DOD suspends preference for disadvantaged businesses

The Defense Department has suspended a preference it has previously given to small, disadvantaged businesses, saying that it had exceeded its goal of awarding 5 percent of its contracts to such firms in fiscal 2006.

Federal law requires DOD to suspend the preference for one year after meeting the goal, according to a Federal Register notice published Feb. 15.

Using the price evaluation adjustment, DOD can act as if offers from small disadvantaged businesses are priced 10 percent lower than they actually are, for the purpose of evaluating offers. However, Congress amended the law in 1999 to require that the preferential treatment be suspended for one year after a year in which the goal is met.

The suspension lasts from March 10, 2007, through March 9, 2008. DOD will evaluate the performance of small disadvantaged businesses during that period to determine whether the suspension should remain in place after March 9, 2008, or be rescinded.