FAR 19.506—Documentation requirements.
Plain-English Summary
FAR 19.506 explains when the contracting officer must create written documentation supporting small-business set-aside decisions and related acquisition choices. It covers two main documentation duties: first, explaining why a contract was not totally set aside for small business under FAR 19.502-2; and second, explaining why a multiple-award contract was not partially set aside, not reserved, and did not allow set-asides of orders when those small-business authorities could have been used. It also requires the contracting officer, when applicable, to document why the agency did not follow recommendations from the Office of Small and Disadvantaged Business Utilization (OSDBU) Director, or for DoD the Office of Small Business Programs Director or designee, regarding whether the acquisition should be awarded under FAR subparts 19.5, 19.8, 19.13, 19.14, or 19.15. The section further clarifies that this documentation is not required when award is anticipated to a small business under those subparts. In practice, this rule creates a record showing that the agency considered small-business participation options and explains any decision not to use them, which is important for accountability, internal review, protests, and compliance with small-business policy goals.
Key Rules
Document non-set-aside decisions
If a contract is not totally set aside for small business under FAR 19.502-2, the contracting officer must document the rationale. The record should explain why a full small-business set-aside was not appropriate.
Document multiple-award choices
When a multiple-award contract could have been partially set aside, reserved, or structured to allow set-asides of orders, the contracting officer must document why those options were not used. The explanation is required only when those small-business authorities were available but not selected.
Address small-business office recommendations
If applicable, the documentation must include the rationale for not accepting recommendations from the agency small-business office leadership. This includes the OSDBU Director, or for DoD, the Director of the Office of Small Business Programs or that Director’s designee, on whether the acquisition should be awarded under the listed small-business subparts.
Covers specific small-business subparts
The recommendation-related documentation applies to acquisitions considered under FAR subparts 19.5, 19.8, 19.13, 19.14, and 19.15. These are the small-business programs and authorities referenced by the rule.
No documentation when small-business award is anticipated
Documentation is not required if the contract award is anticipated to a small business under subparts 19.5, 19.8, 19.13, 19.14, or 19.15. In that situation, the acquisition is already being pursued as a small-business award, so the rationale for not using those authorities is unnecessary.
Responsibilities
Contracting Officer
Prepare and retain written rationale when a contract is not totally set aside for small business, and when a multiple-award contract is not partially set aside, not reserved, or not structured to allow set-asides of orders despite the availability of those options. Include, when applicable, the reasons for not following small-business office recommendations.
Agency Director of the Office of Small and Disadvantaged Business Utilization (OSDBU)
Provide recommendations, when involved, on whether a particular acquisition should be awarded under the applicable small-business subparts. The contracting officer must consider these recommendations and document any decision not to accept them.
Department of Defense Director of the Office of Small Business Programs or Designee
For DoD acquisitions, provide recommendations on whether the acquisition should be awarded under the applicable small-business subparts. If the contracting officer does not follow the recommendation, the rationale must be documented when applicable.
Agency Acquisition/Small Business Stakeholders
Support the contracting officer by identifying whether small-business set-aside, reserve, or order-level set-aside authorities are available and by providing input for the written record.
Practical Implications
This section is mainly a documentation and accountability rule: if you decide not to use a small-business set-aside or related authority, you need a defensible written record.
A common pitfall is assuming the decision itself is enough; FAR 19.506 requires the rationale to be documented, especially for full set-asides and multiple-award structuring choices.
Another risk is overlooking recommendations from the OSDBU or DoD small-business office leadership. If those recommendations are not followed, the file should explain why.
For multiple-award acquisitions, the contracting officer should think early about partial set-asides, reserves, and order-level set-asides, because the documentation must show why those options were not used if they were available.
If the acquisition is already anticipated to be awarded to a small business under the cited subparts, this documentation requirement does not apply, so the file should clearly reflect that anticipated award strategy.
Official Regulatory Text
(a) (1) The contracting officer shall document the rationale when a contract is not totally set aside for small business in accordance with 19.502-2 . (2) The contracting officer shall document the rationale when a multiple-award contract is not partially set aside, not reserved, and does not allow for setting aside of orders, when these authorities could have been used. (b) If applicable, the documentation shall include the rationale for not accepting the recommendations made by the agency Director of the Office of Small and Disadvantaged Business Utilization, or, for the Department of Defense, the Director of the Office of Small Business Programs, or the Director's designee, as to whether a particular acquisition should be awarded under subparts 19.5 , 19.8 , 19.13 , 19.14 , or 19.15 . (c) Documentation is not required if a contract award is anticipated to a small business under subpart 19.5 , 19.8 , 19.13 , 19.14 , or 19.15 .