CANCELED BY PIC 08-06

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99-21

Procurement Information Circular


November 10, 1999

EXTENSION OF THE NASA AND SBA MEMORANDUM OF
UNDERSTANDING (MOU) TO ALLOW DIRECT CONTRACTING
WITH 8(a) FIRMS

PURPOSE: To extend the NASA/SBA MOU that enables NASA contracting officers to contract directly with 8(a) contractors and streamline the 8(a) contracting process, and to update the implementing FAR deviation provided in PIC 98-10.

BACKGROUND: On May 6, 1998, an MOU was executed between SBA and NASA that establishes streamlined procedures for expediting the award requirements pursuant to Section 8(a) of the Small Business Act (15 U.S.C. 637(a), as amended). The objectives of the MOU were to:

            1. Reduce the interval between the time NASA sends an offering letter to SBA and SBA acceptance of the offering to a maximum of five (5) workdays.

            2. Eliminate SBA approval of contracts and purchase orders executed under the authority of the MOU.

            3. Establish a uniform policy and procedure regarding application of Simplified Acquisition Procedures (SAP) to the 8(a) contracting process, when applicable.

The original MOU expired May 6, 1999, and has been extended twice, first to September 30, 1999, and now to January 31, 2000. The MOU was implemented in PIC 98-10, dated June 1, 1998.

GUIDANCE: A revised FAR class deviation is enclosed to implement the extended MOU. Inserted language is in bracketed bold face type and deleted text is lined-out. This deviation is substantively the same as that provided under PIC 98-10, with minor editorial changes to reflect recent FAR changes to the affected FAR text. This class deviation is mandatory for all applicable requirements generated after the effective date of this PIC. Ongoing requirements may be converted to these procedures with the written concurrence of the cognizant SBA field office.

CANCELLATION: PIC 98-10 is hereby cancelled.

EFFECTIVE DATE: This PIC is effective as dated, and expires January 31, 2000, unless extended, superseded, or canceled.

HEADQUARTERS CONTACT: Tom O'Toole, Code HK, (202) 358-0478, email: thomas.otoole@hq.nasa.gov; or Tony Diamond, Code K, (202) 358-2088, email: anthony.diamond@hq.nasa.gov.

  

Tom Luedtke
Associate Administrator for Procurement

Enclosure


CLASS DEVIATION IMPLEMENTING THE NASA AND SBA MEMORANDUM OF UNDERSTANDING (MOU) TO ALLOW DIRECT CONTRACTING WITH 8(a) FIRMS

Subpart 19.8--Contracting with the Small Business Administration (The 8(a) Program)

19.800 General. (No Change)

19.801 [Reserved] NASA/SBA Memorandum of Understanding.

[(a) By Memorandum of Understanding (MOU) dated May 6, 1998, as extended, between the Small Business Administration (SBA) and NASA, the SBA delegated to each NASA installation and to NASA contracting officers, its authority under section 8(a)(1)(A) of the Small Business Act to enter into section 8(a) prime contracts, and its authority under section 8(a)(1)(B) of the Small Business Act to award the performance of those contracts to eligible section 8(a) program participants. This authority is being delegated on a pilot test basis and shall expire on January 31, 2000, unless the MOU is renewed by mutual agreement between NASA and SBA.

(b) The MOU provides for the award of both contracts and purchase orders. It

encompasses all competitive and non-competitive requirements offered and accepted by SBA into the 8(a) program including but not limited to: Acquisition of Commercial Items (FAR Part 12); awards under the Simplified Acquisition Procedures (FAR Part 13); awards resulting from Sealed Bidding (FAR Part 14); Contracting by Negotiation (FAR Part 15); and Construction and Architect Engineer Contracts (FAR Part 36).

(c) The MOU provides that NASA may award contracts and purchase orders directly to the 8(a) participant. An SBA signature on the contract or purchase order is not required. Awards may be made on a sole source basis or as a result of competition.]

