PART 1819

**SMALL BUSINESS PROGRAMS**

# TABLE OF CONTENTS

1819.001 Definitions.

**SUBPART [1819.2](#OLE_LINK2) POLICIES**

1819.201 General policy.

**SUBPART [1819.3](#OLE_LINK3) DETERMINATION OF SMALL BUSINESS STATUS**

**FOR SMALL BUSINESS PROGRAMS**

1819.302 Protesting a small business representation.

**SUBPART [1819.5](#OLE_LINK5) SET-ASIDES FOR SMALL** **BUSINESS**

1819.502 Setting aside acquisitions.

1819.502-70 Non-initiation of set-asides.

1819.502-3 Partial set-asides.

1819.502-370 NASA reporting requirements.

1819.505 Rejecting Small Business Administration recommendations.

**SUBPART [1819.6](#OLE_LINK6) CERTIFICATES OF** **COMPETENCY AND**

**DETERMINATIONS OF RESPONSIBILITY**

1819.602 Procedures.

1819.602-1 Referral.

1819.602-3 Resolving differences between the agency and the Small
Business

Administration.

1819.602-370 NASA procedures.

**SUBPART [1819.7](#OLE_LINK7) THE SMALL BUSINESS SUBCONTRACTING
PROGRAM**

1819.705-2 Determining the need for a subcontracting plan.

1819.705-4 Reviewing the subcontracting plan.

1819.705-470 Acquisition-specific subcontracting goals.

1819.708 Contract clauses.

1819.708-70 NASA solicitation provision and contract clause.

**SUBPART [1819.8](#OLE_LINK8) CONTRACTING WITH THE** **SMALL BUSINESS**

**ADMINISTRATION** **(THE** **8(a) PROGRAM)**

1819.800 General

1819.804 Evaluation, offering, and acceptance.

1819.804-1 Agency evaluation.

1819.812 Contract Administration

**SUBPART   [1819.10](#OLE_LINK10) SMALL BUSINESS COMPETITIVENESS**

**DEMONSTRATION PROGRAM**

1819.1005 Applicability.

**SUBPART [1819.70](#OLE_LINK70) NASA 8 PERCENT GOAL**

1819.7000 General.

1819.7002 Contracting officer responsibility.

1819.7003 Contract clause.

**SUBPART [1819.71](#OLE_LINK71) NASA RURAL AREA SMALL BUSINESS PLAN**

1819.7101 Definition.

1819.7102 General.

1819.7103 Solicitation provision and contract clause.

**SUBPART [1819.72](#OLE_LINK72) NASA MENTOR-PROTÉGÉ PROGRAM**

1819.7201 Scope of subpart.

1819.7202 Definitions.

1819.7203 Non-affiliation.

1819.7204 Transportability of features from the Department of Defense

(DOD) Mentor-Protégé program to NASA contractors.

1819.7205 General policy.

1819.7206 Incentives for prime contractor participation.

1819.7207 Measurement of Program success.

1819.7208 Mentor firms.

1819.7209 Protégé firms.

1819.7210 Selection of protégé firms.

1819.7211 Application process for mentor firms to participate in the
Program.

1819.7212 OSDBU review and approval process of agreement.

1819.7213 Agreement contents.

1819.7214 Developmental assistance.

1819.7215 Obligation.

1819.7216 Internal controls.

1819.7217 Reports.

1819.7218 Program review.

1819.7219 Solicitation provision and contract clauses.

**SUBPART 1819.73 SMALL BUSINESS INNOVATION RESEARCH (SBIR) AND**

**SMALL BUSINESS TECHNOLOGY TRANSFER (STTR)**

**PROGRAMS**

1819.7301 Scope of subpart.

1819.7302 NASA contract clauses.

## PART 1819

**SMALL BUSINESS PROGRAMS**

**1819.001 Definitions.**

**"High-Tech"** as used in this part means research and/or development
efforts that are within or advance the state-of-the-art in a technology
discipline and are performed primarily by professional engineers,
scientists, and highly skilled and trained technicians or specialists.

**Subpart** []{#OLE_LINK2 .anchor}**1819.2\--Policies**

**1819.201 General policy.**

(a)**(i)** NASA is committed to providing to small, veteran-owned small
business, service-disabled veteran-owned small business, HUBZone, small
disadvantaged, and women-owned small business concerns, maximum
practicable opportunities to participate in Agency acquisitions at the
prime contract level. The participation of NASA prime contractors in
providing subcontracting opportunities to such entities is also an
essential part of the Agency\'s commitment. The participation of these
entities is particularly emphasized in high-technology areas where they
have not traditionally dominated.

**(ii)** NASA annually negotiates Agency small, service-disabled
veteran-owned small business, HUBZone, small disadvantaged, and
women-owned small business prime and subcontracting goals with the Small
Business Administration pursuant to section 15(g) of the Small Business
Act (15 U.S.C. 644). In addition, NASA has the following statutory goals
based on the total value of prime and subcontract awards:

**(A)** Under Public Laws 101-144, 101-507, and 102-389, an annual goal
of at least 8 percent for prime and subcontract awards to small
disadvantaged business (SDB) concerns, Historically Black Colleges and
Universities (HBCUs), minority institutions (MIs), and women-owned small
businesses (WOSBs) (see 1819.7000); and

**(B)** Under 10 U.S.C. 2323, an annual goal of 5 percent for prime and
subcontract awards to SDBs, HBCUs, and WOSBs.

\(d\) The Assistant Administrator for Small and Disadvantaged Business
Utilization is the Agency official responsible for carrying out the
duties in **[FAR
19.201(d)](http://www.acquisition.gov/far/current/html/Subpart 19_2.html#wp1084234).**

