federal Supply Schedule Program: The interim rule includes a reference to the changes in FAR Subpart 8.4, clarifying that set-asides can be used for orders and BPAs under Federal Supply Schedules
Even though many of these changes grant the agencies discretionary authority to use set-asides, whereas many of the existing set-aside requirements in the FAR are mandatory, they present additional avenues through which agencies can increase the credit they receive toward their small business goals.
With agencies under the spotlight for missing these goals, there will likely be a lot of activity under these changes. While the impact on small businesses is obvious—increased set-aside contracting opportunities, the impact on large businesses is not so clear. Certainly, there will be the loss of some opportunities, as large businesses cannot submit proposals on set-aside competitions. However, with careful planning, such as identifying potential subcontracting opportunities, large businesses may be able to soften any blow from the potential loss of work and perform a value service by supporting a small business.
The interim rule went into effect November 2, 2011, and companies or trade groups interested in submitting comments to be considered before a final rule is issued will have until January 3, 2012 to submit their comments.