New Federal Acquisition Regulation (FAR) for Small Businesses
The Federal Acquisition Regulation (FAR) Council has issued revisions to FAR Part 19, which governs small business participation in federal contracting. Part 19 has long served as the cornerstone for federal contracting officers (COs) and small business contractors alike by implementing statutes that promote small business participation, support federal socioeconomic objectives, and ensure fair competition in the federal contracting process.
Some notable aspects of the new FAR Part 19 include:
- Formerly titled "Small Business Programs," Part 19 is now titled "Small Business" and has been reorganized around the acquisition life cycle, i.e., Presolicitation (FAR Subpart 19.1), Evaluation and Award (19.2) and Postaward (19.3).
- The so-called "rule of two" -- a statutory requirement that mandates a set-aside solicitation for small businesses when the contracting agency expects that at least two responsible small business will submit offers at fair market prices -- remains in effect for contracts above the micro-purchase threshold of $15,000.
- For orders under multiple-award contracts, FAR Part 19 now provides that set-aside decisions are discretionary and not subject to protest (although it remains to be seen whether administrative and federal court tribunals with jurisdiction over bid protests will agree).
- Small businesses establish their size status at the time of award for multiple-award contracts and no longer must re-represent their size status at the order level.
- For 8(a) programs for eligible, small, socially, and economically disadvantaged businesses, COs must first attempt competitive 8(a) acquisitions below the competitive threshold using Small Business Administration (SBA)-approved vehicles before considering 8(a) sole source awards.
Note that the FAR Council made no substantive changes to small, disadvantaged, veteran-owned (SDVOSB), woman-owned (WOSB), or HUBZone program rules, and size and status protest procedures remain unchanged.
Understanding the new FAR Part 19 and its implications is critical for small businesses hoping to sell to federal customers and for federal contractors that subcontract with small businesses. If you have concerns about the new FAR Part 19 or other government contracting issues, please contact Bill Speros at 814-870-7600 or another attorney at our firm.
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