GSA Schedules and the Utilization of Small Business Mahruba Uddowla Procurement Analyst GSA – Federal Acquisition Serv

1. GSA Schedules and the Utilization of Small Business MahrubaUddowlaProcurement AnalystGSA – Federal Acquisition ServiceMay 2012

2. Objectives • The FAR • The Basics • Frequently Asked Questions • Sample RFQ Language • Helpful Links

3. The FAR Part 19: Small Business Programs As of November 2,2011, the FAR was changed to provide agencies with the discretionary authority to set-aside orders against multiple award contracts for small business. 19.502-4 Multiple-award contracts and small business set-asides.  In accordance with section 1331 of Public Law 111-240 (15 U.S.C. 644(r)) contracting officers may, at their discretion— (a) When conducting multiple-award procurements using full and open competition, reserve one or more contract awards for any of the small business concerns identified in 19.000(a)(3). The specific program eligibility requirements identified in this part apply;  (b) Set aside part or parts of a multiple-award contract for any of the small business concerns identified in 19.000(a)(3). The specific program eligibility requirements identified in this part apply; or  (c) Set aside orders placed under multiple-award contracts for any of the small business concerns identified in 19.000(a)(3). For orders placed under the Federal Supply Schedules Program see 8.405-5. For all other multiple award contracts see 16.505.

4. The FAR Subpart 8.4: Federal Supply Schedules The FAR now exempts Subpart 8.4 purchases from the mandatory nature of Part 19 but allows COs the discretion to set-aside Schedule orders and BPAs for small business programs. 8.405-5  Small business. (a) Although the preference programs of Part 19 are not mandatory in this subpart, in accordance with section 1331 of Public Law 111-240 (15 U.S.C. 644(r))– (1) Ordering activity contracting officers may, at their discretion— (i) Set aside orders for any of the small business concerns identified in 19.000(a)(3); and (ii) Set aside BPAs for any of the small business concerns identified in 19.000(a)(3).

5. The FAR Subpart 8.4: Federal Supply Schedules 8.405-5  Small business. (a) (2) When setting aside orders and BPAs– (i) Follow the ordering procedures for Federal Supply Schedules at 8.405-1, 8.405-2, and 8.405-3; and (ii) The specific small business program eligibility requirements identified in part 19 apply. Contracting Officers use authority and ordering procedures of FAR 8.4 when setting-aside Schedule order or BPA, not FAR 19.

6. 8.405-5  Small business. Orders placed against schedule contracts may be credited toward the ordering activity’s small business goals. For purposes of reporting an order placed with a small business schedule contractor, an ordering agency may only take credit if the awardee meets a size standard that corresponds to the work performed. Ordering activities should rely on the small business representations made by schedule contractors at the contract level. Ordering activities should rely on the small business representations made by Schedule contractors at the contract level. Agencies do not need to make a separate size determination at the order level but the GAO has upheld agencies’ right to request a recertification at the order level (CMS Information Services Inc., B-290541, Aug. 7, 2002). The FAR Subpart 8.4: Federal Supply Schedules

7. The FAR Subpart 8.4: Federal Supply Schedules 8.405-5  Small business. (c) Ordering activities may consider socio-economic status when identifying contractor(s) for consideration or competition for award of an order or BPA. At a minimum, ordering activities should consider, if available, at least one small business, veteran-owned small business, service disabled veteran-owned small business, HUBZone small business, women-owned small business, or small disadvantaged business schedule contractor(s). GSA Advantage! and Schedules e-Library contain information on the small business representations of Schedule contractors. When not setting-aside an order/BPA: Agencies are encouraged to consider at least one small business prior to placing an order under the program. Agencies are advised that they may establish evaluation criteria which give preference to socio-economic factors in their best value analysis.

8. The FAR Subpart 8.4: Federal Supply Schedules 8.405-5  Small business. (d) For orders exceeding the micro-purchase threshold, ordering activities should give preference to the items of small business concerns when two or more items at the same delivered price will satisfy the requirement. Ordering activities should give preference to items of small business concerns when those items satisfy agency requirements at the same delivered price as items offered by large business concerns.

9. The Basics: Socioeconomic Credit SBA policy allows agencies to include in their procurement base and goals, the dollar value of orders expected to be placed against GSA Schedule contracts. Actual Orders may be reported as accomplishments and credited toward ordering activities’ small business goals.