(e)**(i)** The center director shall designate a qualified individual in
the contracting office as a small business specialist to provide a
central point of contact to which small business concerns may direct
inquiries concerning small business matters and participation in NASA
acquisitions. The small business specialist shall also perform other
functions specifically set forth in this section 1819.201 or that the
procurement officer may prescribe, with the concurrence of the Assistant
Administrator for Small and Disadvantaged Business Utilization, for
implementing the Small Business Program. When the center director
considers that the volume of acquisitions or the functions relating to
acquisitions at the center do not warrant a full-time small business
specialist, these duties may be assigned to procurement personnel on a
part-time basis. However, whether full-time or part-time, that assigned
individual, when performing the duties of a small business specialist,
shall report directly to the Procurement Officer.

**(ii)** Small business specialists appointed under paragraph (d)(i) of
this section shall perform the following duties, as the procurement
officer determines appropriate to the installation:

**(A)** Maintain a program designed to locate capable small business
sources, including those located in labor surplus areas, for current and
future acquisitions.

**(B)**  Coordinate inquiries and requests for advice from small
business concerns on acquisition matters.

**(C)**  Before issuance of solicitations or contract modifications for
additional supplies or services, determine that small business concerns
will receive adequate consideration, including making recommendations
for initiation of set-asides (see [**FAR
19.5**](http://www.acquisition.gov/far/current/html/Subpart 19_5.html#wp1086824)
and
[**19.8**](http://www.acquisition.gov/far/current/html/Subpart 19_8.html#wp1092796))
and for taking action in accordance with [**FAR
19.506(b)**](http://www.acquisition.gov/far/current/html/Subpart 19_5.html#wp1086824)
and 1819.502-70. Participate and provide input early in the acquisition
planning phase of proposed acquisitions, including procurement strategy
meetings.

**(D)** If small business concerns cannot be given an opportunity to
compete because adequate specifications or drawings are not available,
work with appropriate technical and contracting personnel to ensure that
necessary specifications or drawings for current or future acquisitions
will be available.

**(E)**  Review acquisitions for possible breakout of items suitable for
acquisition from small business concerns.

**(F)**  Advise small business concerns regarding financial assistance
available under laws and regulations, assist such concerns in applying
for such assistance, and ensure that small business concerns\' requests
for financial assistance are not treated as a handicap in securing the
award of contracts.

**(G)**  Participate in responsibility determinations (see [**FAR
9.103**](http://www.acquisition.gov/far/current/html/Subpart 9_1.html#wp1084058))
when small business concerns are involved.

**(H)**  Participate in the evaluation of prime contractors\' small
business subcontracting programs (see [**FAR
19.705-4**](http://www.acquisition.gov/far/current/html/Subpart 19_7.html#wp1088741)).

**(I)**  Review and make appropriate recommendations to the contracting
officer on any proposal to furnish Government-owned facilities to a
contractor if such action may hurt the Small Business Program.

**(J)**  Ensure that participation of small business concerns is
accurately reported.

**(K)** Make available to SBA copies of solicitations when requested.

**(L)** Act as liaison between contracting officers and SBA area offices
and representatives in connection with set-asides, certificates of
competency, and any other matters in which the Small Business Program
may be involved.

**(M)** In cooperation with contracting officers and technical
personnel, seek and develop information on the technical competence of
small business concerns for research and development contracts.
Regularly bring to the attention of contracting officers and technical
personnel descriptive data, brochures, and other information regarding
small business concerns that are apparently competent to perform
research and development work in fields in which NASA is interested.

**(N)**  When a small business concern\'s offer has been rejected for
nonresponsiveness or nonresponsibility, assist that concern, upon its
request, in understanding such requirements for future awards.

**(O)** Advise center personnel, as necessary, on new Governmentwide and
Agency-approved small business programs and initiatives.

\(f\) (1) The NASA Ombudsman, the Director of the Contract Management
Division, is the designated official for determining whether the use of
the SDB mechanism in [**FAR Subpart
19.11**](http://www.acquisition.gov/far/current/html/Subpart 19_11.html#wp1076639)
has resulted in an undue burden on non-SDB firms in the Department of
Commerce designated NAICS Major Groups, or is otherwise inappropriate.

**Subpart** []{#OLE_LINK3 .anchor}**1819.3\--Determination of Small
Business Status for Small Business Programs**

**1819.302** **Protesting** **a** **small** **business**
**representation.**

\(d\) (1) The contracting officer shall not make awards of small
business set-aside acquisitions before the expiration of the period for
receipt of a size standard protest.

**Subpart** []{#OLE_LINK5 .anchor}**1819.5\--Set-Asides for Small
Business**

**1819.502** **Setting** **aside** **acquisitions.**

**1819.502-70 Non-initiation of set-asides.**

\(a\) All cases involving the non-initiation of a set-aside, whether
resulting from a joint decision of the small business specialist and the
contracting officer or a decision by the contracting officer alone,
require referral to the SBA representative (if one is assigned and
available) for review.

\(b\) If the small business specialist recommends that an individual
acquisition or a class of acquisitions, or a portion thereof, be set
aside, the contracting officer shall promptly either concur in or
disapprove the recommendation, stating in writing the reasons for
disapproval.

