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| ![](media/image1.wmf) **Department of Energy No.**                    |
| [2004-03]{.underline}                                                 |
|                                                                       |
| **Acquisition Regulation Date** [05/05/04]{.underline}                |
|                                                                       |
| **ACQUISITION LETTER**                                                |
|                                                                       |
| This Acquisition Letter is issued under the authority of the DOE and  |
| NNSA Procurement Executives.                                          |
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# Subject: Small Business Programs

**References:**

FAR 7.107 Additional requirements for acquisitions involving bundling

FAR 19.201 General policy

FAR 19.202-1 Encouraging small business participation in acquisitions

FAR 19.302 Protesting a small business representation

FAR 19.306 Protesting a firm's status as a HUBZone small business
concern

FAR 19.307 Solicitation provisions

FAR Subpart 19.5 Set-Asides for Small Business

FAR Subpart 19.7 The Small Business Subcontracting Program

FAR Subpart 19.8 Contracting with the Small Business Administration (The
8(a) Program)

FAR Subpart 19.9 Very Small Business Pilot Program

FAR Subpart 19.10 Small Business Competitiveness Demonstration Program

FAR Subpart 19.11 Price Evaluation Adjustment for Small Disadvantaged
Business Concerns

FAR Subpart 19.12 Small Disadvantaged Business Participation Program

FAR Subpart 19.13 Historically Underutilized Business Zone (HUBZone)
Program

FAR Subpart 26.1 Indian Incentive Program

FAR 52.219-10 Incentive Subcontracting Program

FAR 52.219-22 Small Disadvantaged Business Status

FAR 52.219-23 Notice of Price Evaluation Adjustment for Small
Disadvantaged Business

Concerns

FAR 52.219-24 Small Disadvantaged Business Participation Program-Targets

FAR 52.219-25 Small Disadvantaged Business Participation
Program‑Disadvantaged

Status and Reporting

FAR 52.226-1 Utilization of Indian Organizations and Indian-Owned
Economic

Enterprises

DEAR Subpart 919.5 Set-Asides for Small Business

DEAR Subpart 919.7 Subcontracting with Small Business, Small
Disadvantaged Business, and

Women-Owned Small Business Concerns

DEAR Subpart 919.8 Contracting with the Small Business Administration
(The 8(a) Program)

DEAR Subpart 919.70 The Department of Energy Mentor-Protégé Program

DEAR 970.1504-4-1 Make-or-buy plans

DEAR 970.5215-2 Make-or-buy plan

DOE Acquisition

Guide Chapter 38 Task Order Contracting

13 CFR Chapter 1 Small Business Administration

OFPP Letter 99-1 Small Business Procurement Goals

**Effective date of the Acquisition Letter (AL)**

This AL is effective 10 business days from the date of issuance.

**AL Expiration**

This AL remains in effect until superseded or canceled. This AL
supersedes AL-2000-02 (Small Business Programs, dated April 20, 2000)
and AL-2001-05 (Maximizing Opportunities for Small Businesses, dated
October 12, 2001), which are rescinded in their entirety.

**Points of Contact**

Contact Stephen Zvolensky of the Department of Energy (DOE) Office of
Procurement and Assistance Policy at (202) 586-5936, or at
<stephen.zvolensky@hq.doe.gov>, or Gary Lyttek, National Nuclear
Security Administration (NNSA) Office of Acquisition and Supply
Management at (202) 586-8304, or at <gary.lyttek@nnsa.doe.gov>.

Visit the website at
[http://professionals.pr.doe.gov](http://professionals.pr.doe.gov/) for
information on Acquisition Letters and other policy issues.

**Purpose of the AL**

The purpose of this AL is to make available guidance on contracting with
small business concerns.

This AL is divided into three parts: Part I applies to the award of
prime contracts; Part II applies to the award of subcontracts; and Part
III includes other considerations.

**Background on Small Business**

The Small Business Act contains a government-wide goal for participation
by small business concerns of not less than 23 percent of the total
value of all prime contract awards for each fiscal year as well as
individual goals for women-owned small business concerns (5%), small
disadvantaged business concerns (5%), service-disabled veteran-owned
small business concerns (3%) and HUBZone small business concerns (3%).
The Act further provides that agencies negotiate annual goals with the
Small Business Administration (SBA).

In September of 2002, Secretary Spencer Abraham issued his "Policy
Statement Supporting Small Businesses in Implementing DOE Missions." In
that statement, the Secretary directed all departmental elements to
examine and seek to expand their grant and contract opportunities with
small businesses and tasked the Director of the Office of Small and
Disadvantaged Business Utilization (OSDBU) to prepare a comprehensive
small business strategy to ensure that small businesses are provided the
maximum practicable opportunity to participate in departmental programs
at the prime contract level. Additionally, the policy directed that the
plan include a strategy to increase the level and expand the types of
subcontracts awarded to small business by the Department's facilities
management contractors.

