Martin

The "convincing arguments" I was referring to are found on posts 11-16 of the follwing discussion. They shed light as to the place of performance of supplies for FAR 19 purposes. http://www.wifcon.com/discussion/index.php?/topic/871-far-part-19-applicability-in-foreign-countries/ Assuming you agree with Don and Napolik's analysis, one could argue that the place of performance for a supply is not the place where the item is manufactured.

Some of the issues were previously discussed in the following Wifcon post. http://www.wifcon.com/discussion/index.php?/topic/871-far-part-19-applicability-in-foreign-countries/ Napolik and Don Mansfield had some very convincing arguments.

Boof, Is your agency supplement silent on this matter?

Agree with Boof. The SBA proposed rule posted Dec 29 tries to clarify self-performance requirements for software under small business set-asides.

mettec: I was aware of the calculations for the IT VAR. At least 15% and no more than 50% of value added services as measured by the total price less the cost of information technology hardware, computer software, and profit per footnote 18. My comment in regards to footnote 18 was to clarify that I am only buying software and as such cannot take advantage of the flexibilities afforded under the IT Value Added Reseller approach. The reason for my post is a somewhat recent interaction I had with the SBA. I tried obtaining an individual waiver of the non-manufacturer rule from the SBA for the purchase of software licenses. At first I classified the procurement under NAICS code 511210 (Software Publishers, Packaged). The SBA responded that it was not a manufacturing NAICS code and as such a NMR waiver could not be processed. I then changed the NAICS to 334614, to which the SBA responded that designing developing and publishing software is a service, not manufacturing. Just venting a bit, but while the SBA rules are relatively straightforward when dealing with services and “tangible” products they are a mess to apply in the case of software. After all, is software really manufactured as described in 13 CFR 121.406 ( b ) ( 2 ) and FAR 19.102( f )( 1 )? Maybe I should have argued that the software was initially developed by a US small business concern and this small business subsequently sold the rights to commercialize the product to a large business (i.e. other than a small business concern). While we are acquiring a license to use the software from a large business the actual “manufacturer” was a small business concern and as such a NMR waiver is not required. The again, I should have stayed away from a small business set-aside and gone out unrestricted.

Jonfucius: 541519 under the VAR (150 employee size standard) - I am not buying any services, just software. The purchase does not meet the requirements of footnote 18 of the SBA Table of Small Business Size Standards. Would you classify buying pre-packaged software as a service under NAICS code 541519 (subject to the $27.5 million size standard)?

Troy: People might throw the $500 figure around due to FAR 52.214-22 and FAR 14.201-8 ( C ). I wouldn't use it as a basis for the determination you mention in your original post.

Jonfucius: FAR 52.219-14© If you consider pre-packaged software to be a manufactured product or other supply item and purchasing from a nonmanufacturer see also 13 CFR 121.406. Price of the software exceeds $25,000. Would you classify pre-packaged software as a service or as a supply? What NAICS code would you use?

What self-performance requirements must a firm meet in order to provide "pre-packaged" software under a small business set-aside? By "pre-packaged" think of a firm selling / licensing software that is available in the commercial marketplace (think Microsoft Office or similar).

The Best Procurement Approach Determination applies to FSS orders exceeding $500k. Economy Act determination and findings do not apply to FSS orders of any value. See FAR 17.502-2 ( b ).

Mr. Edwards, Your question has sparked my curiosity. Unfortunately the OP has not responded. For arguments sake, let’s say the contract for the system or service was awarded as an 8(a) sole-source. What then? Will the exception at FAR 9.505-2 ( b ) ( 1 )( i ) apply?

You might want to check what the CPARS manual has to say. I haven't read the new one, but I recall a while back that reports were not to be used for advertisement or promotional purposes. That being said, unless your company has to agree to some terms of use prior to gaining access to CPARS I doubt an user manual published on the CPARS website is binding.

I do not dispute the fact that FAR clause 52.232-23 is not required in purchase orders per FAR 32.806 ( a ) ( 1 ). However, if the purchase order is for commercial items assignments are covered under FAR 52.212-4 paragraph b.

Don, I work for a civilian agency for which the BOPP does not apply and for which the agency FAR supplement provides no further guidance. My questions were more in line with what is discussed in Westlaw Journal, Government Contract, Volume 24, Issue 6 by Jeffrey Belkin and Donald Brown. If the BAA does not apply (IT exception, foreign use, etc.) why apply the TAA?