19.802 Selecting concerns for the 8(a) Program. (No Change)

19.803 Selecting acquisitions for the 8(a) Program. (No Change)

19.804 Evaluation, offering, and acceptance.

19.804-1 Agency evaluation. (No Change)

19.804-2 Agency offering.

(a)-(c) (No Change)

[(d) During the period of the MOU identified in 19.801, the notification shall clearly

indicate that the offer is being processed under the MOU. All notifications should be faxed or e-mailed to the SBA when possible and, in addition to the information required by FAR 19.804-2 (a)-(c), shall specify --

            (1) That under the MOU, an SBA acceptance or rejection of the offer is required to be transmitted to NASA within 5 working days of receipt of the offer. The letter should request that the SBA response be faxed or e-mailed to NASA;

            (2) For sole source offers, that acceptance shall include a size verification and a determination of the 8(a) participant's program eligibility, and that upon acceptance, the contracting officer will solicit a proposal, conduct negotiations, and make award directly to the 8(a) firm; or

            (3) For competitive offers, that upon acceptance, the contracting officer will solicit offers and conduct source selection. The contracting officer will, upon selecting an 8(a) contractor, submit the contractor's name, address and telephone number to SBA for eligibility verification. The notice should be faxed or e-mailed to SBA if possible. SBA has 5 working days to transmit to NASA that the 8(a) firm selected is eligible for award. Upon confirmation of eligibility by SBA or after the 5 working days have elapsed, the contracting officer may award a contract directly to the selected 8(a) program participant.]

19.804-3 SBA acceptance.

(a) Upon receipt of the contracting agency's offer, the SBA will determine whether to accept the requirement for the 8(a) Program. The SBA's decision whether to accept the requirement will be transmitted to the contracting agency in writing within 10 working days of receipt of the offer if the contract is likely to exceed the simplified acquisition threshold [except for those requirements processed under the MOU cited in 19.801 (see 19.804-3(e))] and within 2 days of receipt if the contract is at or below the simplified acquisition threshold. The contracting agency may grant an extension of these time periods. If SBA does not respond to an offering letter within 10 days, the contracting activity may seek SBA's acceptance through the Associate Administrator (AA)/8(a)BD [except for those requirements processed under the MOU cited in 19.801 (see 19.804-3(e))].

(b)-(d) (No Change)

[(e) For requirements processed under the MOU identified in 19.801, SBA's acceptance is required to be transmitted to NASA within 5 working days. If an offer letter has not been accepted within the 5 working days, NASA contracting officers may assume acceptance of the 8(a) acquisition and may continue with the 8(a) procurement process.]

19.804-4 Repetitive acquisitions, through 19.804-6 Multiple award and Federal Supply Schedule contracts. (No Change)

19.805 Competitive 8(a).

19.805-1 General. (No Change)

19.805-2 Procedures.

(a) Offers shall be solicited from those sources identified in accordance with 19.804-3. [Announcement of the 8(a) solicitations shall be made in the Commerce Business Daily and on the Internet, and a copy sent to the SBA's coordinating office.]

(b)-(d) (No Change)

19.806 Pricing the 8(a) contract.

(a)-(d) No Change)

[(e) For requirements processed under the MOU identified in 19.801, SBA concurrence in the negotiated price is not required. However, except for purchase orders, the contracting officer shall notify the SBA prior to withdrawing a requirement from the 8(a) program due to failure to agree on price or other terms and conditions.]

19.807 Estimating fair market price. (No Change)

19.808 Contract negotiation.

19.808-1 Sole source.

(a) and (b) (No Change)

[(c) For requirements processed under the MOU identified in 19.801 --

            (1) The contracting officer is responsible for initiating and conducting negotiations;

            (2) The agency may negotiate directly with the 8(a) contractor; however, if requested by the 8(a) participant, the SBA may participate in negotiations; and

            (3) SBA approval of the contract is not required.]

