Federal Acquisition Regulation; Procurement Program for Service-Disabled Veteran-Owned Small Business Concerns, 14950-14962 [05-5656]

Agencies

• General Services Administration
• National Aeronautics and Space Administration
• DEPARTMENT OF DEFENSE

[Federal Register Volume 70, Number 55 (Wednesday, March 23, 2005)]
[Rules and Regulations]
[Pages 14950-14962]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-5656]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 4, 5, 13, 15, 19, 42, 44, and 53

[FAC 2005-02; FAR Case 2004-002]
RIN 9000-AJ92


Federal Acquisition Regulation; Procurement Program for Service-
Disabled Veteran-Owned Small Business Concerns

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on a final rule 
amending the Federal Acquisition Regulation (FAR) governing the 
procurement program for Service-Disabled Veteran-Owned Small Business 
Concerns (SDVOSB). The final rule retains the interim rule with 
changes. The final rule deletes commissary or exchange resale items 
from a list of actions excluded from the SDVOSB program and modifies 
protest procedures. The final rule also includes technical corrections 
adding service-disabled veteran-owned small, veteran-owned small, and 
HUBZone small business concerns to the list of socioeconomic programs, 
and makes changes to the Optional Form 347, Order for Supplies and 
Services, Standard Form 1447, Solicitation/Contract, and Standard Form 
1449,

[[Page 14951]]

Solicitation/Contract/Order for Commercial Items.

DATES: Effective Date: March 23, 2005.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (202) 501-4755 
for information pertaining to status or publication schedules. For 
clarification of content, contact Ms. Rhonda Cundiff, Procurement 
Analyst, at (202) 501-0044. Please cite FAC 2005-02, FAR case 2004-002.

SUPPLEMENTARY INFORMATION:

