Tiered Set-Aside (Cascading)

Tiered Set-AsidesReduce the Need to Re-SolicitEasier to Meet Socio-Economic GoalsSave TimeReduce Workload

By Daniel Cotto

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Set-Asides TodayIt is all about COMPETITION!!!

Incentivize specific types of small businesses by limiting competition.

Downside by limiting competition COs take a risk of not finding enough qualified offerors.

What is a set-aside?Limits competition to a special type of small businesses.

Dont have to compete against large businesses.

What is a set-aside? Cont.Must award exclusively to small businesses. 8(a), HUBZone,SDVSB, WOSB,Small business

Before considering large businesses.

Set-Asides Today - ExampleHUBZone Expect at least two qualified offers.Receive one qualified offer.Proceed to award the contract.

If not Cancel and start again.

All that prep time LOST!Plus add at least 30 more days to resolicit.

Approx 2000 Solicitations Cancelled Every 90 Days!!!

Keep more $$$ in small businesses.

Save Government time.

Reduce the administrative burden.Tiered Set-Aside Goals

Tiers ExampleHUBZone Receive at least one offer Good!No Go small business. Small businesses Receive at least one offer Good!No Go full & open.

Full & open Award.

SBA GoalsIncentivize Small Businesses.

Preserve competition.

Strengthen our economy.

***With tiers we can also save precious time and cut the administrative burden when we dont have to cancel and resolicit.

Implementation SuggestionsExplain the method as simple as possible.

Back up your set-aside sequence with data:- Agency SB Goals.- Results of Market Research

Try it if you only found one business in the category your Agency needs.

Explain in your solicitation the need to try to incentivize that socio-economic group.

Possible NegativesLower-tier companies might not want to compete.- State that market research shows that you might not find enough competition on higher tiers.

Government forms do not support tiers.- Explain in the instruction to offerors section.

Educating the ForceThe majority of COs, SBA PCRs, and Agency SB Technical Advisors do not know about tiered set-asides.

DOD and DLA added tiers (also called cascading) to their regulations.DFARS 215.203-70DLAD 19.590

VA and others use tiers without changes to the reg. (Next slide)

Mostly used by DOD and VA

GAO DecisionMaersk Line, File B-410280, December 01, 2014.

we find reasonable the contracting officers decisions to conduct the procurement under FAR part 19, to use a tiered evaluation, and to set aside the solicitation for small business concerns.

What Needs to Change

Title 13, Chapter I, Part 125.2(e)(7)http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr;sid=299aa800413f4791786f676e094a1d24;rgn=div5;view=text;node=13%3A1.0.1.1.20;idno=13;cc=ecfr

(7)Tiered evaluation of offers, or cascading.An agency cannot create a tiered evaluation of offers or cascade unless it has specific statutory authority to do so. This is a procedure used in negotiated acquisitions when the contracting officer establishes a tiered or cascading order of precedence for evaluating offers that is specified in the solicitation, which states that if no award can be made at the first tier, it will evaluate offers at the next lower tier, until award can be made. For example, unless the agency has specific statutory authority to do so, an agency is not permitted to state an intention to award one contract to an 8(a) BD Participant and one to a HUBZone SBC, but only if no awards are made to 8(a) BD Participants.

Suggested ChangeFAR 19.203(c) - Review the word or:

Instead of SDVOSB Program or WOSB Program use and/or.

No need to evaluate offers from lower-tier until that tier is reached.May use for fair & reasonable determination if found technically acceptable.

Any Questions?

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Spread the Word!Ask your Contracting Officerto considerTiered Set-Asides!

References:Cascading Small Business Set-Asides - http://coherentcontracts.com/2012/12/31/cascading-small-business-set-asides/ Code of Federal Regulations - http://www.ecfr.gov Defense Federal Regulation Supplement (DFARS)Defense Logistics Acquisition Directive (DLAD)FedBizOpps.gov - https://www.fbo.gov Federal Acquisition Regulation (FAR) - http://farsite.hill.af.mil/vffara.htm GAO Decision December 2014 (Page 5)

References Cont.:Photo of calendar on slide 3 courtesy of fencingphotos.com.Photo on slide 5 courtesy of photobucket.com.Photo on slide 7 could not find copyright data.WIFCON.com - http://www.wifcon.com/discussion/index.php?/topic/3577-concurrent-solicitations-for-one-award/