Set-Asides Not Required on GSA Schedules In a multibillion dollar setback for small businesses, the Office of Federal Procurement Policy has ruled that GSA Schedule orders will remain exempt from set-aside requirements. A Florida businessman, Raul Espinoza, asked OFPP to require set-asides on all schedule orders between $3,000, the micropurchase threshold, and $100,000, the simplified acquisition threshold. Espinoza contends the Small Business Act mandates that all such contracts to be set aside for small firms. SBA supported Espinoza, but GSA argued that other statutory provisions exempt the schedules from set-aside requirements. “I am not convinced that these regulations should be revised,” OFPP Administrator Paul Denett wrote in a Jan. 16 letter to Espinoza. “The GSA Schedules program is a strong supporter of small businesses, as evidenced by the fact that small business contractors received 37.6 percent of the dollars awarded under GSA Schedules in Fiscal Year 2006. That compares favorably with the 23 percent statutory small business procurement goal.” He said the Federal Acquisition Regulation provides “agency discretion to consider small businesses in these orders and procurements.” GSA policy allows contracting officers to give preference to small firms, without setting aside contracts. Denett made no specific finding on whether the GSA exemption violates the Small Business Act. Espinoza is founder of the Fairness in Purchasing Alliance. The Alliance’s attorneys argued that there is no legal basis for “agency discretion” in the treatment of small businesses. Espinoza also asked OFPP to strike down the set-aside exemption for contracts awarded overseas. He said he will seek support in Congress to overturn the exemptions. GSA says the average size of a schedule order is around $50,000, so the vast majority of orders are under $100,000. If those orders were set aside, GSA said, “medium and large businesses would effectively be eliminated from the program.” The Government Accountability Office has ruled that set-aside requirements do not apply to schedule orders above $100,000, but it has not ruled specifically on orders under $100,000. Last year GAO dismissed Espinoza’s protest over the issue on technical grounds.