E8-13459. Reinstitution of Small Business Set-Asides for Certain Acquisitions Under the Small Business Competitiveness Demonstration Program

AGENCY:

Defense Acquisition Regulations System, Department of Defense (DoD).

ACTION:

Notice of reinstitution of small business set-asides under the Small Business Competitiveness Demonstration Program.

SUMMARY:

The Director, Defense Procurement, Acquisition Policy, and Strategic Sourcing has reinstituted the use of small business set-aside procedures for solicitations issued under the Designated Industry Groups (DIGs), including Construction (except dredging), Subsector 236—Construction of Buildings; non-nuclear ship repair acquisitions conducted by the Department of the Navy under North American Industry Classification System (NAICS) Code 3366111, Product or Service Code J999 (West Coast only); Architect and Engineering Services (including Surveying and Mapping); and Refuse Systems and Related Services. The Director, Defense Procurement, Acquisition Policy, and Strategic Sourcing has also reinstituted the use of small business set-aside procedures for construction solicitations issued under specific construction NAICS codes for the Army, the Navy, the Air Force, the Defense Logistics Agency, the Defense Information Systems Agency, the Defense Threat Reduction Agency, the Defense Education Activity, and the U.S. Special Operations Command. This action is required under the Small Business Competitiveness Demonstration Program because DoD has failed to attain its 40 percent goal in these DIGs.

EFFECTIVE DATE:

June 2, 2008.

FOR FURTHER INFORMATION CONTACT:

Ms. Lee Renna, OUSD(AT&L), Assistant Director, DoD Office of Small Business Programs, 201-12th Street South, Suite 406, Arlington, VA 22202; telephone [phone].

SUPPLEMENTARY INFORMATION:

The Office of Federal Procurement Policy and the Small Business Administration issued a final policy directive and an implementation plan on May 25, 1999, for the Small Business Competitiveness Demonstration Program. The Program is further implemented in the Federal Acquisition Regulation (FAR) Subpart 19.10 and the Defense FAR Supplement Subpart 219.10.

Under the Program, small business set-asides are suspended for certain DIGs. However, pursuant to sections III.D.2.a. and IV.A.3. of the final policy directive and implementation plan, participating agencies such as DoD are required to reinstitute the use of small business set-asides whenever the small business awards under any DIG fall below 40 percent. Reinstitution of small business set-asides is limited to the organizational units(s) within the participating agency that failed to meet the small business participation goal(s).

The Federal Procurement Data System—Next Generation indicates that for the 12-month period ending September 30, 2007, DoD's small business participation rate was less than 40 percent in the following DIGs:

1. Construction (Except Dredging), Subsector 236, Construction of Buildings.

2. Non-Nuclear Ship Repair, Product or Service Code J999 (West Coast only).

3. Architect and Engineering Services (including Surveying and Mapping).

4. Refuse Systems and Related Services.

In addition to the DIGs identified above, section IV.A.3. of the final policy directive and implementation plan requires that small business set-asides also be reinstituted when an individual organizational unit attained less than a 35 percent small business participation rate, even when DoD's overall achievement in the DIG was 40 percent or greater. The 35 percent rule applies only to Architect and Engineering services and the Construction Subsectors and only for the specific NAICS codes (formerly known as Standard Industrial Classification codes) that fell below 35 percent. Accordingly, the Director, Defense Procurement, Acquisition Policy, and Strategic Sourcing has directed that subsequent contracting opportunities in excess of the amount reserved for emerging small businesses be solicited through competition restricted to eligible small businesses, for individual organizational units as follows:

1. Department of the Army.

(a)(1) Construction, Subsector 236, Construction of Buildings.

(2) Construction, Subsector 237, Heavy and Civil Engineering Construction.

• NAICS 237120.

(3) Construction, Subsector 238, Specialty Trade

Contractors.

• NAICS 238110.
• NAICS 238290.
• NAICS 238350.

(b) Architect and Engineering Services (including Surveying and Mapping).

(c) Refuse Systems and Related Services.

2. Department of the Navy.

(a)(1) Construction, Subsector 236, Construction of Buildings.

(2) Construction, Subsector 237, Heavy and Civil Engineering Construction.

• NAICS 237120.
• NAICS 237990.

(3) Construction, Subsector 238, Specialty Trade Contractors.

• NAICS 238120.
• NAICS 238190.
• NAICS 238390.

(b) Non-Nuclear Ship Repair, Product or Service Code J999 (West Coast only).

(c) Architect and Engineering Services (including Surveying and Mapping).

3. Department of the Air Force.

(a)(1) Construction, Subsector 236, Construction of Buildings.

(2) Construction, Subsector 237, Heavy and Civil Engineering Construction.

• NAICS 237120.

(b) Architect and Engineering Services (including Surveying and Mapping).

4. Defense Contract Management Agency.

Construction, Subsector 236, Construction of Buildings.

5. Defense Logistics Agency.

(a) Construction, Subsector 236, Construction of Buildings.

(b) Construction, Subsector 238, Specialty Trade Contractors.

• NAICS 238110.
• NAICS 238120.
• NAICS 238220.

6. Defense Commissary Agency.

Refuse Systems and Related Services.

7. Washington Headquarters Services.

(a) Construction, Subsector 236, Construction of Buildings.

(b) Architect and Engineering Services (including Surveying and Mapping).

8. Defense Information Systems Agency.

Construction, Subsector 238, Specialty Trade Contractors.

• NAICS 238990.

9. Defense Threat Reduction Agency.

Construction, Subsector 237, Heavy and Civil Engineering Construction.

• NAICS 237990.

10. Defense Education Activity.

Construction, Subsector 238, Specialty Trade Contractors.

• NAICS 238990.

11. U.S. Special Operations Command.

(a) Construction, Subsector 237, Heavy and Civil Engineering Construction.

• NAICS 237310.

(b) Construction, Subsector 238, Specialty Trade Contractors.

• NAICS 238170.

Consistent with the revised final policy directive and implementation plan, section III.D.3.b., competition in the four DIGs with an estimated award value that is equal to or less than the emerging small business reserve amount will be restricted to emerging small businesses, provided that the contracting officer determines there is a reasonable expectation of obtaining offers from two or more responsible emerging small businesses that will be competitive in terms of market price, quality, and delivery. If no such reasonable expectation exists, requirements will be processed in accordance with FAR Subpart 19.5 or 19.8.

The use of unrestricted competition will be reinstated upon determining, after annual review, that contract awards to small business concerns again meet the required goals.

Michele P. Peterson,

Editor, Defense Acquisition Regulations System.