\(c\) When an SBA representative is assigned and available and the
contracting officer disapproves the small business specialist\'s
recommendation, the contracting officer shall promptly refer the case to
the SBA representative for review. The small business specialist shall
take no further appeal action. The SBA representative must either concur
with the decision or appeal the case to the procurement officer under
[**FAR
19.505**](http://www.arnet.gov/far/current/html/Subpart_19_5.html#1046533).
If the procurement officer approves the contracting officer's decision
and the SBA appeals under FAR 19.505(c), the procurement officer shall
forward the required written justification, including a history of
discussions between the center and the SBA and rationale for the
decision, to the Headquarters Office of Procurement, Program Operations
Division.

\(d\) The contracting officer shall prepare, sign, and retain in the
contract file a memorandum of nonconcurrence in a recommended set-aside
action.

**1819.502-3 Partial set-asides.**

**1819.502-370 NASA Reporting Requirements.**

The contracting officer shall separately report, in accordance with
[**Subpart
1804.6**](http://www.hq.nasa.gov/office/procurement/regs/1804.html),
awards of the non-set-aside portions of small business set-aside
acquisitions.

**1819.505 Rejecting Small Business Administration recommendations**.

See 1819.502-70.

**Subpart** []{#OLE_LINK6 .anchor}**1819.6\--Certificates of Competency
and Determinations of Responsibility**

**1819.602 Procedures.**

**1819.602-1 Referral.**

\(a\) On proposed awards exceeding the simplified acquisition threshold,
the contracting officer should consider requesting a preaward survey
(see [**FAR
9.106**](http://www.arnet.gov/far/current/html/Subpart_9_1.html#1046654))
before determining that a responsive small business firm is not
responsible. The scope of the preaward survey request should be limited
to those elements of responsibility that are questioned.

\(2\) The contracting officer shall forward a copy of the referral to
SBA through the procurement officer to the Headquarters Office of Small
and Disadvantaged Business Utilization (Code K).

**1819.602-3 Resolving** **differences** **between** **the** **agency**
**and** **the Small Business** **Administration.**

**1819.602-370 NASA Procedures.**

\(a\) When agreement cannot be reached between the contracting officer
and the SBA Area Office, the contracting officer shall forward to the
Headquarters Office of Procurement (Code HS) on an expedited basis, a
complete case file with a request that the case be considered for appeal
to SBA Headquarters. The contracting officer shall include the data
already furnished to SBA, SBA\'s rationale for proposing to issue a COC,
and the contracting officer\'s comments. The contracting officer shall
suspend acquisition action until informed by Code HS of the final
decision in the case.

\(b\) If the Office of Procurement concludes that the referral to SBA
should be withdrawn and a contract awarded without benefit of a COC,
Code HS shall inform the contracting officer.

\(c\) If the Office of Procurement agrees with the contracting
officer\'s recommended appeal action, the Assistant Administrator for
Procurement shall forward the appeal through the Office of Small and
Disadvantaged Business Utilization (Code K) to SBA Headquarters.

**Subpart** []{#OLE_LINK7 .anchor}**1819.7\--The Small Business
Subcontracting Program**

**1819.705-2 Determining the need for a subcontracting plan.**

\(d\) Solicitations for competitive negotiated acquisitions shall
require proposed subcontracting plans with initial proposals (see
1819.708(b)(1)). For sole source negotiated acquisitions, the contractor
shall be required to submit a proposed subcontracting plan with the
proposal.

**1819.705-4 Reviewing the subcontracting plan.**

**1819.705-470 Acquisition-specific subcontracting goals.**

Section 1819.201 addresses Agencywide goals at the combined prime and
subcontract levels. Appropriate subcontracting goals for an individual
acquisition, however, are to be independently determined on the basis of
the specific circumstances of the acquisition, consistent with **[FAR
19.705-4](http://www.arnet.gov/far/current/html/Subpart_19_7.html#1046549)**
and 1819.7002(b), and not on the basis of an Agencywide or center goal.
Acquisition-specific subcontracting goals should reflect maximum
practicable opportunities for all categories of small business concerns
to participate in NASA programs, consistent with efficient performance.
The methods outlined in NASA Policy Directive [**(NPD)
5000.2**](http://nodis3.gsfc.nasa.gov/library/displayDir.cfm?Internal_ID=N_PD_5000_002A_&page_name=main),
Uniform Methodology for Determination of Small Disadvantaged
Subcontracting Goals, may also be useful in establishing reasonable
subcontracting goals for small, veteran-owned small business,
service-disabled veteran-owned small business, HUBZone, and women-owned
small business concerns.

**1819.708 Contract clauses.**

\(b\) (1) The contracting officer shall use the clause at **[FAR
52.219-9](http://www.arnet.gov/far/current/html/52_217_221.html#1046690)**
with its Alternate II when contracting by negotiation.

**1819.708-70** **NASA solicitation provision** **and contract clause.**

\(a\) The contracting officer shall insert the provision at
[**1852.219-73**](http://www.hq.nasa.gov/office/procurement/regs/5217-25.htm#1852.219-73),
Small Business Subcontracting Plan, in invitations for bids containing
the clause at FAR 52.219-9 with its Alternate I. Insert in the last
sentence the number of calendar days after request that the offeror must
submit a complete plan.

\(b\) The contracting officer shall insert the clause at 1852.219-75,
Small Business Subcontracting Reporting, in solicitations and contracts
containing the clause at FAR 52.219-9, except for contracts covered by
an approved commercial plan.

