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Procurement Information Circular

August 27, 1992

ACHIEVING NASA'S 8% SMALL DISADVANTAGED BUSINESS GOAL

PURPOSE: To explain the NASA 8% goal and the means for meeting it.

BACKGROUND:

I. Introduction. Congress requires NASA, to the fullest extent possible, to award at least 8% of its contract dollars to small business concerns and other organizations owned or controlled by socially and economically disadvantaged individuals including Historically Black Colleges and Universities and minority educational institutions. For this requirement, economically and socially disadvantaged individuals include women.

A plan for reaching the 8% goal was issued by the NASA Administrator in 1990. The agency has adopted the end of Fiscal Year (FY) 1994 as the time target for meeting the minimum goal.

This circular reflects the policy of the Assistant Administrator for Procurement and Director, Office of Small and Disadvantaged Business Utilization, on how acquisition personnel can aid in reaching it.

II. Policy. NASA's efforts to reach the 8% small disadvantaged business (SDB) goal must be committed and aggressive but also reasonable. The goal is an agency objective.

It is important to understand that the 8% goal applies to the total annual dollar obligations of the agency. It is not an absolute percentage to be placed in each subcontracting plan. It is understood that while some procurement requirements (contracts) offer 8% SDB subcontracting opportunities, others will offer greater, and some less, than 8% opportunity. The aggregate comprises the agency's total effort in response to the legislative mandate.

At this time NASA procurement offices have one sure method of awarding prime contracts to small disadvantaged firms--the competitive and sole source 8(a) procedures. Procurement personnel are encouraged to bring non-8(a) SDB's to the attention of requirements offices and ensure that those SDB's are solicited for non-8(a) competitive buys.

When a subcontracting plan is required of a prime contractor, each applicable plan must reflect a reasonable, yet challenging, SDB's goal. The establishment of arbitrary goals is not conducive to business-like contracting; nor does it further the interests of the SDB community. Primes will be encouraged to utilize SDB set-aside competitions to attract and utilize SDB's in their subcontracting activity.

After a careful assessment of the statement of work associated with each procurement, contracting officers should estimate an appropriate goal for SDB's when preparing solicitations that will have subcontracting opportunities. Solicitations will reflect the contracting officer's estimate of suitable small business and small disadvantaged business goals. The contracting officer is advised to confer with the small business specialist during the assessment stage since the specialist has knowledge and information regarding SDB capability. These goals will be stated as mandatory goals.

Goals must be challenging but must also be well thought out and reflect the nature of the specific work requirements of the contract.

If requirements personnel, small business specialists, and the NASA acquisition offices assiduously pursue all reasonable opportunities at the prime and subcontract levels, NASA will achieve the 8% goal by the end of FY 1994.

GUIDANCE: Requirements personnel must help in the search for SDB's that can perform NASA prime or subcontracts and give full consideration to the capabilities of SDB's brought to their attention by small business specialists and acquisition personnel for solicitation or award.

Small business specialists must identify prospective SDB sources for requirements personnel and contracting officers. When requested by a prime contractor, small business specialists will assist in identifying SDB sources for subcontracting opportunities. In either case, the specialist must base any recommendations on a fully researched and carefully examined analysis of potential SDB capabilities for the work to be performed.

Contracting officers must pursue SDB's at the prime contract level using the 8(a) procedures and seek SDB's in other competitive selections. Full consideration must be given SDB's to satisfy requirements. Maximum SDB participation at the subcontract level should follow aggressive, realistic estimates in solicitations and fitting goals in subcontracting plans. Full consideration will be given small business specialist recommendations for mandatory goals. Alert contract administration should ensure prompt submission of accurate Standard Forms 294 and 295.

Procurement officers must engender an atmosphere that strongly promotes contracting with SDB's at both the prime and subcontract levels. In those cases in which the contracting officer is unable to obtain a subcontracting plan with An SDB goal at the level recommended by the small business specialist, the procurement officer may be called upon to assure himself that the goal that can be negotiated is realistic.

Specific SDB policy changes involve the following:

1. Acquisition Strategy Meeting/Procurement Plan Special Interest Item--Early contract planning should include consideration of 51313's as prime or subcontractors. The recommendations and conclusions should be fully documented as part of the ASM/Procurement Plan process.

2. Procurement Officer Review of Disputed Goals--If the small business specialist and the contracting officer are unable to agree on a SDB goal in a subcontracting plan, the procurement officer shall review and resolve the situation.

3. Consolidated Contracts-Prior to effecting a contracting consolidation valued at $5 million or more, including options, which will not be exclusively reserved for small or 8(a) firms, an impact assessment on the effects of consolidation on their present and future NASA small disadvantaged business shall be prepared by the center, submitted to Headquarters Code H, concurred in by Code K, and approved by this, cognizant Associate Administrator.

4. Profit Incentives-Award fee plans should specifically address SDB subcontracting as a factor in determining award fee. In non-award fee contracts, an incentive provision modeled on FAR 52.219-10, Incentive Subcontracting Program for Small and Small Disadvantaged Business Concerns, but applicable only to SDB's, should be considered.

EFFECTIVE DATE: This PIC is effective as dated and automatically expires April 1, 1993, unless extended, superseded, or canceled.

HEADQUARTERS CONTACTS: Tom Deback, Code HS, (202) 358-0431; Gene Rosen, Code K, (202) 358-2088.

Assistant Administrator for Procurement