Is there a DoD except to the use of 52.219-4? If so, where is the exception cited?
1. Per FAR 52.219-4 and its prescription in FAR 19.1309(b), the HUBZONE Small Business price evaluation preference only applies in full and open competitions. Per research through DFARS and the latest DoD procurement policy, DoD does not provide exceptions.
2. Pursuant to paragraphs b(3) and b(4) of the 52.219-4, a Small Disadvantaged Business price evaluation adjustment must also be considered with a HUBZONE Small Business Price Evaluation Adjustment. However, see FAR Deviation 2011-O0003, November 8, 2011 (embedded in DFARS 219.1101) for current guidance on the SDB price evaluation adjustment--the SDB price evaluation adjustment is no longer in effect! (http://www.acq.osd.mil/dpap/dars/class_deviations.htm). Therefore, do not apply the SDB price evaluation adjustment in parallel with the HUBZONE Small Business price evaluation adjustment.
HUBZone Price Evaluation Preference.
Primary References: FAR 19.1309(b), 52.219-4, and the Contract Pricing Reference Guide, Vol 1, Chapter 5
Per FAR 19.1309(b), When you anticipate full and open competition, assure that the FAR Notice of Price Evaluation Preference for HUBZone Small Business Concerns clause is inserted in any solicitation that exceeds the micro-purchase threshold. This clause:
• Informs prospective offerors that a 10-percent PEP will be considered in contract award;
• Establishes guidelines that an offeror must meet to qualify for the evaluation preference, including related contract performance requirements; and
• Permits the offeror to waive PEP consideration.
Also, pay particular attention to paragraphs b(3) and b(4) of the 52.219-4 clause. This language indicates the Small Disadvantaged Business price evaluation adjustment must also be considered. However, see FAR Deviation 2011-O0003, November 8, 2011 (embedded in DFARS 219.1101) for current guidance on the SDB price evaluation adjustment--the SDB price evaluation adjustment is no longer in effect! (http://www.acq.osd.mil/dpap/dars/class_deviations.htm)
Therefore, when executing the HUBZONE price evaluation preference, consider the general evaluation requirements, per the CPRG Vol 1 Chapter 5, Section 5.10, and clause language of FAR 52.219-1(b) and 52.219-4.
Step 1. Determine Solicitation Provisions.
The solicitation must identify all factors that will be considered in offer evaluation. In particular:
• Assure that the solicitation includes the FAR Notice of Price Evaluation Preference for HUBZone Small Business Concerns clause and the Small Business Program Representations provision with its Alternate II.
• Review offeror representations to identify any offeror representing that it is a HUBZone small business concern.
• Identify any HUBZone concern that has waived PEP consideration. Offerors may waive PEP consideration for many different reasons (e.g., inability to comply with requirements that at least 50 percent of all manufacturing cost (excluding materials cost) will be performed by the contractor or another HUBZone small business concern).
Step 2. Determine Offered Prices
Determine the price(s) in each offer for each item or group of items being considered for contract award.
Step 3. Evaluate Possible Award Combinations.
Evaluate offers using the specific criteria set forth in the solicitation. As you evaluate offers consider the following PEP requirements:
• For each offer, calculate the base offer (BO). The BO is the total evaluated price considering all price-related evaluation factors (e.g., transportation cost, small disadvantaged business concern price evaluation adjustment (PEA), etc.) except the PEP.
• Calculate the final evaluated price.
For the following offers, the Base Offer (BO) is the final evaluated price:
• Offers from HUBZone small business concerns that have not waived the PEP;
• Otherwise successful offers from small business concerns;
• Otherwise successful offers of eligible products under the Trade Agreements Act when the acquisition equals or exceeds the applicable FAR dollar threshold; and
• Otherwise successful offers where application of the factor would be inconsistent with a Memorandum of Understanding or other international agreement with a foreign government.
For other offers, if a PEA was added to the offered price in calculating the BO, calculate the final evaluated price as follows:
Final Evaluated Price = BO + [.10 x (BO - PEA)]
If a PEA was not added to the offered price in calculating the BO, calculate the final evaluated price as follows:
Final Evaluated Price = BO + [.10 x BO]
Step 4. Make Award Decision.
Award to the firm whose offer provides the best value to the Government under the terms of the solicitation.
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