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Hello All

DOD reinstated the use of set asides under the Small Business Competitiveness Demonstration Program (SBCDP). SBDCP in part tests the ability of small businesses and emerging small businesses to compete on an unrestricted basis with large businesses in designated industry groups. There is more to it but, Construction is part of this group.

GAO in part opined rule of two applies to orders from multiple award contracts (Delex 2008 decision).

Question. Does SBCDP affect existing construction MACs? How does this program work with the Delex decision?

Thoughts and Comments?

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Given Delex Systems, Inc., B-400403, Oct. 8, 2008, I read FAR 19.502-2(d) to answer this fairly squarely. It states, "The requirements of this subsection do not apply to acquisitions over $30,000 during the period when small business set-asides cannot be considered for the designated industry groups (see 19.1007(B))." (emphasis added). Conversely, the "Rule of Two" would apply to "acquisitions" (already interpreted to include orders) when small business set-asides can be considered.

Even in the absence of FAR 19.502-2(d), I suspect the GAO would decide, even for contracts originally required to be solicited under full and open competition under FAR Subpart 19.10, that when the agency failed to meet its goal, its requirement to reinstitute restricted competition includes delivery orders where the "Rule of Two" is met.

Consider the Implementation Plan referenced in FAR 19.1001. It provides, if the annual review shows the agency failed to meet its 40% goal for a designated industry group, for those organizational units that failed, unless set aside under 8(a), SDB, or HUBZone, "subsequent contracting opportunities...shall be solicited through competition restricted to eligible small businesses" and that such solicitations "shall be conducted in accordance with section 15(a) of the Small Business Act and Subpart 19.5 of the Federal Acquisition Regulation (FAR)." Para III.D.2.a. First, "subsequent contracting opportunities" seems broader than "contract," and the SBA and GAO have already shown their cards on this score. Second, the Plan specifically invokes FAR Subpart 19.5, which the GAO interpreted in Delex. Third, the OFPP & SBA specifically rejected excluding task order contracts from coverage. 64 Fed. Reg. 29693, 29694 (June 2, 1999). Finally, the drafters of the Plan showed they knew how to exclude contract actions from coverage (see para III.D.3.c.), but did not expressly do so here.

Bottom line, I doubt the SBA and GAO would interpret "contracting opportunity" differently than they did "acquisition."

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