tion and found by the President to be in the public interest as contributing to the national defense, shall be construed to be within the prohibitions of the antitrust laws or the Federal Trade Commission Act of the United States. A copy of each such request intended to be within the coverage of this section, and any modification or withdrawal thereof, shall be furnished to the Attorney General and the Chairman of the Federal Trade Commission when made, and it shall be published in the FEDERAL REGISTER unless publication thereof would, in the opinion of the President, endanger the national security.

(c) The authority granted in subsection (b) of this section shall be delegated only (1) to an official who shall for the purpose of such delegation be required to be appointed by the President by and with the advice and consent of the Senate, (2) upon the condition that such official consult with the Attorney General and the Chairman of the Federal Trade Commission not less than ten days before making any request or finding thereunder, and (3) upon the condition that such official obtain the approval of the Attorney General to any request thereunder before making the request.

(d) Upon withdrawal of any request or finding hereunder, or upon withdrawal by the Attorney General of his approval of the voluntary agreement or program on which the request or finding is based, the provisions of this section shall not apply to any subsequent act, or omission to act, by reason of such finding or request.

§ 126.11-1 General. Defense production pools are authorized to enter into defense contracts with the Government and may perform such contracts or assign subcontracts to the members of the pool, or may in the case of an unincorporated pool designate a member as prime contractor. The Secretary of Labor has exempted such pools from the requirement of section 1 (a) of the WalshHealey Public Contracts Act as to the certification that such pool is a "Manufacturer" or "Regular Dealer" under said Act.

§ 126.11-2 Procedures. (a) Concerns planning to organize a small business defense production pool will file an application (Form 418) with detailed information to be included, with the SBA Regional Office.

(b) Upon receipt of an application, the Regional Office will review it as to sufficiency and if it is fully completed will refer it to the Adminstrator for his action.

(c) Upon receipt of the application, the Administrator will forward a copy to the Attorney General and the Chair

man of the Federal Trade Commission and request consultation with them.

(d) Upon completing the consultation and upon a finding by the Administrator that the action is in the public interest as contributing to the national defense, the Administrator will request written approval of the Attorney General.

(e) Upon receipt of approval by the Attorney General, the Administrator notifies the pool and each applicant that the plan has been approved and asks each to participate in the pool's operation.

(f) The pool may commence operations upon its written acceptance and each member thereof may participate as a pool member upon their written acceptances transmitted to the Administrator. The Administrator will publish in the FEDERAL REGISTER copies of his approval and findings unless in his opinion the publication would endanger the national security.

§ 126.11-3 Types of defense production pools. (a) Incorporated: A pool which has been incorporated by the member firms under the laws of a state.

(b) Unincorporated: A pool in which the activities are directed and controlled by an executive committee, and no action is taken on behalf of the pool without prior authorization or approval of the committee.

(c) "Mother hen": An unincorporated pool sponsored by a large company which assumes prime contracting responsibility for the members of the pool.

§ 126.11-4 Antitrust exemption. No act or omission to act, if requested by the Administrator pursuant to approval of a voluntary agreement or program and found by the Administrator to be in the public interest as contributing to the national defense, shall be construed to be within the prohibition of the antitrust laws or the Federal Trade Commission Act of the United States. A copy of each such request intended to be within the coverage of this section, and any notification or withdrawal thereof, shall be furnished to the Attorney General and the Chairman of the Federal Trade Commission when made.

§ 126.11-5 Withdrawal of approval of a small business defense production pool. The withdrawal of any request or finding hereunder by the Administrator, or the withdrawal by the Attorney General of his approval of the voluntary agreement

or program on which the request or finding is based, would cancel any exemptions to the Antitrust laws granted under these provisions. A copy of any modification or withdrawal of approval shall be published in the FEDERAL REGISTER Unless publication thereof would, in the opinion of the Administrator, endanger the national security.

§ 126.11-6 Reports. Approved small business defense production pools will furnish periodic reports to SBA. These reports will indicate whether they are seeking defense contracts or actively producing as defense prime or subcontractors. They will also include the number and value of prime and subcontracts obtained since operations were begun, and any changes in address or management.

§ 126.11-7 New members. All small business defense production pools must agree to admit new members upon equitable terms and permit existing members to withdraw from the organization.

AUTHORITY: Sections 127.15 to 127.15-2 issued under sec. 5, 72 Stat. 385; 15 U. S. C. 634.

SOURCE: §§ 127.15 to 127.15-2 appear at 23 F. R. 10530, Dec. 31, 1958.

§ 127.15 Statutory provisions.

SEC. 15. To effectuate the purposes of this Act, small business concerns within the meaning of this Act shall receive any award or contract or any part thereof, and be awarded any contract for the sale of Government property, as to which it is determined by the Administration and the contracting procurement or disposal agency (1) to be in the interest of maintaining or mobilizing the Nation's full productive capacity, (2) to be in the interest of war

or national defense programs, (3) to be in the interest of assuring that a fair proportion of the total purchases and contracts for property and services for the Government are placed with small-business concerns, or (4) to be in the interest of assuring that a fair proportion of the total sales of Government property be made to smallbusiness concerns; but nothing contained in this Act shall be construed to change any preferences or priorities established by law with respect to the sale of electrical power or other property by the Government or any agency thereof. These determinations may be made for individual awards or contracts or for classes of awards or

contracts. Whenever the Administration and the contracting procurement agency fail to agree, the matter shall be submitted for determination to the Secretary or the head of the appropriate department or agency by the Administrator.

