Federal Acquisition Regulation; Socioeconomic Program Parity, 14566-14568 [2011-5556]
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14566
Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Rules and Regulations
2011–004, in all correspondence related
to this case. All comments received will
be posted without change to https://
www.regulations.gov, including any
personal and/or business confidential
information provided.
FOR FURTHER INFORMATION CONTACT: Mr.
Karlos Morgan, Procurement Analyst, at
(202) 501–2364, for clarification of
content. For information pertaining to
status or publication schedules, contact
the Regulatory Secretariat at (202) 501–
4755. Please cite FAC 2005–50, FAR
Case 2011–004.
SUPPLEMENTARY INFORMATION:
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 13 and 19
[FAC 2005–50; FAR Case 2011–004; Item
V; Docket 2011–0004, Sequence 1]
RIN 9000–AL88
Federal Acquisition Regulation;
Socioeconomic Program Parity
AGENCY:
I. Background
DoD, GSA, and NASA are
issuing an interim rule amending the
Federal Acquisition Regulation (FAR) to
implement section 1347 of the ‘‘Small
Business Jobs Act of 2010.’’ Section 1347
clarifies the contracting officer’s ability
to use discretion when determining
whether an acquisition will be restricted
to small businesses participating in the
8(a), HUBZone, or service-disabled
veteran-owned small business
(SDVOSB) programs. There is no order
of priority among small businesses in
the 8(a) Business Development Program,
the HUBZone Program, or the SDVOSB
Program.
DATES: Effective Date: March 16, 2011.
Comment Date: Interested parties
should submit written comments to the
Regulatory Secretariat on or before May
16, 2011 to be considered in the
formulation of a final rule.
ADDRESSES: Submit comments
identified by FAC 2005–50, FAR Case
2011–004, by any of the following
methods:
• Regulations.gov: https://
www.regulations.gov.
Submit comments via the Federal
eRulemaking portal by inputting ‘‘FAR
Case 2011–004’’ under the heading
‘‘Enter Keyword or ID’’ and selecting
‘‘Search.’’ Select the link ‘‘Submit a
Comment’’ that corresponds with ‘‘FAR
Case 2011–004.’’ Follow the instructions
provided at the ‘‘Submit a Comment’’
screen. Please include your name,
company name (if any), and ‘‘FAR Case
2011–004’’ on your attached document.
• Fax: (202) 501–4067.
• Mail: General Services
Administration, Regulatory Secretariat
(MVCB), ATTN: Hada Flowers, 1275
First Street, NE., 7th Floor, Washington,
DC 20417.
Instructions: Please submit comments
only and cite FAC 2005–50, FAR Case
DoD, GSA, and NASA are issuing an
interim rule amending the FAR, to
implement section 1347 of the Small
Business Jobs Act of 2010 (Pub. L. 111–
240). Section 1347 changed the word
‘‘shall’’ to ‘‘may’’ at section 31(b)(2)(B) of
the Small Business Act (15 U.S.C.
657a(b)(2)(B)). This interim rule makes
similar changes to the FAR, ensuring
that the FAR clearly reflects the
statutory relationship among the small
business programs and eliminates any
confusion on the part of contracting
officers or others.
DoD, GSA, and NASA published a
proposed rule under FAR Case 2006–
034 in the Federal Register at 73 FR
12699, March 10, 2008, which would
have amended the FAR to clearly reflect
the Small Business Administration’s
(SBA) interpretation of the Small
Business Act and its agency regulations
that no order of precedence applies
when the contracting officer considers
satisfying a requirement through an
award to a HUBZone small business
concern, a SDVOSB concern, or a small
business participating in the 8(a)
Program. The proposed rule was closed
due to the Government Accountability
Office’s and the Court of Federal Claims’
interpretation of the Small Business Act
to require acquisitions to be set aside for
HUBZone small businesses before
setting aside acquisitions for other small
business programs. See Mission Critical
Solutions v. U.S., 91 Fed. Cl. 386 (2010),
and B–401057.
This rule does not address the
women-owned small businesses and
their relationship to the other small
business programs. FAR Case 2010–015,
Women-Owned Small Business
Program, will be published as an
interim rule with request for comments
to implement the SBA’s Women-owned
Small Business (WOSB) Federal
Contract Program final rule, (75 FR
62258, October 7, 2010), which became
effective on February 4, 2011. SBA’s
rule provides parity for WOSBs with
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Interim rule.
