### Subpart 19.10- Small Business Competitiveness Demonstration Program

## 19.1001 General.

The Small Business Competitiveness Demonstration Program was established by the Small Business Competitiveness Demonstration Program Act of 1988, Public Law 100-656 (15 U.S.C. 644 note). The program is implemented by a joint OFPP and SBA Policy Directive and Implementation Plan, dated May 25, 1999. The program consists of two major components-

(a) Unrestricted competition in four designated industry groups; and
(b) Enhanced small business participation in 10 agency targeted industry categories.

## 19.1002 Definitions.

"Emerging small business," as used in this subpart, means a small business concern whose size is no greater than 50 percent of the numerical size standard applicable to the North American Industry Classification System (NAICS) code assigned to a contracting opportunity.

"Emerging small business reserve amount," for the designated groups described in 19.1005, means a threshold established by the Office of Federal Procurement Policy of-

(1) $25,000 for construction, refuse systems and related services, and nonnuclear ship repair; and
(2) $50,000 for architectural and engineering services.

## 19.1003 Purpose.

The purpose of the Program is to-

(a) Assess the ability of small businesses to compete successfully in certain industry categories without competition being restricted by the use of small business set-asides. This portion of the program is limited to the four designated industry groups listed in section 19.1005.
(b) Expand small business participation in 10 targeted industry categories through continued use of set-aside procedures, increased management attention, and specifically tailored acquisition procedures, as implemented through agency procedures.
(c) Measure the extent to which awards are made to a new category of small businesses known as emerging small businesses (ESB's), and to provide for certain acquisitions to be reserved for ESB participation only. This portion of the program is also limited to the four designated industry groups listed in section 19.1005.

## 19.1004 Participating agencies.

The following agencies have been identified as participants in the demonstration program:

The Department of Agriculture.

The Department of Defense, except the National Imagery and Mapping Agency.

The Department of Energy.

The Department of Health and Human Services.

The Department of the Interior.

The Department of Transportation.

The Department of Veterans Affairs.

The Environmental Protection Agency.

The General Services Administration.

The National Aeronautics and Space Administration.

## 19.1005 Applicability.

(a) Designated industry groups.

NAICS CODE | NAICS DESCRIPTION
--- | ---
| Construction (except drudging)
Subsector 233-Building, Developing, and General Contracting
23311 | Land Subdivision and Land Development
23321 | Single Family Housing Construction
23322 | Multifamily Housing Construction
23331 | Manufacturing and Industrial Building Construction
23332 | Commercial and Institutional Building Construction
Subsector 234-Heavy Construction
23411 | Highway and Street Construction
23412 | Bridge and Tunnel Construction
23491 | Water, Sewer, and Pipeline Construction
23492 | Power and Communication Transmission Line Construction
23493 | Industrial Nonbuilding Structure Construction
23499 | All Other Heavy Construction
Subsector 235-Special Trade Contractors
23511 | Plumbing, Heating, and Air-Conditioning Contractors
23521 | Painting and Wall Covering Contractors
23531 | Electrical Contractors
23541 | Masonry and Stone Contractors
23542 | Drywall, Plastering, Acoustical, and Insulation Contractors
23543 | Tile, Marble, Terrazzo, and Mosaic Contractors
23551 | Carpentry Contractors
23552 | Floor Laying and Other Floor Contractors
23561 | Roofing, Siding, and Sheet Metal Contractors
23571 | Concrete Contractors
23581 | Water Well Drilling Contractors
23591 | Structural Steel Erection Contractors
23592 | Glass and Glazing Contractors
23593 | Excavation Contractors
23594 | Wrecking and Demolition Contractors
23595 | Building Equipment and Other Machinery Installation Contractors
23599 | All Other Special Trade Contractors
Nonnuclear Ship Repair
336611 | Ship Building and Repairing
Architectural and Engineering Services (including surveying and mapping)
54131 | Architectural Services
54133 | Engineering Services
54136 | Geophysical Surveying and Mapping Services
54137 | Surveying and Mapping (except Geophysical) Services
Refuse Systems and Related Services
562111 | Solid Waste Collection
562119 | Other Waste Collection
562219 | Other Nonhazardous Waste Treatment and Disposal

(b) Targeted industry categories. Each participating agency, in consultation with the Small Business Administration, designates its own targeted industry categories for enhanced small business participation.

## 19.1006 Exclusions.

This subpart does not apply to-

(a) Orders placed against Federal Supply Schedules;
(b) Contract awards to educational and nonprofit organizations; or
(c) Contract awards to governmental entities.

## 19.1007 Procedures.

(a) General.

(1) All solicitations must include the applicable NAICS code and size standards.
(2) The face of each award made pursuant to the program must contain a statement that the award is being issued pursuant to the Small Business Competitiveness Demonstration Program.

(b) Solicitations greater than the ESB reserve amount.

(1) Solicitations for acquisitions in any of the four designated industry groups that have an anticipated dollar value greater than the emerging small business reserve amount must not be considered for small business set-asides under Subpart 19.5. However, agencies may reinstate the use of small business set-asides as necessary to meet their assigned goals, but only within organizational units that failed to meet the small business participation goal.
(2) Acquisitions in the designated industry groups must continue to be considered for placement under the 8(a) Program (see Subpart 19.8) and the HUBZone Program (see Subpart 19.13).

(c) Solicitations equal to or less than the ESB reserve amount.

(1) Solicitations for acquisitions in the four designated industry groups with an estimated value equal to or less than the emerging small business reserve amount must be set aside for ESBs, provided that the contracting officer determines that there is a reasonable expectation of obtaining offers from two or more responsible ESBs that will be competitive in terms of market price, quality, and delivery. If no such reasonable expectation exists, the contracting officer must-

(i) For acquisitions $25,000 or less, proceed in accordance with Subpart 19.5, 19.8, or 19.13; or
(ii) For acquisitions greater than $25,000 and less than or equal to the ESB reserve amount, proceed in accordance with paragraph (b) of this section.

(2) If the contracting officer proceeds with the ESB set-aside and receives a quotation from only one ESB at a reasonable price, the contracting officer must make the award. If there is no quote from an ESB, or the quote is not at a reasonable price, then the contracting officer must cancel the ESB set-aside and proceed in accordance with paragraph (c)(1)(i) or (ii) of this section.

(d) Expanding small business participation in targeted industry categories. Each participating agency must develop and implement a time-phased strategy with incremental goals, including reporting on goal attainment. To the extent practicable, provisions that encourage and promote teaming and joint ventures must be considered. These provisions should permit small business firms to effectively compete for contracts that individual small businesses would be ineligible to compete for because of lack of production capacity or capability.

## 19.1008 Solicitation provisions.

(a) Insert in full text the provision at 52.219-19, Small Business Concern Representation for the Small Business Competitiveness Demonstration Program, in all solicitations in the four designated industry groups.
(b) Insert in full text the provision at 52.219-20, Notice of Emerging Small Business Set-Aside, in all solicitations for emerging small businesses in accordance with 19.1007(c).
(c) Insert in full text the provision at 52.219-21, Small Business Size Representation for Targeted Industry Categories under the Small Business Competitiveness Demonstration Program, in all solicitations issued in each of the targeted industry categories under the Small Business Competitiveness Demonstration Program that are expected to result in a contract award in excess of $25,000.