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                            Subpart 19.5 - Small Business Total Set-Asides, Partial Set-Asides, and Reserves
        
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FAC Number: 2024-03 Effective Date: 02/23/2024
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Subpart19.019.119.219.319.419.519.619.719.819.1319.1419.15
Section19.50119.50219.50319.50419.50519.50619.507
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Subpart 19.5 - Small Business Total Set-Asides, Partial Set-Asides, and ReservesSubpart 19.5 - Small Business Total Set-Asides, Partial Set-Asides, and Reserves    **Parent topic:**  Part 19 - Small Business Programs19.501 General.       (a)                                                         (1) The purpose of small business set-asides is to award certain acquisitions exclusively to small business concerns. A "set-aside for small business" is the limiting of an acquisition exclusively for participation by small business concerns. A small business set-aside may be open to any of the small business concerns identified at  19.000(a)(3). A small business set-aside of a single acquisition or a class of acquisitions may be total or partial.                                                            (2) The purpose of small business reserves is to award one or more multiple-award contracts to any of the small business concerns identified at  19.000(a)(3), under a full and open competition. A small business reserve shall not be used when the acquisition can be set aside, in total or in part.                                                                             (b) The contracting officer makes the determination to make a small business set-aside, in total or in part, or a reserve. The Small Business Administration (SBA) procurement center representative (PCR) (or, if a PCR is not assigned, see  19.402(a)) may make a recommendation to the contracting officer.                                          (c) The contracting officer shall review acquisitions to determine if they can be set aside, in total or in part, or reserved for small business, giving consideration to the recommendations of agency personnel in the Office of Small and Disadvantaged Business Utilization, or for the Department of Defense, in the Office of Small Business Programs. Agencies may establish threshold levels for this review depending upon their needs.                                          (d)                   At the request of an SBA PCR (or, if a PCR is not assigned, see  19.402(a)), the contracting officer shall make available for review at the contracting office (to the extent of the SBA representative's security clearance) any proposed acquisition in excess of the micro-purchase threshold.                                          (e) All solicitations involving set-asides, in total or in part, or reserves shall specify the NAICS code(s) and corresponding size standard(s) (see  19.102).                                          (f) Except as authorized by law, a contract may not be awarded as a result of a small business set-aside if the cost to the awarding agency exceeds the fair market price.                                          (g) For the applicability of the limitations on subcontracting and the nonmanufacturer rule, see  19.505.19.502 Setting aside acquisitions.    19.502-1 Requirements for setting	aside acquisitions.       (a) 						            The contracting officer shall	set aside an individual acquisition or class of acquisitions for	competition among small businesses when-                                                         (1) 								                It is determined	to be in the interest of maintaining or mobilizing the Nation’s	full productive capacity, war or national defense programs; or                                                            (2) 								                Assuring	that a fair proportion of Government contracts in each industry	is placed with small business concerns; and the circumstances described	in  19.502-2 or  19.502-3(a) exist.                                                                             (b) 						            The requirement in paragraph	(a) of this section does not apply to purchases at or below the	micro-purchase threshold, or purchases from required sources under  part  8(e.g., Committee	for Purchase From People Who are Blind or Severely Disabled).19.502-2 Total small business	set-asides.       (a) 						            Before setting aside an acquisition	under this paragraph, refer to  19.203(b). Each acquisition of supplies	or services that has an anticipated dollar value above the micro-purchase	threshold, but not over the simplified acquisition threshold, 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 fair market prices, quality, and delivery. If the	contracting officer receives only one acceptable offer from a responsible	small business concern in response to a set-aside, the contracting	officer should make an award to that firm. If the contracting officer	receives no acceptable offers from responsible small business concerns,	the set-aside shall be withdrawn and the requirement, if still valid,	shall be resolicited on an unrestricted basis. The small business	set-aside does not preclude the award of a contract as described	in  19.203.                                          (b) 						            Before	setting aside an acquisition under this paragraph, refer to  19.203(c). The contracting	officer shall set aside any acquisition over the simplified acquisition	threshold for small business participation when there is a	reasonable expectation that-                                                         (1) 								                Offers will	be obtained from at least two responsible small business concerns;	and                                                            (2) 								                Award will	be made at fair market prices. Total small business set-asides shall	not be made unless such a reasonable expectation exists (see  19.502-3 for partial set-asides).	Although past acquisition history and market research of an item or	similar items are always important, these are not the only factors	to be considered in determining whether a reasonable expectation	exists. In making research and development small business set-asides,	there must also be a reasonable expectation of obtaining from small	businesses the best scientific and technological sources consistent	with the demands of the proposed acquisition for the best mix of	cost, performances, and schedules.19.502-3 	Partial set-asides of contracts other than multiple-award contracts.       (a) 						            The contracting officer shall set aside a portion or portions of an acquisition, except for construction, for exclusive small business participation when—                                                         (1) 								                Market research indicates that a total set-aside is not appropriate (see  19.502-2);                                                            (2) 								                The requirement can be divided into distinct portions;                                                            (3) 								                The acquisition is not subject to simplified acquisition procedures;                                                            (4) 								                Two or more responsible small business concerns are reasonably expected to submit offers on the set-aside portion or portions of the acquisition that are competitive in terms of fair market prices, quality, and delivery;                                                            (5) 								                The specific program eligibility requirements identified in this part apply; and                                                            (6) 								                The solicitation will result in a contract other than a multiple-award contract (see  2.101 for definition of multiple-award contract).                                                                             (b) 						            When the contracting officer determines that a requirement is to be partially set aside, the solicitation shall identify which portion or portions are set aside and not set aside.                                          (c) 						            The contracting officer shall specify in the solicitation how offers shall be submitted with regard to the set-aside and non-set-aside portions.                                          (d) 						            Offers received from concerns that do not qualify as small business concerns shall be considered nonresponsive and shall be rejected on the set-aside portion of partial set-asides. However, before rejecting an offer otherwise eligible for award because of questions concerning the size representation, an SBA determination must be obtained (see  subpart  19.3).19.502-4 	Partial set-asides of multiple-award contracts.       (a) 						            In accordance with section 1331 of the Small Business Jobs Act of 2010 (   15 U.S.C. 644(r)(1)), contracting officers may, at their discretion, set aside a portion or portions of a multiple-award contract, except for construction, for any of the small business concerns identified at  19.000(a)(3) when—                                                         (1) 								                Market research indicates that a total set-aside is not appropriate (see  19.502-2);                                                            (2) 								                The requirement can be divided into distinct portions;                                                            (3) 								                The acquisition is not subject to simplified acquisition procedures;                                                            (4) 								                Two or more responsible small business concerns are reasonably expected to submit an offer on the set-aside portion or portions of the acquisition that are competitive in terms of fair market prices, quality, and delivery; and                                                            (5) 								                The specific program eligibility requirements identified in this part apply.                                                                             (b) 						            When the contracting officer determines that a requirement is to be partially set aside, the solicitation shall identify which portion or portions are set aside and not set aside.                                          (c) 						            The contracting officer shall specify in the solicitation how offers shall be submitted with regard to the set-aside and non-set-aside portions.                                          (d) 						            Offers received from concerns that do not qualify as small business concerns shall be considered nonresponsive and shall be rejected on the set-aside portion of partial set-asides. However, before rejecting an offer otherwise eligible for award because of questions concerning the size representation, an SBA determination must be obtained (see  subpart  19.3).19.502-5 	Insufficient reasons for not setting aside an acquisition.       None of the following is, in itself, sufficient cause for not setting aside an acquisition:                                       (a) 						            A large percentage of previous contracts for the required item(s) has been placed with small business concerns.                                          (b) 						            The item is on an established planning list under the Industrial Readiness Planning Program. However, a total small business set-aside shall not be made when the list contains a large business Planned Emergency Producer of the item(s) who has conveyed a desire to supply some or all of the required items.                                          (c) 						            The item is on a Qualified Products List. However, a total small business set-aside shall not be made if the list contains the products of large businesses unless none of the large businesses desire to participate in the acquisition.                                          (d) 						            A period of less than 30 days is available for receipt of offers.                                          (e) 						            The acquisition is classified.                                          (f) 						            Small business concerns are already receiving a fair proportion of the agency’s contracts for supplies and services.                                          (g) 						            A class small business set-aside of the item or service has been made by another contracting activity.                                          (h) 						            A "brand name or equal" product description will be used in the solicitation.19.502-6 	Setting aside a class of acquisitions for small business.       (a) 						            A class of acquisitions of selected products or services, or a portion of the acquisitions, may be set aside for exclusive participation by small business concerns if individual acquisitions in the class will meet the criteria in  19.502-1,  19.502-2, or  19.502-3(a). The determination to make a class small business set-aside shall not depend on the existence of a current acquisition if future acquisitions can be clearly foreseen.                                          (b) 						            The determination to set aside a class of acquisitions for small business may be either unilateral or joint.                                          (c) 						            Each class small business set-aside determination shall be in writing and must-                                                         (1) 								                Specifically identify the product(s) and service(s) it covers;                                                            (2) 								                Provide that the set-aside does not apply to any acquisition automatically set aside under  19.502-2(a).                                                            (3) 								                Provide that the set-aside applies only to the (named) contracting office(s) making the determination; and                                                            (4) 								                Provide that the set-aside does not apply to any individual acquisition if the requirement is not severable into two or more economic production runs or reasonable lots, in the case of a partial class set-aside.                                                                             (d) 						            The contracting officer shall review each individual acquisition arising under a class small business set-aside to identify any changes in the magnitude of requirements, specifications, delivery requirements, or competitive market conditions that have occurred since the initial approval of the class set-aside. If there are any changes of such a material nature as to result in probable payment of more than a fair market price by the Government or in a change in the capability of small business concerns to satisfy the requirements, the contracting officer may withdraw or modify (see  19.502-9(a)) the unilateral or joint set-aside by giving written notice to the SBA PCR (or, if a PCR is not assigned, see  19.402(a)) stating the reasons.19.502-7 	Inclusion	of Federal Prison Industries, Inc.       When using competitive procedures in	accordance with  8.602(a)(4),	agencies shall include Federal Prison Industries, Inc. (FPI), in	the solicitation process and consider a timely offer from FPI.19.502-8 Rejecting Small Business Administration recommendations.       (a) If the contracting officer rejects a recommendation of the SBA, written notice shall be furnished to the appropriate SBA representative within 5 working days of the contracting officer's receipt of the recommendation.                                          (b) The SBA PCR (or, if a PCR is not                   assigned, see  19.402(a)) may appeal the                   contracting officer's rejection to the head of the contracting                   activity within 2 working days after receiving the notice                   (except see  19.1305(d), 19.1405(e),                   and  19.1505(i)). The head of the                   contracting activity  shall render a decision in writing, and                   provide it to the SBA representative within 7 working days.                   Pending issuance of a decision to the SBA representative, the                   contracting officer shall suspend action on the                   acquisition.                                          (c) If the head of the contracting activity agrees that the contracting officer’s rejection was appropriate-                                                         (1) Within 2 working days, the SBA procurement center representative (or, if a procurement center representative is not assigned, see  19.402(a)) may request the contracting officer to suspend action on the acquisition until the SBA Administrator appeals to the agency head (see paragraph (f) of this section); and                                                            (2) The SBA must be allowed 15 working days after making such a written request, within which the Administrator of SBA–                                                                           (i) May appeal to the Secretary of the Department concerned; and                                                                              (ii) Must notify the contracting officer whether the further appeal has, in fact, been taken. If notification is not received by the contracting officer within the 15-day period, it is deemed that the SBA request to suspend the contract action has been withdrawn and that an appeal to the Secretary was not taken.                                                                                                                            (d) When the contracting officer has been notified within the 15-day period that the SBA has appealed to the agency head, the head of the contracting activity (or designee) shall forward justification for its decision to the agency head. The contracting officer shall suspend contract action until notification is received that the SBA appeal has been settled.                                          (e) The agency head shall reply to the SBA within 30 working days after receiving the appeal. The decision of the agency head shall be final.                                          (f) A request to suspend action on an acquisition need not be honored if the contracting officer determines that proceeding to contract award and performance is in the public interest. The contracting officer shall include in the contract file a statement of the facts justifying the determination, and shall promptly notify the SBA representative of the determination and provide a copy of the justification.19.502-9 Withdrawing or modifying small business set-asides.       (a) 						            If, before award of a contract involving a total or partial small business set-aside, the contracting officer considers that award would be detrimental to the public interest (e.g., payment of more than a fair market price), the contracting officer may withdraw the small business set-aside, whether it was unilateral or joint. The contracting officer shall initiate a withdrawal of an individual total or partial small business set-aside, by giving written notice to the agency small business specialist and the SBA PCR (or, if a PCR is not assigned, see  19.402(a)) stating the reasons. In a similar manner, the contracting officer may modify a unilateral or joint class small business set-aside to withdraw one or more individual acquisitions.                                          (b) 						            If the agency small business specialist does not agree to a withdrawal or modification, the case shall be promptly referred to the SBA PCR (or, if a PCR is not assigned, see  19.402(a)) for review.                                          (c) 						            The contracting officer shall prepare a written statement supporting any withdrawal or modification of a small business set-aside and include it in the contract file.19.502-10 	Automatic	dissolution of a small business set-aside.       (a) 						            If a small business set-aside	acquisition or portion of an acquisition is not awarded, the unilateral	or joint determination to set the acquisition aside is automatically	dissolved for the unawarded portion of the set-aside. The required	supplies and/or services for which no award was made may be acquired	by sealed bidding or negotiation, as appropriate.                                          (b) 						            Before	issuing a solicitation for the items called for in a small business	set-aside that was dissolved, the contracting officer shall ensure	that the delivery schedule is realistic in the light of all relevant	factors, including the capabilities of small business concerns.19.502-11 Solicitation notice regarding administration of change orders for construction.       See  36.211 for the requirement to provide a notice to offerors regarding definitization of equitable adjustments for change orders under construction contracts.19.503 	Reserves.       (a) 						            In accordance with section 1331 of the Small Business Jobs Act of 2010 (  15 U.S.C. 644(r)(3)) and   13 CFR 125.2(e)(4), contracting officers may, at their discretion when conducting multiple-award procurements using full and open competition, reserve one or more contract awards for any of the small business concerns identified in  19.000(a)(3), when market research indicates—                                                         (1) 								                A total set-aside is not feasible because there is no reasonable expectation of receiving offers that are competitive in terms of fair market prices, quality, and delivery from at least two responsible small business concerns identified in  19.000(a)(3), that can perform the entire requirement; and                                                            (2) 								                A partial set-aside is not feasible because—                                                                           (i) 										                    The contracting officer is unable to divide the requirement into distinct portions; or                                                                              (ii) 										                    There is no reasonable expectation that at least two responsible small business concerns identified in  19.000(a)(3) can perform any portion of the requirement competitively in terms of fair market price, quality, and delivery.                                                                                                                            (b) 						            A reserve will result in one of the following:                                                         (1) 								                One or more contract awards to any one or more types of small business concerns identified in  19.000(a)(3).                                                            (2) 								                In the case of a solicitation of a bundled requirement that will result in a multiple-award contract, an award to one or more small businesses with a Small Business Teaming Arrangement.                                                                             (c) 						            The specific program eligibility requirements identified in this part apply.                                          (d) 						            The limitations on subcontracting and the nonmanufacturer rule (see  19.505) do not apply to reserves at the contract level, but shall apply to orders that are set aside or issued directly to one small business concern under  19.504(c)(1)(ii).19.504 	Orders under multiple-award contracts.       (a)                   *General.* In accordance with section 1331 of the Small Business Jobs Act of 2010 (   15 U.S.C. 644(r)(2)), contracting officers may, at their discretion, set aside orders placed under multiple-award contracts for any of the small business concerns identified in  19.000(a)(3).                                                         (1)                          								                The contracting officer shall state in the solicitation and resulting contract whether order set-asides will be discretionary or mandatory when the conditions in  19.502-2 are met at the time of order set-aside, and the specific program eligibility requirements, as applicable, are also then met.                                                            (2)                          								                When setting aside an order at or below the simplified acquisition threshold, the contracting officer may set aside the order for any of the small business concerns identified in  19.000(a)(3).                                                            (3)                          								                When setting aside an order above the simplified acquisition threshold, the contracting officer shall first consider setting aside the order for the small business socioeconomic contracting programs (*i.e.*, 8(a), HUBZone, service-disabled veteran-owned small business, and women-owned small business) before considering a small business set-aside.                                                            (4)                          								                The contracting officer shall comply with the specific program eligibility requirements identified in this part in addition to the ordering procedures for a multiple-award contract (for orders placed under the Federal Supply Schedules Program, see  8.405-5; for orders placed under all other multiple-award contracts, see  16.505).                                                                             (b)                   *Orders under set-aside contracts—*                                                         (1)                         *Orders under total set-aside contracts.* Under a total small business set-aside, contracting officers may at their discretion set aside orders for any of the small business socioeconomic concerns identified in 19.000(a)(3) provided that the requirements at paragraph (a) of this section, 19.502-2(b), and the specific program eligibility requirements are met.                                                            (2)                         *Orders under partial set-aside contracts*.                                                                           (i)                                Only small business concerns awarded contracts for the portion(s) that were set aside under the solicitation for the multiple-award contract may compete for orders issued under those portion(s).                                                                              (ii)                                Small business awardees may compete against other than small business awardees for an order issued under the portion of the multiple-award contract that was not set aside, if the small business received a contract award for the non-set-aside portion.                                                                                                                            (c)                   *Orders under reserves.*                                                         (1)                          								                The contracting officer may—                                                                           (i)                                										                    Set aside orders for any of the small business concerns identified in  19.000(a)(3) when there are two or more contract awards for that type of small business concern; or                                                                              (ii)                                										                    Issue orders directly to one small business concern for work that it can perform when there is only one contract award to any one type of small business concern identified in  19.000(a)(3).                                                                                                           (2)                          								                Small business awardees may compete against other than small business awardees for an order that is not set aside if the small business received a contract award for the supplies or services being ordered.19.505           Limitations on subcontracting and nonmanufacturer rule.       (a)                   *Applicability.*                                                         (1)This section applies to small business set-asides above the simplified acquisition threshold and orders issued directly to a small business in accordance with  19.504(c)(1)(ii) above the simplified acquisition threshold.                                                            (2)This section applies, regardless of dollar value, to the following awards under subparts  19.8,  19.13,  19.14, and  19.15:                                                                           (i)Contracts that are set aside.                                                                              (ii)Contracts that are awarded on a sole-source basis.                                                                              (iii)Orders that are set-aside as described in  8.405-5 and  16.505(b)(2)(i)(F).                                                                              (iv)Orders that are issued directly in accordance with  19.504(c)(1)(ii).                                                                              (v)Contracts that use the HUBZone price evaluation preference to award to a HUBZone small business concern unless the concern waived the evaluation preference.                                                                                                                            (b)                                                         (1)                         *Limitations on subcontracting.* A small business concern subject to the limitations on subcontracting is required to comply with the following:                                                                           (i)For a contract or order assigned a North American Industry Classification System (NAICS) code for services (except construction), the concern will not pay more than 50 percent of the amount paid by the Government for contract performance to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the concern's 50 percent subcontract amount that cannot be exceeded. When a contract includes both services and supplies, the 50 percent limitation shall apply only to the service portion of the contract.                                                                              (ii)For a contract or order assigned a NAICS code for supplies or products (other than a procurement from a nonmanufacturer of such supplies or products), the concern will not pay more than 50 percent of the amount paid by the Government for contract performance, excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the concern's 50 percent subcontract amount that cannot be exceeded. When a contract includes both supplies and services, the 50 percent limitation shall apply only to the supply portion of the contract.                                                                              (iii)For a contract or order assigned a NAICS code for general construction, the concern will not pay more than 85 percent of the amount paid by the Government for contract performance, excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the concern's 85 percent subcontract amount that cannot be exceeded.                                                                              (iv)For a contract or order assigned a NAICS code for construction by special trade contractors, the concern will not pay more than 75 percent of the amount paid by the Government for contract performance, excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the concern’s 75 percent subcontract amount that cannot be exceeded.                                                                                                           (2)                         *Compliance period.* A small business contractor subject to the limitations on subcontracting is required to comply with the limitations on subcontracting—                                                                           (i)For a contract that has been set aside, either by the end of the base term and then by the end of each subsequent option period, or by the end of the performance period for each order issued under the contract, at the contracting officer's discretion; and                                                                              (ii)For an order set aside under a contract as described in  19.504(a), (b), or (c)(1)(i) or an order issued in accordance with  19.504(c)(1)(ii), by the end of the performance period for the order.                                                                                                                            (c)                   *Nonmanufacturer rule.* The nonmanufacturer rule applies to nonmanufacturers in accordance with paragraph (c)(1) of this section and to kit assemblers who are nonmanufacturers in accordance with paragraph (c)(2) of this section.                                                         (1)                         *Nonmanufacturers.* Any concern, including a supplier, that is awarded a contract or order subject to the nonmanufacturer rule, other than a construction or service acquisition, but proposes to furnish an end item that it did not itself manufacture, process, or produce (*i.e.