No.

GSA Legal Opinion: No Schedule Order Set Asides

[The above document was submitted by GSA Legal on a GAO protest on the issue.  GAO did not decide the merits of the set-aside protest case because the party protesting was not an interested party.]

As shown in the document included above, GSA has consistently held that FAR Part 19, which contains the regulatory authority to set any procurement (Schedule or non-Schedule) aside for Small Business, does not apply to Schedule orders (or BPAs). That position is firmly based on the FAR:

1) FAR 8.404(a) says that the only sentence in all of Part 19 that applies to Schedule orders and BPAs is FAR 19.202(e)(1)(iii), a statement that bundling is bad on Schedule orders too.

2) FAR 8.405-5 says that the mandatory preference programs of FAR Part 19 do not apply but agencies may get credit toward their socioeconomic goals.

3) FAR 38.101(e) states: "The requirements of Parts 5, 6, and 19 apply at the acquisition planning state prior to issuing the schedule solicitation and do not apply to orders and BPAs placed under the resulting schedule contracts."

The FAR authority to set something aside for Small Business comes from FAR subpart 19.5, not a word of which applies to Schedule orders or Schedule BPAs in accordance with FAR 8.404(a), 8.405-5, and 38.101(e).

It should be noted that SBA takes the view opposite that of GSA. They believe the phrase “except … as otherwise provided by law” in FAR 8.002 means that all procurements between $3k and $100k, even including Schedule orders, are set-aside for small business by virtue of the Small Business Act. SBA asserts that set-asides outrank Schedule orders in the FAR 8.002 pecking order.

Some ordering agencies persist in the view that they have authority to "set-aside” their Schedule orders (or Schedule BPAs) and reject quotes from large business Schedule contractors when no such authority exists in the FAR or in the Schedule contracts themselves. (Most of the Schedules are "Unrestricted" as shown on the standing solicitations at FedBizOpps.  Note that the award of one service Schedule, 736 TAPS, is reserved for small business at the Schedule contract level.  In addition, there are some SINs on 520 FABS and 541 AIMS only awarded to small businesses.)

This consistent GSA position is sound and solidly based on the FAR. Ordering agencies comply with the FAR unless/until there is authoritative guidance to the contrary.  (While it's possible that a court could someday adopt the SBA position, that hasn't happened yet.)

Agencies can make progress toward their socioeconomic goals a primary evaluation factor for the award of their Schedule orders and BPAs.  They just can't limit quotes to small businesses.  If they receive a quote from a large business, they must evaluate it in accordance with the evaluation factors shown in their RFQ.  (That is another reason why the selection and weighing of best value evaluation factors is important on Schedule orders too.)

GSA has repeated this position in its web-posted FAQs and in GSA Acquisition Letter V-05-12 “Socio-Economic Programs Under Schedules” (the expiration date of which has been extended separately to June 8, 2009).

GSA A/L V-05-12


10/28/2008 Update: Just in case you might think that GAO's decision in B-400403 Delex Systems Inc., (10/8/2008) contradicts any of the foregoing with respect to non-applicability of set-asides to Schedule orders, you will notice that the Delex protest was a protest against a Navy IDIQ and the facts presented to GAO for decision there have nothing to do with a Schedule order.

GSA Acquisition Alert 2008-07 (10/28/2007)