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SBA’s other small business contracting
programs.
II. Discussion and Analysis
Section 1347 amended the language
concerning HUBZone set asides by
deleting the ‘‘shall’’ set aside in the
statute and replacing that term with
‘‘may’’ set aside. This clarifies that
contracting officers can exercise
discretion when determining whether a
requirement will be restricted to small
business concerns under the 8(a),
HUBZone or SDVOSB programs.
This interim rule is intended to
address the recent statutory clarification
and make clear that—
1. There is no order of precedence
among the 8(a), HUBZone, or SDVOSB
programs. However, if a requirement has
been accepted by SBA under the 8(a)
Program, it must remain in the 8(a)
program unless SBA agrees to its release
in accordance with 13 CFR 124, 125 and
126;
2. For acquisitions exceeding the
simplified acquisition threshold, the
contracting officer must consider a setaside or sole source acquisition to a
small business under the 8(a),
HUBZone, or SDVOSB programs before
the contracting officer proceeds with a
small business set-aside. See FAR
19.203(c) and 19.502–2(b); and
3. The small business set-aside
requirement of FAR 19.502–2(a) does
not preclude award of a contract to a
qualified 8(a) Program participant,
HUBZone small business concern, or
SDVOSB concern, because the SBA’s
regulations give the contracting officer
discretionary authority to use the 8(a),
HUBZone, or SDVOSB, at dollar levels
above the micro-purchase threshold and
at or below the simplified acquisition
threshold.
III. Executive Order 12866
This is a significant regulatory action
and, therefore, was subject to review
under Section 6(b) of Executive Order
12866, Regulatory Planning and Review,
dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
IV. Regulatory Flexibility Act
The change 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 this
rule revises the FAR to implement
Section 1347 of the Small Business Jobs
Act of 2010 governing specific
contracting and business assistance
programs which include the 8(a),
HUBZone, and the SDVOSB programs.
The Regulatory Secretariat will be
submitting a copy of the Interim
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Regulatory Flexibility Analysis (IRFA)
to the Chief Counsel for Advocacy of the
Small Business Administration. A copy
of the IRFA may be obtained from the
Regulatory Secretariat. DoD, GSA, and
NASA invite comments from small
business concerns and other interested
parties on the expected impact of this
rule on small entities.
DoD, GSA, and NASA will also
consider comments from small entities
concerning the existing regulations in
subparts affected by this rule in
accordance with 5 U.S.C. 610. Interested
parties must submit such comments
separately and should cite 5 U.S.C. 610
(FAC 2005–50, FAR Case 2011–004) in
correspondence.
The analysis is summarized as
follows:
The purpose of this rule is to ensure that
the FAR clearly reflects section 1347 of the
Small Business Jobs Act of 2010 (Pub. L.
111–240) and to incorporate the SBA’s
interpretation of the Small Business Act and
regulations promulgated thereunder.
Following recent interpretations of the Small
Business Act by the Government
Accountability Office and the Court of
Federal Claims, some in the acquisition
community have been confused about
whether there is an order of precedence that
applies when deciding whether to satisfy a
requirement through an award to a small
business, a small business participating in
the 8(a) Business Development Program, a
HUBZone small business, or a SDVOSB.
Section 1347 clarified that there is parity,
rather than an order of precedence, and the
purpose of this interim rule is to ensure that
the FAR removes any uncertainty on the part
of the contracting officer, small businesses,
and others.
Small businesses that participate in
Federal Government contracting are the
entities that may be impacted by the rule.
There should be no negative impact on small
businesses as a whole. The number of
contracts awarded overall to small businesses
should not decrease as a result of this rule.
However, it is possible that the clarity the
rule provides could result in a difference in
the number of contracts awarded to any
particular category of small businesses.
Generally, all current and potential
Government contractors must register in the
Central Contractor Registration (CCR)
database to be eligible for contract award and
payment. There are approximately 349,992
small business firms; 9,303 HUBZone firms;
9,234 8(a) firms and 18,213 SDVOSB firms
currently registered in CCR that may be
affected by this final rule.
There are no significant alternatives that
would reduce the impact on small
businesses. This FAR rule is implementing
section 1347 of the Small Business Jobs Act
of 2010 (Pub. L. 111–240).