A. Background

    This FAR case was opened to implement section 308 of the Veterans 
Benefit Act of 2003 (Public Law 108-183, 15 U.S.C. 657f), ``Procurement 
Program for Small Business Concerns Owned and Controlled by Service-
Disabled Veterans.'' The law provides that contracting officers may: 
award contracts on the basis of competition restricted to service-
disabled veteran-owned small businesses (SDVOSB) if there is a 
reasonable expectation that two or more SDVOSBs will submit offers and 
that the award can be made at a fair market price; or award a sole 
source contract to a responsible SDVOSB when there is not a reasonable 
expectation that two or more SDVOSBs would submit offers, the 
anticipated contract price (including options) will not exceed $5 
million (for manufacturing) or $3 million otherwise, and the contract 
award can be made at a fair and reasonable price. The rule also limited 
use of SDVOSB procurement authority to procurements that would not 
otherwise be made from Federal Prison Industries (section 4124 or 4125 
of Title 18.
    An interim rule was published in the Federal Register at 69 FR 
25274, May 5, 2004, and invited comments by July 6, 2004. The rule 
amended the Federal Acquisition Regulation (FAR) to implement Pub. L. 
108-183, 15 U.S.C. 657f. Thirty-five (35) comments from 17 respondents 
were received. The Small Business Administration (SBA) published an 
interim rule in the Federal Register at 69 FR 25262, May 5, 2004. The 
SBA's final rule revises protest procedures as a result of public 
comments it received. Additionally, on February 24, 2005, SBA published 
an interim rule detailing the appeal procedures, as a result of a 
public comment it received. Therefore, in order to avoid any potential 
conflict between the FAR and SBA's final rule on appeals and to 
streamline the regulations, FAR 19.307 is revised by shortening the 
protest appeal discussion to be a cross reference to 13 CFR part 134. 
The Councils considered all of the public comments and recommendations 
on the FAR rule in developing this final rule. The specific FAR 
comments and the corresponding response are summarized below.
    a. Exclusions at FAR 19.1404. Three commenters expressed concern 
that the exclusions from the SDVOSB procurement program specified in 
paragraphs (b), (c), (d) and (e) of FAR 19.1404 go beyond those 
contained in Pub. L. 108-183, 15 U.S.C. 657f.
    Disposition. Partially accepted. The Councils have removed the 
exclusion in paragraph (e) for commissary or exchange resale items, as 
these items are subject to separate statutes and regulations. The 
Councils determined that the remaining exclusions are appropriate. The 
exclusions at FAR 19.1404(b) and (c) address orders placed against 
indefinite delivery contracts and Federal Supply Schedules. The SDVOSB 
procurement program applies to the award of a contract; therefore, the 
program will have been already considered in the award of the 
underlying contracts and is not applicable to the placement of orders 
under those contracts.
    The exclusion in 19.1404(d) for the 8(a) program is consistent with 
Small Business Administration (SBA) regulations. Under these 
regulations, requirements are offered by Agencies and accepted by the 
SBA for performance under the 8(a) Business Development Program. To 
ensure the integrity of the business development aspects of the 
program, normally the requirement is retained for exclusive 8(a) 
participation, but may be released by the SBA as indicated in FAR 
19.1404(d).
    b. Delay implementation until FPDS-NG is updated. One commenter 
questioned whether the effective date of the rule was premature given 
that the background section of the rule stated that the Federal 
Procurement Data System-Next Generation (FPDS-NG) has not yet been 
updated to capture information regarding awards under the program.
    Disposition. Not accepted. The SDVOSB program was mandated by 
statute. The benefits under this program cannot be delayed because of 
underlying Government data reporting systems. The Councils anticipate 
and expect that contracting officers will pursue their SDVOSB goals, 
notwithstanding the need for the FPDS-NG to be updated to reflect the 
SDVOSB procurement authorities.
    c. Rule establishes unauthorized prerequisite to sole source awards 
to SDVOSB. Three commenters expressed concern that the interim rule 
changed the intent of Pub. L. 108-183, 15 U.S.C. 657f, by establishing 
in FAR 19.1405 set aside procedures for SDVOSB that must be satisfied 
before a sole-source award to a SDVOSB can be made. The commenters 
recommend that FAR 19.1405 be deleted.
    Disposition. Not accepted. The rule is consistent with the statute. 
It does not establish a requirement that a contracting officer satisfy 
the set-aside requirement before being able to award a sole source 
contract. If market research indicates that there is only one SDVOSB 
source capable of satisfying the requirement at a fair and reasonable 
price, the contracting officer may award on a sole-source basis. If 
market research indicates two or more SDVOSBs are capable of fulfilling 
the requirement, the contracting officer may set-aside the requirement. 
In the event where only one acceptable SDVOSB offer is received in 
response to the set-aside, the contracting officer may make award to 
that offeror.
    d. No prohibition against SDVOSB sole source awards below the 
Simplified Acquisition Threshold (SAT). One commenter expressed concern 
that there is no explicit prohibition against use of a SDVOSB sole 
source below the SAT similar to the HUBZone coverage at FAR 
19.1306(a)(4). This commenter notes that since the statutory language 
for both the HUBZone and SDVOSB programs is silent regarding whether 
sole-source can be used below the SAT and the other criteria for use 
are the same in both statutes, SDVOSB sole-source awards below the SAT 
should be prohibited as they are for HUBZones.
    Disposition. Not accepted. To ensure that agencies have the 
broadest set of options to aggressively pursue the statutory 3% 
contracting goal for SDVOSBs, the Councils did not include in the 
interim rule a prohibition on sole source awards under the SAT. This is 
consistent with the SBA interim rule that provides for SDVOSB sole 
source awards under the SAT. As the commenter notes, there is nothing 
in the statute that prohibits sole source awards under the SAT, and the 
Councils do not believe that there is any compelling justification for 
revising the final rules in this respect since such a change would only 
limit opportunities for SDVOSBs. The Councils recognize the different 
regulatory treatment of HUBZone sole source awards under the SAT, but 
changes to the HUBZone program are outside the scope of the current 
case.
    e. Require SDVOSB Certification. Two commenters recommended that 
SDVOSB status be certified by the Department of Veterans Affairs (DVA) 
or

