2010-10969. Class Deviation From FAR 52.219-7, Notice of Partial Small Business Set-Aside

AGENCY:

Defense Logistics Agency, DoD.

ACTION:

Notice.

SUMMARY:

This is to notify interested parties of a proposed class deviation to the Federal Acquisition Regulation (FAR) regarding partial small business set-asides for Defense Logistics Agency (DLA), Defense Energy Support Center (DESC) bulk fuels solicitations and resulting contract awards. DLA is requesting Department of Defense approval of a class deviation to FAR 52.219-7, to revise an existing class deviation to that clause.

DATES:

Comments must be received on or before July 9, 2010.

ADDRESSES:

Submit your comments concerning this Deviation to DLA, Attn: J-71 (Kerry Pilz), 8725 John J. Kingman Rd, Fort Belvoir, VA 22060-6221. Telephone [phone] or E-mail at [e-mail].

FOR FURTHER INFORMATION CONTACT:

Kerry Pilz, [phone] or e-mail at [e-mail].

SUPPLEMENTARY INFORMATION:

In accordance with Federal Acquisition Regulation (FAR) 1.404 and Defense Federal Acquisition Regulation Supplement 201.404, DESC is requesting a class deviation from FAR Clause 52.219-7, Notice of Partial Small Business Set-Aside. DESC intends to use the clause in domestic bulk fuel solicitations.

Under the bulk petroleum program, DESC purchases, distributes, and manages millions of gallons of military specification fuel products for the Military Services. Domestic bulk fuel solicitations generally contain partial small business set-asides pursuant to FAR subpart 19.5. These set-asides are solicited and awarded using the current deviation clause, DESC Clause I237.06, Notice of Partial Small Business Set-Aside (Deviation). The current deviation was approved on June 25, 1990, pursuant to DAR Case 90-922. The current deviation established a methodology for partial small business set-aside evaluation and awards.

DESC proposes revisions to the current deviation clause to clarify language in various portions of the clause, and in particular to clarify that a small business will not be awarded a set-aside portion at a price higher than its offer price under the non-set-aside portion. The proposed revisions are incorporated into the clause below:

Defense Logistics Agency Defense Logistics Acquisition Directive provision and clause.

I237.06 NOTICE OF PARTIAL SMALL BUSINESS SET-ASIDE (DEVIATION)

Required in all domestic bulk solicitations/contracts when the solicitation contains one or more partial set-aside items. Be sure lead-in appears above the clause. This clause is a deviation from FAR Clause I237.

THE FOLLOWING CLAUSE APPLIES ONLY TO PARTIAL SMALL BUSINESS SET-ASIDE LINE ITEMS THAT MAY BE CONTAINED IN THIS DOCUMENT.

I237.06 NOTICE OF PARTIAL SMALL BUSINESS SET-ASIDE (DEVIATION) (DESC)

(a) DEFINITION. Small business concern, as used in this clause, means a concern, including its affiliates that is independently owned and operated, not dominant in the field of operation in which it is bidding on Government contracts, and qualified as a small business under the size standards in this solicitation.

(b) GENERAL.

(1) A portion of certain items of this procurement, as listed in the Schedule, has been set aside for award to eligible small businesses. The quantities indicated for such items in the Schedule include the set-aside portion. All offerors are urged to offer the maximum quantities they desire and are capable of delivering. Small business concerns interested in receiving a set-aside contract should submit an offer in the same manner as though there were no set-aside. Volumes offered by qualified small business concerns will be evaluated for the non-set-aside and set-aside portions of the procurement. Separate offers should not be submitted on the non-set-aside and set-aside portions.

(2) The partial small business set-aside of the procurement is based on a determination by the Contracting Officer that it is in the interest of maintaining or mobilizing the nation's full production capacity or in the interest of national defense programs, or in the interest of assuring that a fair portion of Government procurement is placed with small business concerns.

(3) All of the offers received under this solicitation will first be negotiated as to price and an evaluation will be made as though there were no set-aside.

(4) For the purposes of set-aside evaluation, when an offer contains increments at different prices, each increment will be considered a separate offer. Except as provided in (d) below, negotiations will be limited to the offered quantities not awarded under the provision of (c)(2) below.

(c) SET-ASIDE AWARD PROCEDURE.

(1) The price for the small business set-aside portion will be negotiated by the Contracting Officer based upon prices the Government would otherwise pay the successful offeror for the non-set-aside portion of the location under this solicitation, adjusted for transportation charges and other factors. In the case of a small business concern whose offer is determined by the evaluation process to be low on the non-set-aside portion, awards of the set-aside portion will be made to that small business concern without further negotiation. Contracts for any remaining set-aside portions will be negotiated with those eligible small business concerns that have submitted a responsive offer on the various items for which a set-aside has been established. In no event will a small business concern be awarded a set-aside portion at a price higher than its offer price under the non-set-aside portion.

(2) Negotiations for small business set-aside awards will begin with the small business concern with the lowest evaluated price and a quantity of offered product remaining. If the low small business concern on the item does not offer to supply product at the set-aside price established in accordance with (1) above, the next low small business concern on the item will be given the same opportunity; this process will continue with the successive low small business concerns until all small business concerns have been contacted.

(3) The Government reserves the right to make awards to the otherwise low offeror for all or any portion of the set-aside quantities, without regard to the size of the offeror, if eligible small business concerns do not offer a quantity of product sufficient to meet a set-aside requirement or do not offer to supply at the set-aside prices. The total quantity that will be awarded a small business offeror on both the unreserved and reserved portions will not exceed the total quantity offered under this solicitation by such small business offerors. However, if insufficient product is offered by small business concerns to meet the quantity set aside for small business, small business concerns with which the Government has already commenced negotiations may be given an opportunity to offer additional product.

(4) Where the Trade Agreements Act applies to the non-set-aside portion, offers of eligible products will be treated as if they were qualifying country end products.

(d) AGREEMENT. For the set-aside portion of the acquisition, a small business concern submitting an offer in its own name agrees to furnish, in performing the contract, only end items manufactured or produced by small business concerns inside the United States. The term United States includes its territories and possessions, the Commonwealth of Puerto Rico, the Trust Territory of the Pacific Islands, and the District of Columbia. If this procurement is processed under simplified acquisition procedures and the total amount of this contract does not exceed $25,000, a small business concern may furnish the product of any domestic firm. This paragraph does not apply in connection with construction or service contracts.

Dated: May 5, 2010.

Mitchell S. Bryman,

Alternate OSD Federal Register Liaison Officer, Department of Defense.