Federal Acquisition Regulation; Constitutionality of Federal Contracting Programs for Minority-Owned and Other Small Businesses, 55849-55859 [2011-22944]
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Federal Register / Vol. 76, No. 175 / Friday, September 9, 2011 / Proposed Rules
Dated: September 2, 2011.
R.C. Proctor,
Acting Director of Commercial Regulations
and Standards.
[FR Doc. 2011–23053 Filed 9–8–11; 8:45 am]
BILLING CODE 9110–04–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 1, 2, 4, 12, 14, 15, 19, 22,
26, 52, and 53
[FAR Case 2009–016; Docket 2011–0090;
Sequence 1]
I. Background
RIN 9000–AM05
Federal Acquisition Regulation;
Constitutionality of Federal
Contracting Programs for MinorityOwned and Other Small Businesses
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Proposed rule.
AGENCY:
DoD, GSA, and NASA are
proposing to amend the Federal
Acquisition Regulation (FAR) to address
the impact of the decision in Rothe
Development Corporation vs. the DoD
and the U.S. Department of the Air
Force (USAF) on small disadvantaged
business concerns and certain
institutions of higher education.
DATES: Interested parties should submit
written comments to the Regulatory
Secretariat at one of the addresses
shown below on or before November 8,
2011 to be considered in the formation
of the final rule.
ADDRESSES: Submit comments in
response to FAR Case 2009–016 by any
of the following methods:
• Regulations.gov: https://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
inputting ‘‘FAR Case 2009–016’’ under
the heading ‘‘Enter Keyword or ID’’ and
selecting ‘‘Search.’’ Select the link
‘‘Submit a Comment’’ that corresponds
with ‘‘FAR Case 2009–016.’’ Follow the
instructions provided at the ‘‘Submit a
Comment’’ screen. Please include your
name, company name (if any), and
‘‘FAR Case 2009–016’’ on your attached
document.
• Fax: (202) 501–4067.
• Mail: General Services
Administration, Regulatory Secretariat
(MVCB), Attn: Hada Flowers, 1275 First
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SUMMARY:
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Street, NE., 7th Floor, Washington, DC
20417.
Instructions: Please submit comments
only and cite FAR Case 2009–016, 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 FAR Case 2009–016.
SUPPLEMENTARY INFORMATION:
In November 1998, Rothe
Development Corporation (RDC) filed
suit against DoD and the USAF (Rothe),
in the U.S. District Court for the
Western District of Texas. In its
complaint, RDC challenged the
constitutionality of section 1207 of the
National Defense Authorization Act of
1987, Public Law 99–661 (10 U.S.C.
2323), alleging that it violated the right
to equal protection under the Due
Process Clause of the Fifth Amendment
to the United States Constitution. RDC’s
initial complaint against the DoD/USAF
focused on the reauthorization of
section 1207 in 1992. On September 25,
2007, the U.S. District Court for the
Western District of Texas entered a
judgment in favor of DoD. However,
RDC appealed the court’s ruling and on
November 4, 2008, the U.S. Court of
Appeals for the Federal Circuit decided
in its favor (Rothe Dev. Corp. v. DoD,
545 F.3d 1023 (Fed. Cir. November 4,
2008)). The U.S. Court of Appeals for
the Federal Circuit found 10 U.S.C. 2323
unconstitutional. A District court
decision mandated by the U.S. Court of
Appeals was issued on February 27,
2009, enjoining all application of 10
U.S.C. 2323 (Rothe Dev. Corp. v. DoD,
606 F. Supp. 2d 648 (W.D. Tex. 2009)).
Section 1207 of the National Defense
Authorization Act of 1987, Public Law
99–661, codified at 10 U.S.C. 2323,
established the DoD, NASA, and the
U.S. Coast Guard (USCG), Small
Disadvantaged Business (SDB)
Participation Program. The purpose of
the program was to ensure that SDBs
could fully participate in the Federal
contracting process. Section 1207
provided the authority for DoD, NASA,
and USCG contracting officers to apply
a price adjustment of up to 10 percent
to afford SDBs a competitive price
advantage when competing in a full and
open competition and assist in
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achieving a 5 percent SDB goal. Section
1207 serves as the statutory
underpinning for FAR subpart 19.11,
Price Evaluation Adjustment for Small
Disadvantaged Business Concerns, as
well as some of FAR subpart 19.12,
Small Disadvantaged Business
Participation Program, and certain
associated FAR clauses.
A. FAR Revisions
DOD, GSA, and NASA are proposing
to amend the FAR to remove coverage
at FAR subpart 19.11, FAR subpart
19.12, corresponding clauses at FAR
52.219–22, Small Disadvantaged
Business Status, FAR 52.219–23, Notice
of Price Evaluation Adjustment for
Small Disadvantaged Business
Concerns, FAR 52.219–24, Small
Disadvantaged Business Participation
Program—Targets, FAR 52.219–25,
Small Disadvantaged Business
Participation Program—Disadvantaged
Status and Reporting, and FAR 52.219–
26, Small Disadvantaged Business
Participation Program—Incentive
Subcontracting, and to remove
references to FAR subpart 19.11, 19.12,
and corresponding clauses in FAR parts
1, 2, 4, 12, 14, 15, 19, 22, 26, 52, and
53.