[[Page 14952]]

the Department of Defense (DoD) to avoid fraud and abuse.
    Disposition. Not accepted. The SBA, which has the statutory 
authority to administer the SDVOSB program, has determined that SDVOSB 
status should be on a self-representation basis. If the disability 
status of the owner of a firm is challenged, the SBA will rely on 
existing Department of Veteran Affairs or DoD determinations regarding 
the owner's status as a veteran or service-disabled veteran (see FAR 
19.307).
    f. Establish a SDVOSB Mentor-Prot[eacute]g[eacute] Program. One 
commenter recommended that the final rule establish guidelines for a 
SDVOSB Mentor-Prot[eacute]g[eacute] Program similar to the SBA's 8(a) 
regulations (13 CFR 124.520). The same commenter recommended that the 
final rule establish provisions to award SDVOSB set-aside contracts to 
SDVOSB Mentor-Prot[eacute]g[eacute] joint ventures very similar to 
SBA's 8(a) Mentor-Prot[eacute]g[eacute] joint ventures (13 CFR 
124.513).
    Disposition. Not accepted. The SBA has authority under the Small 
Business Act to administer the 8(a) Mentor-Prot[eacute]g[eacute] 
Program. SBA current regulations do not provide for an SDVOSB Mentor-
Prot[eacute]g[eacute] program. Therefore, this recommendation falls 
outside the scope of this rule.
    g. Change the threshold for the nonmanufacturer rule. One commenter 
recommended changes to the ``nonmanufacturing rule'' to either exclude 
SDVOSBs from the $25,000 restriction at 19.102(f)(7)(i)(B) or raise the 
threshold to $1 million.
    Disposition. Not accepted. The SBA has exclusive authority to 
establish the threshold, which is set at $25,000. Therefore, the 
recommendation falls outside of the scope of this rule.
    h. Monitoring of Subcontracting SDVOSB goal. Two commenters 
recommended SBA take the following steps to improve compliance with 
SDVOSB subcontracting plans.
     Base SBA contractor reviews on compliance risks, such as 
size of the contract, date of the last review, and previous ratings and 
send the results of the reviews to contracting officers, especially 
when the ratings are marginal. SBA should produce an annual list of 
prime contractors who meet their small business plans by category.
     The primes who fail to meet their plans for two 
consecutive years should be barred from federal contracting until a 
suitable corrective action plan is received and approved. Or, if this 
is not feasible, enforce FAR 52.219-16, ``Liquidated Damages--
Subcontracting Plan.''
     Prime contractors who consistently meet their 
subcontracting plans should be rewarded by receiving priority in future 
contracts. FAR 52.219-10, Incentive Subcontracting Program should be 
vigorously used where applicable.
    Disposition. Partially accepted. SBA has taken action to implement 
the first recommendation. The Councils do not believe that the 
debarment action is feasible, since debarment is a severe sanction 
taken only when no other remedy is available to protect the 
Government's interests. Liquidated damages are assessed under FAR 
52.219-16, which establishes a standard of willful or intentional 
actions to frustrate the contract's subcontracting plan before the 
damages can be assessed. Regarding affording priority to contractors 
who consistently meet goals, a contractor who receives a positive past 
performance evaluation for achieving its subcontracting goals has a 
better chance of receiving future contracts. Conversely, a contractor 
who fails to make good faith efforts is subject to negative past 
performance evaluations (which could affect its ability to receive 
future contracts). The Councils agree that the Incentive Subcontracting 