V. Paperwork Reduction Act
The interim rule does not contain any
information collection requirements that
require the approval of the Office of
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Management and Budget under the
Paperwork Reduction Act (44 U.S.C.
chapter 35).
V. Determination To Issue an Interim
Rule
A determination has been made under
the authority of the Secretary of Defense
(DoD), the Administrator of General
Services (GSA), and the Administrator
of the National Aeronautics and Space
Administration (NASA) that urgent and
compelling reasons exist to promulgate
this interim rule without prior
opportunity for public comment. This
action is necessary because the
enactment of the Small Business Jobs
Act of 2010 requires the implementation
of section 1347. The statute was enacted
on September 27, 2010. However,
pursuant to 41 U.S.C. 1707 and FAR
1.501–3(b), DoD, GSA, and NASA will
consider public comments received in
response to this interim rule in the
formation of the final rule.
List of Subjects in 48 CFR Parts 13 and
19
Government procurement.
Dated: March 4, 2011.
Millisa Gary,
Acting Director, Office of Governmentwide
Acquisition Policy.
Therefore, DoD, GSA, and NASA
amend 48 CFR parts 13 and 19 as set
forth below:
■ 1. The authority citation for 48 CFR
parts 13 and 19 continues to read as
follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).
PART 13—SIMPLIFIED ACQUISITIONS
PROCEDURES
2. Amend section 13.003 by removing
from paragraph (b)(1) ‘‘see 19.000’’ and
adding ‘‘see 19.000, 19.203,’’ in its place;
and by revising paragraph (b)(2) to read
as follows:
■
13.003
Policy.
*
*
*
*
*
(b) * * *
(2) The contracting officer may make
an award to a small business under the
8(a) Program (see subpart 19.8), or set
aside for HUBZone small business
concerns (see 19.1305) or servicedisabled veteran-owned small business
concerns (see 19.1405) an acquisition of
supplies or services that has an
anticipated dollar value exceeding the
micro-purchase threshold and at or
below the simplified acquisition
threshold. The following contracting
officer’s decisions for acquisitions at or
below the simplified acquisition
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14567
threshold are not subject to review
under subpart 19.4:
(i) A decision not to make an award
under the 8(a) Program (see subpart
19.8).
(ii) A decision not to set aside an
acquisition for HUBZone small business
or service-disabled veteran-owned small
business concerns participation.
*
*
*
*
*
PART 19—SMALL BUSINESS
PROGRAMS
19.202
[Amended]
3. Amend section 19.202 by removing
‘‘Subpart 19.5, 19.8, or 19.13’’ and
adding ‘‘subpart 19.5, 19.8, 19.13, or
19.14’’ in its place.
■ 4. Add section 19.203 to read as
follows:
■
19.203 Relationship among small
business programs.
(a) There is no order of precedence
among the 8(a) Program (subpart 19.8),
HUBZone Program (subpart 19.13), or
Service-Disabled Veteran-Owned Small
Business (SDVOSB) Procurement
Program (subpart 19.14).
(b) At or below the simplified
acquisition threshold. The requirement
to exclusively reserve acquisitions for
small business concerns at 19.502–2(a)
does not preclude the contracting officer
from awarding a contract to a small
business under the 8(a) Program,
HUBZone Program, or SDVOSB
Program. If the contracting officer does
not proceed with a small business setaside and purchases on an unrestricted
basis, the contracting officer shall
include in the contract file the reason
for this unrestricted purchase.
(c) Above the simplified acquisition
threshold. The contracting officer shall
first consider an acquisition for the 8(a),
HUBZone, or SDVOSB programs before
using a small business set-aside (see
19.502–2(b)). However, if a requirement
has been accepted by the SBA under the
8(a) Program, it must remain in the 8(a)
Program unless SBA agrees to its release
in accordance with 13 CFR parts 124,
125 and 126.
(d) Small business set-asides have
priority over acquisitions using full and
open competition. See requirements for
establishing a small business set-aside at
subpart 19.5.
