“Educating the Government Contracting Community”

SBA Issues Final Rule on Acquisition Processes for Task and Delivery Order under Multiple Award Contracts and Bundling and Consolidation of Contracts

The Small Business Administration has recently issued final rules implementing, among other things, two important aspects of the enacted Small Business Jobs Act of 2010: “(1) the application of the Small Business Administration’s (SBA’s) small business programs to multiple award contracts; and (2) limitations on contract consolidation and bundling.” Effective on or before December 31, 2013, the SBA Final Rule “seeks to ensure the increased consideration of small businesses in connection with the establishment and use of multiple award contracts and acquisitions that consolidate contracts. “

Under the new rule, Federal agencies may: (1) set aside part or parts of multiple award contracts for small business; (2) reserve one or more awards for small businesses on multiple award contracts that are established through full and open competition; or (3) set aside orders under multiple award contracts awarded pursuant to full and open competition that have not been set-aside or partially set-aside, nor include a reserve for small businesses, but only after a contracting officer has determined through market research prior to the issuance of a solicitation that at least two capable small business cannot meet the contract’s requirement.

The new rule does not change the mandatory small business set aside contract requirement if the “rule of two” is satisfied. The new rule would apply to multiple award contracts “issued and used by only one agency as well as to multiple award multi-agency contracts (MMACs), which can be used by more than one agency. “ The new rule does not require an agency to use any of the above-referenced set-asides or reserves before awarding an MAC, but does require that agencies that choose not the utilize these contracting options to document “how their planned action is consistent with the best interests of the agency and the agency’s overarching responsibility to provide maximum practicable opportunities for small businesses (e.g., agency met its small business goal in the last year).”

With respect to the consolidation of contracts, the new rule obligates agencies to (1) demonstrate that the benefits of the consolidated acquisition substantially exceed the benefits of each possible alternative approach that would involve a lesser degree of consolidation and (2) identify the negative impact on small businesses, before an acquisition may be consolidated.  This new requirement applies to consolidation of contract requirements with a total value of more than $2 million or more. Moreover, the new rule requires agencies to publish their justification for any bundled acquisition at least thirty (30) days before the issuance of the bundled acquisition. (http://www.gpo.gov/fdsys/pkg/FR-2013-10-02/pdf/2013-22064.pdf)

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