**Subpart** []{#OLE_LINK8 .anchor}**1819.8\--Contracting with the Small
Business Administration**

**(The 8(a) Program)**

**1819.800 General.**

\(f\) NASA and the Small Business Administration maintain a Partnership
Agreement (PA) to allow direct contracting with 8(a) firms by NASA.
Specific guidance on the implementation of the PA through a class
deviation to certain requirements set forth in Subpart 19.8 is set forth
in Procurement Information (PIC) 08-06. Centers are to refer to the PIC
to determine if direct contracting is currently authorized**.**

**1819.804** **Evaluation, offering, and** **acceptance.**

**1819.804-1 Agency evaluation.**

The small business specialist shall review and evaluate all acquisition
requirements to determine their suitability for offering to SBA for 8(a)
acceptance and make a recommendation to the contracting officer
concerning award to SBA.

**1819.812 Contract Administration.**

\(d\) The Small Business Act, at 15 USC 637(a)(21)(A), requires a
contract awarded under the 8(a) Program to be performed by the concern
that initially received the contract. If the owner(s) upon whom
eligibility was based subsequently relinquishes ownership or control, or
enters into any agreement to relinquish ownership or control, the
contract shall be terminated for convenience unless a request for waiver
is submitted by the contractor, or by NASA. Only the Small Business
Administration (SBA) may waive this requirement. Contracting Officers
must coordinate any planned requests for waiver of an 8(a) contract
termination with the Headquarters Office of Procurement (Program
Operations Division). The Headquarters Office of Procurement will review
and coordinate the package with Headquarters offices, as appropriate,
and will either forward the request to the Administrator for signature
or will advise the Contracting Officer of the decision not to submit the
request to the SBA.

**Subpart** []{#OLE_LINK10 .anchor}**1819.10\--Small Business
Competitiveness Demonstration Program**

**1819.1005 Applicability.**

\(b\) The targeted industry categories for NASA and their North American
Industry Classification System (NAICS) codes are:

  -------------- --------------------------------------------------------
  **NAICS Code** **Industry Category**

  334111         Electronic Computer Manufacturing

  334418         Printed Circuit Assembly (Electronic Assembly)
                 Manufacturing

  334613         Magnetic and Optical Recording Media Manufacturing

  334119         Other Computer Peripheral Equipment Manufacturing

  33422          Radio and Television Broadcasting and Wireless
                 Communication Equipment Manufacturing

  336415         Guided Missile and Space Vehicle Propulsion Unit and
                 Propulsion Unit Parts Manufacturing

  336419         Other Guided Missile and Space Vehicle Parts and
                 Auxiliary Equipment Manufacturing

  334511         Search, Detection, Navigation, Guidance, Aeronautical,
                 and Nautical Systems and Instrument Manufacturing

  333314         Optical Instrument and Lens Manufacturing

  541511         Custom Computer Programming Services

  541512         Computer Systems Design Services

  51421          Data Processing Services

  541519         Other Computer Related Services
  -------------- --------------------------------------------------------

**Subpart** []{#OLE_LINK70 .anchor}**1819.70\--NASA 8 Percent Goal**

**1819.7000 General.**

Public Laws 101-144, 101-507, and 102-389 require the NASA Administrator
to ensure, to the fullest extent possible, that at least 8 percent of
Federal funding for prime and subcontracts awarded in support of
authorized programs, including the space station by the time operational
status is obtained, be made available to small disadvantaged business
concerns, Historically Black Colleges and Universities, minority
institutions, and women-owned small business concerns.

**1819.7002 Contracting officer responsibility.**

\(a\) Contracting officers must seek out as potential sources small
disadvantaged business concerns, women-owned small business concerns,
historically black colleges or universities and minority institutions,
and give full consideration to these entities to satisfy NASA
requirements. The participation of NASA prime contractors is also
essential to meeting the Agency's 8 percent goal.

\(b\) NASA Policy Directive [**(NPD)
5000.2**](http://nodis3.gsfc.nasa.gov/library/displayDir.cfm?Internal_ID=N_PD_5000_002A_&page_name=main),
Uniform Methodology for Determination of Small Disadvantaged
Subcontracting Goals, contains guidance on developing realistic goals.
It is applicable to acquisitions expected to exceed \$50 million,
including options. The methodology may be used for lesser value
acquisitions.

**1819.7003 Contract clause.**

The contracting officer shall insert the clause at
[**1852.219-76**](http://www.hq.nasa.gov/office/procurement/regs/5217-25.htm#1852.219-76),
NASA 8 Percent Goal, in all solicitations and contracts other than those
below the simplified acquisition threshold or when the contract,
together with all its subcontracts, is to be performed entirely outside
of any State, territory, or possession of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, and the Trust
Territory of the Pacific Islands.

**Subpart** []{#OLE_LINK71 .anchor}**1819.71\--NASA Rural Area Small
Business Plan**

**1819.7101 Definition.**

**\"Rural area\"** means a county with a population of fewer than twenty
thousand individuals.

**1819.7102 General.**

Pursuant to Public Law 100-590, NASA established a Rural Area Business
Enterprise Development Plan, including methods for encouraging prime and
subcontractors to use small business concerns located in rural areas as
subcontractors and suppliers. One method is to encourage the contractor
to use its best efforts to comply with the intent of the statute.