■ 5. Amend section 19.501 by removing
paragraphs (c) and (d); redesignating
paragraphs (e) through (i) as paragraphs
(c) through (g), respectively; and
revising the newly redesignated
paragraph (c) to read as follows:
19.501
*
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*
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Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Rules and Regulations
(c) The contracting officer shall
review acquisitions to determine if they
can be set aside for small business,
giving consideration to the
recommendations of agency personnel
having cognizance of the agency’s small
business programs. The contracting
officer shall perform market research
and document why a small business setaside is inappropriate when an
acquisition is not set aside for small
business, unless an award is anticipated
to a small business under the 8(a),
HUBZone, or service-disabled veteranowned programs. If the acquisition is set
aside for small business based on this
review, it is a unilateral set-aside by the
contracting officer. Agencies may
establish threshold levels for this review
depending upon their needs.
*
*
*
*
*
■ 6. Amend section 19.502–2 by adding
a new first sentence and revising the last
sentence of paragraph (a); and by
revising the first sentence in paragraph
(b) to read as follows:
19.502–2
Total small business set-asides.
(a) Before setting aside an acquisition
under this paragraph, refer to 19.203(b).
* * * The small business reservation
does not preclude the award of a
contract as described in 19.203.
(b) Before setting aside an acquisition
under this paragraph, refer to
19.203(c). * * *
*
*
*
*
*
■ 7. Amend section 19.800 by revising
paragraph (e) to read as follows:
19.800
General.
*
*
*
*
*
(e) Before deciding to set aside an
acquisition in accordance with subpart
19.5, the contracting officer may
consider offering the acquisition to a
small business under the 8(a) Program
in accordance with 19.203.
*
*
*
*
*
19.804–2
[Amended]
8. Amend section 19.804–2 by
removing paragraph (a)(12); and
redesignating paragraphs (a)(13) through
(a)(16) as paragraphs (a)(12) through
(a)(15), respectively.
■ 9. Amend section 19.1305 by—
■ a. Revising paragraph (a);
■ b. Removing paragraph (c);
■ c. Redesignating paragraphs (d) and
(e) as paragraphs (c) and (d),
respectively; and
■ d. Removing from the newly
redesignated paragraph (c) ‘‘(see subpart
19.5)’’ and adding ‘‘(see 19.203)’’ in its
place.
The revised text reads as follows:
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19.1305
HUBZone set-aside procedures.
(a) The contracting officer—
(1) May set aside acquisitions
exceeding the micro-purchase threshold
for competition restricted to HUBZone
small business concerns when the
requirements of paragraph (b) of this
section can be satisfied (see 19.203); and
(2) Shall consider HUBZone set-asides
before considering HUBZone sole
source awards (see 19.1306) or small
business set-asides (see subpart 19.5).
*
*
*
*
*
■ 10. Amend section 19.1306 by
revising the introductory text of
paragraph (a) to read as follows:
19.1306
HUBZone sole source awards.
(a) A contracting officer may award
contracts to HUBZone small business
concerns on a sole source basis (see
6.302–5(b)(5)) before considering small
business set-asides (see 19.203 and
subpart 19.5), provided none of the
exclusions at 19.1304 apply; and—
*
*
*
*
*
■ 11. Amend section 19.1405 by
revising paragraph (a); and removing
from paragraph (c) ‘‘(see Subpart 19.5)’’
and adding ‘‘(see 19.203)’’ in its place.
The revised text reads as follows:
19.1405 Service-disabled veteran-owned
small business set-aside procedures.
(a) The contracting officer—
(1) May set-aside acquisitions
exceeding the micro-purchase threshold
for competition restricted to servicedisabled veteran-owned small business
concerns when the requirements of
paragraph (b) of this section can be
satisfied (see 19.203); and
(2) Shall consider service-disabled
veteran-owned small business set-asides
before considering service-disabled
veteran-owned small business sole
source awards (see 19.1406) or small
business set-asides (see subpart 19.5).
*
*
*
*
*
■ 12. Amend section 19.1406 by
revising the introductory text of
paragraph (a) to read as follows:
19.1406 Sole source awards to servicedisabled veteran-owned small business
concerns.
