First Wednesday Virtual Learning Series 2018

www.sba.gov

HUBZone Program

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Christopher Eischen, Procurement Center Representative SBA Office of Government Contracting, Area IV, Kansas City, MO christopher.eischen@sba.gov (816) 426-4911

Deborah Crumity, Procurement Center Representative SBA Office of Government Contracting, Area IV, Rock Island Arsenal deborah.d.crumity.civ@mail.mil (309) 782-5734

Hosts

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1. Questions answered during the final 10 minutes.

2. Technical problems: Contact the moderator with a note or call AT&T

Connect Support at 1-888-796-6118.

3. Page numbers stated for those working off hard copies of the

program.

4. We cover the “SBA Quick Reference” as time allows.

5. For more SBA training visit the SBA Learning Center website https://www.sba.gov/tools/sba-learning-center/search/training

Welcome to “SBA Virtual Learning 2018”

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Procurement Technical Assistance Centers are a vital resource partner.

• APTAC posts past “First Wednesday” programing at this link:

http://www.aptac-us.org/for-contracting-officers-sba-webinar-library/

• Contracting officer resources: “How PTACs partner with federal

agencies”: http://www.aptac-us.org/federal-partners/

• Find your nearest Procurement Technical Assistance Center at

http://www.aptac-us.org

Association of Procurement Technical Assistance Centers (APTAC)

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The program schedule above is for information only and is subject to change.

FY 2018 Date Topic

1 October 4, 2017 Non-Manufacturer Rule

2 November 1, 2017 About SBA

3 December 6, 2017 SBA Programs You May Not Know About Natural Resources Assistance/Disaster Assistance

4 January 10, 2018 Historically Underutilized Business Zones

5 February 7, 2018 Certificate of Competency Program

6 March 7, 2018 Woman Owned Small Business

7 April 4, 2018 Size and Affiliation

8 May 2, 2018 Subcontracting Tools

9 June 6, 2018 SDVOSB

10 July 11, 2018 SBA Legislative Update

11 August 1, 2018 Mentor/ Protégé Program

1st WEDNESDAY VIRTUAL LEARNING SERIES 2018 SCHEDULE

1:00 to 2:00 Central Time

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Self-service: Using the PowerPoint that was sent with your invitation for this training event, fill in your name on the certificate slide and save. Download the certificate and print for your records. You submit your request for training credit IAW your agency policy, i.e. FAITAS.

Phoning in only: If you listen in groups and you want all attendees to be included on the future mailing list, send email addresses of participants in an excel document to sbalearning@sba.gov.

One Continuous Learning Point

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• Mariana Pardo, Director HUBZone Program Washington, DC mariana.pardo@sba.gov

• Mark Hagedorn, Attorney Advisor

Office of General Counsel Washington, DC mark.hagedorn@sba.gov

Speaker

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First Wednesday Virtual Learning Series 2018

www.sba.gov

HUBZone Program

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Historically Underutilized Business Zone Program

13 CFR part 126

FAR subpart 19.13

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• PROGRAM OVERVIEW

• HUBZONE SET-ASIDES AND SOLE SOURCE AWARDS

• SET ASIDE OF ORDERS

• HUBZONE PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITION

• LIMITATIONS ON SUBCONTRACTING AND NONMANUFACTURER RULE

Agenda

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OVERVIEW

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• Status as a HUBZone small business concern (SBC) is determined by SBA, pursuant to 13 CFR part 126

• A firm must apply to SBA for HUBZone certification (13 CFR 126.300 to 126.309)

• If SBA determines that a concern is a HUBZone SBC, SBA will issue a certification to that effect and will add the concern to the List of Qualified HUBZone Small Business Concerns at http://dsbs.sba.gov/dsbs/search/dsp_searchhubzone.cfm

• Only firms on the List are HUBZone SBCs and eligible for HUBZone contracting preferences and awards

SBA Administers the HUBZone Program

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HUBZone contracts (including Multiple Award Contracts) include awards to qualified HUBZone SBCs through:

• Sole source awards

• 100% HUBZone set-aside awards and partial set-asides

• Full and open competition, where the HUBZone price evaluation

preference is applied

• Reserves for HUBZone SBCs under Multiple Award Contracts (MAC)

• Orders set-aside for HUBZone SBCs against a MAC, where the MAC was awarded in full and open competition

HUBZone Contracts (13 CFR 126.600)

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When a HUBZone SBC submits its initial offer on a specific HUBZone contract, it must certify to the CO that:

• It is a certified HUBZone SBC that appears on SBA’s List;

• There has been no material change in its circumstances that could affect its HUBZone eligibility since the date of HUBZone certification;

• It is a small business under the NAICS code assigned to the procurement; and

• It will “attempt to maintain” the required percentage of employees who are HUBZone residents during the performance of a HUBZone contract.