2

In May of 2003, the OSDBU issued a Small Business Strategic Plan that
provides steps the department will take to increase its small business
awards. The Plan is posted on the OSDBU website:
<http://smallbusiness.doe.gov/OSDBU_Strategic_Plan.pdf>

An "Advanced Planning Acquisition Team" (APAT) has been established to
review acquisition requests over \$3 million for their ability to be set
aside for small business. The team consists of representatives of the
program office requesting the acquisition, the Office of Procurement and
Assistance Management, the OSDBU and the SBA Procurement Center
Representative (PCR). \[Note the APAT requirement does not apply to
NNSA.\]

**Definitions**

**"8(a) contractor"** means a concern, certified by the SBA, to be
eligible to participate in the SBA 8(a) program, established by section
8 (a) of the Small Business Act, 15 U.S.C. section 637(a), which
authorizes the SBA to enter into all types of contracts with other
agencies and award subcontracts for performing these contracts with
eligible 8(a) contractors.

**\"HUBZone\"** means a historically underutilized business zone that is
an area located within one or more qualified census tracts, qualified
nonmetropolitan counties, or lands within the external boundaries of an
Indian reservation.

**\"HUBZone small business concern\"** means a small business concern
that appears on the List of Qualified HUBZone Small Business Concerns
maintained by the Small Business Administration.

**\"Small business concern\"** means a concern, including its
affiliates, that is independently owned and operated, not dominant in
the field of operation in which it is bidding on government contracts,
and qualified as a small business under the criteria and size standards
in 13 CFR part 121 (see 19.102). Such a concern is \"not dominant in its
field of operation\" when it does not exercise a controlling or major
influence on a national basis in a kind of business activity in which a
number of business concerns are primarily engaged. In determining
whether dominance exists, consideration shall be given to all
appropriate factors, including volume of business, number of employees,
financial resources, competitive status or position, ownership or
control of materials, processes, patents, license agreements,
facilities, sales territory, and nature of business activity.

**\"Small disadvantaged business concern\"** (except for 52.212-3(c)(2)
and 52.219-1(b)(2) for general statistical purposes and
52.212-3(c)(7)(ii), 52.219-22(b)(2), and 52.219-23(a) for joint ventures
under the price evaluation adjustment for small disadvantaged business
concerns), means an offeror that represents, as part of its offer, that
it is a small business under the size standard applicable to the
acquisition; and either (1) It has received certification as a small
disadvantaged business concern consistent with 13 CFR part 124, subpart
B; and (i) No material change in disadvantaged ownership and control has
occurred since its certification; (ii) Where the concern is owned by one
or more disadvantaged individuals, the net worth of each individual upon
whom the certification is based does not exceed \$750,000 after taking
into account the applicable exclusions set forth at 13 CFR
124.104(c)(2); and (iii) It is identified, on the date of its
representation, as a certified small disadvantaged business concern in
the data base maintained by the Small Business Administration (PRO-Net);
or (2) For a prime contractor, it has submitted a completed application
to the Small Business Administration or a private certifier to be
certified as a small disadvantaged business concern in accordance with
13 CFR part 124, subpart B, and a decision on that application is
pending, and that no material change in disadvantaged ownership and
control has occurred since it submitted its application. In this case, a
contractor must receive certification as a small disadvantaged business
by the Small Business Administration prior to contract award.

**\"Service-disabled veteran-owned small business concern\"** means a
small business concern- (i) Not less than 51 percent of which is owned
by one or more service-disabled veterans or, in the case of any publicly
owned business, not less than 51 percent of the stock of which is owned
by one or more service-disabled veterans; and (ii) The management and
daily business operations of which are controlled by one or more
service**-**disabled veterans or, in the case of a service**-**disabled
veteran with permanent and severe disability, the spouse or permanent
caregiver of such veteran. Service-disabled veteran means a veteran, as
defined in 38 U.S.C. 101(2), with a disability that is
service-connected, as defined in 38 U.S.C. 101(16).

**\"Veteran-owned small business concern\"** means a small business
concern- (1) Not less than 51 percent of which is owned by one or more
veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any
publicly owned business, not less than 51 percent of the stock of which
is owned by one or more veterans; and (2) The management and daily
business operations of which are controlled by one or more veterans.

**\"Women-owned small business concern\"** means a small business
concern- (1) That is at least 51 percent owned by one or more women; or,
in the case of any publicly owned business, at least 51 percent of the
stock of which is owned by one or more women; and (2) Whose management
and daily business operations are controlled by one or more women.

