Department of the Interior Acquisition Policy Release (DIAPR) 2004-04

SUBJECT: Interim Rule: Federal Acquisition Regulation (FAR); Procurement Program for Service-Disabled Veteran-Owned Small Business (SDVOSB) Concerns

1. Purpose:

This policy release implements an interim FAR rule regarding the Procurement Program for Small Business Concerns Owned and Controlled by Service-Disabled Veterans, as provided for under section 308 of the Veterans Benefits Act of 2003 (Public Law 108-183) (December 16, 2003).

2. Effective Date:

This policy is effective upon issuance.

3. Expiration Date:

This policy shall remain in effect until the final rule implementing section 308 of the Veterans Benefits Act of 2003 is incorporated into the Federal Acquisition Regulation.

4. Background and Explanation:

On December 16, 2003, President Bush signed Public Law 108-183, the Veterans Benefits Act of 2003. Section 308 of this law establishes the Service- Disabled Veteran-owned Small Business Procurement Program, the purpose of which is to provide Federal contracting assistance to service-disabled veteran-owned small business concerns. Under the program, contracting officers may:

A. Rule of Two: - Award contracts on the basis of competition restricted to SDVOSB concerns if there is a reasonable expectation that two or more SDVOSB concerns will submit offers for the contracting opportunity and that the market award can be made at a fair or reasonable price; or

B. Sole Source (Applies to contract actions (including options) not exceeding $5 million (within the NAICS codes for manufacturing) or $ 3 million (within any other NAICS codes): Award a sole source contract to a responsible SDVOSB concern if there is not a reasonable expectation that two or more SDVOSB concerns will submit an offer, that the requirement falls within the dollar thresholds referenced above, and the contract award can be made at a fair and reasonable price.

According to FAR Part 19.1405(a), contracting officers shall consider SDVOSB set-asides before considering SDVOSB sole source awards. Also, an appropriate numbered note will be used to indicate SDBOSB set-asides in FedBizOpps.

Highlights of the interim FAR rule on the SDVOSB procurement program include:

The SDVOSB procurement authority may not be exercised for procurements that would otherwise be made from Federal Prison Industries or under the Javits-Wagner-ODay Act. Nor does the SDVOSB procurement program apply to: orders under indefinite delivery contracts; orders against Federal Supply Schedules; requirements currently being performed by an 8(a) participant or requirements that the Small Business Administration (SBA) has accepted for performance under the 8(a) Program; or requirements for commissary or exchange resale items.

SDVOSB set-asides above the micro-purchase threshold, but below the simplified acquisition threshold are at the contracting officers sole discretion, and the contracting officers decision not to set aside an acquisition in this dollar value range for an SDVOSB is not subject to review by SBA Procurement Center Representatives.

For sole source acquisitions, the SBA or the contracting officer may protest the apparently successful offerors service-disabled veteran-owned small business status. For service-disabled veteran-owned small business set-asides, any interested party may protest the apparently successful offerors service-disabled veteran-owned small business concern status. The new FAR subpart at 19.307 provides detailed information regarding related protest procedures.

Revisions to offeror representations and certifications, contract terms and conditions, and new clause, Notice of Total Service-Disabled Veteran-Owned Small Business Set-Aside (May 2004) are included in the attached interim rule.

5. Action Required:

Bureau Procurement Chiefs shall review, circulate, and implement, as appropriate, the attached interim FAR rule within their bureaus. For further information, a helpful Frequently Asked Questions guide prepared by the SBA's Office of Veterans Affairs is also attached. (Electronic copies of this DIAPR and its attachments will be provided to Bureau Procurement Chiefs.)

Please provide Patricia Corrigan of this office (202-208-1906) with any questions or comments that you have regarding the interim rule by June 30, 2004.

Attachments

Debra E. Sonderman, Director Office of Acquisition and Property Management