DAU GLOSSARY DEFINITION
An acquisition strategy whereby more than one contractor is sought to bid on a service or function; the winner is selected on the basis of criteria established by the activity for which the work is to be performed. The law and DoD policy require maximum competition, to the extent possible, throughout the acquisition life cycle.
Competition can be categorized in three ways, in accordance with FAR Part 6, Competition Requirements:
- Full and Open Competition: All responsible sources can compete.
- Full and Open Competition After Exclusion of Sources: The acquisition is reserved for competition among a specific type of business concern.
- Other Than Full and Open Competition: Sources are limited based on one of the seven reasons listed at FAR 6.302. This generally requires a justification and approval (J&A) in accordance with FAR 6.303 and 6.304.
FAR 19.502-2 requires each acquisition of supplies or services that has and anticipated dollar value between micro purchase threshold and the simplified acquisition threshold (SAT) to be reserved exclusively for small business concerns. Additionally, each acquisition anticipated to be over the SAT requires the contracting officer to set aside the action for small business when two criteria are met:
- There is a reasonable expectation that offers/bids from at least two responsible small businesses will be received, and
- That award will be made at fair market prices.
The contracting officer must employ the requirements of competition under FAR subpart 6.2, 6.302-5 and FAR Part 19 and understand how they work together.
Full and Open Competition after Exclusion of Sources under FAR Subpart 6.2 is still considered “competition” and thus does not require a J&A. FAR subpart 6.2 provides seven reasons for which competition can be restricted:
- 6.202 -- Establishing or Maintaining Alternative Sources
- 6.203 -- Set-Asides for Small Business Concerns
- 6.204 -- Section 8(a) Competition
- 6.205 –- Set-asides for HUBZone Small Business Concerns
- 6.206 –- Set-asides for Service-Disabled Veteran-Owned Small Business Concerns
- 6.207 – Set-asides for Economically Disadvantaged Women-owned Small Business (EDWOSB) Concerns or Women-owned Small Business (WOSB)Concerns Eligible Under the WOSB Program – under certain NAICS codes only
- 6.208 -- Set-asides for Local Firms During a Major Disaster or Emergency
Establishing or Maintaining Alternative Sources is used to increase or maintain competition, and can result in reduced overall costs to the acquisition. It is the only exclusion that requires a Determination and Findings (D&F).
Set-Asides for Local Firms during a Major Disaster or Emergency implement the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5150) (FAR subpart 26.2). These set-asides are for specific geographic areas for a limited time frame and can include both large and small businesses.
The five remaining circumstances for Full and Open Competition after Exclusion of Sources deal with set-asides for various categories of small businesses. These five circumstances along with the sole source authority at FAR 6.302-5(b)(4), (5), and (6) must be considered in conjunction with the policy at FAR 19.203 and Subparts 19.5, 19.8, 19.13, 19.14 and 19.15 to determine the appropriate small business set-aside small for your acquisitions. FAR 19.203 now sets a parity rule between the 8a program (FAR subpart 19.8), HUBZone Program (FAR subpart 19.13), Service-Disabled Veteran-Owned Small Business (SDVOSB) Procurement Program (FAR subpart 19.14), or the Women-Owned Small Business (WOSB) Program (FAR subpart 19.15). At or below the simplified acquisition threshold (SAT) the contracting officer shall award to a small business and may award to any of the small business programs, excluding a sole source HUBZone award. Above the SAT, the contracting officer shall consider the 8(a), HUBZone, SDVOSB, or WOSB programs before using a small business set-aside. In order to be able to determine which type of small business set aside to use, the following must be considered (NOTE: for visual depiction click on link under Attachments below):
- The value of the contracting action (including all options).
- The NAICS code. Note that priorities change at different levels for non-manufacturing procurements ($4 million) vs. manufacturing procurements ($6.5/$7 million).
- WOSB/EDWOSB set-aside NAICS chart links https://www.sba.gov/contracting/government-contracting-programs/women-owned-small-businesses
- Completed your market research to be knowledgeable of potential sources to available to compete for your requirement.
Competition on Orders Under Multiple Award Contracts. Per FAR 16.505(b)(1), contracting officers must provide each awardee a "fair opportunity" to be considered for each order exceeding the micro-purchase threshold issued under multiple delivery-order contracts or multiple task-order contracts. The contract officer has some discretion on how to accomplish this (see FAR 16.505(b)(1)(ii)). The requirements for ensuring that contract holders receive "fair opportunity" are more stringent for orders exceeding the simplified acquisition threshold. FAR 16.505(b)(1)(iii) describes the procedures for these situations.