**1819.7103 Solicitation provision and** **contract clause.**

The contracting officer shall insert the clause at
[**1852.219-74**](http://www.hq.nasa.gov/office/procurement/regs/5217-25.htm#1852.219-74),
Use of Rural Area Small Businesses, in solicitations and contracts that
offer subcontracting possibilities or that are expected to exceed
\$550,000 (\$1,000,000 for construction of public facility) unless the
contract, together with all its subcontracts, is to be performed
entirely outside of any State, territory, or possession of

the United States, the District of Columbia, the Commonwealth of Puerto
Rico, and the Trust Territory of the Pacific Islands.

**Subpart** []{#OLE_LINK72 .anchor}**1819.72\--NASA Mentor-Protégé
Program**

**1819.7201 Scope of subpart**.

The NASA Mentor-Protégé Program is designed to incentivize NASA prime
contractors to assist small disadvantaged business (SDB) concerns,
Historically Black Colleges and Universities (HBCUs), minority
institutions (MIs), and women-owned small business (WOSB) concerns, in
enhancing their capabilities to perform NASA contracts and subcontracts,
foster the establishment of long-term business relationships between
these entities and NASA prime contractors, and increase the overall
number of these entities that receive NASA contract and subcontract
awards.

**1819.7202 Definition.**

**"High-Tech"** is defined in 1819.001.

**1819.7203 Non-affiliation.**

For purposes of the Small Business Act, a protégé firm may not be
considered an affiliate of a mentor firm solely on the basis that the
protégé firm is receiving developmental assistance referred to in
1819.7214 from such mentor firm under the Program. In addition, NASA
shall not consider partial ownership, up to 10 percent, of a Department
of Defense (DOD)-sanctioned protégé firm by its DOD mentor to constitute
affiliation.

**1819.7204 Transportability of features from the Department of Defense
(DOD) Mentor- Protégé Program to NASA contractors.**

\(a\) In accordance with the benefits authorized by the DOD
Mentor-Protégé Program (Public Law 101-510, Section 831, as amended by
Public Law 102-190, Section 814), a NASA contractor who is also an
approved DOD mentor can transfer credit features to their NASA
contracts.

\(b\) NASA prime contractors, who are approved DOD mentors, can award
subcontracts noncompetitively under their NASA contracts to the protégés
which they are assisting under the DOD Program (Public Law 101-510,
Section 831(f)(2)).

\(c\) NASA prime contractors may count the costs of developmental
assistance provided to protégés being assisted under the DOD Program
toward meeting the goals in their subcontracting plans under their NASA
prime contracts (Public Law 102-190, Section 814). Limitations which may
reduce the value of this benefit include:

\(1\) Credit toward attaining subcontracting goals is available only to
the extent that the developmental assistance costs have not been
reimbursed to the contractor by DOD as direct or indirect costs; or

\(2\) The credit is available to meet the goals of a NASA subcontracting
plan only to the extent that it has not been applied to a DOD
subcontracting plan. The same unreimbursed developmental assistance
costs cannot be counted toward meeting the subcontracting goals of more
than one prime contract. These costs would accrue from credit for the
multiples attributed to assistance provided by Small Business
Development Centers, Historically Black Colleges and Universities and
minority institutions.

\(d\) The features identified in paragraphs (a), (b) and (c) of this
section point out the portability of features from the DOD
Mentor-Protégé Program to NASA prime contractors. NASA mentors will be
held to show \"good faith\" by providing actual developmental assistance
beyond transferring credit from activity in the DOD Program to NASA
subcontracting plans.

**1819.7205 General policy.**

\(a\) Eligible large business prime contractors, not included on the
\"[**List of Parties Excluded from Federal Procurement and
Nonprocurement Programs**](http://epls.arnet.gov/)\", who have at least
one active subcontracting plan, and who are approved as mentor firms may
enter into agreements with eligible entities (as defined in 1819.7209)
as protégés to provide appropriate developmental assistance to enhance
the capabilities of protégés to perform as subcontractors and suppliers.
Eligible small business prime contractors, not included on the \"List of
Parties Excluded from Federal Procurement and Nonprocurement Programs\",
and that are capable of providing developmental assistance to protégés,
may also be approved as mentors. An active mentor-protégé arrangement
requires the protégé to be a subcontractor under the mentor\'s prime
contract with NASA.

\(b\) The Mentor-Protégé program may be used in cost reimbursement type
contracts and contracts that include an award fee incentive. Costs
incurred by a mentor to provide the developmental assistance described
in 1819.7214 are allowable. Except for cost-plus-award-fee contracts,
such proposed costs shall not be included in the cost base used to
develop a fee objective or to negotiate fee. On contracts with an award
fee incentive, a contractor's Mentor-Protégé efforts shall be evaluated
under the award fee evaluations.

**1819.7206 Incentives for prime contractor participation.**

\(a\) Proposed mentor-protégé efforts, except for the extent of
participation of protégés as subcontractors, shall be evaluated under
the Mission Suitability factor . The participation of SDB protégés as
subcontractors shall be evaluated separately as a Mission Suitability
subfactor (see [**FAR
15.304(c)(4)**](http://www.arnet.gov/far/current/html/Subpart_15_3.html#1046497)
and
[**19.1202**](http://www.arnet.gov/far/current/html/Subpart_19_12.html#1046483)).
The participation of other categories of protégés as subcontractors may
be evaluated separately as part of the evaluation of proposed
subcontracted efforts.

