The “Rule of Two” has a well-established place in federal contracting.  Federal Acquisition Regulations Part 19.502-2(a) states: “Each acquisition of supplies or services that has an anticipated dollar value exceeding $3,500…but not over $150,000…is automatically reserved exclusively for small business concerns and shall be set aside for small business unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive…”

FAR Part 19.502-2(b) covers larger acquisitions and clearly states: “The contracting officer shall set aside any acquisition over $150,000 for small business participation when there is a reasonable expectation that—(1) [o]ffers will be obtained from at least two responsible small business concerns…; and (2) award will be made at fair market prices….”

So how do you use these regulations to promote the creation of small business set-asides that would grant you an advantage in a competitive procurement? Here are some tips.

Get to work early

Once the solicitation is released publicly, it is too late to request that it be set aside. When the announcement is made on the Federal Business Opportunities website (http://www.FBO.gov), the acquisition method already has been selected and the NAICS code has been assigned.

Once it is publicized as a full and open competition, there is no way to make a change short of cancelling the solicitation and starting over. Anticipate months or even a year ahead of time what contracts are coming up that have potential for you and reach out to the contracting office as early as possible.

Identify your targets

There are several ways to identify potential opportunities before they are announced. Sources Sought notices, Requests for Information and Presolicitation notices in http://www.FBO.gov all provide early warning of impending contracts.

At a time when the solicitation is still months ahead, the contracting staff usually is making an effort to determine if there are two or more responsible small businesses that are likely to submit responsive offers. Those notices give you a heads-up to make your interest – and your small business status – known.

Agency acquisition forecasts, listing all new and renewable contracts over $25,000, are another good resource.

Contracts to be recompeted

Another method to anticipate specific opportunities is to be aware of the expiration date of existing contracts that are likely to be recompeted.

The Federal Procurement Data System (FPDS) (http://www.FPDS.gov), USASpending.gov (http://www.USASpending.gov)website and other information tools can help you find out when existing contracts expire, whether they were previously set aside, and some idea of the magnitude of the contract. Compare your skills and reputation to the incumbent, and assess your chances of becoming the follow-on contractor.

Execute

It is up to you to take the actions necessary to bring the Rule of Two into effect. Waiting, hoping or expecting someone else to do it may ruin your opportunity for success.

Research whether there are two or more potential bidders who can meet the requirement and are likely to bid. If there are, then send a letter (both by email and by postal mail) to the contracting officer clearly stating that you are formally requesting a Rule of Two determination for the specific requirement under Section 19.502-2[(a) or (b), depending on acquisition size] of the FAR.

Note in the letter that market research will identify a number of small businesses (or 8(a)s, HUBZone firms, or women-owned or service-disabled veteran-owned firms, etc.) that can perform the work and are likely to bid. You should even identify a couple of those firms (yourself and your competitors) or offer to provide a list at their request.

If the expiring contract was previously set aside, your letter should mention it and request that the follow-on procurement also should be set aside.

Adding validity

Along with your letter, attach your capabilities statement and examples of past performance. Cite similar contracts performed in federal or in other markets.

Enlisting support

Obviously, the Rule of Two cannot be applied if the contracting officer is not assured of at least two responsible and responsive bidders. Work with your competition for mutual benefit. Ask two or three other potential bidders to also request, in writing, that the contracting officer sets aside the requirement pursuant to FAR 19.502-2.

Manage the process

You also may wish to send copies of the letter to the OSDBU office, your SBA specialist or others up the chain, especially if your previous requests have been ignored.

A week after you have submitted your request, contact the recipient to be sure it has been received and noted. Take the opportunity to once again mention your capabilities, past performance and skills. Offer to identify other similar companies that can do the work.

Finally, be absolutely responsible by submitting your timely, responsive offer. You will burn bridges quickly if you request set-asides and then fail to bid. And you will damage the contracting officer’s reputation if he or she creates a set-aside and then does not get two or more bids.

from Set-Aside Alert, April 15 2016