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Socio-Economic Status as an Evaluation Factor/Criteria

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I am asking for feedback on the proposed language below. This is draft boilerplate language for when Socio-Economic Status will be used as an Evaluation Factor/Criteria in a Solicitation. What do you think of this language, any suggestions for improvement. It is intended to be used under FAR 8, FAR 13, FAR 15, and FAR 16. If anyone has better language/examples, please post here. Here is the proposed language:

Instructions:

Socioeconomic Status

It is the policy of the Government to place a fair portion of its acquisitions with small business concerns. The agency desires to meet socio-economic goals through this procurement. Your quote shall identify the business size of the prime contractor and any subcontractors, if applicable, based on the NAICS code provided. Offerors must clearly identify the percentage of work, based on the cost of contract performance incurred for personnel, to be performed by each.

Evaluation:

Socioeconomic Status

An offer received from a small business prime contractor in which at least 50% of the cost of contract performance incurred for personnel will be performed by the small business concern will be evaluated more favorably.

An offer received from a large business prime contractor or a small business prime contractor in which less than 50% of the cost of contract performance incurred for personnel will be performed by the small business concern will be evaluated least favorably.

Source Selection Plan:

Socioeconomic Status

Excellent (Blue) rating ? Prime contractor is a small business concern in which at least 50% of the cost of contract performance incurred for personnel will be performed by the small business concern.

Acceptable (Yellow) rating ? Prime contractor is a large business or a small business concern in which less than 50% of the cost of contract performance incurred for personnel will be performed by the small business concern.

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The criterion manages to be both half-baked and needlessly complicated, which means that its use would be stupid. Using it in competitions under Parts 8, 13, and 16 would be criminally stupid.

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govt2310,

I also feel the language is unecessarily complex. Notwithstanding any small business set-aside requirements that must be considered with an open market purchase, why not try something simpler when you want to include socio-economic status as an evaluation factor, especially for FAR 8.4, FAR 13, or FAR 16 acquisitions?:

"Best Value" will be used as the basis of award. Quotations will be reviewed and evaluated using the following four evaluation criteria and their symbolized relative importance to each other:

- Technical Capability > Past Performance > Socio-Economic Status > Price

You could also spell-out your preference for certain Socio-Economic Status if need be:

Under the Socio-Economic Status criterion, the Government will give preference to the following six business size statuses and their symbolized relative importance to each other:

- 8(a) SB Concern > HubZone SB Concern > SDVOSB > Woman Owned SB > Small Business > Large Business

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In addition to what has already been said, I also see two major problems. It encourages subcontracting for the sake of subcontracting. That's a poor practice to promote. Also it only covers small business and subcontract plans should cover all the different goals.

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It's terrible language. Consider this:

An offer received from a small business prime contractor in which at least 50% of the cost of contract performance incurred for personnel will be performed by the small business concern will be evaluated more favorably.

An offer received from a large business prime contractor or a small business prime contractor in which less than 50% of the cost of contract performance incurred for personnel will be performed by the small business concern will be evaluated least favorably.

Suppose you receive offers from two small businesses. One proposes to do 30 percent of the work itself and subcontract 60 percent of the work to other small businesses and 10 percent to a large business. The other proposes to do 60 percent of the work itself and subcontract 40 percent to large businesses.

According to the language quoted, which offeror gets evaluated most favorably?

What sense does that make?

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It's terrible language. Consider this:

Suppose you receive offers from two small businesses. One proposes to do 30 percent of the work itself and subcontract 60 percent of the work to other small businesses and 10 percent to a large business. The other proposes to do 60 percent of the work itself and subcontract 40 percent to large businesses.

According to the language quoted, which offeror gets evaluated most favorably?

What sense does that make?

I am not the creative genius that came up with this language. You make a good point. I'm not sure what would happen. Hmm.

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"QUOTE

An offer received from a small business prime contractor in which at least 50% of the cost of contract performance incurred for personnel will be performed by the small business concern will be evaluated more favorably.

An offer received from a large business prime contractor or a small business prime contractor in which less than 50% of the cost of contract performance incurred for personnel will be performed by the small business concern will be evaluated least favorably.

Suppose you receive offers from two small businesses. One proposes to do 30 percent of the work itself and subcontract 60 percent of the work to other small businesses and 10 percent to a large business. The other proposes to do 60 percent of the work itself and subcontract 40 percent to large businesses.

According to the language quoted, which offeror gets evaluated most favorably?"

I don't see how this language is unclear in that scenario.

The second one is evaluated most favorably. It says, "the" small business, not "a" small business must perform. How can that mean anything other than the offering small business?

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contractor100:

The language is not unclear. That is not the problem. The problem is that it can yield a result that is clearly absurd. Here is the stated objective:

It is the policy of the Government to place a fair portion of its acquisitions with small business concerns. The agency desires to meet socio-economic goals through this procurement.

From the standpoint of agency goals and reporting, the outcome is the same no matter which small business receives the award, no matter what percentage of the work they plan to do with their own workers. But despite the fact that the offer based on subcontracting 60 percent to small business is better for small businesses than the offer based on subcontracting 40 percent to large business, the language leads to a less favorable evaluation for the better offer. In fact, it appears that the better offer will be evaluated the same as an offer from a large business.

Make sense to you? I hope not.

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contractor100:

The language is not unclear. That is not the problem. The problem is that it can yield a result that is clearly absurd. Here is the stated objective:

From the standpoint of agency goals and reporting, the outcome is the same no matter which small business receives the award, no matter what percentage of the work they plan to do with their own workers. But despite the fact that the offer based on subcontracting 60 percent to small business is better for small businesses than the offer based on subcontracting 40 percent to large business, the language leads to a less favorable evaluation for the better offer. In fact, it appears that the better offer will be evaluated the same as an offer from a large business.

Make sense to you? I hope not.

VE:

Absolutely it is absurd.

However, in the last year, I have seen a provision like this used three times - on GSA schedule solicitations.

I think it is to get around the fact an agency can't set aside on schedules. I see govt2310 mentions the language would be used for Part 8 procurements, (and I don't see that limited to open market items), so I wonder if this is another instance.

I don't get this. Assuming the agency's trying to boost its small business contracting numbers, not actually increase small business opps, why not just make small business status the most important eval factor? If an agency makes a GSA award to a small business that contracts out 99 percent, the agency counts all the dollars as a small business award. And if the agency makes a GSA award to a large business that contracts out 99 percent to small businesses, GSA gets the SB credit, not the awarding agency, isn't that right?

I know I am missing something, I hope someone will let me know what it is.

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