19.808-2 Competitive. (No Change)

19.809 Preaward considerations. (No Change)

19.810 SBA appeals. (No Change)

19.811 Preparing the contracts.

19.811-1 Sole source.

(a) The contract to be awarded by the agency to the SBA shall be prepared in accordance with agency procedures and in the same detail as would be required in a contract with a business concern. The contracting officer shall use the Standard Form 26 as the award form, except for construction contracts, in which case the Standard Form 1442 shall be used as required in 36.701(b). [Awards under the MOU identified in 19.801 may be made directly to the 8(a) contractor, and award documents shall be prepared in accordance with procedures established for non-8(a) contracts and purchase orders, using any authorized award form or equivalent electronic forms. The "Issued by" block shall identify the awarding NASA office. The section 8(a) participant's name and address shall be listed as the contractor.]

(b) [Reserved] The agency shall prepare the contract that the SBA will award to the 8(a) contractor in accordance with agency procedures, as if the agency were awarding the contract directly to the 8(a) contractor, except for the following:

            (1) The award form shall cite 41 U.S.C. 253(c)(5) or 10 U.S.C. 2304(c)(5) (as appropriate) as the authority for use of other than full and open competition.

            (2) Appropriate clauses shall be included, as necessary, to reflect that the contract is between the SBA and the 8(a) contractor.

            (3) The following items shall be inserted by the SBA:

                        (i) The SBA contract number.

                        (ii) The effective date.

                        (iii) The typed name of the SBA's contracting officer.

                        (iv) The signature of the SBA's contracting officer.

                        (v) The date signed.

            (4) The SBA will obtain the signature of the 8(a) contractor prior to signing and returning the prime contract to the contracting officer for signature. The SBA will make every effort to obtain signatures and return the contract, and any subsequent bilateral modification, to the contracting officer within a maximum of 10 working days.

(c) Except in procurements where the SBA will make advance payments to its 8(a) contractor, the agency contracting officer may, as an alternative to the procedures in paragraphs (a) and (b) of this subsection, use a single contract document for both the prime contract between the agency and the SBA and its 8(a) contractor. The single contract document shall contain the information in paragraphs (b) (1), (2), and (3) of this subsection. Appropriate blocks on the Standard Form (SF) 26 or 1442 will be asterisked and a continuation sheet appended as a tripartite agreement which includes the following:

            (1) Agency acquisition office, prime contract number, name of agency contracting officer and lines for signature, date signed, and effective date.

            (2) The SBA office, the SBA contract number, name of the SBA contracting officer, and lines for signature and date signed.

            (3) Name and lines for the 8(a) subcontractor's signature and date signed.

[(c) For direct awards made under the MOU identified in 19.801 the contract shall--

            (1) Cite 10 U.S.C. 2304(c)(5) as the authority for use of other than full and open competition;

            (2) Include the clause at 52.219-11 (Deviation) which allows for direct award to the 8(a) contractor and identification of the cognizant SBA district office for the 8(a) contractor;

            (3) Not include an SBA contract number or signature; and,

            (4) Include the name of the NASA Center/Installation in the NASA contracting officer title in the signature block;]

(d) For acquisitions not exceeding the simplified acquisition threshold, the contracting officer may use the alternative procedures in paragraph (c) of this subsection with the appropriate simplified acquisition forms. [The contracting officer must provide an executed copy of the contract to the SBA servicing District Office.]

19.811-2 Competitive.

(a) [Awards made under the MOU shall be prepared in accordance with 19.811-1.] The contract will be prepared in accordance with 14.408-1(d), except that appropriate blocks on the Standard Form 26 or 1442 will be asterisked and a continuation sheet appended as a tripartite agreement which includes the following:

            (1) The agency contracting activity, prime contract number, name of agency contracting officer, and lines for signature, date signed, and effective date.

            (2) The SBA office, the SBA subcontract number, name of the SBA contracting officer and lines for signature and date signed.

(b) The process for obtaining signatures shall be as specified in 19.811-1(b)(4).