Requirements to Bid on HUBZone Contract (13 CFR 126.601)

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• To be eligible for a HUBZone contract, a concern must be a HUBZone SBC both at the time it submits its initial offer AND at the time of contract award (13 CFR 126.601(c))

• A HUBZone SBC may joint venture with one or more other small business concerns or its SBA-approved mentor for the purpose of submitting an offer for a HUBZone contract.

Note: The joint venture itself need not be certified as a qualified HUBZone SBC.

Status as a HUBZone Small Business Concern

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How to Locate HUBZone Contractors Using the Dynamic Small Business Search (DSBS)

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Each firm’s DSBS profile has two fields relevant to HUBZone certification:

• “HUBZone Certified? [ ] Yes [ ] No”

• “HUBZone Certification Date”

• "HUBZone Certified? [X] Yes [ ] No” indicates the firm is currently HUBZone certified

• "HUBZone Certified? [ ] Yes [X] No” indicates the firm is NOT currently HUBZone certified

• "HUBZone Certified? [ ] Yes [X] No” with N/A next to “HUBZone Certification Date” means that the firm was never HUBZone certified

NOTE:

“HUBZone Certification Date” indicates the initial date of certification and does not reflect the dates of any recertification process, which are internal to SBA

An approval or recertification letter is NOT valid evidence that a firm is currently HUBZone certified, because the firm may have been decertified since the notice was issued.

DSBS – How HUBZone Certification is Displayed

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DSBS example: Currently Certified HUBZone Small Business

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DSBS example: Decertified HUBZone Small Business

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DSBS example: Non-HUBZone Small Business

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• SBA’s small business socioeconomic programs include:

• 8(a) Program

• HUBZone Program

• Service-Disabled Veteran-Owned (SDVO) Small Business Program

• Women-Owned Small Business (WOSB) Program

• There is no order of precedence among these programs

• In determining which socioeconomic program to use, the contracting officer should consider, at a minimum—

• Results of market research

• Agency progress in fulfilling small business goals

Relationship Among Small Business Programs (FAR 19.203)

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Acquisition must be set-aside for small business. Before awarding as small business set-aside, CO must first consider awarding as—

• 8(a) set-aside (or sole source)

• HUBZone set-aside (or sole source)

• SDVO set-aside (or sole source)

• WOSB set-aside (or sole source)

EXCEPTION: “Once 8(a), always 8(a)” rule - If a requirement has been accepted by SBA under the 8(a) Program, it must remain in the 8(a) Program unless SBA agrees to its release.

Acquisition is automatically reserved exclusively for small business —

CO may award as:

• small business set-aside

• 8(a) set-aside

• HUBZone set-aside

• SDVO set-aside

• WOSB set-aside

The 2018 NDAA raised the micro-

purchase threshold to $10,000 and the

simplified acquisition threshold to

$250,000.

A B O V E S A T

( > $ 1 5 0 , 0 0 0 )

B E L O W O R A T S A T

( $ 3 , 5 0 0 - $ 1 5 0 , 0 0 0 )

HUBZones and Parity

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HUBZONE SET-ASIDES AND

SOLE SOURCE AWARDS

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• Below SAT CO MAY award via HUBZone set-aside

• Above SAT CO SHALL consider a HUBZone set-aside before considering a HUBZone sole source award or a small business set-aside

• To award via HUBZone set-aside, CO must have a reasonable expectation that—

• Offers will be received from 2+ HUBZone SBCs; and

• Award will be made at a fair market price

HUBZone Set-Aside Procedures (13 CFR 126.607, FAR 19.1305)

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If the CO receives—

• only one acceptable offer from a certified HUBZone SBC

the CO should make an award to that concern

• no acceptable offers from HUBZone SBCs

the CO should withdraw the HUBZone set-aside and set the procurement aside for small business concerns, as appropriate (see FAR 19.203)

HUBZone Set-Aside – Only One Offer or No Offers (FAR 19.1305(c))

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• CO may award a sole source contract to a HUBZone SBC (before considering a small business set-aside) if— • CO does not expect to receive offers from at least 2 HUBZone SBCs • The acquisition is greater than the SAT • Anticipated price of the contract (including options) will not

exceed— • $7 M for a requirement assigned a manufacturing NAICS code; or • $4 M for all other requirements

