U.S. DEPARTMENT OF INTERIOR

BUSINESS AND ECONOMIC DEVELOPMENT PROGRAM HANDBOOK

TABLE OF CONTENTS

CHAPTER 1. INTRODUCTION 3

CHAPTER 2. DEFINITIONS 4

CHAPTER 3. ROLES AND FUNCTIONS, OSDBU AND THE HEADQUARTERS BUDS 5

CHAPTER 4. GOALING 6

CHAPTER 5. ADVANCED ACQUISITION PLAN 6

CHAPTER 6. IDENTIFICATION OF SPECIFIC REQUIREMENTS

8(a) OR OTHER PREFERENCE PROGRAMS 7

CHAPTER 7. ACQUISITION SCREENING FOR INDIVIDUAL

PROCUREMENT ACTIONS 7

CHAPTER 8. ACCOMPLISHMENTS 8

CHAPTER 9. PURPOSE AND TYPE OF OUTREACH 8

CHAPTER 10. PROVIDING BEDP UPDATES AND GUIDANCE

FAR 19.201(c) and DIAR 1419.201(c)(2) 8

CHAPTER 11. BUNDLING 9

CHAPTER 12. SUBCONTRACTING PLANS (SF-294 AND SF-295 REPORTS) 10

CHAPTER 13. SMALL BUSINESS DEBRIEFING AND PERFORMANCE ISSUES 11

CHAPTER 14. FEDERAL ASSISTANCE 11

CHAPTER 15. HISTORICALLY BLACK COLLEGES AND UNIVERSITIES

AND MINORITY INSTITUTIONS 11

**CHAPTER 1. INTRODUCTION**

[Background]{.underline}. The President and Congress of the United
States recognize the key roles small businesses play in ensuring the
health of the nation's economy. Small businesses employ more people,
create more new jobs, and bring more innovation to the marketplace than
large businesses. They also recognize the historical record that shows
certain small businesses have been at an unfair disadvantage in
competing for federal contracts. Executive orders have been issued and
legislation enacted authorizing preference programs to provide federal
procurement opportunities to the small and small disadvantaged business
communities. The Department of the Interior (DOI) established the Office
of Small and Disadvantaged Business Utilization (OSDBU) within the
Office of the Secretary (Secretary) and assigned Business Utilization
and Development Specialists (BUDS) to the contracting activities in the
bureaus and offices, to implement the laws and regulations directing
these preference programs. The Director of the OSDBU then instituted the
Business and Economic Development Program (BEDP) to provide guidance to
these BUDS and the Acquisition and Assistance professionals in the
Department.

[Purpose.]{.underline} This handbook presents the policy of DOI
concerning the BEDP to provide consistent guidance for implementing the
program. The BEDP addresses the legal requirement that all federal
contracting activities afford the maximum practicable opportunity for
businesses in various preference programs to participate, whether as
prime contractors, direct recipients of federal assistance, or as
subcontractors. While the Secretary's commitment to the BEDP doesn't
change, the specifics of the individual preference programs, and the
programs themselves, change over time to reflect changes in law or
regulation. DOI's BEDP is tailored to the DOI organization and culture.
The DOI bureaus and offices may tailor their individual programs further
to suit their missions, structure and business practices, without
reducing the minimum requirements in this handbook.

[Scope.]{.underline} All DOI acquisitions or federal assistance actions,
including actions undertaken by partnerships, cooperative agreements,
interagency agreements or other arrangements where funding is received
from other public or private sources, are within the scope of this
handbook. Purchases under the Micro Purchase Threshold in FAR 13.2 are
exempt.

[Applicability.]{.underline} This handbook applies to all DOI managers
with authority to commit federal funds. It applies to OSDBU and all DOI
BUDS, contracting officers, purchasing agents, grant and assistance
officers. It is not applicable to purchase card holders.