19.811-3 Contract clauses.

(a) [The contracting officer shall insert the clause at 52.219-11, Special 8(a) Contract

Conditions (DEVIATION), in direct award contracts and purchase orders processed under the MOU identified in 19.801.] The contracting officer shall insert the clause at 52.219-11, Special 8(a) Contract Conditions, in contracts between the SBA and the agency when the acquisition is accomplished using the procedures of 19.811-1(a) and (b).

(b) [Reserved] The contracting officer shall insert the clause at 52.219-12, Special 8(a)

Subcontract Conditions, in contracts between the SBA and its 8(a) contractor when the acquisition is accomplished using the procedures of 19.811-1(a) and (b).

(c) [Reserved] The contracting officer shall insert the clause at 52.219-17, Section 8(a) Award, in competitive solicitations and contracts when the acquisition is accomplished using the procedures of 19.805 and in sole source awards which utilize the alternative procedure in 19.811-1(c).

(d) The contracting officer shall insert the clause at 52.219-18, Notification of Competition Limited to Eligible 8(a) Concerns [(Deviation)], in competitive solicitations and contracts when the acquisition is accomplished using the procedures of 19.805 [the MOU identified in 19.801].

            (1) The [NASA deviation to the] clause at 52.219-18 with its Alternate I will be used when competition is to be limited to 8(a) concerns within one or more specific SBA districts pursuant to 19.804-2.

            (2) The [NASA deviation to the] clause at 52.219-18 with its Alternate II will be used when the acquisition is for a product in a class for which the Small Business Administration has waived the nonmanufacturer rule (see 19.102(f)(4) and (5)).

(e) (No Change)

19.812 Contract administration.

(a)-(c) No Change)

(d) An 8(a) contract, whether in the base or an option year, must be terminated for convenience if the 8(a) concern to which it was awarded transfers ownership or control of the firm or if the contract is transferred or novated for any reason to another firm, unless the Administrator of the SBA waives the requirement for contract termination (13 CFR 124.515). The Administrator may waive the termination requirement only if certain conditions exist. Moreover, a waiver of the requirement for termination is permitted only if the 8(a) firm's request for waiver is made to the SBA prior to the actual relinquishment of ownership or control, except in the case of death or incapacity where the waiver must be submitted within 60 days after such an occurrence. The clauses in the contract entitled "Special 8(a) Contract Conditions [(Deviation)]" and "Special 8(a) Subcontract Conditions" require[s] the [8(a) contractor] SBA and the 8(a) subcontractor to notify the contracting officer [and SBA] when ownership of the firm is being transferred. When the contracting officer receives information that an 8(a) contractor is planning to transfer ownership or control to another firm, the contracting officer must take action immediately to preserve the option of waiving the termination requirement. The contracting officer should determine the timing of the proposed transfer and its effect on contract performance and mission support. If the contracting officer determines that the SBA does not intend to waive the termination requirement, and termination of the contract would severely impair attainment of the agency's program objectives or mission, the contracting officer should immediately notify the SBA in writing that the agency is requesting a waiver. Within 15 business days thereafter, or such longer period as agreed to by the agency and the SBA, the agency head must either confirm or withdraw the request for waiver. Unless a waiver is approved by the SBA, the contracting officer must terminate the contract for convenience upon receipt of a written request by the SBA. This requirement for a convenience termination does not affect the Government's right to terminate for default if the cause for termination of an 8(a) contract is other than the transfer of ownership or control.

PART 52 - SOLICITATION PROVISIONS AND CONTRACT CLAUSES

52.219-11 Special 8(a) Contract Conditions.

As prescribed in 19.811-3(a), insert the following clause:

Special 8(a) Contract Conditions (Feb 1990)

[(Deviation)]

The Small Business Administration (SBA) agrees to the following:

(a) To furnish the supplies or services set forth in this contract according to the specifications and the terms and conditions hereof by subcontracting with an eligible concern pursuant to the provisions of section 8(a) of the Small Business Act, as amended (15 U.S.C. 637(a)).