(a) A contracting officer may award
contracts to service-disabled veteranowned small business concerns on a
sole source basis (see 6.302–5(b)(6)),
before considering small business setasides (see 19.203 and subpart 19.5)
provided none of the exclusions of
19.1404 apply and—
*
*
*
*
*
[FR Doc. 2011–5556 Filed 3–15–11; 8:45 am]
BILLING CODE 6820–EP–P
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DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Part 15
[FAC 2005–50; FAR Case 2008–034; Item
VI; Docket 2009–0035, Sequence 1]
RIN 9000–AL44
Federal Acquisition Regulation; Use of
Commercial Services Item Authority
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
AGENCIES:
DoD, GSA, and NASA have
adopted as final, without change, an
interim rule amending the Federal
Acquisition Regulation (FAR) to
implement section 868 of the Duncan
Hunter National Defense Authorization
Act for Fiscal Year 2009. Section 868
provides that the FAR shall be amended
with respect to the procurement of
commercial services, specifically
services that are not offered and sold
competitively in substantial quantities
in the commercial marketplace, but are
of a type offered and sold competitively
in substantial quantities in the
commercial marketplace. These services
may be considered commercial items
only if the contracting officer has
determined in writing that the offeror
has submitted sufficient information to
evaluate, through price analysis, the
reasonableness of the price for such
services. The rule details the
information the contracting officer may
consider in order to make this
determination.
SUMMARY:
Effective Date: March 16, 2011.
Mr.
Edward N. Chambers, Procurement
Analyst, at (202) 501–3221 for
clarification of content. For information
pertaining to status or publication
schedules, contact the Regulatory
Secretariat at (202) 501–4755. Please
cite FAC 2005–50, FAR Case 2008–034.
SUPPLEMENTARY INFORMATION:
DATES:
FOR FURTHER INFORMATION CONTACT:
I. Background
DoD, GSA, and NASA published an
interim rule in the Federal Register at
74 FR 52852 on October 14, 2009, to
implement section 868 of the Duncan
Hunter National Defense Authorization
Act for Fiscal Year 2009. The comment
period closed on December 14, 2009.
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]]>Agencies
[Federal Register Volume 76, Number 51 (Wednesday, March 16, 2011)]
[Rules and Regulations]
[Pages 14566-14568]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-5556]
[[Page 14566]]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 13 and 19
[FAC 2005-50; FAR Case 2011-004; Item V; Docket 2011-0004, Sequence 1]
RIN 9000-AL88
Federal Acquisition Regulation; Socioeconomic Program Parity
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA are issuing an interim rule amending the
Federal Acquisition Regulation (FAR) to implement section 1347 of the
``Small Business Jobs Act of 2010.'' Section 1347 clarifies the
contracting officer's ability to use discretion when determining
whether an acquisition will be restricted to small businesses
participating in the 8(a), HUBZone, or service-disabled veteran-owned
small business (SDVOSB) programs. There is no order of priority among
small businesses in the 8(a) Business Development Program, the HUBZone
Program, or the SDVOSB Program.
DATES: Effective Date: March 16, 2011.
Comment Date: Interested parties should submit written comments to
the Regulatory Secretariat on or before May 16, 2011 to be considered
in the formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-50, FAR Case 2011-
004, by any of the following methods:
Regulations.gov: https://www.regulations.gov.
Submit comments via the Federal eRulemaking portal by inputting
``FAR Case 2011-004'' under the heading ``Enter Keyword or ID'' and
selecting ``Search.'' Select the link ``Submit a Comment'' that
corresponds with ``FAR Case 2011-004.'' Follow the instructions
provided at the ``Submit a Comment'' screen. Please include your name,
company name (if any), and ``FAR Case 2011-004'' on your attached
document.
Fax: (202) 501-4067.
Mail: General Services Administration, Regulatory
Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE., 7th
Floor, Washington, DC 20417.
Instructions: Please submit comments only and cite FAC 2005-50, FAR
Case 2011-004, in all correspondence related to this case. All comments
received will be posted without change to https://www.regulations.gov,
including any personal and/or business confidential information
provided.
FOR FURTHER INFORMATION CONTACT: Mr. Karlos Morgan, Procurement
Analyst, at (202) 501-2364, for clarification of content. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-50, FAR
Case 2011-004.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are issuing an interim rule amending the FAR, to
implement section 1347 of the Small Business Jobs Act of 2010 (Pub. L.
111-240). Section 1347 changed the word ``shall'' to ``may'' at section
31(b)(2)(B) of the Small Business Act (15 U.S.C. 657a(b)(2)(B)). This
interim rule makes similar changes to the FAR, ensuring that the FAR
clearly reflects the statutory relationship among the small business
programs and eliminates any confusion on the part of contracting
officers or others.