[Authority.]{.underline} The Small Business Act of 1953, as amended,
authorizes small and small disadvantaged business preferential
contracting programs to ensure that small business concerns receive a
fair share of Government contracts. PL 95-507 extended preference
programs to subcontracting on federal contracts. Statutory and
regulatory basis for the BEDP is set forth in FAR Part 19 (FAR 19.000,
Scope of part). The DIAR, Part 1419, provides general guidance on the
BEDP.

[Supercession.]{.underline} This Handbook supercedes the DOI BUDS SOP
Handbook (405 DM) issued 29 August 1988. While DOI Bureaus may
supplement this Handbook, any supplements written prior to the date of
this handbook are also superceded.

**CHAPTER 2. DEFINITIONS**

AAP - Advanced Acquisition Plan

BEDP - Business and Economic Development Program

BUDS - Business Utilization and Development Specialist

CCO - Chief of the Contracting Office

CO - Contracting Officer

DIAR - Department of Interior Acquisition Regulations

DOI - Department of Interior

FAR - Federal Acquisition Regulations

FPDS - Federal Procurement Data System

FSS - Federal Supply Schedule

Goaling Category - Small Business firms, Section 8(a) awards, Small
Disadvantaged Business

firms, Women-Owned Small Business entities, HUBZone firms, Veteran-Owned
firms.

HBCU - Historically Black Colleges and Universities

HBCU/MI - Historically Black Colleges and Universities and Minority
Institutions

HCA - Head of the Contracting Activity

HeadBUDS - Headquarters Business Utilization and Development Specialist

IAP - Individual Acquisition Plan

IDEAS-PD - Interior Department Electronic Acquisition System-Procurement
Desktop

IPDS - Interior Procurement Data System

OSDBU - Office of Small and Disadvantaged Business Utilization

OMB - Office of Management and Budget

PCR - Procurement Center Representative

PRO-NET - Small Business Administration's Procurement Marketing and
Access Network

SAT - Simplified Acquisition Threshold

SBA - Small Business Administration

**CHAPTER 3. ROLES AND FUNCTIONS**

**OSDBU AND THE HEADQUARTERS BUDS**

[Function of OSDBU Office.]{.underline} The Small Business Act requires
each agency with contracting authority to establish an OSDBU office.
OSDBU manages the BEDP for DOI. OSDBU is responsible for developing and
maintaining policies, procedures, regulations, and guidelines for
effective administration of the Department's small business and small
disadvantaged business programs. The office provides functional
direction and policy guidance to personnel for implementation of the
BEDP. OSDBU works with the SBA to establish meaningful socioeconomic
acquisition program goals for Interior and its bureaus/offices. The
office facilitates small business participation as contractors,
including small business contract teams. OSDBU facilitates small
business participation as subcontractors and suppliers where
participation by small business concerns as prime contractors is
unlikely. The office assists small business concerns in obtaining
payments under their contracts, late payment, interest penalties, or
other information on contractual payment provisions. OSDBU makes
recommendations, when appropriate, as to whether a particular
acquisition should be awarded under FAR Subpart 19.5, as a small
business set-aside, under FAR Subpart 19.8 as a Section 8(a) award, or
under FAR Subpart 19.13 as a HUBZone set-aside. OSDBU identifies
proposed solicitations that involve bundling.

[Responsibility of HeadBUDS.]{.underline} The HeadBUDS is primarily
responsible for implementing and managing the bureau/office's BEDP. The
HeadBuds facilitates implementation of Federal socioeconomic programs
mandated by statue and regulation through leadership provided to
operational BUDS. The HeadBUDS manages the BEDP by conducting an ongoing
program to ensure bureau/office conformance with existing socioeconomic
statutes and regulations. The HeadBUDS negotiates annually with
bureau/office operational offices and DOI to establish BEDP goals by
specific socioeconomic category. The HeadBUDS manages the development of
ad hoc, interim, and annual BEDP reports. He or she reviews and analyzes
bureau/office BEDP quarterly accomplishments and recommends
improvements. He or she assists bureau/office operational acquisition
offices, as requested, in identifying projects suitable for acquisition
in support of socioeconomic development programs. The HeadBUDS conducts
a program to recognize BEDP accomplishments within the bureau/office. He
or she represents the bureau/office and DOI at Federal, State, and local
small business programs, trade fairs, and other socioeconomic
development advocacy events, providing marketing assistance and
counseling to small socially and economically disadvantaged business
enterprises. The HeadBUDS prepares an annual message of BEDP support
from the head of the bureau/office (Director or Commissioner).

