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What are some courses of action for a SDVOSB manufacturer that typically sees RFQs with a Brand Name purchase description for a Large Business product? Buyer often calls RFQ a Small Business Set-aside.

Thx!

C. R. (Bob) Thompson, CPCM

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Guest Vern Edwards

Brian has asked a good question. If the problem is general, and not with a particular office of a particular agency, then it may be that the only solution is to file protests with the GAO. If the problem is with a particular office of a particular agency, then there are other, better things to try.

Another question: Have you seen the justifications for brand name specification?

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Vern - We have reviewed a few justifications, but usually they are not published. Problem is general, not limited to a specific office. These RFQs are all Simplified Acquisitions or GSA solicitations.

Thx for info. It helps.

R,

Bob Thompson

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Vern,

I once had a gig as a Small Business Utilization and Development Specialist in Interior.

Very fun job.

I found that some small businesses were reluctant to push for fair consideration, lest they develop a reputation of being I guess pushy, or hard to work with, or something.

But my own anecdotal experience was that some of the small businesses who were pushy about getting to meet with end users usually got at least the fair consideration of their services or products they sought, and in some cases even got small awards so that our programs could test drive their offerings.

The hardest sell was usually the buyer in the Contracting Office, who didn't want to change.

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cogp2:

A sole source brand name solicitation at any dollar value is not appropriate as a small business set-aside regardless of whether the sole source is asmall business or not (except that you might use the sole source programs designed for 8(a), Hubzone, or SDVOSB if the actual manufacturer falls into one of those categories).

Are you sure these aren't brand name or equal requirements under $25K for which a non-manufacturer exception applies?

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If the buyer is posting the solicitations as small business set-asides and is using brand name specifications (for a large business' product), I have to assume that there are small business distributors of that product. Do you see any notices of award? Are they to the same awardee or different awardees? I also second Linda K's question about whether the non-manufacture waiver may be applicable here. If it is applicable, than your options would seem to be to:

1. Contact the buyer(s) directly and inform them of your capabilities (attempting to disuade them from using the brand name justification).

2. Protest their usage of brand name specifications (as Vern mentioned).

3. Reach out to the SBA and see if they can intercede on your behalf, or reconsider the waiver (assuming it's a class waiver).

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I believe the biggest issue is ignorance. Many contract specialists are not aware of the non-manufacturer rule. They should be, no doubt, but they aren't. When I started contracting with the Army, I was not taught anything about it and performed several improper acquisitions until the issue was brought to my attention by a small business who was upset with a purchase I was making. The rule is barely touched in the CON classes, and not discussed much in contracting offices, so it's just not as well-known as it should be.

My recommendation would be as stated above and to discuss with the agency's OSDBU, and if you see multiple occurrences within one office, ask the OSDBU if they could offer a class on the topic to their 1102s.

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Guest Vern Edwards
A sole source brand name solicitation at any dollar value is not appropriate as a small business set-aside regardless of whether the sole source is asmall business or not...

Is that true? Use of a brand name spec makes an acquisition "sole source", but there might be numerous retailers or distributors. But I suppose it can be a double sole source in the sense that the brand name item if available only from the manufacturer or a single distributor. Is that what you mean by "sole source brand name"?

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Vern,

If the acquisition is subject to CICA, then use of a brand name spec would be considered other than full and open competition pursuant to FAR 6.302-1( c )(1)(i) regardless of the number of sources solicited. For acquisitions not subject to CICA, I don't know how to justify Linda's statement.

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Guest Vern Edwards

I know about 6.302-1 and brand name. That's not the issue. What I want to know is: If brand name is the only reason the acquisition is sole source, and there are multiple retailers or distributors, why can't you have a small business set-aside? If the product is from a large business, but the nonmanufacturer rule applies, why can't you have a small business set aside? Why would it be inappropriate?

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Generally, unless an exception applies, you cannot have a small business set-aside for a brand name product manufactured by an other than domestic small business, even if there are multiple retailers or distributors. However, there is a way to get around that requirement through some interagency multiple award contracts.

For procurements conducted under Federal Acquisition Regulation (FAR) Subpart 6.3 or 8.4, FAR Section 19.102(f) would apply. See FAR Subsection 8.405-5(a)(2)(ii). Unless an exception at FAR Section 19.102(f)(1) through (7) applied, you could not conduct a small business set-aside amongst brand name resellers unless a domestic small business manufactured that brand name product.

For procurements conducted under FAR Subpart 16.5, FAR Section 16.505( B)(2)(i)(F) would prevent a small business set-aside for a brand name product unless an exception at FAR 19.102(f) applied. However, many of the popular interagency contracts include different multiple award contracts for small businesses and other than small businesses, even though both provide the same supplies and services. These interagency contracts give you the option to provide fair opportunity to one, some, or all of the awarded multiple award contracts. You could get around the non-manufacturer rule by providing fair opportunity only to Contractors under the small business interagency contract.

Consequently, those interagency multiple award contracts set-aside for small businesses are a way to circumvent the Trade Agreements Act (see FAR Section 25.401(a)(1)).

My office routinely sets-aside brand name requirements because the supplies and services that we purchase are often on the SBA's non-manufacturer waiver list.

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Vern,

See FAR 19.502-2( c ):

For small business set-asides other than for construction or services, any concern proposing to furnish a product that it did not itself manufacture must furnish the product of a small business manufacturer unless the SBA has granted either a waiver or exception to the nonmanufacturer rule (see 19.102(f)). In industries where the SBA finds that there are no small business manufacturers, it may issue a waiver to the nonmanufacturer rule (see 19.102(f)(4) and (5)). In addition, SBA has excepted procurements processed under simplified acquisition procedures (see Part 13), where the anticipated cost of the procurement will not exceed $25,000, from the nonmanufacturer rule. Waivers permit small businesses to provide any firm’s product. The exception permits small businesses to provide any domestic firm’s product. 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.

[bold added].

Given the "offering the products of different concerns", I don't know what authority one would use for a small business set-aside for a brand name item.

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Guest Vern Edwards

Thanks, Don. I'm glad somebody finally cited a regulation.

Funny rule. If the government has to buy a brand name item, you'd think it would prefer to buy it from a small business, assuming it can get a fair market price.

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Don: Thanks for beating me to the punch on the regulation. You nailed it! Some contracting officers 'reserve' these brand name requirements for small business, but a set-aside is inappropriate. A little bit of research will uncover incidences of abuse of programs such as the 8(a) program for these brand name items manufactured by other than small business concerns, so I'm not opposed to the rule in principle.

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I appreciate all comments. Discussion helps frame a strategy.

Additional info: Non-mfgr rule does not apply. A couple years ago, DLA asked SBA to invoke it, but we demonstrated to SBA that would limit Sm Bus awards. SBA declined to issue the ruling.

Marketplace is characterized by 2 large mfgrs, 2-3 small mfgrs and many dealers, mostly Sm Bus. 1 large mfgr is the 800 lb gorilla and has name recognition like Coca Cola, Kleenex or Xerox...

RFQs are almost always for a Qty of 1. Item is relatively high unit cost, long economic life, and is bought infrequently by same contracting office. (Xc for DLA who has commodity responsibility; many agencies do not use DLA.) We seldom see a justification for Brand Name Only.

Looks to me like our courses of action is to:

1. Challenge each RFQ that cites Brand Name only; I guess it is up to us to police the system

2. Advise office Sm Bus specialist and/or agency Sm Bus director. This is a costly process, esp for a sm bus.

I really do appreciate the comments.

R,

Bob Thompson

COGP2@aol.com

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