**[Part I. Prime Contracting]{.underline}**

A.  **SMALL BUSINESS CONTRACTING PROCESSES**

B.  **SMALL BUSINESS PROCUREMENT TOOLS**

####### SMALL BUSINESS MARKET RESEARCH

**D. SMALL BUSINESS ACQUISITION PLANNING**

**[Part II. Subcontracting with Small Business]{.underline}**

A.  **SUBCONTRACTING PLANS**

B.  **SUBCONTRACTING PROCEDURES**

##### [Part III. Other Considerations]{.underline}

A.  **SECURITY CLEARANCES**

**B. SMALL BUSINESS STATISTICS**

**C. CENTRAL CONTRACTOR REGISTRATION DATABASE**

**D. SECRETARY'S SMALL BUSINESS AWARDS**

[Part I. Prime Contracting]{.underline}

**A. SMALL BUSINESS CONTRACTING PROCESSES**

[Total small business set-asides]{.underline}*.* Except for those
acquisitions set aside for very small business concerns (see Subpart
19.9), each acquisition of supplies or services that has an anticipated
dollar value exceeding \$2,500 (\$15,000 for acquisitions as described
in 13.201(g)(1)), but not over \$100,000 (\$250,000 for acquisitions
described in paragraph (1) of the Simplified Acquisition Threshold
definition at 2.101), is automatically reserved exclusively for small
business concerns and shall be set aside for small business unless the
Contracting Officer determines there is not a reasonable expectation of
obtaining offers from two or more responsible small business concerns
that are competitive in terms of market prices, quality, and delivery.
This obligation also applies to purchase card transactions. The
Contracting Officer shall set aside any acquisition over \$100,000 for
small business participation when there is a reasonable expectation that
(1) offers will be obtained from at least two responsible small business
concerns offering the products of different small business concerns (but
see paragraph (c) of this subsection); and (2) award will be made at
fair market prices.

[Awards to 8(a) Firms]{.underline}*.* For procurements with an
anticipated total value, including options, in excess of \$5,000,000 for
acquisitions assigned manufacturing North American Industry
Classification System (NAICS) codes and \$3,000,000 for all other
acquisitions, if an 8(a) certified firm can be identified with the
expectation that the award would be at a fair market price, an award may
be made noncompetitively to an 8(a) firm. If the procurement is valued
in excess of \$3 million (\$5 million for manufacturing) and two or more
capable 8(a) firms can be so identified, the procurement shall be set
aside for competition among 8(a) firms (see FAR 19.805-1(a)(2)).
Contracting activities may make awards under the 8(a) program with
DOE/NNSA Contracting Officers signing on behalf of SBA. This delegated
signature authority saves time and effort in completing the award
between DOE and SBA and the subcontract between SBA and the selected
8(a) firm.

[Set-Asides for Very Small Businesses]{.underline}*.* Under a
statutorily directed pilot program, purchases valued between \$2,500 and
\$50,000 must be set aside for very small businesses (those businesses
with no more than 15 employees and average annual receipts not exceeding
\$1 million). This pilot program applies to supplies procured by DOE
offices located in, and to services performed in, designated SBA
districts identified in FAR 19.902. Within this dollar range, awards
still may be made to 8(a) firms that are not very small businesses.

[Small Business Competitiveness Demonstration]{.underline}*.* DOE is
signatory to the Small Business Competitive Demonstration program
established by the Small Business Competitiveness Demonstration Program
Act of 1988. Currently, the program includes the following NAICS codes:
Construction (236,237,238), Non-nuclear Ship Repair (336611),
Architectural (541310) and Engineering Services (541330) including
Mapping and Surveying (541360, 541370), and Refuse and related services
(562). Additionally, as part of the Competitiveness Demonstration
Program, participating agencies periodically develop their own list of
Targeted Industry Categories (TICs). The intent is to expand
participation by small businesses in designated industries, through the
use of set-asides, increased management attention, and specifically
tailored acquisition procedures. Firms in these TICs should be
encouraged to use teaming and joint venture arrangements that enable
them to effectively compete for contracts. This list is currently under
review and will be distributed by OSDBU's when it is finalized.

[Price Evaluation Adjustment for Small Disadvantaged Business
Concerns]{.underline}. If a procurement is not otherwise set aside,
price preferences may be used to facilitate an award to certified small
disadvantaged businesses if the acquisition is for items or services in
the authorized NAICS industry subsector or HUBZone small business
concerns or to a firm that is both. For small disadvantaged businesses
the current 10% price preference is known as a "price evaluation
adjustment" (see FAR 19.1101). For HUBZone small business concerns, the
10% price preference is known as a "price evaluation preference" (see
FAR 19.1307). If a firm is both a HUBZone small business concern and a
small disadvantaged business competing for work in one of the designated
NAICS industry subsectors, the two preferences can be combined entitling
the firm to a 20% price evaluation preference (see FAR 19.1307(d)).

[Set-Asides for HUBZone Small Business Concerns]{.underline}*.* If there
is a reasonable expectation that proposals will be received from two or
more small businesses certified by the SBA as Historically Underutilized
Business Zone concerns and the award would be made at a fair market
price, FAR 19.1305(b) requires that the award be set aside for HUBZone
small business concerns.

