FAR council urged not to play small-biz favorites

An interim rule intended to create parity among the Small Business Administration’s small-business programs would inappropriately elevate small businesses participating in the socio-economically based programs above other small businesses, the Professional Services Council said May 16.

Such as step would perpetuate disparity in the overall small-business set-aside program, PCS said in comments submitted to the Federal Acquisition Regulation Council, and made public today

The interim FAR rule released March 16 would make all programs that benefit socio-economically disadvantaged firms – the 8(a), Historically Underutilized Business Zone, Service-Disabled Veteran-Owned Small Business and Women-Owned Small Business programs – equal to each other when contracting officers consider setting aside competitions for small businesses.

However, in deciding whether work should be set aside for small business, the rule mandates contracting officers “shall first consider” socio-economic programs, thus excluding all other small businesses from the initial competition.

“It is possible for contracting officers to construe this coverage [in the rule] as a mandate to use socio-economic program acquisition set-asides to the exclusion of other business categories,” wrote PSC Executive Vice President and Counsel Alan Chvotkin.

“Despite the goal of establishing parity among the individual socio-economic programs, the result…could be to restrict small business awards to only those four socioeconomic categories, potentially heightening the disparity between the programs and the ‘regular’ small business set-aside awards,” he said.

“The effect of the interim rule will be to decrease the amount of regular small-business set-asides and full-and-open awards to small businesses outside of the programs,” Chvotkin said.

“Thus, despite the interim rule’s intent of alleviating confusion caused by protest decisions” he added, “the rule may actually lead to increased protests that challenge agencies’ decisions to set aside work for non-socioeconomic small business competition.”