The HeadBUDS work is crucial in encouraging expansion of the national
industrial base by developing new or improved small business firms to
assure increase opportunities to contract and subcontract with
bureaus/offices, other Federal, State, and local entities, and with
prime contractors. This work affects the economic well-being of small
and socially and economically disadvantaged businesses.

**CHAPTER 4. GOALING**

This part identifies authorities and presents background information and
procedures for proposal and negotiation of BEDP goals between DOI and
various Bureaus and Offices.

As required by the general policy statement found at FAR 19.201 and 401
DM 1419.201, the HCA shall develop annual BEDP goals for their small
business and small disadvantaged business utilization program (see
current DIAR). The purpose of these goals is to increase participation
of 8(a) firms, small business, service-disabled veteran-owned small
business, veteran-owned small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns. All
such goals must comply with the criteria established by OSDBU.

After consultation with the Regional BUDS and the CCO, the headquarters
BUDS develops annual BEDP goals for proposal to OSDBU. The proposed
goals are reviewed and approved by the Bureau Procurement Chief and
submitted to OSDBU by September 1. They are based on available budget
information, historical data, current fiscal year achievements, and
information obtained on specific contract opportunities which have been
identified in the BUDS review of the AAP.

OSDBU reviews the proposed goals and forwards recommendations in each
goaling category to the HeadBUDS by September 15. If the bureau/office
does not concur with the OSDBU proposal, it must respond to the OSDBU
within ten (10) working days. Where no response is received, the OSDBU
will consider the goals to be accepted by the bureau/office. The BEDP
goals are bureau-wide with headquarters, Service Centers, and the
regions having equal responsibility for their achievement.

**CHAPTER 5. ADVANCED ACQUISITION PLAN**

**FAR Part 7**

The most opportune time in the acquisition process for a bureau or
office to ensure that a fair proportion of its acquisitions are placed
with small business and small disadvantaged business concerns is during
the development of its annual AAP.

In order to ensure that all reasonable action is taken to increase the
participation of businesses which are a part of the BEDP in the activity
contracting program, the BUDS will participate to the maximum extent
practical in the AAP process as prescribed by FAR 7.102(b).

The BUDS shall take action to ensure that the Bureau or Office AAP is
posted to the agency website so that interested firms can review it for
possible procurement actions. The AAP/Forecast shall be reviewed and
updated as frequently as possible, but not less than quarterly.

**CHAPTER 6. IDENTIFICATION OF SPECIFIC REQUIREMENTS**

**8(a) OR OTHER PREFERENCE PROGRAMS**

BUDS will review the AAP to identify upcoming requirements that can be
reserved for 8(a) or set-aside under one of the preference programs
listed in FAR Part 19.

Section 8(a) of the Small Business Act authorizes SBA to enter into
prime contracts with Government departments or agencies for the
procurement of products or services. Under this procedure SBA negotiates
subcontracts with small business concerns owned and controlled by
socially and economically disadvantaged firms. SBA has delegated its
contract formation authority to DOI under a Partnership Agreement . The
BUDS shall refer to the Partnership Agreement for procedural guidance.

**CHAPTER 7. ACQUISITION SCREENING FOR INDIVIDUAL**

**PROCUREMENT ACTIONS**

All acquisitions expected to exceed the SAT shall be screened by the
Bureau or Office BUDS prior to synopsis. Screening ensures that all
small business preference programs (as defined in FAR Part 19) are given
the maximum practical opportunity to participate in the Federal
contracting process.

Upon request from SBA, contracting officers may be required to obtain
SBA approval to enter into interagency agreements under the Economy Act.

Bureaus may develop their own policy for screening actions below the SAT
and for FSS awards.

