Does FAR part 19 apply when contracting for project with non-appropriated funds?
From the guidance found at Federal Acquisition Regulation (FAR) 6.203 -- Set-Asides for Small Business Concerns:
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(a) To fulfill the statutory requirements relating to small business concerns, contracting officers may set aside solicitations to allow only such business concerns to compete. This includes contract actions conducted under the Small Business Innovation Research Program established under Pub. L. 97-219.
(b) No separate justification or determination and findings is required under this part to set aside a contract action for small business concerns.
(c) Subpart 19.5 prescribes policies and procedures that shall be followed with respect to set-asides.
From Federal Regulation (FAR) 19.502-2 -- Total Small Business Set-Asides:
(b)… The contracting officer shall set aside any acquisition over $150,000 for small business participation when there is a reasonable expectation that:
(1) Offers will be obtained from at least two responsible small business concerns offering the products of different small business concerns…; 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….
And from DFAR 219.502-2 -- Total set-asides:
(a) Unless the contracting officer determines that the criteria for set-aside cannot be met, set aside for small business concerns acquisitions for—
(i) Construction, including maintenance and repairs, under $2.5 million;
(ii) Dredging under $1.5 million; and
(iii) Architect-engineer services for military construction or family housing projects of under $350,000.
Based on the information you provided, the short answer is yes FAR Part 19 does apply to NAF funded construction projects. The FAR and DFAR sections above are very explicit in requiring the Contracting Officer to set aside any acquisition when there is a reasonable expectation of at least two responsible small business concerns submitting a proposal and award being made at fair market prices. There is no exception in the FAR or DFARs based on type of funds used on the contract. Furthermore DFAR 219.502-2 states that unless the Contracting Officer determines that the criteria for set-aside cannot be met, a set aside will be made for small business concerns when the acquisition is for construction under $2.5 million, which appears to apply to your situation. I’m not aware of any other specific exceptions to FAR Part 19, particularly as it relates to NAF funded projects. Therefore, FAR Part 19 does appear to apply to your situation.