10. The Basics: MAS Contractors’ Catalogs/Pricelists GSA Advantage! and GSA eLibrary contain information on a broad array of supplies (product) and services offered by small business concerns. Ordering activities can utilize the small business program indicators that state the socioeconomic status of each of the Multiple Award Schedule (MAS) contracts. This information should be used as a tool to assist agencies in providing the maximum practicable opportunities for small businesses. The next few slides contain snapshots of GSA Advantage! and GSA eLibrary.

11. The Basics: GSA Advantage! (See notes for details on the functionality of GSA Advantage!)

12. The Basics: eLibrary (See notes for details on the functionality of eLibrary.)

13. The Basics: eBuy (See notes for details on the functionality of eBuy.)

14. The Basics: Set-Aside Special Item Numbers GSA also provides specific Special Item Numbers (SINs) within certain Schedules that are solely set aside for small business Schedule contractors. Below is a sample of these SINs: For the full list of set-aside SINs and an article on using these SINs, read our blog article on set-asides.

15. Frequently Asked Questions Does the interim rule authorize set-asides for orders and BPAs under Schedule contracts? Yes. The interim rule amends FAR Subpart 8.4 to make clear that set-asides may be used in connection with the placement of orders and the establishment of BPAs under Schedule contracts.

16. Frequently Asked Questions May an agency set aside Schedule orders and/or BPAs for any of the socioeconomic programs (e.g., small disadvantaged, service-disabled veteran-owned, women-owned, and HUBZone small business concerns)? Yes. FAR 8.405-5(a)(1) expressly states that agencies may set aside orders and BPAs for any of the small business concerns identified in 19.000(a)(3).

17. Frequently Asked Questions Are there any circumstances in which the interim rule requires the consideration or use of set-asides? No. It is entirely up to the ordering contracting officer to decide whether or not it is in the best interest of the Government to set aside an order for small business. See FAR 8.405-5.

18. Frequently Asked Questions Must agencies prepare any special determinations in order to conduct set-asides under Schedule contracts? Generally, no. No special documentation is required if the agency is conducting a competitive set-aside. However, if the agency is limiting the number of small business sources considered to fewer than that anticipated in FAR 8.404 and 8.405 (which lay out the basic competition requirements when using the Schedules) the agency must prepare documentation to justify the limitation.

19. Frequently Asked Questions What steps must an agency take under the interim rule to set aside an order under the Schedules Program? Agencies must take the following four steps: • Perform market research. Determine if there are small businesses capable of performing the desired work. Given that there are more than 15,000 small business Schedule contract holders, and Schedule contracts focus exclusively on commercial products and services, agencies should easily be able to identify small businesses that are capable and competitive.

20. Frequently Asked Questions (cont.) Incorporate clauses into RFQs. Until Schedule contracts have been modified to incorporate set-aside clauses, contracting officers shall incorporate the following FAR clauses, as applicable, in all RFQs: 52.219-13 Notice of Set-Aside of Orders (NOV 2011) 52.219-3 Notice of Total HUBZone Set-Aside or Sole Source Award (NOV 2011) 52.219-6 Notice of Total Small Business Set-Aside (NOV 2011) 52.219-14 Limitations on Subcontracting (NOV 2011) 52.219-27 Notice of Total Service-Disabled Veteran-Owned Small Business Set-Aside (NOV 2011) 52.219-29 Notice of Total Set-Aside for Economically Disadvantaged Women-Owned Small Business (EDWOSB) Concerns (NOV 2011) 52.219-30 Notice of Total Set-Aside for Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program (NOV 2011)

21. Frequently Asked Questions (cont.) • Include a statement in the RFQ for an order or BPA that will be set aside. The contracting officer should include the following language in the RFQ: “This is a notice that this order is a total set-aside for [insert either “small business concerns” or specify a subset of small business concern]. Only quotes submitted by [insert either “small business concerns” or specify a subset of small business concern] will be accepted by the Government. Any quote that is submitted by a contractor that is not [insert either “a small business concern” or specify a subset of small business concern] will not be considered for award.”

22. Frequently Asked Questions (cont.) • Use the same competition rules as provided in FAR 8.405, except limit consideration only to small businesses.

23. Frequently Asked Questions If an agency uses eBuy, must it ever prepare a justification, such as if the agency receives fewer than three bids? No. Posting an RFQ on eBuy so that all those awarded the relevant Special Item Numbers (SINs) can view the requirement satisfies all Schedule competition requirements, both above and below the SAT. See FAR 8.402(d)(1).