Program should be vigorously used where applicable, but no change to 
the rule for this, or the other recommendations in the comment, is 
necessary.
    i. 8(a)/SDB program.
    Allow Migration of work from 8(a) to SDVOSB. One commenter 
recommended that the final rule allow business concerns in the 8(a) SDB 
Program to migrate work from that program to the SDVOSB Procurement 
Program if eligible, and allow SDVOSB concerns to migrate work to the 
8(a) SDB Program if eligible.
    Disposition. Not accepted. The two programs have different 
purposes. The 8(a) program is a business development program. The 
SDVOSB program is a procurement mechanism to enhance Federal 
contracting opportunities for SDVOSBs. Given the different purposes of 
these two programs, allowing migration from one program into another 
would adversely impact both programs by limiting business development 
opportunities available for 8(a) firms and procurement opportunities 
for SDVOSB firms.
     Provide equal consideration as 8(a) SDB Program including 
goals. Two commenters suggested that SDVOSB concerns be provided equal 
consideration as those business concerns in the 8(a) Business 
Development Program, including equivalent government-wide procurement 
goals.
     Disposition. Not accepted. It is important to note that 
the 8(a) Program is a business development program. While the 8(a) 
Program offers a broad scope of assistance to socially and economically 
disadvantaged small businesses, the SDVOSB Program strictly pertains to 
benefits in Federal contracting. Congress authorized sole source awards 
to 8(a) firms, even when multiple firms can satisfy the requirement, as 
a business development tool. Further, Congress established separate 
Governmentwide goals for participation by Small Disadvantaged 
Businesses and SDVOSBs. Although Congress did not establish a mandatory 
goal for 8(a) small businesses, as a matter of policy, the SBA 
negotiates an 8(a) goal with each Federal Agency. Consequently, the 
comments are outside the scope of this rule.
    j. Expand authority for sole source awards. Three commenters 
recommended that the final rule allow a sole source award to an SDVOSB 
up to the 8(a) sole-source dollar thresholds regardless of whether 
there are two or more SDVOSB competitors capable of satisfying the 
requirement.
    Disposition. Not accepted. The statute specifically states that a 
sole source award is allowed only when market research establishes that 
only one SDVOSB is capable of meeting the Government's requirements at 
a fair and reasonable price, and only when the award price will not 
exceed $3 million ($5 million for manufacturing.)
    k. Establish an Order of Precedence. Two commenters expressed 
concern that the interim rule did not establish the order of precedence 
for SDVOSB set-asides relative to the 8(a) and HUBZone set-aside 
programs.
    Disposition. Not accepted. The FAR rule implements Pub. L. 108-183, 
15 U.S.C. 657f, as written. The statute established a discretionary 
set-aside and sole-source authority for SDVOSBs. The statute did not 
establish a preference for SDVOSBs relative to the 8(a) or HUBZone 
programs.
    l. Provide for a Price Evaluation Adjustment. Four commenters 
recommended that SDVOSB concerns be entitled to the same 10% price 
evaluation adjustment when competing for Government opportunities as 
established in the 8(a) program under the FAR clause at 52.219-23, 
Notice of Price Evaluation Adjustment for Small Disadvantaged Business 
Concerns. One commenter recommended that a SDVOSB should be considered 
a Small Disadvantaged Business (SDB).