(b) That in the event SBA does not award a subcontract for all or a part of the work hereunder, this contract may be terminated either in whole or in part without cost to either party.

(c) Except for novation agreements and advance payments, delegate to the _________ [insert name of contracting agency] the responsibility for administering the subcontract to be awarded hereunder with complete authority to take any action on behalf of the Government under the terms and conditions of the subcontract; provided, however, that the _________ [insert name of contracting agency] shall give advance notice to the SBA before it issues a final notice terminating the right of a subcontractor to proceed with further performance, either in whole or in part, under the subcontract for default or for the convenience of the Government.

(d) That payments to be made under any subcontract awarded under this contract will be made directly to the subcontractor by the ___________ [insert name of contracting agency].

(e) That the subcontractor awarded a subcontract hereunder shall have the right of appeal from decisions of the Contracting Officer cognizable under the "Disputes" clause of said subcontract.

(f) To notify the _________ [insert name of contracting agency] Contracting Officer immediately upon notification by the subcontractor that the owner or owners upon whom 8(a) eligibility was based plan to relinquish ownership or control of the concern.

[(a) This contract is issued as a direct award between the contracting activity and the 8(a) contractor pursuant to a Memorandum of Understanding between the Small Business Administration (SBA) and the National Aeronautics and Space Administration. Accordingly, the SBA is not a party to this contract. SBA does retain responsibility for 8(a) certification, 8(a) eligibility determinations and related issues, and providing counseling and assistance to the 8(a) contractor under the 8(a) program. The cognizant SBA district office is:

________________________________________

________________________________________

________________________________________

________________________________________

[insert name and address of cognizant SBA office]

(b) The contracting activity is responsible for administering the contract and taking any action on behalf of the Government under the terms and conditions of the contract; provided, however, that the contracting activity shall give advance notice to the SBA before it issues a final notice terminating performance, either in whole or in part, under the contract. The contracting activity shall also coordinate with the SBA prior to processing any novation agreement. The contracting activity may assign contract administration functions to a contract administration office.

(c) The contractor agrees --

            (1) To notify the Contracting Officer, simultaneous with its notification to SBA (as required by SBA's 8(a) regulations), when the owner or owners upon whom 8(a) eligibility is based plan to relinquish ownership or control of the concern. Consistent with Section 407 of Public Law 100-656, transfer of ownership or control shall result in termination of the contract for convenience, unless SBA waives the requirement for termination prior to the actual relinquishing of ownership and control; and

            (2) It will not subcontract the performance of any of the requirements of this contract without the prior written approval of the SBA and the Contracting Officer.]

(End of clause)

52.219-12 Special 8(a) Subcontract Conditions.

As prescribed in 19.811-3(b), insert the following clause:

Special 8(a) Subcontract Conditions (FEB 1990)

(a) The Small Business Administration (SBA) has entered into Contract No.________ [insert number of contract] with the ____________ [insert name of contracting agency] to furnish the supplies or services as described therein. A copy of the contract is attached hereto and made a part hereof.

(b) The ___________ [insert name of subcontractor], hereafter referred to as the subcontractor, agrees and acknowledges as follows:

            (1) That it will, for and on behalf of the SBA, fulfill and perform all of the requirements of Contract No. ______ [insert number of contract] for the consideration stated therein and that it has read and is familiar with each and every part of the contract.

            (2) That the SBA has delegated responsibility, except for novation agreements and advance payments, for the administration of this subcontract to the _______ [insert name of contracting agency] with complete authority to take any action on behalf of the

Government under the terms and conditions of this subcontract.

            (3) That it will not subcontract the performance of any of the requirements of this subcontract to any lower tier subcontractor without the prior written approval of the SBA and the designated Contracting Officer of the _______ [insert name of contracting agency].