• The requirement is not currently being performed by an 8(a) participant and has not been accepted as an 8(a) requirement by SBA

• The HUBZone SBC has been determined to be a responsible contractor with respect to performance

• Award can be made at a fair and reasonable price

SBA has the right to appeal CO’s decision not to make a HUBZone sole source award

Check

for FAR

inflation

change

HUBZone Sole Source Awards (13 CFR 126.612, FAR 19.1306)

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SET ASIDE OF ORDERS

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• A CO may—

• Set-aside an order placed against a multiple-award contract for HUBZone SBCs (FAR 19.5) and no justification for this exception to fair opportunity is required (FAR 16.5)

• Set-aside part(s) of a multiple-award contract for HUBZone SBCs (FAR 19.5)

• Reserve one or more contract awards for HUBZone SBCs under full and open multiple-award procurements (FAR 19.5)

• Set-aside orders & BPAs under the GSA Schedule (FAR 8.4)

Set-Aside of Orders

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FAR 16.505(b)(2)(i)(F): When setting aside orders for small business concerns:

• The specific small business program eligibility requirements identified in part 19 apply.

FAR 8.405-5(a)(2): When setting aside orders and BPAs against the GSA Schedule:

• The specific small business program eligibility requirements identified in part 19 apply.

What does this mean? Examples:

• HUBZone joint venture requirements apply

• HUBZone limitations on subcontracting apply

Set-Aside of Orders – FAR Part 19 Applies

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HUBZONE PRICE EVALUATION PREFERENCE (PEP)

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HZ PEP only

applied in F&O,

including on non-

reserved portion or

non-set-aside

portion

• The HUBZone price evaluation preference (PEP) shall be used in acquisitions conducted using full and open competition

• The preference shall NOT be used—

• Where price is not a selection factor (e.g., Architect/Engineer acquisitions)

• Where all fair and reasonable offers are accepted (e.g., the award of multiple award schedule contracts)

Price Evaluation Preference For HUBZone SBCs (13 CFR 126.613, FAR 19.1307)

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NOTE: If PEP

waived, then

not submitting

offer as HZ

SBC and do

not need to

meet LOS or

NMR

• The CO shall apply the HUBZone PEP in F&O competition, when the lowest, responsive, responsible offeror is a large business

• The PEP is applied by adding a factor of 10% to—

• The otherwise lowest, responsive, responsible offer from a large business (AKA the large business that is the apparent successful offeror)

• Offers from HUBZone SBCs that have waived the PEP

• Offers from small business concerns that are not the apparent successful offeror

• NOTE: Apply PEP first, then do best value analysis

Applying the HUBZone PEP

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NOTE: If price equal Award to the HZ SBC

• Before PEP applied, the large business is the lowest, responsive and responsible offeror.

• After applying the 10% PEP, the large business is still the lowest, responsive and responsible offeror.

• In this example, the application of the PEP does not benefit the HUBZone SBC.

PEP APPLIED (*10%): HUBZone $113 Small $113.3 Large $110

OFFER: HUBZone $113 Small $103 Large $100

Price Evaluation Preference – Examples

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• Before PEP applied, the large business is the lowest, responsive and responsible offeror.

• After applying the 10% PEP, the large business is no longer the lowest, responsive and responsible offeror.

• In this example, the application of the PEP does benefit the HUBZone SBC.

PEP APPLIED (*10%): HUBZone $100 Small $106.7 Large $104.5

OFFER: HUBZone $100 Small $97 Large $95

Price Evaluation Preference – Examples

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• Before PEP applied, the small business is the lowest, responsive and responsible offeror.

• Since lowest offeror is not a large business, the HUBZone PEP is not applied.

PEP NOT APPLIED

OFFER: HUBZone $100 Small $95 Large $97

Price Evaluation Preference – Examples

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LIMITATIONS ON SUBCONTRACTING AND

NONMANUFACTURER RULE (NMR)

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NOTE: Subcontractors that are also HUBZone SBCs are referred to as “similarly situated entities”

Services (except construction) • Spend no more than 50% of the value

of the prime contract on subcontractors that are not HUBZone SBCs

Supplies (from a manufacturer) • Spend no more than 50% of the value of

the prime contract on subcontractors that are not HUBZone SBCs

General Construction • Spend no more than 85% of the value

of the prime contract on subcontractors that are not HUBZone SBCs

• Cost of materials are excluded

Special Trade Construction • Spend no more than 75% of the value of

the prime contract on subcontractors that are not HUBZone SBCs

• Cost of materials are excluded

A HUBZone SBC prime contractor may subcontract part of a HUBZone contract, provided the HUBZone SBC meets the following requirements:

