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Advisory panel would boost SDVs, HUBZones.

Who is first in line for setasides?

The federal Acquisition Advisory Panel says contracting officers should have authority to decide whether to set aside contracts for 8(a), HUBZone or service-disabled veteran-owned businesses, based on the agency's progress toward meeting procurement goals in each category.

"If you are ... way behind on HUBZone, then you're going to be giving HUBZone the priority. If you're behind on 8(a), you're going to be giving 8(a) the priority," said SBA General Counsel, David Javdan, who heads the advisory panel's small business working group.

If adopted by the Bush administration and Congress, the panel's recommendation would codify a policy stated by SBA last year when it implemented the new set-aside program for service-disabled veterans. (SAA, 5/14/04) As a practical matter, it is likely to move HUBZone and SDV firms to the head of the line, because no agency has met the 3% goal for contracting with those companies. The government has exceeded the 2.5% goal for 8(a) contracting for the past decade.

A set-aside for all small businesses can be considered only after the contracting officer determines that no 8(a), HUBZone or SDV business can satisfy the requirement.

The advisory panel was established by Congress in the Services Acquisition Reform Act of 2004 with a mandate to review all federal acquisition laws, regulations and policies. Its 14 members, appointed by the Office of Federal Procurement Policy, are equally divided between government and the private sector.

The group tentatively adopted its recommendations on small business issues at a meeting in Washington Jan. 31. Its final report was originally due in February, but Congress has extended the deadline for six more months.

Javdan said contracting officers need definitive guidance on how to choose among the preference programs because there have been varying interpretations of the law. "In no way are we diminishing the value or importance of any of these programs," he said.

He said the women's set-aside program could be added to the mix when or if it is implemented.

The panel's other recommendations:

* Permit set-asides for task orders on GSA schedules and other multiple-award contracts.

* Permit agencies to reserve some awards for small businesses in multiple-award contracts. Panel member Roger Waldron of GSA pointed out that agencies are already doing this, although there is no explicit legal authority for it.

* Prohibit cascading, or tiered, procurements. Industry has opposed this procurement strategy, saying it leads companies to spend money preparing proposals that may never be considered. In the 2006 Defense Authorization Act, Congress banned cascades in most Defense Department procurements.

* Provide additional training for federal acquisition personnel on how to unbundled contracts and mitigate the effects of bundling.

* Provide additional training for federal acquisition personnel on small business contracting and subcontracting.

Industry Opposes Restricting Commercial-Item Sales

A coalition of leading contractor groups urged the Acquisition Advisory Panel to reject recommendations that would restrict the use of simplified commercial-item rules in federal procurement.

In commenting on proposals by the panel's commercial practices working group, the industry associations said, "The Working Group's 'preliminary recommendations' will undermine years of government and industry efforts to expand the government's access to commercial products and services."

The working group proposed changes in the definitions of commercial items and commercial services under Part 12 of the Federal Acquisition Regulation. The industry associations said the changes would unnecessarily complicate procurement and drive some commercial businesses away from government contracting.

The position paper was presented by the Aerospace Industries Association, Contract Services Association, Government Electronics and Information Technology Association, Information Technology Association of America, National Defense Industrial Association and Professional Services Council.
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Publication:Set-Aside Alert
Date:Feb 10, 2006
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