            (4) That it will notify the __________ [insert name of contracting agency] Contracting Officer in writing immediately upon entering an agreement (either oral or written) to transfer all or part of its stock or other ownership interest to any other party.

(c) Payments, including any progress payments under this subcontract, will be made directly to the subcontractor by the ______ [insert name of contracting agency].

(End of clause)

52.219-13 through -16. (No Change)

52.219-17 Section 8(a) Award.

As prescribed in 19.811-3(c), insert the following clause:

Section 8(a) Award (Dec 1996)

(a) By execution of a contract, the Small Business Administration (SBA) agrees to the

following:

            (1) To furnish the supplies or services set forth in the contract according to the specifications and the terms and conditions by subcontracting with the Offeror who has been determined an eligible concern pursuant to the provisions of section 8(a) of the Small Business Act, as amended (15 U.S.C. 637(a)).

            (2) Except for novation agreements and advance payments, delegates to the ______ [insert name of contracting activity] the responsibility for administering the contract with complete authority to take any action on behalf of the Government under the terms and conditions of the contract; provided, however that the contracting agency shall give advance notice to the SBA before it issues a final notice terminating the right of the subcontractor to proceed with further performance, either in whole or in part, under the contract.

            (3) That payments to be made under the contract will be made directly to the subcontractor by the contracting activity.

            (4) To notify the ___________ [insert name of contracting agency] Contracting Officer immediately upon notification by the subcontractor that the owner or owners upon whom 8(a) eligibility was based plan to relinquish ownership or control of the concern.

            (5) That the subcontractor awarded a subcontract hereunder shall have the right of appeal from decisions of the cognizant Contracting Officer under the "Disputes" clause of the subcontract.

(b) The offeror/subcontractor agrees and acknowledges that it will, for and on behalf of the SBA, fulfill and perform all of the requirements of the contract.

(c) The offeror/subcontractor agrees that it will not subcontract the performance of any of the requirements of this subcontract to any lower tier subcontractor without the prior written approval of the SBA and the cognizant Contracting Officer of the ______________ [insert name of contracting agency].

(End of clause)

52.219-18 Notification of Competition Limited to Eligible 8(a) Concerns.

As prescribed in 19.811-3(d), insert the following clause:

Notification of Competition Limited to Eligible 8(a) Concerns (June 1999)

[Deviation]

(a) Offers are solicited only from small business concerns expressly certified by the Small Business Administration (SBA) for participation in the SBA's 8(a) Program and which meet the following criteria at the time of submission of offer--

            (1) The Offeror is in conformance with the 8(a) support limitation set forth in its approved business plan; and

            (2) The Offeror is in conformance with the Business Activity Targets set forth in its approved business plan or any remedial action directed by the SBA.

(b) By submission of its offer, the Offeror represents that it meets all of the criteria set forth in paragraph (a) of this clause.

(c) [Any award resulting from this solicitation will be made directly by the Contracting Officer to the successful 8(a) offeror selected through the evaluation criteria set forth in this solicitation.] Any award resulting from this solicitation will be made to the Small Business Administration, which will subcontract performance to the successful 8(a) offeror selected through the evaluation criteria set forth in this solicitation.

(d)(1) Agreement. A small business concern submitting an offer in its own name agrees to furnish, in performing the contract, only end items manufactured or produced by small business concerns in the United States. The term "United States" includes its territories and possessions, the Commonwealth of Puerto Rico, the trust territory of the Pacific Islands, and the District of Columbia. If this procurement is processed under simplified acquisition procedures and the total amount of this contract does not exceed $25,000, a small business concern may furnish the product of any domestic firm. This subparagraph does not apply in connection with construction or service contracts.

(2) The ____________ [insert name of SBA's contractor] will notify the ____________ [insert name of contracting agency] Contracting Officer in writing immediately upon entering an agreement (either oral or written) to transfer all or part of its stock or other ownership interest to any other party.

(End of clause)

Alternate I (Nov 1989). No Change

Alternate II (Dec 1996). No Change