[[Page 14953]]

    Disposition. Not accepted. There is no statutory authority to 
afford SDVOSBs the same price evaluation adjustment as certain SDBs, 
whereas the price evaluation adjustment for certain SDBs was authorized 
by section 7102 of Pub. L. 103-355. An SDVOSB can be certified as an 
SDB if it meets the eligibility criteria established by SBA.
    m. Replace ``may'' with ``shall''. Four commenters expressed 
concern that the order of precedence established in 19.800(e), 
19.501(c), 19.1305(a) and the ``may set aside'' and ``shall set-aside'' 
language make the Service-Disabled Veteran Owned Small Business 
(SDVOSB) the lesser priority relative to the other set-aside programs. 
These commenters request change in language at 19.1405 and that the 
words ``shall set-aside'' be used in every place that ``may set-aside'' 
is found.
    Disposition. Not accepted. The FAR rule implements Pub. L. 108-183, 
15 U.S.C. 657f, as written. The statute established a discretionary, 
not mandatory, set-aside authority for SDVOSBs.
    n. Apply a citizenship restriction. One commenter suggested that 
the Public Law should be written to state that it is restricted to 
those U.S. Veterans that are also citizens of the United States and not 
dual citizenship individuals living abroad.
    Disposition. Not accepted. The Council must implement the law as 
written. Pub. L. 108-183, 15 U.S.C. 657f, does not include a residency 
or citizenship requirement to qualify for SDVOSB status.
    o. Reassign Advocacy Responsibility for the Regulatory Flexibility 
Act. One commenter suggested replacing the Chief Counsel at SBA with 
the Office of Management and Budget (OMB) as the senior reporting 
agency for advocacy responsibility under the Regulatory Flexibility 
Act.
    Disposition. Partially accepted. Under the authority of the 
Regulatory Flexibility Act, SBA's Chief Counsel for Advocacy reviews 
Regulatory Flexibility Act analyses. In addition, OMB reviews as a 
matter of course the analyses prior to publication of any rule. 
Accordingly, existing procedure already implements the intent of this 
suggestion, and no further action is required. The Chief Counsel for 
Advocacy's authority is statutory and cannot be changed by this 
regulation.
    p. Reserve 25% of all procurement actions for SDVOSB.One commenter 
suggested that the rule be changed to encourage agencies to set aside 
25% of their procurements for competition among SDVOSB. To ensure 
achievement of this goal, the commenter recommended that the rule 
provide for--
    1. Including in all contracts over $15 million a requirement that a 
contractor set aside a portion of the work for an SDVOSB;
    2. GSA notification to agencies that fail to meet the goal;
    3. Publication in the Federal Register of a list of agencies that 
fail to meet the goal during the fiscal year and the corrective actions 
those agencies will take during the following fiscal year to meet the 
goal;
    4. Establishment of an Office of Economic Advocacy in OMB to 
monitor, along with SBA and GSA, compliance with agency achievement of 
the goal and to report to the President and Congress on the climate in 
America for small businesses;
    5. Debarment of any contractor that fails to meet the 25% goal for 
two consecutive fiscal years; and
    6. Suspension of the contracting officer warrant of any contracting 
officer responsible for awarding a contract that results in an agency 
not meeting the goal.
    Disposition. Not accepted. The Councils are unclear as to whether 
the commenter is advocating establishing goals based on dollars or 
actions. If the commenter is advocating dollar goal changes, a 
Governmentwide goal for each small business category is established 
pursuant to the Small Business Act. The goal for small business 
concerns in general is 23% of the total value of all prime contracts 
awarded each fiscal year. A goal of not less than 3% of the total value 
of all prime contract and subcontract awards for each fiscal year has 
been established for SDVOSB concerns. It is beyond the scope of this 
rule, and impracticable, to establish a 25% goal of procurements for 
SDVOSB.
    If the commenter is advocating goals for actions, the Councils 
believe that such a change would not result in a meaningful measure of 
contracting opportunities given the high volume of actions at small-
dollar amounts. We do note that the rule provides contracting officers 
the authority to make sole source awards or set aside procurements in 
order to meet the Governmentwide goal of awarding 3% of the procurement 
dollars to SDVOSBs.
    The Councils believe that the recommended oversight and remedial 
actions are outside the scope of the case. However, agency and 
contractor achievement of goals is already being monitored by SBA, 
which is already required to report agency achievement of small 
business goals, established by the President pursuant to the Small 
Business Act, on an annual basis to Congress and OMB.
    q. Include SDVOSB as an Evaluation Point. One commenter suggested 
that FAR 19.1406, Sole source awards for service-disabled veteran-owned 
small business concerns, be revised to require that RFPs include SDVOSB 
as an evaluation point for procurements in excess of $15M during the 
contract award period; ``where the procurement is in excess of 
$15,000,000 a copy of the source selection evaluation guidance will be 
made public for inspection and review by GSA, SBA;'' and ``notification 
to the Office of Economic Advocacy in OMB.''
    Disposition. Not accepted. Although the commenter refers to FAR 
19.1406, which pertains to sole-source SDVOSB awards, the Councils 
believe the commenter is recommending a source selection evaluation 
factor for SDVOSB subcontracting be required in all competitive 
procurements above $15 million. General evaluation factors are 
identified in the FAR. Although there is no specific requirement to 
include SDVOSB participation as an evaluation factor, past performance 
is required to be evaluated in virtually all source selections. This 
past performance data used is derived from FAR 42.1502(a), which 
requires an assessment of contractor performance against, and efforts 
to achieve, the goals identified in the small business subcontracting 
plan when the contract includes the FAR clause at 52.219-9, Small 
Business Subcontracting Plan, which includes goals for SDVOSB 
participation. In addition, all solicitations that require a 
subcontracting plan will require agencies to negotiate acceptable goals 
for each small business category, including SDVOSBs. Accordingly, 
existing regulations already accommodate evaluation of past and 
proposed SDVOSB participation.
    All evaluation factors are included in the solicitation; there are 
no factors that are not identified. Involvement of GSA in the review of 
these factors would be duplicative and inefficient. SBA representatives 
and Agency small business specialists review and make recommendations 
on solicitations and source selection plans. GSA has no oversight 
authority on Agency acquisitions.
    With regard to establishing a new Office of Economy Advocacy in 
OMB, the comment is beyond the scope of the rule.
    This is a significant regulatory action and, therefore, was subject 
to review under Section 6(b) of Executive Order 12866, Regulatory 
Planning and Review,

