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Giorgiana Chen

Se-aside a procurement for Small Businesses

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The Government plans to use ARMY CHESS for hardware (laptops/docking stations/routers/servers) buys (supplies) over the SAT. Many of these procurements require Brand Name Justification (FAR 16.505). The competition is limited to the resellers on ARMY CHESS capable of providing the brand-name items. These procurements have been set-aside to small businesses because during market research the Program Offices found at least two small business resellers on ARMY CHESS capable of providing the brand-name items. However, the Contracting Officer would like to extend the competition to larger resellers hoping increased competition would result in better prices and more advantageous terms an conditions for the Government. The manufacturers of these items are large businesses. We contacted ARMY CHESS directly and the response received was "look into FAR 19.502 in order to view the actions required in order to waive this requirement from your KO".

Question: Is there a Class waiver needed in order not to set-aside a procurement for small businesses on ARMY CHESS under NAICS code 334111 for procurements over the SAT and allow both small and large companies the opportunity to compete for the requirement?

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The general rule for fair opportunity:  All multiple-award contract holders (large and small) are to be provided a fair opportunity to be considered for every order opportunity exceeding $3,500.

The exception:  Those circumstances listed in FAR 16.505(b)(2)(i)(A) through (F).  (F) is for set-asides.

The general rule for set-asides:  Set-asides under multiple-award IDIQ contracts are covered by FAR 19.502-4 and FAR 16.505(b)(2)(i)(F).  The Rule-of-Two does not apply to orders against multiple-award IDIQ contracts; rather, set-asides under multiple-award IDIQ contracts are wholly at the contracting officer's discretion.  See Edmond Scientific Company; GAO Bid Protest Decision B-410179, B-410179.2; November 12, 2014.

The exception:  Amenable to 13 CFR § 125.2(e)(6)(ii), a contracting officer may state in a solicitation and resulting multiple-award contract that (1) based on the results of market research, orders will be set aside whenever the Rule of Two (or any alternative small business set-aside) has been met; or (2) the agency will preserve the right to set aside orders using the Rule of Two on an order-by-order basis.

I don't know if the exception applies to the CHESS multiple-award IDIQ contracts.

Please note that the exception to the general rule for set-asides is not in the FAR (48 CFR) -- it is in the small business regulations (13 CFR) -- contracting officers might not be universally aware of the exception.

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