Your reasoning makes sense to me. Not that my opinion matters much. I never fully understood the language in FAR 25.402( a )( 1 ) If the Buy American Act does not apply (due to supplies being used outside the US) what discriminatory provisions will the TAA waive? Would you apply the TAA if the supplies being purchased fell under the FSGs covered in DFARS 225.4 even if the supplies are to be used outside the US?

Don't know the particulars of your case, but you might want to consider FAR 19.805-1 ( c ) and 13 CFR 124.506( a )( 4 ). A proposed 8(a) requirement with an estimated value exceeding the applicable competitive threshold amount may not be divided into several separate procurement actions for lesser amounts in order to use 8(a) sole source procedures to award to a single contractor.

Unfortunately I was not able to respond to a question posed by Mr. Edwards under jwomack's "Termination Fee or Minimum Guarantee" post. The post was recently locked by Admin. I had recommended setting a minimum guarantee of $3,000 under a supply IDIQ contract for which the unit price of an item was $10,000. Going out on a limb here as I know my proposed approach is unorthodox to say the least… FAR 16.504( a ) states that quantity limits may be stated as a number of units or as dollar values. In addition: It stands to reason that you will likely not be able to order 0.3 items ($3,000 out of $10,000). Does that necessarily mean that the minimum guarantee (expressed as a dollar value) under a supply IDIQ contract has to cover the price of at least 1 item? Don’t know, but I think a case may be made that it doesn’t necessarily have to. For example: IDIQ contract for widgets. The solicitation established a minimum guarantee for the contract of $20,000. The minimum guarantee corresponds to the price the agency expects to pay for 1 widget based on their IGCE. Award is made to a vendor for $21,000. Would you increase the minimum guarantee to $21,000 to award the contract? If so, would you notify all other offerors of the change in the minimum guarantee and allow them to submit revised proposals? Assuming the agency approves and prospective contractors don't protest I would proceed and award the contract with a $3,000 minimum guarantee. I would be promising to order at least $3,000 worth of supplies. In practical terms when I issue an order for 1 item ($10,000) I would have met the minimum. If I don’t meet the minimum then it is a breach of contract and the Contractor may take action as they see fit. If the contractor sues for breach of contract I would have to refer to 285 F.3d 1040: Thomas E. White, Secretary of the Army, Appellant, v. Delta Construction International, Inc. (United States Court of Appeals, Federal Circuit).

jwomack, It appears your only concern is not having to obligate the $10,000 and just wanting to obligate a lesser amount. Don't know what the particulars of your case are or what you are intending to procure under the IDIQ, but why not just make the $3,000 the minimum guarantee?

Andrea, By receiving "credit for small business contracting" do you mean having it count towards your agency's small business goals accomplishments? Do you report your contract actions in FPDS-NG?

Troy - If the market research has already been performed, and indeed there are no small business manufacturers, submit all pertinent information to the SBA and request a class waiver for the product in question. If the waiver is granted, and the set-aside would have been appropriate but for the waiver issue, the CO would be hard pressed not to set-aside future acquisitions.

If anyone has an issue with the Contracting Officer’s decision not to request an individual waiver have them request a class waiver to the SBA. See 13 CFR 121.1204. The fact that a class or individual waiver exists does not necessarily mean a CO must set-aside the acquisition. Suppose a waiver is issued, but the CO does not have a reasonable expectation that award will be made at a fair market price. Is a set-aside appropriate? A waiver does not ensure a set-aside. See also FAR 19.502-2 ( c ).

Don, Thanks for setting me straight on the applicability of FAR 19.502-2( c ). Could language in FAR 19.502-2( b )(1) be challenged based on inconsistency with SBA implementing regulations?

Mr. Edwards: Paragraph ( c ) as written does not make sense. The decision to not set-aside a requirement under paragraph ( a ) should depend on the fact that there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns... In regards to the FAR councils having authority to impose an additional restrictions I need to research further to make an informed decision. No need to give my opinion if I can’t substantiate it. The fact that the “offering the products of different small business concerns” language in FAR 19.502-2 ( b ) (1) does not track with SBA regulations also caught my attention. See for example 13 CFR 125.19( b ) (2) and 13 CFR 127.503( d )(2). I am curious, anyone knows what prompted the current language in FAR 19.502-2( b )(1) and why is it different than the one in 13 CFR?

Last sentence in FAR 19.502-2( c ) addresses the Contracting Officer's decision not to set-aside a requirement under paragraph a. In both of these cases, the contracting officer’s determination in paragraph ( b ) (1) of this subsection or the decision not to set aside a procurement reserved for small business under paragraph (a) of this subsection will be based on the expectation of receiving offers from at least two responsible small businesses, including nonmanufacturers, offering the products of different concerns.