DoD, GSA, and NASA published a proposed rule under FAR Case 2006-
034 in the Federal Register at 73 FR 12699, March 10, 2008, which would
have amended the FAR to clearly reflect the Small Business
Administration's (SBA) interpretation of the Small Business Act and its
agency regulations that no order of precedence applies when the
contracting officer considers satisfying a requirement through an award
to a HUBZone small business concern, a SDVOSB concern, or a small
business participating in the 8(a) Program. The proposed rule was
closed due to the Government Accountability Office's and the Court of
Federal Claims' interpretation of the Small Business Act to require
acquisitions to be set aside for HUBZone small businesses before
setting aside acquisitions for other small business programs. See
Mission Critical Solutions v. U.S., 91 Fed. Cl. 386 (2010), and B-
401057.
This rule does not address the women-owned small businesses and
their relationship to the other small business programs. FAR Case 2010-
015, Women-Owned Small Business Program, will be published as an
interim rule with request for comments to implement the SBA's Women-
owned Small Business (WOSB) Federal Contract Program final rule, (75 FR
62258, October 7, 2010), which became effective on February 4, 2011.
SBA's rule provides parity for WOSBs with SBA's other small business
contracting programs.
II. Discussion and Analysis
Section 1347 amended the language concerning HUBZone set asides by
deleting the ``shall'' set aside in the statute and replacing that term
with ``may'' set aside. This clarifies that contracting officers can
exercise discretion when determining whether a requirement will be
restricted to small business concerns under the 8(a), HUBZone or SDVOSB
programs.
This interim rule is intended to address the recent statutory
clarification and make clear that--
1. There is no order of precedence among the 8(a), HUBZone, or
SDVOSB programs. However, if a requirement has been accepted by SBA
under the 8(a) Program, it must remain in the 8(a) program unless SBA
agrees to its release in accordance with 13 CFR 124, 125 and 126;
2. For acquisitions exceeding the simplified acquisition threshold,
the contracting officer must consider a set-aside or sole source
acquisition to a small business under the 8(a), HUBZone, or SDVOSB
programs before the contracting officer proceeds with a small business
set-aside. See FAR 19.203(c) and 19.502-2(b); and
3. The small business set-aside requirement of FAR 19.502-2(a) does
not preclude award of a contract to a qualified 8(a) Program
participant, HUBZone small business concern, or SDVOSB concern, because
the SBA's regulations give the contracting officer discretionary
authority to use the 8(a), HUBZone, or SDVOSB, at dollar levels above
the micro-purchase threshold and at or below the simplified acquisition
threshold.
III. Executive Order 12866
This is a significant regulatory action and, therefore, was subject
to review under Section 6(b) of Executive Order 12866, Regulatory
Planning and Review, dated September 30, 1993. This rule is not a major
rule under 5 U.S.C. 804.
IV. Regulatory Flexibility Act
The change 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 this rule revises the
FAR to implement Section 1347 of the Small Business Jobs Act of 2010
governing specific contracting and business assistance programs which
include the 8(a), HUBZone, and the SDVOSB programs.
The Regulatory Secretariat will be submitting a copy of the Interim
[[Page 14567]]
Regulatory Flexibility Analysis (IRFA) to the Chief Counsel for
Advocacy of the Small Business Administration. A copy of the IRFA may
be obtained from the Regulatory Secretariat. DoD, GSA, and NASA invite
comments from small business concerns and other interested parties on
the expected impact of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by this rule
in accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAC 2005-50, FAR Case
2011-004) in correspondence.
The analysis is summarized as follows:
The purpose of this rule is to ensure that the FAR clearly
reflects section 1347 of the Small Business Jobs Act of 2010 (Pub.
L. 111-240) and to incorporate the SBA's interpretation of the Small
Business Act and regulations promulgated thereunder. Following
recent interpretations of the Small Business Act by the Government
Accountability Office and the Court of Federal Claims, some in the
acquisition community have been confused about whether there is an
order of precedence that applies when deciding whether to satisfy a
requirement through an award to a small business, a small business
participating in the 8(a) Business Development Program, a HUBZone
small business, or a SDVOSB. Section 1347 clarified that there is
parity, rather than an order of precedence, and the purpose of this
interim rule is to ensure that the FAR removes any uncertainty on
the part of the contracting officer, small businesses, and others.
