Code of Federal Regulations: Containing a Codification of Documents of ...

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

Step Six. If the entire set-aside portion is not taken by eligible small business concerns pursuant to Steps One through Five above, the partial set-aside is automatically dissolved as to the unawarded portion and such unawarded portion may be procured by advertising or negotiation as appropriate, in accordance with existing regulations.

(4) Determining the Set-Aside Quantity.

(A) The maximum quantity of an item which may be awarded to any eligi-
ble small business concern shall be determined by applying the percent-
age of the total non-set-aside portion of an item on which an offer was
made to the total quantity of the set-aside portion of that item.
(B) If a concern offers on two or more items on the non-set-aside portion,
but conditions its offer in such a manner that the total of all these quan-
tities may not be awarded, or offers a quantity which, at the option of
the Government, may be applied to one or more items, the overall max-
imum which can be offered on the set-aside portion of the items af-
fected will be determined by applying the percentage of the total quan-
tities of these items on the non-set-aside portion that could have been
awarded to the total of these items on the set-aside portion.

(C) Notwithstanding the foregoing, if the entire set-aside portion of an item
is not awarded after completion of the above steps, then the unawarded
balance shall be offered to those concerns who were previously
awarded quantities on the set-aside portion but who were prevented
from accepting additional quantities because of the quantity limitations
stated above. The unawarded quantity will first be offered to that con-
cern in the first priority which has received the largest quantity of the
item. If two or more offerors in the first priority received an identical
quantity, a drawing by lot shall determine their priority. If a balance
still remains, this procedure shall be repeated with the offerors in each
of the original groups in turn, to dispose of any balance of the item still
remaining.

(1) A “small business concern” is a concern, including its affiliates, which is independently owned and operated, is not dominant in the field of operation in which it is making an offer on Government contracts, and can further qualify under the criteria set forth in the regulations of the Small Business Administration (CFR Title 13, Section 121.3–8). In addition to meeting these criteria, a manufacturer or a regular dealer submitting offers in his own name must agree to furnish in the performance of the contract, end items manufactured or produced by small business concerns; provided, that this additional requirement does not apply in connection with construction or service contracts.

(2) A "labor surplus area" is a geographical area which is:

(i) an appropriate section of a city, state, or an Indian reservation classified by the Secretary of Labor as a “section of concentrated unemployment or under-employment" (cities and states with classified sections of unemployment or under-employment, as well as eligible Indian reservations are listed by the Department of Labor in its publication, “Area Trends in Employment and Unemployment"); or

(ii) classified by the Department of Labor as "Area of Persistent Unemployment" (herein referred to as an area of persistent labor surplus) and listed as such by that Department in its publication, "Area Trends in Employment and Unemployment"; or

(iii) classified by the Department of Labor as an "Area of Substantial Unemployment" (herein referred to as an area of substantial labor surplus) and listed as such by that Department in its publication "Area Trends in Employment and Unemployment"; or

(iv) not classified as in (ii) or (iii) above but which is individually certified as an area of persistent or substantial unemployment by the

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appropriate State Employment Security Agency or the Department of Labor at the request of a prospective contractor.

(3) The term, "labor surplus area concern" includes certified-eligible concerns with a first or second preference, and persistent or substantial LSA concerns as defined below:

(i) "Certified-eligible concern with a first preference" means a concern (located in or near a section of concentrated unemployment or under-employment or in an area of persistent or substantial labor surplus) which has been certified by the Secretary of Labor in accordance with 29 CFR 8.7(b) and 8.9(c) with respect to the employment of disadvantaged individuals residing within such sections or areas and which will agree to perform, or cause to be performed by certified concerns with a first preference a substantial proportion of a contract in or near such sections or in such areas; it includes a concern which, though not so certified, agrees to have a substantial proportion of a contract performed by certified concerns with a first preference in or near such sections or in such areas. A concern shall be deemed to perform a substantial proportion of the contract in or near sections of concentrated unemployment or under-employment or in persistent or substantial LSA if the costs that the concern will incur on account of manufacturing or production in or near such sections or in such areas (by itself if a certified concern, or by certified concerns with a first preference acting as first tier subcontractors) amount to more than twentyfive percent (25%) of the contract price.

(ii) “Certified-eligible concern with a second preference" means a concern (located in any area) which has been certified by the Secretary of Labor in accordance with 29 CFR 8.7(c) and 8.9(d) with respect to the employment of disadvantaged individuals, and which will agree to perform, or cause to be performed by certified concerns with a first or second preference a substantial proportion of the contract; it includes a concern which, though not so certified, agrees to have a substantial proportion of a contract performed by such certified concerns. A concern shall be deemed to perform a substantial proportion of the contract if the costs that the concern will incur on account of manufacturing or production (by itself if a certified concern, or by certified concerns with a first or second preference acting as first tier subcontractors) amount to more than twenty-five percent (25%) of the contract price.