\(b\) Under contracts with award fee incentives, approved mentor firms
shall be eligible to earn award fee associated with their performance as
a mentor by performance evaluation period. For purposes of earning award
fee, the mentor firm\'s performance shall be evaluated against the
criteria described in the clause at
[**1852.219-79**](http://www.hq.nasa.gov/office/procurement/regs/5217-25.htm#1852.219-79),
Mentor Requirements and Evaluation. This award fee evaluation shall not
include assessment of the contractor's achievement of [**FAR
52.219-9**](http://www.arnet.gov/far/current/html/52_217_221.html#1046690)
subcontracting plan SDB goals or proposed monetary targets for SDB
subcontracting (see [**FAR
19.1203)**](http://www.arnet.gov/far/current/html/Subpart_19_12.html#1055473).

**1819.7207 Measurement of Program success.**

The overall success of the NASA Mentor-Protégé Program encompassing all
participating mentors and protégés will be measured by the extent to
which it results in:

\(a\) An increase in the number, dollar value and percentage of
subcontracts awarded to protégés by mentor firms under NASA contracts
since the date of entry into the Program;

\(b\) An increase in the number and dollar value of contract and
subcontract awards to protégé firms since the time of their entry into
the Program (under NASA contracts, contracts awarded by other Federal
agencies and under commercial contracts);

\(c\) An increase in the number and dollar value of subcontracts awarded
to a protégé firm by its mentor firm; and

\(d\) An increase in subcontracting with protégé firms in industry
categories where they have not traditionally participated within the
mentor firm\'s activity.

**1819.7208 Mentor firms.**

\(a\) *Eligibility:*

\(1\) Contractors eligible for receipt of government contracts;

\(2\) Large prime contractors performing under contracts with at least
one negotiated subcontracting plan as required by [**FAR
19.7**](http://www.arnet.gov/far/current/html/Subpart_19_7.html#1046478);
and

\(3\) Small business prime contractors that can provide developmental
assistance to enhance the capabilities of protégés to perform as
subcontractors and suppliers.

\(b\) Mentors will be encouraged to identify and select as protégés:

\(1\) A broad base of firms including those defined as emerging firms
(e.g., a protégé whose size is no greater than 50 percent of the size
standard applicable to the NAICS code assigned to a contracting
opportunity);

\(2\) Firms in addition to those with whom they have established
business relationships; and

\(3\) High-tech firms.

**1819.7209 Protégé firms.**

\(a\) For selection as a protégé, a firm must be:

\(1\) An SDB in the NAICS Major Groups as determined by the Department
of Commerce (see [**FAR
19.201(b)**](http://www.arnet.gov/far/current/html/Subpart_19_2.html#1046479)),
HBCU, MI, or WOSB;

\(2\) Certified as small in the NAICS code for the services or supplies
to be provided by the protégé under its subcontract to the mentor; and

\(3\) Eligible for receipt of government contracts.

\(b\) Except for SDBs, a protégé firm may self-certify to a mentor firm
that it meets the requirements set forth in paragraph (a) of this
section. Mentors may rely in good faith on written representations by
potential protégés that they meet the specified eligibility
requirements. SDB status eligibility and documentation requirements are
determined according to [**FAR
19.304**](http://www.arnet.gov/far/current/html/Subpart_19_3.html#1046534).

\(c\) Protégés may have multiple mentors. Protégés participating in
mentor-protégé programs in addition to the NASA Program should maintain
a system for preparing separate reports of mentoring activity for each
agency\'s program.

**1819.7210 Selection of protégé firms.**

\(a\) Mentor firms will be solely responsible for selecting protégé
firms. The mentor is encouraged to identify and select the types of
protégé firms listed in 1819.7208(b).

\(b\) Mentor firms may have more than one protégé.

\(c\) The selection of protégé firms by mentor firms may not be
protested, except for a protest regarding the size or eligibility status
of an entity selected by a mentor to be a protégé. Such protests shall
be handled in accordance with [**FAR
19.703(b)**](http://www.arnet.gov/far/current/html/Subpart_19_7.html#1046509).
The contracting officer shall notify the Headquarters Office of Small
and Disadvantaged Business Utilization (OSDBU) (Code K) of the protest.

**1819.7211 Application process for mentor firms to participate in the
Program.**

\(a\) Prime contractors interested in becoming a mentor firm must submit
a request to the NASA OSDBU to be approved under the Program. The
application will be evaluated on the extent to which the company plans
to provide developmental assistance. The information required in
paragraph (b) of this section must be submitted to be considered for
approval as a mentor firm.

\(b\) A proposed mentor must submit the following information to the
NASA OSDBU:

\(1\) A statement that the mentor firm is currently performing under at
least one active approved subcontracting plan (small business exempted)
and that they are eligible, as of the date of application, for the award
of Federal contracts;

\(2\) The cognizant NASA contract number(s), type of contract, period of
performance (including options), title of technical program effort, name
of NASA Program Manager (including contact information) and name of the
NASA field center where support is provided;

\(3\) The number of proposed mentor-protégé arrangements;

\(4\) Data on all current NASA contracts and subcontracts to include the
contract/subcontract number(s), period of performance, awarding NASA
installation or contractor and contract/subcontract value(s) including
options;

\(5\) Data on total number and dollar value of subcontracts awarded
under NASA prime contracts within the past 2 years and the number and
dollar value of such subcontracts awarded to entities defined as
protégés.

\(6\) Information on the proposed types of developmental assistance. For
each proposed mentor-protégé relationship include information on the
company\'s ability to provide developmental assistance to the identified
protégé firm and how that assistance will potentially increase
subcontracting opportunities for the protégé firm, including
subcontracting opportunities in industry categories where these entities
are not dominant in the company\'s current subcontractor base; and

\(7\) A Letter of Intent signed by both parties. At a minimum, the
Letter of Intent must include the stated commitment that the parties
intend to enter into a mentor-protégé agreement under the NASA Program,
that they intend to cooperate in the establishment of a suitable
developmental assistance program to meet their respective needs, and
that they agree to comply with the obligations in 1819.7215 and all
other provisions governing the Program.

