FAR 52.219-2—Equal Low Bids.
Plain-English Summary
FAR 52.219-2, Equal Low Bids, is a solicitation provision used only for small business concerns and is designed to resolve tie bids by giving possible priority to a bidder that qualifies as a labor surplus area (LSA) concern. The provision explains when LSA status can affect award, what information the bidder must provide to claim that priority, and the consequence of failing to identify the relevant labor surplus area in the solicitation response. It also ties the award preference to a substantive performance obligation: if a bidder receives award because of LSA priority, the contractor must perform, or cause performance to be done, in a manner consistent with the obligations of an LSA concern. In practice, this provision matters when two or more bids are equal and the contracting officer must determine whether one bidder gets preference based on LSA status. It is a narrow but important tie-breaker rule that can affect award outcome, bidder certifications and disclosures, and post-award performance expectations.
Key Rules
Applies Only to Small Businesses
This provision is limited to small business concerns. If a bidder is not a small business, the provision does not provide any tie-bid preference or related benefit.
LSA Status Can Break Ties
A bidder’s status as a labor surplus area concern may affect entitlement to award when bids are equal. The provision creates a possible priority in tie situations, but only if the bidder qualifies and properly identifies the relevant labor surplus area.
Identify the Relevant LSA
To be considered for priority, the bidder must identify the labor surplus area in which more than 50 percent of the contract price will be incurred for manufacturing or production by the bidder or first-tier subcontractors. The identification must be placed in the space provided in the provision.
Failure to Identify Waives Priority
If the bidder does not identify the labor surplus area as required, the bidder cannot receive priority consideration under this provision. The contracting officer may not treat the bidder as having claimed the preference if the required information is missing.
Award Creates Performance Obligation
If a bidder receives award because of LSA priority and would not otherwise have received the contract, the contractor must perform the contract, or cause it to be performed, in accordance with the obligations of an LSA concern. The award preference is therefore linked to ongoing compliance, not just bid evaluation.
Responsibilities
Contracting Officer
Include this provision when prescribed by FAR 19.309(b), evaluate tie bids in accordance with the provision, and determine whether a bidder has properly claimed LSA priority. If award is made based on LSA priority, ensure the resulting contract reflects the contractor’s obligation to perform consistently with LSA concern requirements.
Small Business Bidder
Decide whether to claim LSA priority in a tie-bid situation, identify the relevant labor surplus area in the space provided, and ensure the identified area is the one where more than 50 percent of the contract price will be incurred for manufacturing or production by the bidder or first-tier subcontractors.
Labor Surplus Area Concern / Awardee
If awarded the contract because of LSA priority, perform the contract or arrange for performance in a manner consistent with the obligations of an LSA concern, including maintaining the basis on which the priority was granted.
First-Tier Subcontractors
When relevant to the bidder’s LSA claim, their manufacturing or production costs may count toward the more-than-50-percent threshold. They must support the bidder’s claimed LSA basis through their portion of the work.
Practical Implications
This provision only matters in equal low bid situations, so many procurements will never reach it; when they do, the bidder’s paperwork can determine the award winner.
A common pitfall is failing to fill in the LSA identification space or identifying the wrong area, which eliminates priority consideration even if the bidder otherwise qualifies.
The 50-percent test is tied to manufacturing or production costs incurred by the bidder or first-tier subcontractors, so bidders must understand how their supply chain and cost structure affect eligibility.
Winning on LSA priority is not just a bid-evaluation advantage; it can create a continuing performance obligation, so contractors should be prepared to support their LSA status after award.
Contracting officers should verify that the tie-bid preference is applied only when the provision is properly included and the bidder has complied with the identification requirement.
Official Regulatory Text
As prescribed in 19.309 (b) , insert the following provision: Equal Low Bids (Oct 1995) (a) This provision applies to small business concerns only. (b) The bidder’s status as a labor surplus area (LSA) concern may affect entitlement to award in case of tie bids. If the bidder wishes to be considered for this priority, the bidder must identify, in the following space, the LSA in which the costs to be incurred on account of manufacturing or production (by the bidder or the first-tier subcontractors) amount to more than 50 percent of the contract price. ________________________________________________ ________________________________________________ (c) Failure to identify the labor surplus areas as specified in paragraph (b) of this provision will preclude the bidder from receiving priority consideration. If the bidder is awarded a contract as a result of receiving priority consideration under this provision and would not have otherwise received award, the bidder shall perform the contract or cause the contract to be performed in accordance with the obligations of an LSA concern. (End of provision)