Small businesses that participate in Federal Government
contracting are the entities that may be impacted by the rule. There
should be no negative impact on small businesses as a whole. The
number of contracts awarded overall to small businesses should not
decrease as a result of this rule. However, it is possible that the
clarity the rule provides could result in a difference in the number
of contracts awarded to any particular category of small businesses.
Generally, all current and potential Government contractors must
register in the Central Contractor Registration (CCR) database to be
eligible for contract award and payment. There are approximately
349,992 small business firms; 9,303 HUBZone firms; 9,234 8(a) firms
and 18,213 SDVOSB firms currently registered in CCR that may be
affected by this final rule.
There are no significant alternatives that would reduce the
impact on small businesses. This FAR rule is implementing section
1347 of the Small Business Jobs Act of 2010 (Pub. L. 111-240).
V. Paperwork Reduction Act
The interim rule does not contain any information collection
requirements that require the approval of the Office of Management and
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
V. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary because the enactment of the Small Business Jobs Act of
2010 requires the implementation of section 1347. The statute was
enacted on September 27, 2010. However, pursuant to 41 U.S.C. 1707 and
FAR 1.501-3(b), DoD, GSA, and NASA will consider public comments
received in response to this interim rule in the formation of the final
rule.
List of Subjects in 48 CFR Parts 13 and 19
Government procurement.
Dated: March 4, 2011.
Millisa Gary,
Acting Director, Office of Governmentwide Acquisition Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 13 and 19 as set
forth below:
0
1. The authority citation for 48 CFR parts 13 and 19 continues to read
as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 13--SIMPLIFIED ACQUISITIONS PROCEDURES
0
2. Amend section 13.003 by removing from paragraph (b)(1) ``see
19.000'' and adding ``see 19.000, 19.203,'' in its place; and by
revising paragraph (b)(2) to read as follows:
13.003 Policy.
* * * * *
(b) * * *
(2) The contracting officer may make an award to a small business
under the 8(a) Program (see subpart 19.8), or set aside for HUBZone
small business concerns (see 19.1305) or service-disabled veteran-owned
small business concerns (see 19.1405) an acquisition of supplies or
services that has an anticipated dollar value exceeding the micro-
purchase threshold and at or below the simplified acquisition
threshold. The following contracting officer's decisions for
acquisitions at or below the simplified acquisition threshold are not
subject to review under subpart 19.4:
(i) A decision not to make an award under the 8(a) Program (see
subpart 19.8).
(ii) A decision not to set aside an acquisition for HUBZone small
business or service-disabled veteran-owned small business concerns
participation.
* * * * *
PART 19--SMALL BUSINESS PROGRAMS
19.202 [Amended]
0
3. Amend section 19.202 by removing ``Subpart 19.5, 19.8, or 19.13''
and adding ``subpart 19.5, 19.8, 19.13, or 19.14'' in its place.
0
4. Add section 19.203 to read as follows:
19.203 Relationship among small business programs.
(a) There is no order of precedence among the 8(a) Program (subpart
19.8), HUBZone Program (subpart 19.13), or Service-Disabled Veteran-
Owned Small Business (SDVOSB) Procurement Program (subpart 19.14).
(b) At or below the simplified acquisition threshold. The
requirement to exclusively reserve acquisitions for small business
concerns at 19.502-2(a) does not preclude the contracting officer from
awarding a contract to a small business under the 8(a) Program, HUBZone
Program, or SDVOSB Program. If the contracting officer does not proceed
with a small business set-aside and purchases on an unrestricted basis,
the contracting officer shall include in the contract file the reason
for this unrestricted purchase.
(c) Above the simplified acquisition threshold. The contracting
officer shall first consider an acquisition for the 8(a), HUBZone, or
SDVOSB programs before using a small business set-aside (see 19.502-
2(b)). However, if a requirement has been accepted by the SBA under the
8(a) Program, it must remain in the 8(a) Program unless SBA agrees to
its release in accordance with 13 CFR parts 124, 125 and 126.
(d) Small business set-asides have priority over acquisitions using
full and open competition. See requirements for establishing a small
business set-aside at subpart 19.5.