§ 127.15-1 General. Set-asides are made by the Government for the purchase of property and services including, but not limited to, contracts for maintenance, repair, construction, research and development, and for the disposal of real and personal property, including timber and minerals.

§ 127.15-2 Procedures-(a) Government procurement set-asides. (1) Under agreements with Federal agencies, representatives of SBA are assigned to the major Federal procurement installations to screen purchase requirements.

(2) When a procurement or a class of procurements meets one or more of the statutory criteria and there are sufficient numbers of small business concerns considered capable of furnishing the property or services, at fair and reasonable prices, SBA representatives will initiate small business set-asides. Setasides may be for entire procurements (called 100 percent set-asides) or for portions thereof (called partial setasides). If the procurement officer does not agree to the set-asides, the SBA representative will attempt to resolve the disagreement with the Head of the local installation. Whenever the SBA representative and the Head of the procurement installation fail to agree, the matter will be submitted for determination to the Secretary or Head of the procuring Department or Agency by the Administrator of SBA.

(3) In a 100 percent set-aside, the entire procurement is restricted to small business concerns and bids or quotations by large firms will be rejected as nonresponsive. It is SBA policy to request 100 percent set-asides when there is reasonable expectation that bids or proposals may be obtained from a sufficient number of responsible small business concerns so that awards will be made at reasonable prices.

(4) In a partial set-aside, only a portion of the procurement is restricted to small business concerns. It is SBA policy to request partial set-asides when (i) the procurement is not totally set-aside, (ii) it is severable into two or more reasonable lots, and (iii) two or more

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small business concerns are believed to have the technical competency and productive capacity to furnish a severable portion of the item being purchased by the Government. Insofar as practicable, the set-aside portion shall be such as to make the maximum use of small business capacity.

(b) Property sales or disposal setasides. (1) Under agreements with Federal agencies, SBA assigns representatives to cover major property sales and disposal activities in the regions to screen inventory or proposed sales of real, personal and mixed property, including timber and minerals.

(2) SBA representatives review proposed sales or disposals of Government property, including cost factors and proposed sales method, for the purpose of assuring that a fair proportion of the property for sale or disposal shall be made available for purchase by small business firms, taking into consideration existing preferences and priorities. When SBA representatives believe there is a sufficient number of small business firms capable of competing for the purchase of such property at fair and reasonable prices, the SBA representatives will initiate small business setasides. Set-asides may be for entire sales (called 100 percent set-asides) or for portions thereof (called partial setasides). If the disposal officer does not agree to the set-asides, the SBA representative will attempt to resolve the disagreement with the head of the local disposal installation. Whenever the SBA representative and the Head of the disposal installation fail to agree, the matter shall be submitted for determination to the Secretary or Head of the disposing Department or Agency by the Administrator of SBA.

(3) Bids or quotations by firms not qualifying as small business concerns, on any portion of a set-aside property isale or disposal, will be rejected as nonresponsive.

(c) Awards on procurements, sales or disposals partially set-aside. (1) Under agreements with Federal agencies, when only one award is made on the unreserved portion (the portion that is open to both large and small bidders), the set-aside portion will be awarded at the same unit price as that paid or received by the Government on the unreserved portion. When multiple awards are made on the unreserved portion, the

awards on the set-aside portion will be made at the highest unit price of the unreserved portion in case of purchases by the Government or at the lowest unit price in case of property sales or disposals by the Government.

(2) In partial set-asides involving Government procurement, negotiations for award of the set-aside portion will be conducted by the purchasing officer with responsible small firms who submit responsive bids or proposals on the unreserved portion within 120 percent of the highest unit price awarded on the unreserved portion, beginning with the firm that submitted the lowest bid or proposal.

(3) In partial set-asides involving Government property sales and disposals, negotiations will be conducted by the disposal officer with small firms that bid on the unreserved portion, beginning with the firm that submitted the highest bid on such unreserved portion.

(d) Withdrawal of set-asides. If prior to award, the contracting officer considers that procurement of the set-aside from a small business concern would be detrimental to the public interest (e. g., because of unreasonable price), the contracting officer will initiate a request to the SBA representative for withdrawal of the joint set-aside. If the SBA representative does not agree to the withdrawal, he will attempt to resolve the disagreement with the Head of the local procurement or disposal installation, as the case may be. Whenever the SBA representative and the Head of the local installation fail to agree, the matter will be submitted for determination to the Secretary or Head of the procuring or disposal Department or Agency by the Administrator of SBA.

(e) Participation by small business concerns. Small business concerns desiring to take advantage of the set-aside program should (1) determine which Government purchasing or disposal offices are most likely to buy items which they can supply or dispose of property they desire to purchase, (2) request placement on the bidders' lists maintained by such offices, and (3) bid competitively on these procurements and disposals. Information concerning counsel and guidance in connection with contracting with the Government, furnished by SBA, is set forth under § 124.8-4.