*, a “nonmanufacturer”), is required to—                                                                           (i)Provide an end item that a small business has manufactured, processed, or produced in the United States or its outlying areas (see paragraph (c)(3) of this section for determining the manufacturer of an end item);                                                                              (ii)Not exceed 500 employees, or 150 employees for information technology value-added resellers under NAICS code 541519;                                                                              (iii)Be primarily engaged in the retail or wholesale trade and normally sell the type of item being supplied; and                                                                              (iv)Take ownership or possession of the item(s) with its personnel, equipment, or facilities in a manner consistent with industry practice; for example, providing storage, transportation, or delivery.                                                                                                           (2)                         *Kit assemblers.* When the end item being acquired is a kit of supplies—                                                                           (i)The offeror may not exceed 500 employees, or 150 employees for information technology value-added resellers under NAICS code 541519; and                                                                              (ii)At least 50 percent of the total cost of the components of the kit shall be manufactured, processed, or produced in the United States or its outlying areas by business concerns that are small under the size standards for the NAICS codes of the components of the kit.                                                                                                           (3)                         *Identification of manufacturers*. For the purposes of applying the nonmanufacturer rule, the manufacturer, processor, or producer is the concern that manufactures, processes, or produces an end item with its own facilities (i.e., transforms raw materials, miscellaneous parts, or components into the end item being acquired). See   13 CFR 121.406(b)(2).                                                            (4)                         *Waiver of nonmanufacturer rule.*                                                                           (i)The SBA may grant an individual or a class waiver to the nonmanufacturer rule to allow a nonmanufacturer to provide an end item of an other than small business without regard to the place of manufacture, processing, or production.                                                                                             (A)                                     *Class waiver.* An agency may request that SBA waive the requirement at paragraph (c)(1)(i) or (c)(2)(ii) of this section for a specific product or class of products. See   13 CFR 121.1202 for an explanation of when SBA will issue a class waiver.                                                                                                (B)                                     *Individual waiver.* The contracting officer may also request a waiver of the requirements at paragraph (c)(1)(i) or (c)(2)(ii) of this section for an individual acquisition once the contracting officer determines through market research that no known small business manufacturers, processors, or producers in the United States or its outlying areas can reasonably be expected to offer an end item meeting the requirements of the solicitation. This type of waiver is known as an individual waiver and would apply only to a specific acquisition.                                                                                                                                         (ii)                               *Waiver requests.* Requests for waivers shall include the content specified at   13 CFR 121.1204 and shall be sent via email to   nmrwaivers@sba.gov or by mail to the—Director, Office of Government Contracting, Small Business Administration, 409 Third Street SW, Washington, DC 20416.                                                                              (iii)                               *List of class waivers.* For the most current listing of class waivers, contact the SBA Office of Government Contracting or go to   https://www.sba.gov/document/support-non-manufacturer-rule-class-waiver-list.                                                                              (iv)                               *Notification of waiver.* The contracting officer shall provide potential offerors with written notification of any class or individual waiver in the solicitation. If providing the notification after solicitation issuance, the contracting officer shall provide potential offerors a reasonable amount of additional time to respond to the solicitation.                                                                                                           (5)                         *Multiple-item acquisitions.*                                                                           (i)If at least 50 percent of the estimated contract value is composed of items that are manufactured, processed, or produced by small business concerns, then a waiver of the nonmanufacturer rule is not required. There is no requirement that each item acquired in a multiple-item acquisition be manufactured, processed, or produced by a small business in the United States or its outlying areas.                                                                              (ii)If more than 50 percent of the estimated acquisition cost is composed of items manufactured, processed, or produced by other than small business concerns, then a waiver is required. SBA may grant an individual waiver for one or more items in an acquisition in order to ensure that at least 50 percent of the cost of the items to be supplied by the nonmanufacturer comes from small business manufacturers, processors, and producers in the United States or its outlying areas or are subject to a waiver.                                                                              (iii)If a small business offeror is both a manufacturer of item(s) and a nonmanufacturer of other item(s) for an acquisition, the contracting officer shall apply the manufacturer size standard.19.506 Documentation requirements.       (a)                                                         (1) 								                The contracting officer shall	document the rationale when a contract is not totally set aside	for small business in accordance with  19.502-2.                                                            (2) 								                The contracting	officer shall document the rationale when a multiple-award contract	is not partially set aside, not reserved, and does not allow for	setting aside of orders, when these authorities could have been	used.                                                                             (b) 						            If applicable,	the documentation shall include the rationale for not accepting	the recommendations made by the agency Director of the Office of	Small and Disadvantaged Business Utilization, or, for the Department	of Defense, the Director of the Office of Small Business Programs,	or the Director's designee, as to whether a particular acquisition	should be awarded under subparts  19.5,  19.8,  19.13,  19.14, or  19.15.                                          (c) 						            Documentation	is not required if a contract award is anticipated to a small business	under subpart  19.5,  19.8,  19.13,  19.14, or  19.15.19.507 Solicitation provisions and contract clauses.       (a) [Reserved]                                          (b) [Reserved]                                          (c) The contracting officer shall insert the clause at  52.219-6, Notice of Total Small Business Set-Aside, in solicitations and contracts involving total small business set-asides. This includes multiple-award contracts when orders may be set aside for any of the small business concerns identified in  19.000(a)(3), as described in  8.405-5 and  16.505(b)(2)(i)(F). Use the clause at  52.219-6 with its Alternate I when including FPI in the competition in accordance with  19.502-7.                                          (d) The contracting officer shall insert the clause at  52.219-7, Notice of Partial Small Business Set-Aside, in solicitations and contracts involving partial small business set-asides. This includes part or parts of multiple-award contracts, including those described in  38.101. Use the clause at 52.219-7 with its Alternate I when including FPI in the competition in accordance with  19.502-7.                                          (e)                   The contracting officer shall insert the clause at  52.219-14, Limitations on Subcontracting, in solicitations and contracts—                                                         (1)For supplies, services, and construction, if any portion of the requirement is to be set aside for small business and the contract amount is expected to exceed the simplified acquisition threshold, and in any solicitations and contracts that are set aside or awarded on a sole-source basis in accordance with subparts  19.8,  19.13,  19.14, or  19.15, regardless of dollar value. This includes multiple-award contracts when orders may be set aside for small business concerns, as described in  8.405-5 and  16.505(b)(2)(i)(F), and when orders may be issued directly to a small business concern as described in  19.504(c)(1)(ii). For contracts that are set aside, the contracting officer shall indicate in paragraph (f) of the clause whether compliance with the limitations on subcontracting is required at the contract or order level;                                                            (2)                         *Using the HUBZone price evaluation preference.* However, if the prospective contractor waived the use of the price evaluation preference, or is an other than small business, do not insert the clause in the resultant contract.                                                                             (f)                                                         (1) The contracting officer shall insert the clause at  52.219-13, Notice of Set-Aside of Orders, in all solicitations for multiple-award contracts under which orders may be set aside for any of the small business concerns identified in  19.000(a)(3), and all contracts awarded from such solicitations.                                                            (2) The contracting officer shall insert the clause at  52.219-13 with its Alternate I in all full and open solicitations and contracts for multiple-award contracts under which orders will be set aside for any of the small business concerns identified in  19.000(a)(3) if the conditions in  19.502-2 are met at the time of order set-aside, and the specific program eligibility requirements, as applicable, are also then met.                                                                             (g)                                                         (1) The contracting officer shall insert the provision at  52.219-31, Notice of Small Business Reserve, in solicitations for multiple-award contracts that have reserves.                                                            (2) The contracting officer shall insert the clause at  52.219-32 Orders Issued Directly Under Small Business Reserves, in solicitations and the resulting multiple-award contracts that have reserves.                                                                             (h)                                                         (1) The contracting officer                         shall insert the clause at  52.219-33, Nonmanufacturer                         Rule, in solicitations and contracts (including                         multiple-award contracts when orders may be set aside                         for small business concerns as described in  8.405-5 and  16.505(b)(2)(i)(F), and                         when orders may be issued directly to a small business                         concern as described in  19.504(c)(1)(ii)), when—                                                                           (i)the item being acquired has been assigned a manufacturing or supply NAICS code, and–                                                                              (ii)                                                                                             (A)Any portion of the requirement is to be–                                                                                                               (1)Set aside for small business and is expected to exceed the simplified acquisition threshold; or                                                                                                                  (2)Set aside or awarded on a sole-source basis in accordance with subparts  19.8,  19.13,  19.14, or  19.15, regardless of dollar value; or                                                                                                                                                                       (B)                                     *Using the HUBZone price evaluation preference.* However, if the prospective contractor waived the use of the price evaluation preference, or is an other than small business, do not insert the clause in the resultant contract.                                                                                                                                                                      (2)The contracting officer shall not insert the clause at  52.219-33 when the Small Business Administration has waived the nonmanufacturer rule (see  19.505(c)(4)).
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