Regulators To Consider Set-Asides on Task Orders The Federal Acquisition Regulation councils will consider whether set-asides are required on task and delivery orders. The Defense Department’s inspector general asked for a clarification because of a conflict between different sections of the FAR. Last year the Government Accountability Office ruled that task orders must be set-aside under the rule of two – that is, if at least two qualified small businesses are available to do the work. But the Defense IG said other laws and regulations require open competition for task and delivery orders on IDIQ contracts. In a letter to the IG, Shay Assad, director of defense procurement and acquisition policy, said the regulatory councils “will determine whether the Federal Acquisition Regulation needs to be updated to provide explicit guidance on the allowability of small business set-asides for task orders” on IDIQ contracts. GAO officials told the IG that congressional action might be needed to settle the matter. If GAO’s position prevails, it could open billions of dollars worth of new opportunities for those small firms that participate in multiple award contracts, including GSA schedules. Task and delivery orders now account for more than half of federal procurement dollars. In its decision last year in the Delex case, GAO said the rule of two—FAR 19.502-2(b)—requires that orders be set aside. But the Defense IG pointed to FAR 16.505(b), which requires that each contractor on a multiple award IDIQ contract receive fair opportunity to compete for each order exceeding $3,000. The IG raised the issue in connection with an audit of the Navy’s Seaport-e contract, which allows small business set-asides. The Navy said all contractors on Seaport-e, including large businesses, had agreed to the set-aside provision as part of their contract. But the IG said the Navy had no authority to override the FAR provision requiring fair opportunity for all. The IG report is No. D-2009-082.