**1819.7212 OSDBU review and approval process of agreement.**

\(a\) The information specified in 1819.7211(b) is reviewed by the NASA
OSDBU. This review will be completed no later than 30 days after receipt
by the OSDBU. The OSDBU will provide a copy of the submitted information
to the cognizant NASA technical program manager and contracting officer
for a parallel review and concurrence.

\(b\) If OSDBU approves the application, then the mentor \--

\(1\) Negotiates an agreement with the protégé; and

\(2\) Submits an original and two (2) copies of the agreement to the
OSDBU for approval by the NASA Mentor-Protégé program manager, the NASA
technical program manager, and the contracting officer.

\(c\) Upon agreement approval, the mentor may implement a developmental
assistance program.

\(d\) An approved agreement will be incorporated into the mentor\'s
contract with NASA. It should be added to the subcontracting plan in
contracts which contain such a plan.

\(e\) If OSDBU disapproves the application, then the mentor may provide
additional information for reconsideration. The review of any
supplemental material will be completed within 30 days after receipt by
the OSDBU. Upon finding deficiencies that NASA considers correctable,
the OSDBU will notify the mentor and request information to be provided
within 30 days that may correct the deficiencies.

**1819.7213 Agreement contents.**

The contents of the agreement must contain:

\(a\) Names and addresses of mentor and protégé firms and a point of
contact within both firms who will oversee the agreement;

\(b\) Procedures for the mentor firm to notify the protégé firm, OSDBU,
and the contracting officer, in writing, at least 30 days in advance of
the mentor firm\'s intent to voluntarily withdraw from the Program;

\(c\) Procedures for a protégé firm to notify the mentor firm in writing
at least 30 days in advance of the protégé firm\'s intent to voluntarily
terminate the mentor-protégé agreement. The mentor shall notify the
OSDBU and the contracting officer immediately upon receipt of such
notice from the protégé;

\(d\) A description of the type of developmental program that will be
provided by the mentor firm to the protégé firm, to include a
description of the subcontract work, and a schedule for providing
assistance and criteria for evaluation of the protégé's developmental
success;

\(e\) A listing of the number and types of subcontracts to be awarded to
the protégé firm;

\(f\) Program participation term;

\(g\) Termination procedures;

\(h\) Plan for accomplishing work should the agreement be terminated;
and

\(i\) Other terms and conditions, as appropriate.

**1819.7214 Developmental assistance.**

The forms of developmental assistance a mentor can provide to a protégé
include:

\(a\) Management guidance relating to \--

\(1\) Financial management,

\(2\) Organizational management,

\(3\) Overall business management/planning, and

\(4\) Business development;

\(b\) Engineering and other technical assistance;

\(c\) Noncompetitive award of subcontracts under NASA contracts;

\(d\) Progress payments based on costs. The customary progress payment
rate for all NASA contracts with small disadvantaged businesses is 95
percent. This customary progress payment rate for small disadvantaged
businesses may be used by prime contractors;

\(e\) Advance payments. While a mentor can make advance payments to its
protégés who are performing as subcontractors, the mentor will only be
reimbursed by NASA for these costs if advance payments have been
authorized in accordance with
[**1832.409-170**](http://www.hq.nasa.gov/office/procurement/regs/1832.htm#1832.409-170);

\(f\) Loans;

\(g\) Rent-free use of facilities and/or equipment; and

\(h\) Temporary assignment of personnel to the protégé for purpose of
training.

**1819.7215 Obligation**.

\(a\) The mentor or protégé may voluntarily withdraw from the Program as
mutually agreed by both mentor and protégé.

\(b\) Mentor and protégé firms will submit a \"lessons learned\"
evaluation to the NASA OSDBU at the conclusion of each NASA contract
subject to the approved Mentor-Protégé agreement.

**1819.7216 Internal controls.**

\(a\) The NASA OSDBU will manage the Program. Internal controls will be
established by the OSDBU to achieve the stated program objectives (by
serving as checks and balances against undesired actions or
consequences) such as:

\(1\) Reviewing and evaluating mentor applications for realism, validity
and accuracy of provided information;

\(2\) Reviewing any semi-annual progress reports submitted by mentors
and protégés on protégé development to measure protégé progress against
the master plan contained in the approved agreement.

\(3\) Site visits to NASA installation where mentor-protégé activity is
occurring.

\(b\) NASA may terminate mentor-protégé agreements for good cause and
exclude mentor or protégé firms from participating in the NASA program.
These actions shall be approved by the NASA OSDBU. NASA shall terminate
an agreement by delivering to the contractor a Notice specifying the
reason for termination and the effective date. Termination of an
agreement does not constitute a termination of the subcontract between
the mentor and the protégé. A plan for accomplishing the subcontract
effort should the agreement be terminated shall be submitted with the
agreement as required in NFS 1819.7213(h).

**1819.7217 Reports.**

\(a\) Semi-annual reports shall be submitted by the mentor to the NASA
Mentor-Protégé program manager, the NASA OSDBU, to include information
as outlined in
[**1852.219-79(b).**](http://www.hq.nasa.gov/office/procurement/regs/5217-25.htm#1852.219-79)

\(b\) Protégés are encouraged to submit semi-annual reports to the OSDBU
on Program progress pertaining to their mentor-protégé agreement.
However, costs associated with the preparation of these reports are
unallowable costs under Government contracts and will not be reimbursed
by the Government.