[HUBZone sole source awards]{.underline}*.* Contracting Officers may
award contracts to HUBZone small business concerns on a sole source
basis without considering small business set-asides provided the
acquisition meets requirements of FAR 19.1306(a).

[Awards to Native American Business, Tribal Governments, and Alaskan
Native Corporations]{.underline}*.*

According to the SBA regulations (see 13 CFR 124.109); a business owned
and controlled by a qualifying Native American tribe may qualify as a
small disadvantaged business or, as an 8(a) firm, if accepted into the
SBA program. Such firms may also qualify as HUBZone small business
concerns (13 CFR 126) and would thus be eligible for HUBZone sole source
awards (see FAR 19.1306), HUBZone set-asides (see FAR 19.1305), and the
price evaluation preference for HUBZone small business concerns (see FAR
19.1307). SBA\'s rules for businesses owned and controlled by recognized
tribal governments and for Alaskan Native Corporations (ANC) that have
been admitted to SBA's 8(a) program (see 13 CFR 124.109) include special
provisions that do not apply to other 8(a) concerns. Specifically, the
8(a) competitive thresholds of \$5,000,000 for acquisitions assigned
manufacturing NAICS codes and \$3,000,000 for all other acquisitions
that normally apply to 8(a) acquisitions do not apply to awards made to
8(a) businesses owned by tribal governments or ANCs. That is, awards
valued in excess of the competitive threshold may be made to such
entities on a sole source basis without regard to the estimated cost of
the acquisition (see FAR 19.805-1 and 13 CFR 124.506(a)(iii) and (b)).

[Awards to service-disabled veteran-owned small business
concerns]{.underline}*.* On December 16, 2003, President Bush signed the
Veterans Benefits Act of 2003 (Public Law No. 108-183 at section 308).
This new law requires federal agencies and departments to give special
consideration to small business concerns owned and controlled by
service-disabled veterans during federal contracting and procurement. An
interim rule amending the FAR to implement section 308 of the Veterans
Benefits Act of 2003 was published in the May 5, 2004 issue of the
Federal Register. The interim rule can be found online at:
<http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2004/pdf/04-9752.pdf>

**B. SMALL BUSINESS PROCUREMENT TOOLS**

######## 

######## **Mentor-Protégé/Teaming**

A proven method of increasing the participation of small businesses in
the award of prime contracts is the use of teaming arrangements. DOE and
SBA have Mentor-Protégé programs that promote teaming. Contracting
Officers who seek to increase contract awards to small businesses can
use either the DOE or SBA Mentor-Protégé program. However, if award is
made under the DOE program, the Department will not receive credit for a
prime contract award as an 8(a) or small business award.

DOE's regulations, which provide for a Mentor-Protégé Program, are at
DEAR 919.70. The DOE Mentor‑Protégé Program is designed to encourage
prime contractors to assist small disadvantaged firms certified by the
SBA under Section 8(a) of the Small Business Act, other small
disadvantaged businesses, women‑owned small businesses, Historically
Black Colleges and Universities (HBCU), other minority institutions of
higher learning, and small business concerns owned and controlled by
service disabled veterans in enhancing their capabilities to perform
contracts and subcontracts.

DOE's Mentor-Protégé Program seeks to foster long‑term business
relationships between these small business entities and prime
contractors, and to increase the overall number of these small business
entities that receive contract and subcontract awards.

SBA's regulations (see 13 CFR 121.103(f)(3)(iii)) provide for a joint
venture that may include a large business and an 8(a) firm which qualify
as a Mentor and Protégé, respectively, under SBA's Mentor-Protégé
Program (see 13 CFR 124.520). Such a joint venture will be recognized as
small for the size standard corresponding to the NAICS code assigned to
the procurement, and for purposes of 8(a) sole source procurements, as
long as the participating Protégé 8(a) firm has not reached the dollar
limit set forth at 13 CFR 124.519. Note: DOE Mentor-Protégé Program
participants are not recognized as a small business in a joint venture
arrangement.

**Multiple Award Contracts**

Solicitations for multiple award contracts (MACs) should be structured
in a manner that will guarantee small business firms an opportunity to
compete for prime contracts, which then will allow them to compete for
individual orders under the contracts. The following techniques should
be applied when using MACs to fill program requirements: (1) Contracting
Officers should work closely with program officials and their Small
Business Program Manager to identify small business opportunities early
in the acquisition planning process; (2) Business strategies such as
teaming arrangements should be encouraged in an effort to maximize
opportunities for small businesses. Teaming arrangements not only
increase business opportunities for small businesses, but also expand
the skill mix of the team in some cases; (3) Multiple award contracts
should be set-aside exclusively for competition among small businesses,
to the greatest extent practicable; (4) If a total set-aside is not
practicable, consideration should be given to identifying opportunities
for a component of the statement of work to be set-aside for competition
among small businesses; and (5) If a total or partial set-aside is not
feasible, consideration should be given to reserving and specifying in
the solicitation, a certain number of awards for small businesses.

