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Don Mansfield

Interpreting the new Small Business Parity Rules

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I'm interested to see how others are interpreting the new FAR Part 19 parity rules. Consider the following scenario:

You have a requirement for $3 million. Market research reveals that there are three potential offerors--two are large business and one is a HUBZone small business.

Question: Do you have to do a HUBZone sole source or can you proceed on an unrestricted basis?

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I would interpret as follows: You are not required to make an award to the sole HUBZone entity discovered in market research; although, you are authorized by statute and ?may? make a sole source award to a HUBZone entity should you choose to do so (FAR 6.302-5(B)(5)).

Here?s my reasoning: FAR 19.1306(a) states ?A contracting officer may award contracts to HUBZone small business concerns on a sole source basis before considering small business set-asides?? (Emphasis on ?may?). If you determine you are not going to award a sole-source contract to the HUBZone entity, then I think you must consider small business set-aside under FAR 19.5 prior to proceeding on an unrestricted basis. Since your market research indicates that you would not have a reasonable expectation of receiving two or more offers from small business concerns then you could proceed on an unrestricted basis (assuming the market research was broad enough to reach all types of business concerns).

I imagine the scenario, and question, may really be centered on FAR 19.203( c ) which requires that the ??contracting officer shall first consider an acquisition for the 8(a), HUBZone, or SDVOSB programs before using a small business set-aside?? (Emphasis on ?shall consider?). Again, making the assumption stated earlier, that market research was broad enough; in your scenario, it would appear that due-diligence was made as to ?consideration? of the specified socio-economic programs and you could therefore proceed on an unrestricted basis.

Is my thinking too simplistic? Or have I missed anything?

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That's how I read it, too. I think that it's interesting that if you had one HUBZone and two large businesses, then a HUBZone sole source would be discretionary, but if you had one HUBZone and two small businesses, a HUBZone sole source would be required.

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