\(c\) The NASA technical program manager shall include an assessment of
the prime contractor\'s (mentor\'s) performance in the Mentor-Protégé
Program in a quarterly \'Strengths and Weaknesses\' evaluation report. A
copy of this assessment will be provided to the OSDBU and the
contracting officer.

\(d\) The NASA Mentor-Protégé program manager will submit semi-annual
reports to the cognizant contracting officer regarding the participating
prime contractor\'s performance in the Program for use in the award fee
determination process.

**1819.7218 Program review.**

At the conclusion of each year in the Mentor-Protégé Program, the prime
contractor and protégé, as appropriate, will formally brief the NASA
OSDBU, the technical program manager, and the contracting officer
regarding Program accomplishments pertaining to the approved agreement.
This review will be incorporated into the normal program review, where
applicable. A separate review will be scheduled for other contracts to
be held at the NASA work site location.

**1819.7219 Solicitation provision and contract clauses.**

\(a\) The contracting officer shall insert the clause at
[**1852.219-77**](http://www.hq.nasa.gov/office/procurement/regs/5217-25.htm#1852.219-77),
NASA Mentor-Protégé Program, in:

\(1\) Cost reimbursement solicitations and contracts, or solicitations
and contracts with award fee incentives, that include the clause at
[**FAR
52.219-9**](http://www.arnet.gov/far/current/html/52_217_221.html#1046690),
Small Business Subcontracting Plan;

\(2\) Small business set-asides of the contract types in (a)(1) of this
section with values exceeding \$550,000 (\$1,000,000 for construction)
that offer subcontracting opportunities.

\(b\) The contracting officer shall insert the clause at 1852.219-79,
Mentor Requirements and Evaluation, in contracts where the prime
contractor is a participant in the NASA Mentor-Protégé Program.

**Subpart 1819.73\--Small Business Innovation Research (SBIR) and Small
Business Technology Transfer (STTR) Programs**

**1819.7301 Scope of subpart.**

The Small Business Innovation Research (SBIR) and Small Business
Technology Transfer (STTR) Programs were established and issued under
the authority of the Small Business Act codified at 15 U.S.C. 631, as
amended, and the Small Business Innovation Development Act of 1982
(Pub.L. 97-219), codified with amendments at 15 USC 638. The Small
Business Act requires that the Small Business Administration (SBA) issue
SBIR and STTR Program Policy Directives for the general conduct of the
SBIR/STTR Programs within the Federal Government. The statutory purpose
of the SBIR Program is to strengthen the role of innovative small
business concerns (SBCs) in federally-funded research or research and
development (R/R&D). Specific program purposes are to: stimulate
technological innovation; use small business to meet Federal R/R&D
needs; foster and encourage participation by socially and economically
disadvantaged SBCs, and by SBCs that are 51 percent owned and controlled
by women, in technological innovation; and increase private sector
commercialization of innovations derived from Federal R/R&D, thereby
increasing competition, productivity and economic growth. Federal
agencies participating in the SBIR/STTR Programs (SBIR/STTR agencies)
are obligated to follow the guidance provided by the SBA Policy
Directive. NASA is required to ensure its policies, regulations, and
guidance on the SBIR/STTR Programs are consistent with SBA's Policy
Directive. Contracting officers are required to insert the applicable
clauses identified in 1819.7302 in all SBIR and STTR contracts.

**1819.7302 NASA contract clauses.**

\(a\) Contracting officers shall insert the clause at 1852.219-80,
Limitation on Subcontracting -- SBIR Phase I Program, in all Phase I
contracts awarded under the Small Business Innovation Research (SBIR)
Program established pursuant to Pub.L. 97-219 (the Small Business
Innovation Development Act of 1982).

\(b\) Contracting officers shall insert the clause at 1852.219-81,
Limitation on Subcontracting -- SBIR Phase II Program, in all Phase II
contracts awarded under the Small Business Innovation Research (SBIR)
Program established pursuant to Pub.L. 97-219 (the Small Business
Innovation Development Act of 1982).

\(c\) Contracting officers shall insert the clause at 1852.219-82,
Limitation on Subcontracting -- STTR Program, in all contracts awarded
under the Small Business Technology Transfer (STTR) Program established
pursuant to Pub.L. 97-219 (the Small Business Innovation Development Act
of 1982).

\(d\) Contracting officers shall insert the clause at 1852.219-83,
Limitation of the Principal Investigator -- SBIR Program, in all
contracts awarded under the Small Business Innovation Research (SBIR)
Program established pursuant to Pub.L. 97-219 (the Small Business
Innovation Development Act of 1982).

\(e\) Contracting officers shall insert the clause at 1852.219-84,
Limitation of the Principal Investigator -- STTR Program, in all
contracts awarded under the Small Business Technology Transfer (STTR)
Program established pursuant to Pub.L. 97-219 (the Small Business
Innovation Development Act of 1982).

\(f\) Contracting officers shall insert the clause at 1852.219-85,
Conditions for Final Payment - SBIR and STTR Contracts, in all contracts
awarded under the Small Business Technology Transfer (STTR) Program and
in all Phase I and Phase II contracts awarded under the Small Business
Technology Transfer (STTR) Small Business Innovation Research (SBIR)
Program established pursuant to Pub.L. 97-219 (the Small Business
Innovation Development Act of 1982).