Barry McVay's FEDERAL CONTRACTS DISPATCH
DATE: April 24, 2000
FROM: Barry McVay, CPCM
SUBJECT: Department of Energy (DOE); Small Business Programs
SOURCE: DOE Policy Flash 2000-11, April 20, 2000
AGENCIES: Office of Procurement and Assistance Policy, DOE
SYNOPSIS: Policy Flash 2000-11 forwards Acquisition Letter AL-2000-02 to DOE contracting officers and management and operating (M&O) contractors guidance on effectively utilizing small businesses, small disadvantaged businesses, women-owned businesses, and Historically Underutilized Business Zone (HUBZone) businesses.
EDITOR'S NOTE: For more on Secretary of Energy Bill Richardson's memorandum on maximizing small business participation in DOE M&O contracts, see the February 22, 2000, FEDERAL CONTRACTS DISPATCH "Department of Energy (DOE); Maximizing Small Business Utilization."
FOR FURTHER INFORMATION CONTACT: Robert Webb, 202-586-8264, or e-mail to Robert.Webb@pr.doe.gov.
SUPPLEMENTAL INFORMATION: Beginning in 1991, DOE was advised by the Office of Federal Procurement Policy (OFPP) to count M&O small business subcontracts as prime contract awards because M&O contractors are considered to be extensions of DOE, so M&O subcontracts should be counted as if they are DOE prime contracts. However, the OFPP recently rescinded its previous direction. As a result, DOE's socioeconomic accomplishments will now be based solely on federally awarded prime contract awards. Under the old method, about 18% of DOE contract dollars went to small businesses; under the new method, about 3% of DOE contract dollars will go to small businesses.
Furthermore, on October 8, 1999, OFPP issued Policy Letter 99-1, Small Business Procurement Goals, which establishes an aggregate governmentwide goal of 23% for contracts with small business, small disadvantaged business, women-owned small businesses, and HUBZone small businesses. Therefore, DOE "needs to exercise all appropriate means to improve its performance in making awards to small businesses in order to help achieve the governmentwide goal to counteract the impact of the recent OFPP decision, and to ensure that small business receives a fair portion of DOE's business."
On February 11, 2000, Secretary of Energy Bill Richardson issued a memorandum announcing several initiatives to maximize small business participation in DOE's contracts. The issuance of Acquisition Letter 2000-11 is one of the initiatives.
Acquisition Letter AL-2000-02 is divided into two parts: Section I applies in the award of prime contracts by DOE, and Section II applies to the award of subcontracts under contracts for the management and operation of major DOE sites and facilities.
AL-2000-02 lists the following as among the "tools" available to DOE contracting officers:
- Awards to 8(a) firms (noncompetitive if under $3 million ($5 million for manufacturing) (see Federal Acquisition Regulation (FAR) Subpart 19.8 and Department of Energy Acquisition Regulation (DEAR) Subpart 919.8) (EDITOR'S NOTE: The DEAR is available on the Internet at http://www.pr.doe.gov/dear.html.)
- Memorandum of Understanding between DOE and the Small Business Administration (SBA) (DOE can sign 8(a) contracts on behalf of the SBA)
- Small Business Set-Asides (see FAR Subpart 19.5 and DEAR Subpart 919.5)
- HUBZone Set-Asides (see FAR Subpart 19.13)
- Very Small Business Set-Asides (contracts between $2,500 and $50,000 to firms with 15 or fewer employees in one of 10 SBA district offices) (see FAR Subpart 19.9)
- Targeted Industry Categories Under Small Business Competitiveness Demonstration Program (see FAR Subpart 19.10 (DOE is responsible for increasing small business participation in the following Standard Industrial Classification (SIC) codes: 8731, Commercial Physical and Biological Research (Federal Service Codes (FSC) AG93, Other energy, advanced development; AG13, Coal, advanced development; AZ11, Other research and development, basic research; AG83, Conservation of energy, advanced development; and R415, Technology sharing/utilization services); 4959, Sanitary Services, Not Elsewhere Classified (FSC F108, Environmental systems protection); 8742, Management Consulting Services (FSC R405, Operations research services); 8732, Commercial Economic, Sociological, and Educational Research (FSC R419, Educational services); 3823, Industrial Instruments for Measurement, Display, and Control of Process Variables, and Related Products (Federal Supply Classification Code (FSCC) 7042, Mini and micro computer control devices); and 3825, Instruments for Measuring and Testing of Electricity and Electrical Signals (FSCC 6625, Electrical and electronic properties measuring and testing instruments).
- Other Forms of Preference
- Price Preferences for Small Disadvantaged Businesses (see FAR Subpart 19.11)
- Evaluation Criterion (see FAR Subpart 19.12)
- Increased Outreach Efforts
- Review of procurements that are not set-aside
- Avoid Consolidating Requirements ("Contract Bundling"), or make sure small businesses have an opportunity to participate as subcontractors
- Use General Services Administration (GSA) Federal Supply Schedules (FSS) (orders under GSA schedules count towards DOE goals) (see FAR Part 38)
- Award Multiple Award Contracts (guarantee small businesses an opportunity to win prime contracts) (see FAR Subpart 16.5 and DEAR Subpart 916.5)
AL-2000-02 lists the following as among the "tools" available to DOE contractors to increase small business subcontract awards:
- Use Make-or-Buy Program (see DEAR 970.15407-2)
- Consolidation of Requirements (make sure purchasing system include special internal review)
- 8(a) Pilot Program (M&O contractors are authorized to award noncompetitive subcontracts to 8(a) firms if under $3 million ($5 million for manufacturing))
- Discretionary Construction Class Set-Aside (M&O contractors are authorized to set-aside general construction requirements under $3 million)
- HUBZone Set-Asides (M&O contractors are authorized to use HUBZone set-aside and HUBZone sole source subcontracts)
- Small Disadvantaged Business and Small Woman-Owned Business Evaluation Preference (M&O contractors are authorized to provide an evaluation preference to subcontractors that propose to make significant use of small disadvantaged businesses and small woman-owned businesses)
- Discretionary $100,000 Small Business Set-Asides (M&O contractors are authorized to set aside purchases up to $100,000 for small businesses and to make sole source purchases up to $50,000 from small businesses)
- Mentor-Protege Program (M&O contractors may enter into Mentor-Protege agreements with small businesses, small disadvantaged businesses (including 8(a) concerns), and woman-owned businesses) (EDITOR'S NOTE: For more on recent conversion of the DOE Mentor-Protege Pilot Program into a permanent program, see the April 21, 2000, FEDERAL CONTRACTS DISPATCH "Department of Energy Acquisition Regulation (DEAR); Mentor-Protege Program" (see new Department of Energy Acquisition Regulation (DEAR) Subpart 919.70, The Department of Energy Mentor-Protege Program>").)
FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.
Copyright 2000 by Panoptic Enterprises. All Rights Reserved.
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