When Bureau's or Offices are required to prepare IAP, the IAP shall
state the proposed method of procurement and include consideration of
preference programs. The IAP shall address the extent and results of the
market research and indicate their impact on the various elements of the
IAP.

[DI-1886 Approval process.]{.underline} Upon receipt of the requirement
in the contracting office, the requirement shall be screened by the
BUDS. The BUDS shall identify goaling category sources through the use
of the SBA's PRONET system and any other available market research
sources. The BUDS shall provide the results of the query to the
contracting officer for use in developing an acquisition strategy.

The CO shall prepare and sign the DI-1886 form and forward it to the
BUDS for review. The DI-1886 shall include an adequate description of
the product or services being procured so that the BUDS can adequately
determine the potential for a set-aside. The DI-1886 must be signed by
the BUDS prior to synopsis of the requirement. The DI-1886 must also
thoroughly document the reasons why individual procurement actions are
not suitable for 8(a) or HUBZone set-asides. The BUDS must have an
adequate lead time in order to perform a market analysis of larger and
more complex requirements.

For offices where a SBA PCR is assigned, determinations to solicit using
full and open competition, or other than full and open competition to a
non-goaling category source, must be approved by the PCR. The BUDS will
forward the DI-1886 to SBA for approval.

If the BUDS determines that the individual procurement would be
appropriate for some form of set-aside or 8(a), the BUDS shall attempt
to resolve the matter with the CO. If no successful resolution is
reached, the issue shall be submitted to the CCO for resolution. If the
CCO is the CO, this determination should be made by the Bureau
Procurement Chief. A copy of the determination, documentation leading to
the final decision, and the DI-1886 shall become a part of the official
contract file. The BUDS shall retain a copy of each completed DI-1886
for three years.

**CHAPTER 8. ACCOMPLISHMENTS**

FAR 4.6 requires that data on contract actions be transmitted to the
FPDS. The SF-279 form and the SF-281 form (or the 281 form in IDEAS-PD)
are used to transmit this information. The information is submitted to
IPDS which in turn transmits the data to FPDS.

The BUDS shall obtain FPDS accomplishment reports on a quarterly basis
and at the end of the fiscal year. The BUDS shall utilize the data to
ensure that BEDP goals are being accomplished.

**CHAPTER 9. PURPOSE AND TYPE OF OUTREACH**

One of the primary roles/purposes of the BUDS is to counsel business
owners, or their representatives, in their attempts to do business with
DOI as well as with other elements of the Government. The BUDS shall
provide counseling on a daily basis and at congressionally-sponsored and
other outreach events, including SBA activities.

An important aspect to the BUDS counseling is to provide follow-up
responses to all inquiries. Counseling shall also include researching
and identifying prime contracting opportunities and possible
subcontracting opportunities.

The BUDS shall be familiar with various resources (i.e., Internet
websites, SBA PRO-NET, etc.) and maintain an adequate supply of
appropriate publications designed to assist the small business owner
when marketing to the Government.

The BUDS shall be familiar with the Federal Government's Single Point of
Entry and be able to provide assistance to small businesses on the basic
functions of the website.

The BUDS shall maintain a relationship with Interior and other
Government acquisition offices; State and local agencies, civic
organizations; and the SBA in matters concerning the interests of small
business, small minority business, women-owned business, veteran-owned
business and HUBZone concerns.

**CHAPTER 10. PROVIDING BEDP UPDATES AND GUIDANCE**

**FAR 19.201(c) and DIAR 1419.201(c)(2)**

The BUDS shall provide updates and guidance on the program to
management, contracting, federal assistance, requirements, and technical
personnel on FAR and DOI BEDP policies, procedures, and regulations.

Periodically the BUDS, accompanied by the CCO, should meet with
management, contracting, federal assistance, requirements, and technical
personnel, as a group or individually, to ensure that there is a good
understanding of the Small Business Act (P.L. 95-507), the BEDP, goals,
the order of precedence, the role and authority of the BUDS, and the
role and authority of SBA.