**Governmentwide Acquisition Contracts**

A Governmentwide Acquisition Contract (GWAC)\" is a task-order or
delivery-order contract for information technology established by one
agency for Governmentwide use. GWACs also are referred to as
"multi-agency" or "omnibus" contracts. GWACs often simplify the
acquisition process for the authorizing agency as the contracting agency
may maintain, and make available to the authorizing agency, their list
of pre-screened contractors capable of performing certain types of
requirements. The Department of Commerce's GWAC is entitled "COMMerce
Information Technology Solutions or "COMMITS" and can be found online
at: <http://www.commits.doc.gov/> . A searchable directory of GWACs,
multi-agency contracts, Federal Supply Schedule contracts, and other
procurement instruments intended for use by multiple agencies, can be
found online at: <http://www.contractdirectory.gov/>.

**C. SMALL BUSINESS MARKET RESEARCH**

[Sources Sought Synopsis]{.underline}. In accordance with FAR 5.2,
Synopses of Proposed Contract Actions: Sources Sought Synopsis is a
notice published in FedBizOpps at <http://www.fedbizopps.gov/> to
improve small business access to acquisition information and enhance
competition by identifying contracting and subcontracting opportunities.
Although the notice includes \"screening criteria\", the criteria are
not used to \"qualify\" potential sources or to exclude potential
competitors. The purposes of screening respondents are to allow the
government to assess the potential competitive base, to determine
whether a \"Justification for other than full and open competition\" is
required, or whether various set-asides are appropriate.

[Source Lists]{.underline}. The Program Manager and the Contracting
Officer should work together to develop a list of sources to which the
solicitation is transmitted. The source list should include those
potential offerors who have responded affirmatively to the FedBizOpps
announcement and those potential offerors whose past and present
experience \-- in terms of performance capability, logistic support,
financial status, production capacity, etc. \-- have demonstrated that
they could perform the contract and would be inclined to submit a
proposal. If in response to the FedBizOpps notice, a source that is not
on the list requests a copy of the solicitation, it will be furnished a
copy.

## [Bidders List]{.underline}. FAR 14.204, Records of invitations for bids and records of bids, requires that each contracting office shall retain a record of each invitation that it issues and each abstract or record of bids. Contracting Officers shall review and utilize the information available in connection with subsequent acquisitions of the same or similar items. The file for each invitation shall show the distribution that was made and the date the invitation was issued. The names and addresses of prospective bidders who requested the invitation and were not included on the original solicitation list shall be added to the list and made a part of the record. 

[Other Market Research Efforts]{.underline}. FAR 10.002(b)(2) includes
additional ways agencies can determine industry's capabilities such as:
(1) Contacting knowledgeable individuals in Government and industry
regarding market capabilities to meet requirements; (2) Reviewing
results of recent market research for similar or identical requirements;
(3) Publishing formal requests for information in appropriate technical
or scientific journals or business publications; (4) Querying the
Governmentwide database of contracts and other procurement instruments
intended for use by multiple agencies available at
[www.contractdirectory.gov](http://www.contractdirectory.gov/) and other
Government and commercial databases; (5) Participating in interactive,
on-line communication among industry, acquisition personnel, and
customers; (6) Obtaining source lists of similar items from other
contracting activities or agencies, trade associations or other sources;
(7) Reviewing catalogs and other generally available product literature
published by manufacturers, distributors, and dealers or available
on-line; and (8) Conducting interchange meetings or holding
presolicitation conferences to involve potential offerors early in the
acquisition process.

**D. SMALL BUSINESS ACQUISITION PLANNING**

**Advanced Planning Acquisition Team**

DOE has established an "Advanced Planning Acquisition Team" (APAT),
comprised of the Office of Procurement and Assistance Management, the
OSDBU, the Small Business Administration Procurement Center
Representative (SBA-PCR) and the element requesting the acquisition. The
Contracting Officer will be refer to the OSDBU all proposed acquisitions
over \$3 million (new or extension requests of existing acquisitions)
which have not been proposed for small business set aside. OSDBU will
review the analysis and conclusions with respect to the proposed action
to determine if it is justified to not set it aside and, when justified,
identify strategies to maximize small business participation as
subcontractors. These reviews will apply to all procurement requests,
including M&O contracts, orders against GSA schedules, and orders
against GWACS.

