Type: Law Bulletins
Date: 06/22/2012

Air Force Re-emphasizes Use of Small Business Concerns

On June 15, 2012, the Office of the Assistant Secretary of the Air Force released a Memorandum with the subject line “Increased Use of Small Business Concerns.”  In this Memorandum, the Air Force notes that the Department of Defense has emphasized increasing the use of small businesses (at all levels of contracting).1  Although the Air Force met its goal of awarding 14% of all contracts to small businesses in both 2008 and 2009, that number declined in FY 2010, and the Air Force has not met its goal since.2  The Air Force’s requirement for FY 2012 is that 14.5% of all contract dollars be awarded to small businesses, which the Memorandum notes will “stop the decline.”  The Memorandum notes that in order to meet the 14.5% requirement, the Air Force will have to increase awards to small businesses by an estimated $600 to $800 million in FY 2012.

The Air Force’s strategy for achieving the increased percentage of contract awards to small business will be essentially divided into two prongs: immediate steps, and a reemphasis on Air Force acquisition and procurement policies that will promote increased small business opportunities. 

Immediate action items include:

  • Setting aside for small businesses all acquisitions that are between $3,000 and $150,000 (unless an exception applies) and setting aside for small businesses all acquisitions that are in excess of $150,000, when two or more responsible small businesses are expected to participate and offer fair market prices.  Note, however, that the CO must first consider whether set aside is appropriate under one of the small business socioeconomic programs (i.e., 8(a), HUBZone, SDVOSB, or WOSB) before finding that a “generic” small business set-aside should be selected.  When only one responsible small business will qualify, a partial small business set-aside may be considered when appropriate.
  • Posting sources sought synopses on www.fbo.gov for at least 14 calendar days when the acquisition is expected to be between $150,000 and $3 million, and for 30 calendar days if it is expected to exceed $3 million, in an effort to increase small business competition and utilization.
  • Considering small business set asides first when using GSA Federal Supply Schedules, Government-Wide Acquisition Contracts (“GWACS”), and Interagency Acquisitions.
  • Setting aside task and delivery orders for competition among small businesses when awarding Multiple Award Contracts (“MAC”) and Indefinite Delivery Indefinite Quantity (IDIQ) contracts, in instances where at least two small business entities hold such contracts. 
  • Tracking small business metrics at the Command level for each month.

On a more sustained basis, the Air Force intends to do the following:

  • Utilize new forecasting tools to better track long range estimates for small business use.
  • Consider small businesses for prime contract opportunities first by including a representative from the local small business office to facilitate effective market intelligence including: market research, consistent use and application of NAICS codes, and use of the Air Force’s “enhanced tool” (similar to DoD’s “Maxprac” tool) to determine relevant small business capabilities in the DoD marketplace.
  • Negotiate modifications to existing contracts when the SBA’s size standard for a particular NAICS code increases, changing the prime contractor’s size status from a large business to a small business, so the Air Force can begin receiving additional small business credit.
  • Require notification and approval prior to consolidating or bundling requirements for efforts over $100 million.

Of course, many of these actions listed above were already required.  So, how meaningful this effort will be remains to be seen.  After all, this is not the Air Force’s first effort to increase its use of small businesses, and the annual total dollars awarded to small businesses has not experienced any meaningful trend upward over the last several years.  In fact, as noted above, from 2009 to 2010, the number of contracts awarded to small businesses by the Air Force (both by percentage and dollars) has actually decreased.  Nonetheless, because there is an estimated $600 to $800 million in awards available, small businesses should be aware and take advantage of the renewed energy that small business programs may have.  Small businesses need to make sure the Air Force contracting officers know they are out there and capable of performing at a reasonable price.  Get to know the contracting officers, respond to sources sought notices, and bring this Memorandum to the COs attention if they are not already aware.

1See e.g., DoD Memorandum, Office of the Under Secretary of Defense, June 27, 2011, “Increase Dynamic Small Business Role in the Defense Marketplace,” available here (last accessed June 21, 2012).

2http://www.airforcesmallbiz.org/ (last accessed June 21, 2012). 

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