The Federal Acquisition Regulation and Small Businesses

Posted By fedpractice || 11-Jul-2012

Each small business desiring to conduct business with the Federal Government must do so in accordance with the Federal Acquisition Regulation (“FAR”). The relevant parts of the Regulation for small businesses are Part 19 (Small Business Programs) and Part 52 (Solicitation Provisions and Clauses).

Part 19 implements the Small Business Act, 15 U.S.C. 631, and determines how the Federal Government sets aside aquisitions for small businesses. Part 52 provides definitions and explains how the FAR clauses should be read within the contract with the Federal Government. The Federal Government is required to set aside a portion of its procurement toward small businesses. The only remaining question will be which business will get it.

One of the first issues for small businesses when dealing with the Federal Government is sealed bidding. The Government utilizes this method of procurement in simple purchases. Under FAR 14.101, sealed bidding is a ‘method of contracting that employs competitive bids, public opening of bids, and awards.’ Sealed bidding has well settled rules and formal procedures which must be followed to allow for equal opportunity to compete.

Under FAR 6.401, Contracting Officers shall solicit sealed bids if:

  1. time permits the solicitation, submission and evaluation of sealed bids;
  2. the award will be made on the basis of price and other price-related factors;
  3. it is not necessary to conduct discussions with the responding offerors about their bids; and
  4. there is a reasonable expectation of receiving more than one sealed bid.

In addition, the Federal Government must make an affirmative finding that the lowest bidder has the capability to perform the contract (responsible contractor).

The Federal Acquisition Regulation sets out complex rules governing the Federal Government when it comes to procuring goods and services from small businesses. It is designed to provide transparent, equal, and fair opportunity for all competitors, but it also places requirements on small businesses which may result in a loss of the contract and liabilities if not followed. If you are a small business requiring assistance in ensuring that you comply with Parts 19, 52, or any of the other 51 parts of the FAR, schedule a free appointment with the Federal Practice Group to discuss your objectives and requirements.

Categories: International Business Law