The Contracting Officer shall submit the request for review to the OSDBU
allowing 10 business days for the review process. The request for review
will include the following: copies of the procurement request and the
statement of work; the source list; and a statement of the reason(s) it
cannot be set-aside. \[Note the APAT requirement does not apply to
NNSA.\]

**Small Business Program Managers**

Contracting activity small business program managers, designated by the
Head of the Contracting Activity (HCA), should perform the following
functions: (1) Participate in the planning of, and make recommendations
as to set aside, for acquisitions over \$100,000. The review process
should address 8(a), HUBZone small business, small disadvantaged
business, small business, service-disabled veteran-owned small business,
and women-owned small business concerns; (2) Conduct the review before
the issuance of the solicitation and complete the DOE Form 4220.2,
Section 8(a)/Small Business Set-Aside Review; (3) Maintain copies of all
completed DOE Form 4220.2, Section 8(a)/Small Business Set-Aside Review
to the Small Business Program Manager for all requirements exceeding
\$1,000,000 \[\$100,000 applies to NNSA\] ; and (4) Maintain liaison
with the small business community.

**Contract Bundling**

The consolidation of smaller contracts that have been performed, or
could have been performed, by small business concerns into a single
contract awarded to a large business may have detrimental effects on
some small businesses. As a consequence, Congress enacted legislation to
regulate the consolidation of contracts. If contract consolidation is
otherwise meritorious, such consolidated procurement should be awarded
to the maximum extent practicable to small business as specified in FAR
Subpart 19.5. By definition, consolidated contracts awarded to small
businesses are not bundled contracts. Likewise, M&O contracts are not
bundled contracts. If a consolidated procurement is not set aside for
small business, the Contracting Officer should rethink the acquisition
strategy.

FAR 2.101 defines contract bundling as, "Consolidating 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- (i) The diversity, size, or specialized nature of the
elements of the performance specified; (ii) The aggregate dollar value
of the anticipated award; (iii) The geographical dispersion of the
contract performance sites; or (iv) Any combination of the factors
described in paragraphs (i), (ii), and (iii) of this definition."
\"Separate smaller contract\" as used in this definition, means a
contract that has been performed by one or more small business concerns
or that was suitable for award to one or more small business concerns.
\"Single contract\" as used in this definition, includes multiple awards
of indefinite-quantity contracts under a single solicitation for the
same or similar supplies or services to two or more sources (see FAR
16.504(c)); and an order placed against an indefinite quantity contract
under a Federal Supply Schedule contract; or task-order contract or
delivery-order contract awarded by another agency (i.e., Governmentwide
acquisition contract or multi-agency contract). This definition does not
apply to a contract that will be awarded and performed entirely outside
of the United States.

Contracting activities are required to coordinate with the SBA
Procurement Center Representative (SBA-PCR) on acquisition strategies or
plans contemplating awards at or above \$5,000,000.

Program offices proposing to bundle a contract must quantify identified
benefits and explain how their impact would be measurably substantial.
Reduction of administrative or personnel costs alone is not sufficient
justification for bundling unless the cost savings are expected to be at
least 10 percent of the estimated contract value (including options) of
the bundled requirements if the value is \$75 million or less; or 5
percent of the estimated contract value (including options), if the
value exceeds \$75 million.

If the proposed acquisition strategy involves substantial bundling
(i.e., any bundling that results in a contract with an average annual
value of \$5 million or more), the Contracting Officer must include the
following in acquisition strategy documentation: (1) the specific
measurably substantial benefits or the criticality of bundling to the
Department's mission; and (2) plans to preserve and promote small
business participation as prime contractors and efforts to include small
businesses as subcontractors. Plans to preserve and promote small
business participation in a bundled contract might include teaming by
small business for the prime contract and may include the following: a
factor to evaluate past performance under previous subcontracting plans;

and inclusion of the clause at 52.219-10, Incentive Subcontracting
Program in the resulting contract.

The APAT has been designated as the Department's focal point for the
review of bundled acquisitions, excluding NNSA. DOE program offices
intending to proceed with a bundled procurement must submit the
acquisition to the Team for review to ensure conformance with the
statutory requirements regarding bundling, and to identify ways to
maximize the participation of small businesses in the procurement.
Should the Team determine that the proposed bundling of a contract is
not necessary and there is no agreement between the program office and
the Team about the need to bundle, the matter will be referred to the
Deputy Secretary through the HCA and Senior Procurement Executive.

The Deputy Secretary, without power of delegation, may determine that
bundling is necessary and justified if: (1) the expected benefits do not
meet the thresholds identified in this section, but are critical to
mission success; and (2) the acquisition strategy provides for maximum
practicable participation by small business concerns.