The BUDS should provide verbal and/or written guidance to contracting
and federal assistance personnel as changes occur in the FAR and in DOI
policies, procedures, and regulations which directly affect the program.

Periodically, the BUDS shall insure that standard solicitation and
contract provisions and clauses included in the contracting offices
standard format are as prescribed in FAR Part 19.

**CHAPTER 11. BUNDLING**

"Bundling" is the consolidation of two or more requirements for supplies
or services, previously provided or performed under "separate smaller
contracts," into a solicitation for a single contract that is likely to
be unsuitable for award to a small business concern due to one or more
of the following factors: the diversity, size, or specialized nature of
the elements of the performance specified; the aggregate dollar value of
the anticipated award; or the geographical dispersion of the contract
performance sites. A "separate smaller contract" means that the
requirement was previously performed by one or more small business
concerns or was suitable for award to one or more small business
concerns. The BUDS should be proactive on this issue by conducting
informational briefings to relevant customer groups, identified by
review of the AAP.

Based on economies of scale, bundling may provide substantial benefits
to the Government. However, because of the potential impact on small
business participation, Congress has directed that agencies must conduct
market research to determine whether bundling is necessary and
justified. This may be the case if an agency would derive "measurably
substantial benefits." These benefits must be quantified, and adequacy
thresholds are spelled out at FAR 7.107(b) and (d). If the expected
benefits do not meet these thresholds, the Deputy Secretary may
determine that bundling is still necessary if the benefits are critical
to mission success and if the acquisition strategy provides for maximum
practicable participation by small business concerns. The BUDS is
responsible for coordinating this market research effort with the local
SBA PCR, or, if one is not assigned, the cognizant SBA Office of
Government Contracting Area Office.

These justification requirements do not apply if a cost comparison
analysis will be performed in accordance with OMB Circular A-76.
However, the following "substantial bundling" requirements do apply to
A-76 (as well as non-A-76) scenarios.

"Substantial bundling" is any bundling that results in a contract with
an average annual value of \$10 million or more. In this case, the
agency must identify the specific benefits anticipated to be derived
from bundling, include an assessment of the specific impediments to
participation by small business concerns, and specify actions designed
to maximize small business participation as contractors (including small
business teams) and subcontractors (including suppliers).

When the bundled requirement is received in the contracting office, the
BUDS must ensure that sufficient justification to support bundling is in
the file before approving the DI-1886. For solicitations involving
bundling that offer a significant opportunity for subcontracting, the
BUDS should work with the CO to develop evaluation factors on the extent
of proposed small business subcontracting participation and on the
offeror's past performance in attaining goals for small business
participation under prior contracts that required subcontracting plans.
At least 30 days before release of the solicitation, the BUDS must
notify any affected incumbent small business concerns of the
Government's intention to bundle the requirement and how the concerns
may contact the appropriate SBA representative.

**CHAPTER 12. SUBCONTRACTING PLANS**

**(SF-294 AND SF-295 REPORTS)**

FAR 19.7 requires that each solicitation to perform a contract or
contract modification, expected to exceed \$500,000 (\$1,000,000 for
construction), and having subcontract possibilities shall require the
apparent successful large business to submit an acceptable
subcontracting plan. An acceptable plan must include specific percentage
goals as specified in FAR Part 19.704 (Subcontracting plan
requirements). Prime contractors required to submit subcontracting plans
should establish positive, realistic, and justifiable percentage and
dollar goals.

The CO is responsible in determining whether a proposed contractual
action requires a subcontracting plan. If it is determined that there
are no subcontracting possibilities, the written determination must be
approved at a level above the CO, coordinated with the BUDS, and
included in the contract file. A copy of the determination shall be
forwarded to OSDBU within five working days.

Subcontracting goals shall be negotiated at a level which represents a
good faith, aggressive, and comprehensive effort of the apparent
successful offeror to use to the maximum extent practicable, small and
small disadvantaged subcontractors after giving appropriate
consideration to technical capability, price and other pertinent
factors.