0
5. Amend section 19.501 by removing paragraphs (c) and (d);
redesignating paragraphs (e) through (i) as paragraphs (c) through (g),
respectively; and revising the newly redesignated paragraph (c) to read
as follows:
19.501 General.
* * * * *
[[Page 14568]]
(c) The contracting officer shall review acquisitions to determine
if they can be set aside for small business, giving consideration to
the recommendations of agency personnel having cognizance of the
agency's small business programs. The contracting officer shall perform
market research and document why a small business set-aside is
inappropriate when an acquisition is not set aside for small business,
unless an award is anticipated to a small business under the 8(a),
HUBZone, or service-disabled veteran-owned programs. If the acquisition
is set aside for small business based on this review, it is a
unilateral set-aside by the contracting officer. Agencies may establish
threshold levels for this review depending upon their needs.
* * * * *
0
6. Amend section 19.502-2 by adding a new first sentence and revising
the last sentence of paragraph (a); and by revising the first sentence
in paragraph (b) to read as follows:
19.502-2 Total small business set-asides.
(a) Before setting aside an acquisition under this paragraph, refer
to 19.203(b). * * * The small business reservation does not preclude
the award of a contract as described in 19.203.
(b) Before setting aside an acquisition under this paragraph, refer
to 19.203(c). * * *
* * * * *
0
7. Amend section 19.800 by revising paragraph (e) to read as follows:
19.800 General.
* * * * *
(e) Before deciding to set aside an acquisition in accordance with
subpart 19.5, the contracting officer may consider offering the
acquisition to a small business under the 8(a) Program in accordance
with 19.203.
* * * * *
19.804-2 [Amended]
0
8. Amend section 19.804-2 by removing paragraph (a)(12); and
redesignating paragraphs (a)(13) through (a)(16) as paragraphs (a)(12)
through (a)(15), respectively.
0
9. Amend section 19.1305 by--
0
a. Revising paragraph (a);
0
b. Removing paragraph (c);
0
c. Redesignating paragraphs (d) and (e) as paragraphs (c) and (d),
respectively; and
0
d. Removing from the newly redesignated paragraph (c) ``(see subpart
19.5)'' and adding ``(see 19.203)'' in its place.
The revised text reads as follows:
19.1305 HUBZone set-aside procedures.
(a) The contracting officer--
(1) May set aside acquisitions exceeding the micro-purchase
threshold for competition restricted to HUBZone small business concerns
when the requirements of paragraph (b) of this section can be satisfied
(see 19.203); and
(2) Shall consider HUBZone set-asides before considering HUBZone
sole source awards (see 19.1306) or small business set-asides (see
subpart 19.5).
* * * * *
0
10. Amend section 19.1306 by revising the introductory text of
paragraph (a) to read as follows:
19.1306 HUBZone sole source awards.
(a) A contracting officer may award contracts to HUBZone small
business concerns on a sole source basis (see 6.302-5(b)(5)) before
considering small business set-asides (see 19.203 and subpart 19.5),
provided none of the exclusions at 19.1304 apply; and--
* * * * *
0
11. Amend section 19.1405 by revising paragraph (a); and removing from
paragraph (c) ``(see Subpart 19.5)'' and adding ``(see 19.203)'' in its
place.
The revised text reads as follows:
19.1405 Service-disabled veteran-owned small business set-aside
procedures.
(a) The contracting officer--
(1) May set-aside acquisitions exceeding the micro-purchase
threshold for competition restricted to service-disabled veteran-owned
small business concerns when the requirements of paragraph (b) of this
section can be satisfied (see 19.203); and
(2) Shall consider service-disabled veteran-owned small business
set-asides before considering service-disabled veteran-owned small
business sole source awards (see 19.1406) or small business set-asides
(see subpart 19.5).
* * * * *
0
12. Amend section 19.1406 by revising the introductory text of
paragraph (a) to read as follows:
19.1406 Sole source awards to service-disabled veteran-owned small
business concerns.
(a) A contracting officer may award contracts to service-disabled
veteran-owned small business concerns on a sole source basis (see
6.302-5(b)(6)), before considering small business set-asides (see
19.203 and subpart 19.5) provided none of the exclusions of 19.1404
apply and--
* * * * *
[FR Doc. 2011-5556 Filed 3-15-11; 8:45 am]
BILLING CODE 6820-EP-P