[[Page 14954]]

dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 
804.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to 
this final rule. The Councils prepared a Final Regulatory Flexibility 
Analysis (FRFA), and it is summarized as follows.
    This final rule revises the Federal Acquisition Regulation in 
order to comply with recently enacted Public Law 108-183, Veterans 
Benefits Act of 2003 (Dec. 16, 2003), Section 308, Procurement 
Program for Small Business Concerns Owned and Controlled by Service-
Disabled Veterans to allow for discretionary set-aside and sole 
source procurement authority for service-disabled veteran-owned 
small business (SDVOSB) concerns. The objective is to provide 
Federal contracting officials a means to improve their performance 
toward the statutorily mandated 3% government-wide goal for 
procurement from SDVOSBs. The changes may have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., 
because the law provides that the contracting officer may use the 
set-aside and sole source procurement authority when contracting 
with SDVOSB concerns. Although the percentage of service-disabled 
veteran-owned small businesses is small, the set aside and sole 
source procurement authority will have a small impact on other small 
businesses.
    Interested parties may obtain a copy of the FRFA from the FAR 
Secretariat. The FAR Secretariat has submitted a copy of the FRFA to 
the Chief Counsel for Advocacy of the Small Business Administration.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does apply; however, the changes to FAR 
do not impose additional information collection requirements that 
require the approval of the Office of Management and Budget under 44 
U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 4, 5, 13, 15, 19, 42, 44,and 53

    Government procurement.

    Dated: March 16, 2005.
Rodney P. Lantier
Director, Contract Policy Division.

Interim Rule Adopted as Final With Changes

0
Accordingly, DoD, GSA, and NASA adopt the interim rule amending 48 CFR 
parts 4, 5, 13, 15, 19, 42, 44, and 53, which was published in the 
Federal Register at 69 FR 25274, May 5, 2004, as a final rule with the 
following changes:
0
1. The authority citation for 48 CFR parts 4, 5, 13, 15, 19, 42, 44, 
and 53 is revised to read as follows:

    Authority: Authority. 40 U.S.C. 121(c); 10 U.S.C. chapter 137; 
and 42 U.S.C. 2473(c):

PART 4--ADMINISTRATIVE MATTERS

0
2. Amend section 4.502 by revising paragraph (b)(3) to read as follows:


4.502   Policy.

* * * * *
    (b) * * *
    (3) Facilitate access to Government acquisition opportunities by 
small business concerns, small disadvantaged business concerns, women-
owned, veteran-owned, HUBZone, and service-disabled veteran-owned small 
business concerns;
* * * * *

PART 5--PUBLICIZING CONTRACT ACTIONS

0
3. Amend section 5.503 by revising the second sentence in paragraph 
(a)(1) to read as follows:


5.503   Procedures.

    (a) * * *
    (1) * * * Contracting officers shall give small, small 
disadvantaged, women-owned, veteran-owned, HUBZone, and service-
disabled veteran-owned small business concerns maximum opportunity to 
participate in these acquisitions.
* * * * *

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

0
4. Amend section 13.002 by revising paragraph (b) to read as follows:


13.002   Purpose.

* * * * *
    (b) Improve opportunities for small, small disadvantaged, women-
owned, veteran-owned, HUBZone, and service-disabled veteran-owned small 
business concerns to obtain a fair proportion of Government contracts;
* * * * *

PART 15--CONTRACTING BY NEGOTIATION

0
5. Amend section 15.404-4 by revising the first sentence in paragraph 
(d)(1)(iii) to read as follows:


15.404-4   Profit.