The CO shall review the subcontracting plan in accordance with FAR
19.705-4, obtaining advice and recommendations from the BUDS and the SBA
as appropriate. The BUDS shall review the plan and submit written
recommendations and/or concurrence to the CO within 5 working days.
Deficiencies in the plan, if any, shall be corrected by the offeror to
the satisfaction of the CO/BUDS. The CO is responsible for forwarding a
copy of the award document and subcontracting plan, with the necessary
approvals to the appropriate SBA office. A copy of the subcontracting
plan should be distributed pursuant to individual bureau procedures.

In coordination with the CO, the BUDS shall take all practicable and
reasonable actions to ensure that prime contractors carry out their
contractual obligations to maximize subcontracting opportunities for
firms covered under the BEDP.

If a contract contains an individual contract subcontracting plan, the
Contractor is required to submit both the SF-294 (semiannually) and the
SF-295 (annually). These reports are used to provide a basis for
monitoring and reporting achievements in Contractors' subcontracting
plans.

**Post Performance Analysis.** In situations where contractors have not
made a good faith effort to comply with the subcontracting goals,
contracting officers in coordination with BUDS should remember to
perform an analysis of the contractor's best efforts in performing the
subcontracting plan for possible assessment of liquidated damages
pursuant to FAR 19.705-7 (Liquidated damages).

**CHAPTER 13. SMALL BUSINESS DEBRIEFING**

**AND PERFORMANCE ISSUES**

The BUDS shall assist in the resolution of any issues in regards to
small business and unsuccessful proposals and performance issues.

Prior to meeting with any small business firm to discuss an unsuccessful
proposal or a performance issue, the CO is to meet with the BUDS to
discuss the agency position and to resolve any issues that the BUDS
perceives as unfair or unreasonable. All issues are to be resolved prior
to meeting with the firm. The BUDS is to be given the opportunity to
participate in any meeting between contracting personnel and the small
business firm. The BUDS role is as an observer, and if required, will
provide input on regulations, policies, or procedures related to the
Small Business Act and the BEDP.

**CHAPTER 14. FEDERAL ASSISTANCE**

[Grants and Cooperative Agreements.]{.underline} Federal Assistance
recipients are required by OMB Circulars A-102 and A-110 to take
specific actions to ensure that a fair share of contracts awarded by
recipients to vendors to pursue the purpose of the assistance are placed
with small business firms targeted for benefit under the preference
programs in this Handbook.

In accordance with Department Manual Part 505, bureaus shall comply with
the policy to include the appropriate notice in award documents which
affords opportunities for purchases from the business community to
reflect the Department's implementation and support to Executive Order
12432. The notice for Grants and Cooperative Agreements with State and
Local Governments is available at URL: The notice for Grants and
Agreements with Institutions of Higher Education, Hospitals, and Other
Nonprofit Organizations is available at URL:

**CHAPTER 15. HISTORICALLY BLACK COLLEGES AND UNIVERSITIES**

**AND MINORITY INSTITUTIONS**

[HBCU Program.]{.underline} The DOI HBCU Program concerns the
development of relationships between the Department and these
institutions in order to encourage and promote DOI as an employer of
first choice, as well as developing student employment opportunities
within the Department. It is a part of the Equal Employment Opportunity
Outreach effort and unrelated to Acquisition and Federal Assistance.

[HBCU/MI.]{.underline} HBCU/MI are encouraged to participate fully in
Acquisition and Federal Assistance opportunities across the DOI. They
are particularly encouraged to participate in research efforts. DOI and
the Bureaus are directed under EO 12677, April 1989, to increase
participation of HBCU/MI's in these areas. There are no procurement
preference programs or goals for HBCU/MI within DOI. However, to assist
in monitoring the Department HBCU Program, Field and Regional BUDS shall
report HBCU awards (contracts, grants, and cooperative agreements) to
the HeadBUDS. Award information consists of award number, type, date,
amount, and description. Each year, the HeadBUDS for each bureau shall
consolidate this information and insert it in an annual report to the
Department HBCU Program Manager.