**[Part II. Subcontract Awards to Small Business]{.underline}**

HCAs must ensure that purchasing systems of contractors for the
management and operation of major sites and facilities include small
business outreach programs. Contracting Officers shall ensure: (1) that
all M&O contractors, except small businesses, with contracts over
\$500,000 (\$1 million if construction) have a small business
subcontracting plan in place that has aggressive small business goals
and (2) that subcontract reports, Standard Form (SF) 294, Subcontracting
Report for Individual Contracts, and (SF) 295, Summary Subcontract
Report, are submitted in a timely and accurate fashion reporting the
actual small business achievements. Additionally, Contracting Officers,
in consultation with Small Business Program Managers, shall meet
periodically with directors of contractor purchasing to review the
status of the contractor's performance against its small business
subcontracting plan.

**A. SUBCONTRACTING PLANS**

Every subcontracting plan should, at a minimum, support achievement of
the agency-wide goals negotiated with the SBA. Subcontracting plans
reflecting less than the agency-wide goals must be approved at the HCA
level with a copy of the justification forwarded to the OSDBU. \[Note
this requirement does not apply to NNSA.\] The Small Business Program
Manager should review all subcontracting plans prior to acceptance.
Small Business Program Managers should review, prior to submission
through the Subcontracts Reporting System (SRS), and maintain copies of
the SF 294 and SF 295.

**B. SUBCONTRACTING PROCEDURES:**

**8(a) Pilot Program**

Contractors responsible for the management or operation of sites and
facilities are authorized to award subcontracts with a value of \$5
million or less for manufacturing NAICS codes and \$3 million or less
for all other acquisitions on a noncompetitive basis to firms certified
as participants by the SBA under its 8(a) program. Contractors may also
reserve for competition among 8(a) firms requirements in excess of those
thresholds. The contractor shall assure that awards are made at fair
market prices and are identified as awards to 8(a) firms and Small
Disadvantaged Businesses (SDBs) under the reporting provisions of the
Small Business Subcontracting Plan clause. A special effort may be made
to identify and make awards to 8(a) firms in HUBZones. If such a program
is instituted, the contractor shall assure that awards are made at fair
market prices.

**HUBZone Set-Aside**

*Awards to HUBZone 8(a) Firms.* For procurements under \$3 million (\$5
million for manufacturing NAICS codes) where an 8(a) certified firm can
be identified and award can be made at a fair market price, an award may
be made noncompetitively to a HUBZone 8(a). If the procurement is valued
in excess of \$3 million (\$5 million for manufacturing) and two more
HUBZone 8(a) firms can be identified, the procurement may be set aside
for competition among HUBZone 8(a) firms.

Contractors responsible for the management and operation of DOE sites
and facilities are authorized to use HUBZone set-aside and HUBZone sole
source procurement techniques in the award of subcontracts under
conditions similar to those applicable to the award of Federal prime
contracts.

**Women-Owned Small Business Evaluation Preference**

Contractors responsible for the management and operation of sites and
facilities are authorized to provide for an evaluation criterion that
reflects a preference in the award of subcontracts to firms that propose
to make significant use of women-owned small business (WOSB) concerns in
the performance of the proposed subcontract.

**Discretionary Set-Asides**

Contractors responsible for the management and operation of sites and
facilities are authorized to set aside purchases at any dollar value for
award to small businesses and to make purchases valued up to \$50,000
\[\$100,000 for NNSA contractors\] on a sole source basis to small
businesses. If such programs are instituted, the contractor shall assure
that awards are to be made at fair market prices.

**DOE Mentor-Protégé Program**

Contracting Officers should encourage prime contractors to enter into
Mentor-Protégé agreements with small businesses. DOE regulations that
provide for a Mentor-Protégé Program can be found at DEAR 919.70. The
Department's Mentor-Protégé Program seeks to foster long‑term business
relationships between small business entities and prime contractors, and
to increase the overall number of small business entities that receive
contract and subcontract awards.

Mentors recognized under the DOE Mentor-Protégé Program are authorized,
subject to the best commercial practices and procedures required by DEAR
970.4402-2(d), to award noncompetitive subcontracts, of any dollar
value, to their Protégés. Further, other site and facilities management
contractors may award noncompetitive subcontracts to a Protégé of
another DOE Mentor contractor if those awards are made at fair market
prices. OSDBU maintains a current listing of active Mentor-Protégé
agreements.

#####  

##### 

##### 

##### [Part III. Other Considerations]{.underline} 

**A. SECURITY CLEARANCES**

Much of the Department's work is classified and performance of that work
requires cleared facilities and staff. For many small businesses,
obtaining appropriate clearances may require background checks that
often take three months to complete; whereas, large businesses are more
likely to have personnel and facilities that already have the necessary
security clearances. Contracting Officers should consider the following
when processing procurements that involve classified work:

Security personnel should be consulted when preparing draft statements
of work that may involve security requirements to assure that the
security requirements are not overstated.

Solicitations should be issued and the award made sufficiently in
advance to allow for the processing of required security clearances. The
absence of existing personnel security clearances should not be the sole
basis for denying an award. Offerors should be allowed a reasonable time
for the workforce of the successful offeror to be cleared.