    (d) * * *
    (1) * * *
    (iii) Federal socioeconomic programs. This factor measures the 
degree of support given by the prospective contractor to Federal 
socioeconomic programs, such as those involving small business 
concerns, small business concerns owned and controlled by socially and 
economically disadvantaged individuals, women-owned small business 
concerns, veteran-owned, HUBZone, service-disabled veteran-owned small 
business concerns, handicapped sheltered workshops, and energy 
conservation. * * *
* * * * *
0
6. Amend section 15.407-2 by revising paragraph (d)(2) to read as 
follows:


15.407-2   Make or buy programs.

* * * * *
    (d) * * *
    (2) A description of factors to be used in evaluating the proposed 
program, such as capability, capacity, availability of small, small 
disadvantaged, women-owned, veteran-owned, HUBZone, and service-
disabled veteran-owned small business concerns for subcontracting, 
establishment of new facilities in or near labor surplus areas, 
delivery or performance schedules, control of technical and schedule 
interfaces, proprietary processes, technical superiority or 
exclusiveness, and technical risks involved.
* * * * *

PART 19--SMALL BUSINESS PROGRAMS

0
7. Amend section 19.307 by--
0
a. Removing from paragraph (e) ``Contracting, U.S.'' and adding 
``Contracting AA/GC, U.S.'' in its place;
0
b. Revising paragraph (f);
0
c. Revising the second sentence of paragraph (h);
0
d. Revising paragraph (i); and
0
e. Removing paragraphs (j) through (m).
    The revised text read as follows:


19.307   Protesting a firm's status as a service-disabled veteran-owned 
small business concern.

* * * * *
    (f) The referral letter must include information pertaining to the 
solicitation that may be necessary for SBA to determine timeliness and 
standing, including the solicitation number; the name, address, 
telephone number and facsimile number of the contracting officer; 
whether the contract was sole-source or set-aside; whether the 
protestor submitted an offer; whether the protested concern was the 
apparent successful offeror; when the protested concern submitted its 
offer (i.e., made the self-representation that it was a service-
disabled veteran-owned small business concern); whether the procurement 
was conducted using sealed bid or negotiated procedures; the bid 
opening date, if applicable; when

[[Page 14955]]

the protest was submitted; when the protester received notification 
about the apparent successful offeror, if applicable; and whether a 
contract has been awarded.
* * * * *
    (h) * * * When making its determinations of veteran, service-
disabled veteran, or service-disabled veteran with a permanent and 
severe disability status, the SBA will rely upon determinations made by 
the Department of Veteran's Affairs, Department of Defense 
determinations, or such determinations identified by documents provided 
by the U.S. National Archives and Records Administration. * * *
    (i) SBA will notify the contracting officer, the protester, and the 
protested concern of its determination. The determination is effective 
immediately and is final unless overturned on appeal by SBA's Office of 
Hearings and Appeals (OHA) pursuant to 13 CFR part 134.


19.1404   [Amended]

0
8. Amend section 19.1404 by--
0
a. Adding at the end of paragraph (c) ``or'';
0
b. Removing from paragraph (d) ``; or'' and adding a period at the end 
of the sentence; and
0
c. Removing paragraph (e).

PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES

0
9. Amend section 42.302 by revising paragraphs (a)(52) through (a)(55) 
to read as follows:


42.302   Contract administration functions.

    (a) * * *
    (52) Review, evaluate, and approve plant or division-wide small, 
small disadvantaged, women-owned, veteran-owned, HUBZone, and service-
disabled veteran-owned small business master subcontracting plans.
    (53) Obtain the contractor's currently approved company- or 
division-wide plans for small, small disadvantaged, women-owned, 
veteran-owned, HUBZone, and service-disabled veteran-owned small 
business subcontracting for its commercial products, or, if there is no 
currently approved plan, assist the contracting officer in evaluating 
the plans for those products.
    (54) Assist the contracting officer, upon request, in evaluating an 
offeror's proposed small, small disadvantaged women-owned, veteran-
owned, HUBZone, and service-disabled veteran-owned small business 
subcontracting plans, including documentation of compliance with 
similar plans under prior contracts.
    (55) By periodic surveillance, ensure the contractor's compliance 
with small, small disadvantaged, women-owned, veteran-owned, HUBZone, 
and service-disabled veteran-owned small business subcontracting plans 
and any labor surplus area contractual requirements; maintain 
documentation of the contractor's performance under and compliance with 
these plans and requirements; and provide advice and assistance to the 
firms involved, as appropriate.
* * * * *
0
10. Amend section 42.501 by revising paragraph (b) to read as follows:


42.501   General.

* * * * *
    (b) Postaward orientation is encouraged to assist small business, 
small disadvantaged, women-owned, veteran-owned, HUBZone, and service-
disabled veteran-owned small business concerns (see Part 19).
* * * * *
0
11. Amend section 42.502 by revising paragraphs (i) and (j) to read as 
follows:


42.502   Selecting contracts for postaward orientation.

* * * * *
    (i) Contractor's status, if any, as a small business, small 
disadvantaged, women-owned, veteran-owned, HUBZone, or service-disabled 
veteran-owned small business concern;
    (j) Contractor's performance history with small, small 
disadvantaged, women-owned, veteran-owned, HUBZone, and service-
disabled veteran-owned small business subcontracting programs;
* * * * *

PART 44--SUBCONTRACTING POLICIES AND PROCEDURES

0
12. Amend section 44.303 by revising paragraph (e) to read as follows:


44.303   Extent of review.

* * * * *
    (e) Policies and procedures pertaining to small business concerns, 
including small disadvantaged, women-owned, veteran-owned, HUBZone, and 
service-disabled veteran-owned small business concerns;
* * * * *

PART 53--Forms


53.212   [Amended]

0
13. Amend section 53.212 by removing ``(APR 2002)'' and adding ``(Rev. 
3/2005)'' in its place.


53.213   [Amended]

0
14. Amend section 53.213 by--
0
a. Removing from paragraph (a) ``(Rev. 4/02)'' and adding ``(Rev. 3/
2005)'' in its place; and
0
b. Removing from paragraph (f) ``(Rev. 4/02)'' and adding ``(Rev. 3/
2005)'' in its place; and removing ``(Rev. 6/95)'' and adding ``(Rev. 
3/2005)'' in its place.


53.214   [Amended]

0
15. Amend section 53.214 by removing from paragraph (d) ``(5/88)'' and 
adding ``(Rev. 3/2005)'' in its place.


53.236-1   [Amended]

0
16. Amend section 53.236-1 by removing from paragraph (e) ``(Rev. 6/
95)'' and adding ``(Rev. 3/2005)'' in its place.
0
17. Revise section 53.301-1447 to read as follows:

[[Page 14956]]

53.301-1447   Solicitation/Contract.
[GRAPHIC] [TIFF OMITTED] TR23MR05.000


[[Page 14957]]


[GRAPHIC] [TIFF OMITTED] TR23MR05.001


[[Page 14958]]


0
18. Revise section 53.301-1449 to read as follows:


53.301-1449   Solicitation/Contract/Order for Commercial Items.
[GRAPHIC] [TIFF OMITTED] TR23MR05.002


[[Page 14959]]


[GRAPHIC] [TIFF OMITTED] TR23MR05.003


[[Page 14960]]


0
19. Revise section 53.302-347 to read as follows:


53.302-347   Order for Supplies or Services.
[GRAPHIC] [TIFF OMITTED] TR23MR05.004


[[Page 14961]]


[GRAPHIC] [TIFF OMITTED] TR23MR05.005


[[Page 14962]]


[FR Doc. 05-5656 Filed 3-22-05; 8:45 am]
BILLING CODE 6820-EP-S