[Code of Federal Regulations]

[Title 13, Volume 1]

[Revised as of January 1, 2006]

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

[CITE: 13CFR124.504]



[Page 393-394]

 

                TITLE 13--BUSINESS CREDIT AND ASSISTANCE

 

                CHAPTER I--SMALL BUSINESS ADMINISTRATION

 

PART 124_8(a) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS STATUS 

DETERMINATIONS--Table of Contents

 

                   Subpart A_8(a) Business Development

 

Sec. 124.504  What circumstances limit SBA's ability to accept a 

procurement for award as an 8(a) contract?



    SBA will not accept a procurement for award as an 8(a) contract if 

the circumstances identified in paragraphs (a) through (d) of this 

section exist.

    (a) Reservation as small business or SDB set-aside. The procuring 

activity issued a solicitation for or otherwise expressed publicly a 

clear intent to reserve the procurement as a small business or small 

disadvantaged business (SDB) set-aside prior to offering the requirement 

to SBA for award as an 8(a) contract. The AA/8(a)BD may permit the 

acceptance of the requirement, however, under extraordinary 

circumstances.



    Example to paragraph (a). SBA may accept a requirement where a 

procuring activity made a decision to offer the requirement to the 8(a) 

BD program before the solicitation was sent out and the procuring 

activity acknowledges and documents that the solicitation was in error.



    (b) Competition prior to offer and acceptance. The procuring 

activity competed a requirement among Participants prior to offering the 

requirement to SBA and receiving SBA's formal acceptance of the 

requirement.

    (1) Any competition conducted without first obtaining SBA's formal 

acceptance of the procurement for the 8(a) BD program will not be 

considered an 8(a) competitive requirement.

    (2) SBA may accept the requirement for the 8(a) BD program as a 

competitive 8(a) requirement, but only if the procuring activity agrees 

to resolicit the requirement using appropriate competitive 8(a) 

procedures.

    (c) Adverse impact. SBA has made a written determination that 

acceptance of the procurement for 8(a) award would have an adverse 

impact on an individual small business, a group of small businesses 

located in a specific geographical location, or other small business 

programs. The adverse impact concept is designed to protect small 

business concerns which are performing Government contracts awarded 

outside the 8(a) BD program, and does not apply to follow-on or renewal 

8(a) acquisitions. SBA will not consider adverse impact with respect to 

any requirement offered to the 8(a) program under Simplified Acquisition 

Procedures.

    (1) In determining whether the acceptance of a requirement would 

have an adverse impact on an individual small business, SBA will 

consider all relevant factors.

    (i) In connection with a specific small business, SBA presumes 

adverse impact to exist where:

    (A) The small business concern has performed the specific 

requirement for at least 24 months;

    (B) The small business is performing the requirement at the time it 

is offered to the 8(a) BD program, or its performance of the requirement 

ended within 30 days of the procuring activity's offer of the 

requirement to the 8(a) BD program; and

    (C) The dollar value of the requirement that the small business is 

or was performing is 25 percent or more of its most recent annual gross 

sales (including those of its affiliates). For a multi-year requirement, 

the dollar value of the last 12 months of the requirement will be used 

to determine whether a small business would be adversely affected by 

SBA's acceptance.

    (ii) Except as provided in paragraph (c)(2) of this section, adverse 

impact does not apply to ``new'' requirements. A new requirement is one 

which has not been previously procured by the relevant procuring 

activity.

    (A) Where a requirement is new, no small business could have 

previously performed the requirement and, thus, SBA's acceptance of the 

requirement for the 8(a) BD program will not adversely impact any small 

business.

    (B) Construction contracts, by their very nature (e.g., the building 

of a specific structure), are deemed new requirements.



[[Page 394]]



    (C) The expansion or modification of an existing requirement will be 

considered a new requirement where the magnitude of change is 

significant enough to cause a price adjustment of at least 25 percent 

(adjusted for inflation) or to require significant additional or 

different types of capabilities or work.

    (D) SBA need not perform an impact determination where a new 

requirement is offered to the 8(a) BD program.

    (2) In determining whether the acceptance of a requirement would 

have an adverse impact on a group of small businesses, SBA will consider 

the effects of combining or consolidating various requirements being 

performed by two or more small business concerns into a single contract 

which would be considered a ``new'' requirement as compared to any of 

the previous smaller requirements. SBA may find adverse impact to exist 

if one of the existing small business contractors meets the presumption 

set forth in paragraph (c)(1)(i) of this section.

    (3) In determining whether the acceptance of a requirement would 

have an adverse impact on other small business programs, SBA will 

consider all relevant factors, including but not limited to, the number 

and value of contracts in the subject industry reserved for the 8(a) BD 

program as compared with other small business programs.

    (d) Benchmark achievement. Where actual participation by 

disadvantaged businesses in a SIC Major Group exceeds the benchmark 

limitations established by the Department of Commerce for that Major 

Group, SBA may elect not to accept a requirement having a SIC code 

within the Major Group that is offered to SBA for award as an 8(a) 

contract. In determining whether to accept a requirement in such a case, 

SBA will consider the developmental needs of Participants and other 

anticipated contracting opportunities available to them.

    (e) Release for non-8(a) competition. In limited instances, SBA may 

decline to accept the offer of a follow-on or renewal 8(a) acquisition 

to give a concern previously awarded the contract that is leaving or has 

left the 8(a) BD program the opportunity to compete for the requirement 

outside the 8(a) BD program.

    (1) SBA will consider release only where:

    (i) The procurement awarded through the 8(a) BD program is being or 

was performed by either a Participant whose program term will expire 

prior to contract completion, or, by a former Participant whose program 

term expired within one year of the date of the offering letter;

    (ii) The concern requests in writing that SBA decline to accept the 

offer prior to SBA's acceptance of the requirement for award as an 8(a) 

contract; and

    (iii) The concern qualifies as a small business for the requirement 

now offered to the 8(a) BD program.

    (2) In considering release, SBA will balance the importance of the 

requirement to the concern's business development needs against the 

business development needs of other Participants that are qualified to 

perform the requirement. This determination will include consideration 

of whether rejection of the requirement would seriously reduce the pool 

of similar types of contracts available for award as 8(a) contracts. SBA 

will seek the views of the procuring activity.

    (3) If SBA declines to accept the offer and releases the 

requirement, it will recommend to the procuring activity that the 

requirement be procured as a small business or, if authorized, an SDB 

set-aside.



[63 FR 35739, 35772, June 30, 1998]