Solicitations that require security clearances could provide for the
issuance of a notice to proceed when the security requirements have been
satisfied.

Solicitations that require security clearances for the successful
offeror should include a statement that employees who have been cleared
by [any Federal agency]{.underline} may meet the security requirements
of the contract.

If the personnel security clearance required is level "L" (i.e., secret)
it may be that a full background investigation would not be required,
presenting no particular obstacle to participation by small businesses.
If the clearance required were level "Q" (i.e., top secret, or higher) a
background investigation would be required. Security directives provide
for expedited background investigation where a level "Q" clearance is
required.

Personnel security clearances may be expedited if the time required for
standard processing will result in serious delay or interference in an
operation or project essential to the Department's mission. In certain
circumstances (e.g., urgent need) and under certain conditions (e.g.,

completion of psychological, drug, and polygraph tests), an interim
clearance may be granted while a background investigation is being
conducted.

Further information is contained in a pamphlet, *DOE's Security
Requirements for Small Business Contractors*. It can be found at the
bottom of the following web site: <http://www1.pr.doe.gov/small.html>

**B. SMALL BUSINESS STATISTICS**

**Collecting and Reporting Small Business Contracting Information**

The systems for collecting and reporting small business award
information are the [Procurement and Assistance Data System]{.underline}
(PADS - *DOE prime contract award data*), and the [Subcontract Reporting
System]{.underline} (SRS - *prime contractor subcontracting award
data*).

The accuracy of the statistics reported in these systems is vital to the
credibility of the Department's performance in this area, which is
continually monitored by Congress, the SBA, trade organizations, small
business advocacy groups, and other entities.

**Improving the Accuracy of Small Business Information**

HCAs should assure that proper quality control systems are in place to
ensure the accurate reporting of small business data.

HCAs should include the accuracy of Federal contract data as a
compliance standard for the contracting activities' Federal assessment
program.

The Contracting Officer is responsible for taking all reasonable steps
to validate an offeror's Small Business representation prior to any
Federal prime contract award. \[Note: NNSA Contracting Officers shall
adhere to the FAR standard of self-certification.\]

The Contracting Officer should refer to the SBA and the Office of the
Inspector General any certification of small business status that is
inaccurate and refer instances of misrepresentation of small business
status to the DOE/NNSA Procurement Executive for consideration of
suspension/debarment.

The Contracting Officer is responsible for ensuring that M&O contractors
(1) establish reasonable controls to ensure small business
subcontracting data reports are accurate, including data submissions to
electronic data collection systems; (2) maintain current and accurate
listings of small business suppliers to the extent such listings are
used; (3) obtain certification of size status; (4) conform to the list
of exclusions from subcontract reporting in the SBA document, *Goaling
Guidelines for the Small Business Preference Programs for Prime and
Subcontract Federal Procurement Goals & Achievements*, as provided by
OSDBU; and (5) refer to the Contracting Officer instances of small
business status misrepresentation.

**C. CENTRAL CONTRACTOR REGISTRATION DATABASE**

The Federal Government maintains an interactive web site to access the
Central Contractor Registration (CCR) program at <http://www.ccr.gov/>.
CCR is a small businesses database of with advanced search capabilities.
It allows firms to register their company profile and allows Contracting
Officers to search the database with results stratified by numerous
qualifiers

(e.g., WOSB, SDB, 8(a), HUBZone). The qualifiers can be combined to
narrow the search results to very specific categories of small
businesses having very specific qualifications. Contractors may also use
the search capabilities of CCR.

**D. SECRETARY'S SMALL BUSINESS AWARDS**

DOE recognizes the outstanding small business achievements of its
departmental elements, prime contractors and other organizations. 
 Colleagues and headquarters personnel nominate outstanding individuals
to receive the "Secretary's Small Business Awards."  The awards program
was established in 1978. The following awards are presented annually:

**Element Awards:**

\(1\) Award for the element that breaks out the greatest percent of
small business awards from an existing facility management contract.

\(2\) Award for the element with the greatest percentage increase in
awards to small business from the prior year.

\(3\) Award for the element with the highest percentage of diversity in
its small business awards.

**M&O Awards:**

\(1\) Award for the M&O with the most significant small business teaming
arrangements.

\(2\) Award for the M&O with the greatest percentage increase in awards
to small business from the past year.

\(3\) Award for the M&O with the highest percentage of diversity in its
small business awards.

**Small Business Program Manager Awards:**

\(1\) Award for the SB program manager who has made the most progress in
promoting small business contracting at the HQ level.

\(2\) Award for the SB program manager who has made the most progress in
promoting small business contracting at the field level.

\(3\) Award for the SB program manager who has made the most progress in
promoting small business contracting at the M&O level.

**Mentor-Protégé Award:**

Award for the most outstanding mentor, protégé or mentor-protégé team.