§ 58.411. Small business reserve program.
(a) General.
(1) The purpose of the Department’s SBR program is to increase opportunities for SBs to compete for the award of Commonwealth contracts as prime contractors. While the SBR program aims to foster competitive procurements, it does not guarantee every properly certified SB will receive a contract.
(2) Under the SBR program, a business that satisfactorily completes the Department’s self-certification process will be deemed a ‘‘small business.’’ Only SBs will be eligible to bid or propose as prime contractors for procurements issued under this program. A business is not eligible for an award of a contract issued as a result of an SBR procurement if the Department terminated their SB self-certification after submittal of the bid or proposal but prior to contract award. If the Department terminates an SB’s self-certification during the initial contract term, the agency is not required to cancel the contract; however, the agency shall not exercise any contract renewals or options.
(3) Certification and participation in the Department’s SBR program is race and gender neutral. However, because SDBs and VBEs must meet the requirements for self-certification as an SB, they will also be eligible to participate in the SBR program. Therefore, for purposes of the SBR program, all references to ‘‘small business’’ shall also include SDBs and VBEs.
(4) The Department reserves the right to issue guidelines as necessary with additional details on the operation of the SBR program, which shall be posted on the Department’s web site.
(b) Eligibility for SBR procurements and exclusions.
(1) Prior to considering a procurement for the SBR program, agencies must determine whether the goods or services should be procured under 62 Pa.C.S. § 520 (relating to supplies manufactured and services performed by persons with disabilities).
(2) Agencies shall determine whether to include a procurement in the SBR program on a contract-by-contract basis utilizing all of the following criteria:
(i) A minimum of three SBs must exist in the appropriate geographical area that are qualified to responsibly provide the goods or services required to generate competition.
(ii) The SBs must be able to satisfactorily provide the scope of the supplies or services required (that is, distribute goods across this Commonwealth, provide a specific expertise).
(iii) The contract value for the initial contract term must be less than the SB threshold for gross annual revenue.
(iv) Any other factors that an agency deems relevant in determining whether a procurement is suitable for competition by, and award to, SBs.
(3) Agencies shall consider the practical severability of all contracts and may not bundle contracts for the purpose of precluding or limiting inclusion in the SBR program.
(4) Independent agencies shall utilize the criteria in this subsection to determine whether a procurement for supplies that has been delegated by the Department shall be included in the SBR program.
(5) Agencies shall document in writing their determination as to whether a procurement shall be included in the SBR program and shall maintain a copy of the written determination in the official contract file.
(6) Contracts for small, no-bid, emergency or sole-source procurements—regardless of dollar value—are exempt from the requirements of the SBR program. However, agencies are encouraged to utilize SBs whenever possible for small, no-bid, emergency and sole-source procurements.
(c) Procurement processes.
(1) Agencies shall utilize the procurement processes documented in the Procurement Handbook found at www.dgs.pa.gov for all SBR procurements, subject to all of the following:
(i) For SBR procurements, agencies shall only seek competition from and shall only award contracts to those businesses possessing a valid Department-issued SB certification as of the bid or proposal due date and time, unless otherwise set forth in the procurement.
(ii) Notices of SBR procurements shall be issued through the Department’s publicly accessible Internet web site consistent with 62 Pa.C.S. § 106.1(b) (relating to public access to procurement records). The public notice of an invitation for bids or requests for proposals shall indicate that the procurement is being issued as part of the SBR program.
(iii) Agencies shall reject as nonresponsive any bid or proposal submitted by an entity that is not a Department self-certified SB as of the bid or proposal due date and time, unless otherwise set forth in the procurement.
(2) The selected SB must self-perform at least 51% of the work.
(3) An SBR procurement may be canceled and reissued as a procurement open to all businesses when, after issuing the SBR-designated solicitation, the issuing agency determines that one of the conditions set forth in subsection (b)(2) does not reasonably exist. The decision to cancel and reissue a procurement shall be made in accordance with 62 Pa.C.S. § 521 (relating to cancellation of invitations for bids or requests for proposals) and shall be deemed final. The re-issued procurement may be, but is not required to be, considered for the setting of SDB and VBE participation goals.
(4) The Department will develop and maintain an internal data dashboard and reporting mechanisms to provide regularly updated information on agencies’ procurement spending levels and percentages, including data on the agencies’ SB, SDB and VBE programs.
Cross References This section cited in 4 Pa. Code § 58.402 (relating to definitions).
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