Final FAR Rule Proposed for Small Business Set-Asides on Multiple Award Contracts

On Tuesday, Dec. 6, 2016, the Federal Acquisition Regulatory Council published a proposed rule aimed at finalizing regulations for small business set aside contracts in multiple award procurements. The new rule allows more flexibility to set aside contracts for small businesses in multiple award procurements. The proposed rule provides additional guidance to contracting officials on the use of partial set-asides, reserving some contracts for small businesses in full and open multiple-award procurements, and setting aside orders in multiple award contracts.  The rule also provides guidance on small business contractor requirements with regard to performance of work and the limitations on subcontracting. The limitations on subcontracting (i.e. the minimum amount of work small business contractors are required to perform) will also now be set forth in FAR part 19 to allow for easier reference. The rule further clarifies that these limits do not apply to contracts awarded under full and open competition. The rule is designed to implement changes that flow from the Small Business Jobs Act of 2010, which were finalized into the Small Business Administration’s regulations in 2013.  The FAR Council implemented an interim rule in 2011, but waited until the SBA had finalized its rules before proposing a final rule for the corresponding FAR regulations.  Interested parties may submit comments on the proposed rule until Feb. 6, 2017.