(iii) "Persistent or substantial labor surplus area concern” means a concern that agrees to perform or cause to be performed, a substantial proportion of a contract in persistent or substantial LSA. A concern shall be deemed to perform a substantial proportion of a contract in persistent or substantial LSA if the aggregate costs that will be incurred by the concern or its first tier subcontractors on account of manufacturing or production performed in persistent or substantial LSA and in any area, by itself if a certified concern or by its first tier certified subcontractors, amount to more than fifty percent (50%) of the contract price.

(d) Agreement. The offeror agrees that (i) if awarded a contract as a certified-eligible small business concern with a first preference under the set-aside portion of this procurement, he will perform, or cause to be performed, a substantial proportion of the contract in or near sections of concentrated unemployment or under-employment or in persistent or substantial LSA; and, in the performance of such contract, will employ, or require certified first tier subcontractors with a first preference to employ, a proportionate number of disadvantaged individuals, as defined by the Department of Labor in 29 CFR 8.2(d), residing within such sections or areas in accordance with plans approved by the Secretary of Labor; (ii) if awarded a contract as a certified-eligible small

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CONTRACT CLAUSES AND SOLICITATION PROVISIONS business concern with a second preference under the set-aside portion of the procurement, he will perform or cause to be performed, a substantial proportion of the contract in facilities of a certified-eligible concern, and in the performance of such contract will employ, or require certified first tier subcontractors with a first or second preference to employ, disadvantaged individuals in accordance with plans approved by the Secretary of Labor; and (iii) if awarded a contract as a small business persistent or substantial LSA concern under the set-aside portion of this procurement, he will perform or cause to be performed, a substantial proportion of the contract (A) in areas classified at the time of award or at the time of performance of the contract as persistent or substantial LSA, or (B) any area by himself if a certified concern or by first tier certified subcon

tractors.

(e) Identification of Areas of Performance. Each offeror desiring to be considered for award as a LSA concern on the LSA set-aside portion of this procurement shall identify in Section B of his offer the geographical areas in which he proposes to perform, or cause to be performed, a substantial proportion of the contract. If the Department of Labor classification of any such area changes after the offeror has submitted his offer, the offeror may change the areas in which he proposes to perform, provided that he so notifies the Contracting Officer before award of the LSA set-aside portion. Priority for negotiation will be based upon the labor surplus classification of the designated production areas as of the time of the proposed award. Such offerors are instructed to insert in the clause entitled “Eligibility for Preference as a Labor Surplus Area Concern" in Section B of the solicitation, the address(es) where costs incurred on account of manufacturing or production (by offeror or first tier subcontractor) will amount to more than twenty-five percent (25%) of the contract price, if offering as a certified-eligible concern, or will amount to more than fifty percent (50%) of the contract price, if offering as a persistent or substantial LSA con

cern.

CAUTION: Failure to list the location of manufacture or production and the percentage of cost to be incurred at each location in the space provided in the clause entitled "Eligibility for Preference as a Labor Surplus Area Concern" set forth in Section B of the solicitation will preclude consideration of the offeror as a LSA concern. In addition, if eligibility is based on status as a certified-eligible concern, failure to complete the representation of eligibility set forth in the above referenced clause will preclude consideration of the offeror as a certifiedeligible concern.

(f) Requirements Contract. Only one award will be made for each item or sub-item of the nonset-aside protion and only one award will be made for each item or sub-item of the set-aside portion. For the purpose of equitably distributing orders in accordance with this “Notice of Partial Small Business Set-Aside," the Government will apportion the quantities to be ordered as equally as possible between the non-set-aside Contractor and the set-aside Contractor to whom the awards are made.

(End of clause)

7-2003.4 Notice of Combined Small Business-LSA Set-Asides. In accordance with 1-706.7(d)(1) or (2), insert the clause in (a) or (b) below.

(a)

NOTICE OF COMBINED SMALL BUSINESS-LABOR SURPLUS AREA SET-ASIDE (1975 OCT)

(a) General.

(1) Offers under this procurement are solicited from small business concerns only and the procurement is to be awarded only to one or more small business concerns. This action is based on a determination by the Contracting Officer, alone or in conjunction with a representative of the Small Business Administration, that it is in the interest of maintaining or mobilizing the Nation's full productive capacity, in the interest of war or national defense programs, or in the interest of assuring that a fair proportion of the Government procurement is placed with small business concerns. Offers received from firms which are not small business concerns shall be considered nonresponsive and shall be rejected.

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(2) Part of this procurement, identified in the solicitation as the “labor surplus area (LSA) set-aside portion," has been further set aside for award only to one or more LSA concerns, which are also small business concerns, and, to a limited extent, to small business concerns which do not qualify as LSA concerns. Award of the LSA set- aside portion will be made after awards have been made on the non LSA set-aside portion.

(b) Definitions.

(1) A “small business concern" is a concern, including its affiliates, which is independently owned and operated, is not dominant in the field of operation in which it is making an offer on Government contracts, and can further qualify under the criteria set forth in the regulations of the Small Business Administration (CFR Title 13, Section 121.3–8). In addition to meeting these criteria, a manufacturer or a regular dealer submitting offers in his own name must agree to furnish in the performance of the contract, end items manufactured or produced by small business concerns; provided, that this additional requirement does not apply in connection with construction or service contracts.

