[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR19.502-3]



[Page 367-368]

 

            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. 19.502-3  Partial set-asides.



    (a) The contracting officer shall set aside a portion of an 

acquisition, except for construction, for exclusive small business 

participation when--

    (1) A total set-aside is not appropriate (see 19.502-2);

    (2) The requirement is severable into two or more economic 

production runs or reasonable lots;

    (3) One or more small business concerns are expected to have the 

technical competence and productive capacity to satisfy the set-aside 

portion of the requirement at a fair market price;

    (4) The acquisition is not subject to simplified acquisition 

procedures; and

    (5) A partial set-aside shall not be made if there is a reasonable 

expectation that only two concerns (one large and one small) with 

capability will respond with offers unless authorized by the head of a 

contracting activity on a case-by-case basis. Similarly, a class of 

acquisitions, not including construction, may be partially set aside. 

Under certain specified conditions, partial set-asides may be used in 

conjunction with multiyear contracting procedures.

    (b) When the contracting officer determines that a portion of an 

acquisition is to be set aside, the requirement shall be divided into a 

set-aside portion and a non-set-aside portion, each of which shall (1) 

be an economic production run or reasonable lot and (2) have terms and a 

delivery schedule comparable to the other. When practicable, the set-

aside portion should make maximum use of small business capacity.

    (c)(1) The contracting officer shall award the non-set-aside portion 

using normal contracting procedures.

    (2)(i) After all awards have been made on the non-set-aside portion, 

the contracting officer shall negotiate with eligible concerns on the 

set-aside portion, as provided in the solicitation, and make award. 

Negotiations shall be conducted only with those offerors who have 

submitted responsive offers on the non-set-aside portion. Negotations 

shall be conducted with small business concerns in the order of priority 

as indicated in the solicitation (but see (ii) below). The set-aside 

portion shall be awarded as provided in the solicitation. An offeror 

entitled to receive the award for quantities of an item under the non-

set-aside portion and who accepts the award of additional quantities 

under the set-aside portion shall not be requested to accept a lower 

price because of the increased quantities of the award, nor shall 

negotiation be conducted with a view to obtaining such a lower price 

based solely upon receipt of award of both portions of the acquisition. 

This does not prevent acceptance by the contracting officer of voluntary 

reductions in the



[[Page 368]]



price from the low eligible offeror before award, acceptance of 

voluntary refunds, or the change of prices after award by negotiation of 

a contract modification.

    (ii) If equal low offers are received on the non-set-aside portion 

from concerns eligible for the set-aside portion, the concern that is 

awarded the non-set-aside part of the acquisition shall have first 

priority with respect to negotiations for the set-aside.



[48 FR 42240, Sept. 19, 1989, as amended at 53 FR 43390, Oct. 26, 1988; 

60 FR 34757, July 3, 1995]