Final Rule published at 81 FR 34243 – Effective June 30, 2016

Limitations on Subcontracting (LOS)

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• A HUBZone SBC may submit an offer for supplies as a nonmanufacturer if it meets the requirements of the NMR set forth at 13 CFR 121.406(b)(1)

• In 2016, SBA eliminated the requirement that the manufacturer also be a HUBZone SBC (81 FR 34243)

• Under SBA regulations, A CO may now request a waiver of the NMR for a

HUBZone contract • Class waivers also apply to HUBZone contracts

• As a result, the HUBZone program’s treatment of the NMR is now consistent with SBA’s other socioeconomic programs

• For HUBZone contracts at or below $25,000, a HUBZone SBC may supply the end item of any domestic manufacturer. This means the manufacturer may be a large business, but the product acquired must be manufactured or produced in the U.S.

Nonmanufacturer Rule (NMR) (13 CFR 126.601, FAR 19.1303)

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When do the HZ LOS and NMR apply?

• HUBZone set-asides

• Partial HUBZone set-asides

• HUBZone reserves

• Orders set-aside for HUBZone SBCs

• Awards to HUBZone SBCs under F&O after HZ PEP applied

What is the compliance period?

• Set aside (full or partial): Base term and each subsequent option period

• HOWEVER, CO may require concern to meet the LOS or NMR for each order

• Order set-aside under F&O: Term of order

Compliance With LOS & NMR

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Questions

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Dynamic Small Business Search

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SBA Size Regulations 13 CFR Part 121

HUBZone Regulations 13 CFR 126.616

SBA Certificate of Competency 13 CFR 125.5

Service-Disabled Veteran 13 CFR 125.15(b)

8(a) and SDB Regulations 13 CFR 124.513

Small Disadvantaged Business 13 CFR 124.1002(f)

WOSB Program 13 CFR 127

SBA Prime Contracting 13 CFR 125.2

SBA Subcontracting 13 CFR 125.3

Summary of CFR Regulations

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A. SBA Government Contracting Area Offices

1. SBA Procurement Center Representatives (PCRs)

2. SBA Commercial Market Representatives (CMRs)

B. SBA District Offices

1. Business Opportunity Specialists (BOS)

C. SBA Regional Offices

D. SBA Headquarters

Types of SBA Contacts and Offices

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SBA Government Contracting Areas at hyperlink:

https://www.sba.gov/content/pcr-directory

Six SBA Government Contracting Areas

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1. Size protests (with recertification) FAR 19.302

13 CFR 121.1001

13 CFR 121.1010

2. Locating nearest SBA staffer FAR 19.4

3. Certificate of Competency FAR 19.6

13 CFR 125.5

4. COC Limitations on Subcontracting Compliance

FAR 19.601

13 CFR 125.6(f)

5. Receiving copies subcontracting plans

FAR 19.705-6

A. SBA Quick Reference - SBA Area Offices

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FAR 19.402 Small Business Administration procurement center

representatives. (a)(1) The SBA may assign one or more

procurement center representatives to any contracting activity or

contract administration office to carry out SBA policies and

programs…

(2) If a SBA procurement center representative is not assigned to the

procuring activity or contract administration office, contact the SBA

Office of Government Contracting Area Office…..

(b) Upon their request and subject to applicable acquisition and

security regulations, contracting officers shall give SBA procurement

center representatives….access to all reasonably obtainable

contract….

B. SBA Quick Reference - SBA Procurement Center Representatives(PCRs)

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1. SBA PCR coordination records FAR 19..501(b) 13 CFR 125.2 2. Small business set-aside appeals FAR 19.505 13 CFR 125.2(b)(7) 3. HUBZone set-aside appeals FAR 19.1305 FAR 19.1306 13 CFR 126.61 4. SDVOSB set-aside appeal FAR 19.1405 FAR 19.1406 13 CFR 125.22 5. Reporting bundling to SBA (MATOCs) FAR 19.202-1(e)(1) 13 CFR 125.2 6. SBA subcontracting plan reviews-copies FAR 19.705-5(3) 13 CFR 125.2(b)(6)(iii) FAR 19.705-6(c) 13 CFR 125.2(b)(6)(iii)(C) 7. SBA subcontracting program review FAR 19.707(4) 13 CFR 125.2(b)(6)(iii)(C) 8. Small business TFD FAR 49.402-3 (e)(4)) (Termination for default) 9. Surveillance review of agency contracting FAR 19.402(c)(5)