(2) A “labor surplus area” is a geographical area which is;

(i) an appropriate section of a city, state, or an Indian reservation classified by the Secretary of Labor as a "section of concentrated unemployment or underemployment" (cities and states with classified sections of unemployment or under-employment, as well as eligible Indian reservations are listed by the Department of Labor in its publication, “Area Trends in Employment and Unemployment"); or

(iv) not classified as in (ii) or (iii) above but which is individually certified as an area of persistent or substantial unemployment by the appropriate State Employment Security Agency or the Department of Labor at the request of a prospective

contractor.

(3) The term, "labor surplus area concern" includes certified-eligible concern with a first or second preference, and persistent or substantial LSA concerns as defined below:

(i) “Certified-eligible concern with a first preference” means a concern (located in or near a section of concentrated unemployment or under-employment or in an area of persistent or substantial labor surplus) which has been certified by the Secretary of Labor in accordance with 29 CFR 8.7(b) and 8.9(c) with respect to the employment of disadvantaged individuals residing within such sections or areas and which will agree to perform, or cause to be performed by certified concerns with a first preference a substantial proportion of a contract in or near such sections or in such areas; it includes a concern which, though not so certified, agrees to have a substantial proportion of a contract performed by certified concerns with a first preference in or near such sections or in such areas. A concern shall be deemed to perform a substantial proportion of the contract in or near sections of concentrated unemployment or under-employment or in persistent or substantial LSA if the costs that the concern will incur on account of manufacturing or production in or near such sections or in such areas (by itself if a certified concern, or by certified concerns with a first preference acting as first tier subcontractors) amount to more than twenty-five percent (25%) of the contract price.

(ii) "Certified-eligible concern with a second preference” means a concern (located in any area) which has been certified by the Secretary of Labor in accordance with 29 CFR 8.7(c) and 8.9(d) with respect to the employment of disadvantaged individuals, and which will agree to perform, or cause to be performed by certified concerns with a first or second preference a substantial proportion of the con

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tract; it includes a concern which, though not so certified, agrees to have a substantial proportion of a contract performed by such certified concerns. A concern shall be deemed to perform a substantial proportion of the contract if the costs that the concern will incur on account of manufacturing or production (by itself if a certified concern, or by certified concerns with a first or second preference acting as first tier subcontractors) amount to more than twenty-five percent (25%) of the contract price.

(iii) "Persistent or substantial labor surplus area concern" means a concern that agrees to perform or cause to be performed, a substantial proportion of a contract in persistent or substantial LSA. A concern shall be deemed to perform a substantial proportion of a contract in persistent or substantial LSA if the aggregate costs that will be incurred by the concern or its first tier subcontractors on account of manufacturing or production performed in persistent or substantial LSA and in any area, by itself if a certified concern or by its first tier certified subcontractors, amount to more than fifty percent (50%) of the contract price.

(1) Determining Eligibility:

(i) To be eligible to participate in the LSA set-aside portion of this procurement, a labor surplus area concern which is also a small business concern (or a small business concern to the extent indicated below) must submit a responsive offer on the non LSA set-aside portion.

(ii) The Government reserves the right not to award to any concern submitting a token offer on the non LSA set-aside portion or attempting by any other device to secure an unfair advantage over other offerors.

(2) Determining Priority for Award: Labor surplus concerns which are also small business concerns and other small business concerns eligible under (1) above will participate in the setaside in the following order of priority:

Group 1. Certified-eligible concerns with a first preference which are also small

business concerns.

Group 2. Certified-eligible concerns with a second preference which are also

small business concerns.

Group 3. Persistent or substantial LSA concerns which are also small business

concerns.

Group 4. Small Business concerns which are not LSA concerns.

Within each of the above groups, offers on the LSA set-aside portion will be requested from concerns in the order of their offers on the non LSA set-aside portion, beginning with the lowest responsive offer. Concerns may offer less than the total LSA set-aside portion.

(3) Determining the LSA set-aside award price:

(i) General Rule. Subject to the exceptions listed in (ii) and (iii) below, awards under the LSA set-aside shall be made at the highest unit price for each item awarded on the non LSA set-aside, adjusted to reflect transportation, rent free use of Government property and other cost factors considered in evaluating offers on the non LSA set-aside portion. The LSA set-aside award price shall be subject to the same discount terms used in the evaluation of the highest non LSA set-aside award price.

(ii) Award Price Involving Foreign End Products (see ASPR Section VI).

(A) When the highest award price on the non LSA set-aside is established by an award for a foreign end product, the award price for the LSA setaside portion shall be the award price on the non LSA set-aside as adjusted in evaluating the offer submitting the foreign end product for award under applicable Buy American procedures, except for awards on the LSA set-aside to concerns offering foreign end products, in which case the general rule applies.

(B) Award under the LSA set-aside to a concern offering a foreign end product, when the highest award price on the non LSA set-aside portion is established by an award to a firm offering a domestic source end

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