[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR19.502-2]

[Page 354-355]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 19--SMALL BUSINESS PROGRAMS--Table of Contents
 
               Subpart 19.5--Set-Asides for Small Business
 
Sec. 19.502-2  Total small business set-asides.

    (a) Except for those acquisitions set aside for very small business 
concerns (see subpart 19.9), each acquisition of supplies or services 
that has an anticipated dollar value exceeding $2,500 ($15,000 for 
acquisitions as described in 13.202(g)), but not over $100,000, is 
automatically reserved exclusively for small business concerns and shall 
be set aside for small business unless the contracting officer 
determines there is not a reasonable expectation of obtaining offers 
from two or more responsible small business concerns that are 
competitive in terms of market prices, quality, and delivery. If the 
contracting officer does not proceed with the small business set-aside 
and purchases on an unrestricted basis, the contracting officer shall 
include in the contract file the reason for this unrestricted purchase. 
If the contracting officer receives only one acceptable offer from a 
responsible small business concern in response to a set-aside, the 
contracting officer should make an award to that firm. If the 
contracting officer receives no acceptable offers from responsible small 
business concerns, the set-aside shall be withdrawn and the requirement, 
if still valid, shall be resolicited on an unrestricted basis. The small 
business reservation does not preclude the award of a contract with a 
value not greater than $100,000 under Subpart 19.8, Contracting with the 
Small Business Administration, under 19.1007(c), Solicitations equal to 
or less

[[Page 355]]

than the ESB reserve amount, or under 19.1305, HUBZone set-aside 
procedures.
    (b) The contracting officer shall set aside any acquisition over 
$100,000 for small business participation when there is a reasonable 
expectation that (1) offers will be obtained from at least two 
responsible small business concerns offering the products of different 
small business concerns (but see paragraph (c) of this subsection); and 
(2) award will be made at fair market prices. Total small business set-
asides shall not be made unless such a reasonable expectation exists 
(but see 19.502-3 as to partial set-asides). Although past acquisition 
history of an item or similar items is always important, it is not the 
only factor to be considered in determining whether a reasonable 
expectation exists. In making R&D small business set-asides, there must 
also be a reasonable expectation of obtaining from small businesses the 
best scientific and technological sources consistent with the demands of 
the proposed acquisition for the best mix of cost, performances, and 
schedules.
    (c) For small business set-asides other than for construction or 
services, any concern proposing to furnish a product that it did not 
itself manufacture must furnish the product of a small business 
manufacturer unless the SBA has granted either a waiver or exception to 
the nonmanufacturer rule (see 19.102(f)). In industries where the SBA 
finds that there are no small business manufacturers, it may issue a 
waiver to the nonmanufacturer rule (see 19.102(f) (4) and (5)). In 
addition, SBA has excepted procurements processed under simplified 
acquisition procedures (see part 13), where the anticipated cost of the 
procurement will not exceed $25,000, from the nonmanufacturer rule. 
Waivers permit small businesses to provide any firm's product. The 
exception permits small businesses to provide any domestic firm's 
product. In both of these cases, the contracting officer's determination 
in paragraph (b)(1) of this subsection or the decision not to set aside 
a procurement reserved for small business under paragraph (a) of this 
subsection will be based on the expectation of receiving offers from at 
least two responsible small businesses, including nonmanufacturers, 
offering the products of different concerns.
    (d) The requirements of this subsection do not apply to acquisitions 
over $25,000 during the period when small business set-asides cannot be 
considered for the four designated industry groups (see 19.1007(b)).

[60 FR 34757, July 3, 1995, as amended at 61 FR 39209, July 26, 1996; 63 
FR 70270, Dec. 18, 1998; 64 FR 10536, Mar. 4, 1999; 65 FR 16275, Mar. 
27, 2000; 67 FR 56121, Aug. 30, 2002]