25 OCT 1995

MEMORANDUM FOR ALMAJCOM-FOA-DRU (CONTRACTING)

FROM: SAF/AQC

1060 Air Force Pentagon

Washington DC 20330-1060

SUBJECT: Air Force Acquisition Circular (AFAC) 92-50

Attached is an advance copy of AFAC 92-50. The AFAC disseminates a memorandum by the Under Secretary of Defense (Acquisition and Technology) that suspends portions of the DFARS that relate to set-asides to small disadvantaged businesses (SDBs). The memo was issued as a result of the Supreme Court's decision in Adarand Constructors, Inc. v. Pena, 115 S. Ct. 2097 (June 12, 1995). Effective 23 Oct 1995, contracting officers shall not set aside acquisitions for SDBs. Existing solicitations should be amended to remove SDB set-asides unless it would unduly delay the procurement, so that deliveries under the resultant contract would not be received when required. Subsequent guidance will be provided concerning initiatives to limit the severe adverse impact of this suspension.

This AFAC is also being distributed through the publication distribution system.

Attachment

AFAC 92-50

CC:

ALMAJCOM-FOA-DRU (Contract Law Offices)CURTIS NEWILL, III, Colonel, USAF

Assistant Deputy Assistant Secretary

(Contracting)

Assistant Secretary (Acquisition)

DEPARTMENT OF THE AIR FORCEAFAC 92-50

Headquarters US Air Force

Washington DC 20330October 25, 1995

AIR FORCE ACQUISITION CIRCULAR

This Air Force Acquisition Circular (AFAC) is issued pursuant to the authority of FAR 1.301. Reproduction is authorized.

POLICY CHANGES/INFORMATION

Item Title Pages

Section B, DFARS Changes B1 Small Disadvantaged Business Utilization Program B-1

(USD(A&T) Memo, 23 October 1995)

INSTRUCTIONS

GENERAL--

File this AFAC 92-50 Index page with the AFACs.

ITEM B1--

GENERAL: This AFAC item disseminates a memorandum by the Under Secretary of Defense (Acquisition and Technology) that suspends portions of the DFARS related to the set-aside of acquisitions to small disadvantaged businesses (SDBs).

FILING INSTRUCTIONS: File AFAC pages B-l, B-1.1 and B-1.2 with the AFACs.

MARKING INSTRUCTIONS: Annotate AFAC 92-50, B1" in the margin at each of the following locations in the DFARS:

(i) Page 219.5-1 at 219.501 (S-70) and at 219.502-2-70;

(ii) Page 219.5-3 at 219.502-4, 219.504(b)(i), 219.506 and 219.508(e); and

(iii) Page 219.5-4 at 219.508-70.

EFFECTIVITY INSTRUCTIONS: This AFAC item is effective from 23 Oct 95 until it is cancelled, superceded or otherwise revised.


No. of Printed Pages: 4

OPR: SAF/AQCF

Distribution: F (Same as FAR)

AFAC 92-50 October 25, 1995B-1

The Under Secetary of Defense (Acquisition and Technology)

23 OCT 1995

MEMORANDUM FOR SECRETARIES OF THE MILITARY DEPARTMENTS

ATTN: SERVICE ACQUISITION EXECUTIVES

DIRECTORS OF THE DEFENSE AGENCIES

SUBJECT: Small Disadvantaged Business Utilization Program

Sections 219.501(S-70), 219.502-2-70, 219.502-4, 219.504(b)(i), 219.506, 219.508(e) and 219.508-70, and contract clause 252.219-7002 of the Department of Defense Federal Acquisition Regulation Supplement (DFARS) are hereby suspended. This suspension takes account of the Supreme Court's decision in Adarand Constructors, Inc. v. Pena, 115 S.Ct. 2097 (June 12, 1995).

Until further notice contracting officers shall not set aside acquisitions for small disadvantaged businesses (SDBs). This suspension is effective immediately. Contracting officers should amend solicitations that have been issued to remove a set-aside that was based upon the suspended sections where the amendment of the solicitation will not unduly delay a procurement such that deliveries under the resulting contract would not be received when required. I also waive the requirements of section 22(a) and (b) of the Office of Federal Procurement Policy Act as amended (42 U.S.C. 418b) because action to take account of the Supreme Court's decision is an urgent and compelling circumstance making compliance with these sections impracticable.

The suspension of the "rule of two" does not reflect any change in the Department's commitment to bringing SDBs into the defense industrial base. The Department has an excellent record of contracting and subcontracting with SDBs and we are committed to maintaining that record.

I expect to announce initiatives in the near future that are designed to limit the adverse impact of this suspension on the

B-1.1 October 25, 1995

AFAC 92-50


SDB community. I have also personally contacted defense industry leaders with the request that industry voluntarily adopt greater subcontracting goals. In the meanwhile, I ask and direct all DoD contracting activities to use their utmost skill and existing authorities to increase awards to SDBs. These efforts should include encouraging small businesses to use SDBs as subcontractors, and encouraging all prime contractors to increase their efforts to award subcontracts to SDBs.

Paul G. Kaminski

AFAC 92-50 October 25, 1995 B-1.2

THE DEPUTY SECRETARY OF DEFENSE WASHINGTON, D.C. 20301-10OO

23 OCT 1995

MEMORANDUM FOR SECRETARIES OF THE MILITARY DEPARTMENTS DIRECTORS OF THE DEFENSE AGENCIES

SUBJECT: Small Disadvantaged Business Contracting Program

The Department has announced suspension of the "rule of two" contracting set-aside program for small disadvantaged businesses (SDBs). This action was taken in consideration of the Supreme Court's recent decision in Adarand v. Pena and after consultation with the Justice Department.

I am writing to stress that the suspension of the "rule of two" does not reflect any change in the Department's commitment to bringing SDBs into the defense industrial base. To the contrary, the Department is participating very actively in an intergovernmental working group chaired by the Department of Justice, that is engaged in an expedited review, and where required, reworking of government regulations to ensure that they are fully consistent with the Adarand decision. Nonetheless, the suspension will mean some loss of work for some SDBs in the immediate future. Accordingly, I request that you make participation of SDBs in your contracting and subcontracting programs a number one priority and redouble your efforts to achieve and exceed past levels of SDB participation.

I appreciate your aggressive support for these initiatives to ensure that SDBs play an increasingly greater role as defense contractors and subcontractors.