B. SBA Quick Reference SBA PCRs, cont.

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Agency Form Title

1 Commerce CD 570 Small Business Set-aside Review

2 Defense 2579 Small Business Coordination Record

3 Energy 4220.2 Small Business Review Form

4 GSA 2689 Small Business Analysis Record

5 HHS 653 Small Business Review Form

6 Homeland Security 700-22 Small Business Review Form

7 Interior 1886 Acquisition Screening and Review Form

8 Labor DL1-2004 Small Business Procurement Determination

9 NASA NF 1787 Small Business Review Sheet

10 State DS-1910 Small Business Clearance Form

11 Transportation 4250 Small Business Program Review Form

12 USDA AD-1205

Small Business Program – Procurement

Review

13 VA 2268

Procurement Request Review For Small

Business Programs and Contract Bundling

Small Business Coordination Forms Sent To SBA PCRs

19.705-6 Postaward responsibilities of the contracting officer. …:

(a) Notifying the SBA of the award by sending a copy of the award document to

the Area Director, Office of Government Contracting, in the SBA area

office where the contract will be performed.

(c) Giving to the SBA procurement center representative….a copy of—

(1) Any subcontracting plan submitted in response to a sealed bid

solicitation; and

(2) The final negotiated subcontracting plan that was incorporated into a

negotiated contract or contract modification.

(d) Notifying the SBA procurement center representative…. of the opportunity to

review subcontracting plans in connection with contract modifications.

Document that you have provided SBA Area Directors with copies of subcontracting plans

1. Prime contractor portfolio management 13 CFR 125.3

2. Reviews of subcontracting plan holders 13 CFR 125.3

3. Matchmaking 13 CFR 125.3

4. SBA SUB-Net link at: http://www.sba.gov/content/sub-net

5. SBA Subcontracting Opportunities Directory link at:

http://www.sba.gov/subcontracting-directory

6. “SBLO Handbook” link at: http://www.sba.gov/content/small-

business-liaison-officer-handbook

C. SBA Quick Reference - SBA Commercial Market Representatives (CMRs) link at: https://www.sba.gov/content/cmr-directory

Link to district offices at: http://www.sba.gov/about-offices-list/3

D. SBA Quick Reference – SBA Regional and District Offices

To locate SBA 8(a) business development servicing

office, check Dynamic Small Business Search at the link:

http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm and then

local resources at the link http://www.sba.gov/tools/local-

assistance/districtoffices

D. SBA Quick Reference - SBA District Offices, cont.

1. HUBZone status protests FAR 19.306

13 CFR 126.801

2. NAICS code appeal FAR 19.30 3

13 CFR 121.1103

3. Non-manufacturer rule waivers FAR 19.102(f)(1)-(7)

13 CFR 121.1204

4. SDVOSB status protest FAR 19.307

13 CFR 125.23

5. WOSB Program status protest FAR 19.308/13 CFR 1275.600

E. SBA Quick Reference - SBA Headquarters

FAR 19.102 (f ): No class waiver to NMR? Check out an individual waiver*

If you find no class waivers, an SBA individual waiver to the Nonmanufacturer Rule (NMR) may help you to achieve small business goals if:

• ind no class waivers, an SBA individual waiver to th20170710e

A WAIVER FOR A SET-ASIDE IS NOT NEEDED WHEN:

1. ONE SMALL BUSINESS MANUFACTURER: * SMALL BUSINESS SET-ASIDE

2. SMALL BUSINESS MANUFACTURER, BRAND SPECIFIC OF ANY DOLLAR SIZE WITH FAR 6 JUSTIFICATION: * SMALL BUSINESS SET-ASIDE

3. LARGE BUSINESS, BRAND SPECIFIC (OR BRAND EQUIVALENT) REQUIREMENT $25,000 OR LESS WITH FAR 6: * SMALL BUSINESS SET-ASIDE

GSA SCHEDULE: USE THE CLOSEST CODE LISTED ON THE SCHEDULE. THEN SAME AS ABOVE IF NO CLASS WAIVER.

EXCEPTION TO “NMR” IF PROCUREMENT $25,000 OR LESS.* (FAR 19.102 (f)(7)(B)) *NOTE: THE FAR HAS NOT BEEN UPDATED TO AGREE WITH THE SBA’S CHANGE IN MAY 2016 TO $150K OR LESS IN 13 CFR 125.6 small business goals if*:

NMR Waiver Notes:

The preferred and most expeditious method for asking questions and submitting waiver requests is by e-mail to nmrwaivers@sba.gov.

NMR Program Office

Find your PCR at https://www.sba.gov/content/pcr-directory