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Administration: No Change in Support for SDBs

Elimination of the price evaluation adjustment for small disadvantaged businesses “will have no impact on the government’s ability or commitment to drive contracting opportunities” for those businesses, according to Dan Gordon, administrator of the Office of Federal Procurement Policy.

In September the Federal Acquisition Regulation councils proposed abolishing the price adjustment because a federal court has declared it unconstitutional.

Writing on the Office of Management and Budget’s blog, Gordon pointed out that the price clause has not been used in years, because the affected agencies—the Defense Department, NASA and the Coast Guard—have exceeded their 5% goal for contracting with SDBs. He described the proposed abolition of the clause as a “housekeeping” measure to bring the FAR in line with the court decision.

“ Even more importantly, the proposed rule in no way changes the fundamental policies, practices, or programs that agencies have been using in recent years to achieve strong SDB participation in the federal marketplace, including the goal of awarding 5 percent of federal procurement dollars to SDBs,” Gordon wrote. “The Administration remains committed to the 8(a) business development program and other federal programs that seek to level the playing field for SDBs.”

The proposed rule will not affect other incentives for SDB contracting. Prime contractors will still be eligible for monetary incentives to encourage subcontracting with SDBs and agencies may use an evaluation factor to give preference to primes who hire SDBs as subcontractors.

In fiscal 2010 the government reported awarding 7.95% of prime contract dollars to SDBs, including 8(a)s. Agencies have exceeded the 5% goal for several consecutive years, according to the Federal Procurement Data System.

The proposed rule is FAR case 2009-016 in the Sept. 9 Federal Register. Comments are due Nov. 8.   


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