24. Frequently Asked Questions If an agency decides to limit consideration to fewer than all small businesses (i.e., it does not use eBuy) and thinks it will receive at least three offers but receives only two or one, what must it do? The ordering contracting officer has to prepare a written determination explaining that no additional contractors capable of fulfilling the requirement could be identified despite reasonable efforts to do so. The determination must clearly explain efforts made to obtain quotes from at least three small business Schedule contractors. [This requirement applies only to orders exceeding the SAT.]

25. Frequently Asked Questions If an agency can only find two small businesses, can it still do a set-aside? Yes. However, the agency must document the circumstances for restricting consideration to fewer than three Schedule contractors based on one of the reasons at FAR 8.405-6, which sets out requirements when limiting sources. For actions above the SAT, the requirement to distribute the RFQ to a sufficient number of Schedule-holders to ensure at least three quotes are received is mandated by Section 863 of the FY 2009 National Defense Authorization Act, and Section 1331 of the Jobs Act does not provide relief from this competition requirement.

26. Frequently Asked Questions Can you set aside orders against small business set-aside SINs and/or against the Temporary Administrative and Professional Staffing Services (TAPS) Schedule (which is totally set aside for small business concerns)? Yes, you can do a set-aside for a specific small business socioeconomic category against a set-aside SIN and/or the TAPS Schedule. For example, you can choose to set aside an order against TAPS for HUBZone small business concerns. As always, however, market research must indicate that there are sufficient eligible small business concerns capable of performing the work.

27. Frequently Asked Questions What is meant by the “specific small business program eligibility requirements” in FAR 8.405-5(a)(2)(ii)? • Some of the small business programs identified in FAR Part 19 have special circumstances under which you can set aside an acquisition. • For an order to be set-aside under the WOSB or EDWOSB program, the requirement needs to be under $6.5 million if it is for manufacturing and $4 million for all other requirements and fall within the scope of those specific NAICS code industries in which SBA has determined that women-owned small business concerns are underrepresented or substantially underrepresented in Federal procurement.

28. Frequently Asked Questions What changes will be made to facilitate the set-aside of orders and BPAs in eBuy? System will remove an RFQ from the view of those Schedule contractors that are not eligible to respond to a particular set-aside order.

29. Frequently Asked Questions How often do GSA contractors re-certify their business size status? All GSA contractors must re-certify their business size during the renewal period of their contract. This occurs every five (5) years. In addition, Schedule contractors are required to re-certify their business size within 30 days after a Novation Agreement and after a merger or acquisition.

30. Frequently Asked Questions Can socioeconomic status still be used as an evaluation factor as opposed to set-asides? Yes. If an order is not being set aside exclusively for small business concerns, contracting officers can use socioeconomic status as an evaluation factor in RFQs.

31. Frequently Asked Questions How can ordering activities utilize the evaluation factor of business size effectively and ethically? Provide in the quote a specific statement that demonstrates that a primary evaluation factor will be the business size. If the ordering activity weighs the different small business programs differently provide details on how they are weighed. Also be aware that the business size evaluation factor should not be a “go/no-go” criteria that would eliminate large business entirely.

32. Frequently Asked Questions How can ordering activities still get small business participation if market research indicates no small business is capable of meeting the requirement alone? • Encourage contractor teaming arrangements (CTAs) in the RFQ. This way, if a small business can perform part of the requirement, they can team with another contractor and propose a total solution. • Designate socioeconomic status as an evaluation factor in the RFQ and give credit to CTAs with small businesses as Team Members. Sample RFQ language provided on Portal.

33. Sample RFQ Language For Orders to be set-aside, insert the following in the RFQ: This is a notice that this order is a total set aside for [insert either “small business concerns” or specify a type of small business concern]. Only quotes submitted by [insert either “small business concerns” or specify a type of small business concern] will be accepted by the Government. Any quote that is submitted by a contractor that is not [insert either “a small business concern” or specify a type of small business concern] will not be considered for award.

34. Sample RFQ Language • For sample RFQ language on using socio-economic status as an evaluation factor, click here

35. Schedules and Small Business Utilization in a Snapshot You can access the full-length version on this page

36. Helpful Links Additional information on small business utilization under the Multiple Award Schedule program can be found using the following links: • GSA Schedules Small Business Utilization • Small Business Set-Aside FAQs • Multiple Award Schedules blog and new media atSchedules News & Resources • Office of Small Business Utilization Overview