Certain authorities in FAR subpart
19.12 and supporting clauses addressing
the award of subcontracts to SDBs that
are rooted in the Small Business Act,
rather than in section 1207, were not at
issue in the Rothe decision, and
therefore retain their legal status. These
include the authority to (1) provide
monetary incentives to prime
contractors to encourage subcontracting
opportunities to SDBs and (2) use an
evaluation factor or subfactor to
evaluate the participation of small
businesses as subcontractors. Because
these authorities are not affected by the
Rothe decision, the coverage in FAR
subpart 19.12 addressing subcontracting
(with the exception of the coverage at
FAR 19.1202 on the use of factors or
subfactors to evaluate SDB subcontract
participation) has been retained but
moved to FAR subpart 19.7, which
already addresses subcontracting issues
generally, including the use of monetary
incentives to encourage subcontracting
opportunities. As a result, this
realignment consolidates coverage on
subcontracting with small business
programs in one place.
With respect to FAR 19.1202,
Evaluation factor or subfactor, FAR
subpart 19.7 is currently silent on its
use. Nothing in this rulemaking
precludes an agency from using
evaluation factors and subfactors for
subcontracting during source selections.
The Small Business Administration’s
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(SBA) regulations (13 CFR 125.3(g))
allow the application of evaluation
factors and subfactors to subcontracting
with any of the small business
programs, including, but not limited to,
SDBs. The Federal Acquisition
Regulatory Council will confer with
SBA to evaluate the need for guidance
in the FAR on the use of evaluation
factors and subfactors for
subcontracting.
B. Standard Form (SF) 294,
Subcontracting Report for Individual
Contracts
DOD, GSA, and NASA are proposing
to revise the SF 294, Subcontracting
Report for Individual Contracts to
remove references to DOD and the
USCG collecting subcontract award data
for Historically Black Colleges and
Universities (HBCUs) and Minority
Instructions (MIs). In addition,
conforming changes are made to reflect
that the threshold for contractors to
submit small business subcontracting
plans was increased from $550,000 to
$650,000 (from $1.0 million to $1.5
million for construction).
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II. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 13563 and
12866 direct agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). E.O. 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. 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.
III. Regulatory Flexibility Act
This 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 DOD,
GSA, and NASA are proposing to
implement changes in the FAR
necessitated by the impact of the
decision in Rothe. The court in Rothe
found 10 U.S.C. 2323 unconstitutional,
thus impacting some SDBs. This rule
proposes to delete FAR subpart 19.11,
Price Evaluation Adjustment for Small
Disadvantaged Business Concerns, FAR
subpart 19.12, Small Disadvantaged
Business Participation Program, and
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associated clauses and references, and
reincorporate certain provisions of FAR
subpart 19.12 addressing SDB
subcontracting in FAR subpart 19.7.
This proposed rule may impact small
entities because the removal of FAR
subpart 19.11, Price Evaluation
Adjustment for Small Disadvantaged
Business Concerns and FAR subpart
19.12, Small Disadvantaged Business
Participation Program may have an
effect on SDBs seeking awards as prime
contractors.
Under this proposed revision to the
FAR, Federal agencies will no longer be
authorized to apply certain procurement
mechanisms (FAR subparts 19.11 and
19.12) that had offered a benefit for SDB
prime awards. As a practical matter,
however, because the price evaluation
adjustment at issue in Rothe had not
been used for approximately a decade
before that decision, this change will
not alter the status quo for SDBs. In
addition, the Small Business Act (15
U.S.C. 644(g)(1)) establishes a 5 percent
SDB governmentwide contracting goal
at the prime and subcontract levels.
Further, prime contractors may continue
to receive a benefit in solicitations that
utilize factors or subfactors during
source selection for small businesses
and small disadvantaged businesses, as
well as monetary incentives as part of
the incentive subcontracting program
(FAR 52.219–10).
An Initial Regulatory Flexibility
Analysis (IRFA) has been prepared. The
analysis is summarized as follows:
1. Description of the reasons why action by
the agency is being considered.
This proposed rule implements changes in
the FAR necessitated by the impact of the
decision in Rothe Development Corporation
vs. the U.S. Department of Defense and the
U.S. Department of the Air Force (545 F. 3rd
1023 (Fed. Cir. November 4, 2008)).
2. Succinct statement of the objectives of,
and legal basis for, the proposed rule.
The Court found 10 U.S.C. 2323
unconstitutional, thus impacting SDBs and
certain institutions of higher education (i.e.,
HBCUs/MIs). As a result of the Rothe
decision, DOD, GSA, and NASA propose to
revise the FAR to delete FAR subpart 19.11,
Price Evaluation Adjustment for Small
Disadvantaged Business Concerns, for DoD,
NASA, and USCG. FAR subpart 19.12, Small
Disadvantaged Business Participation
Program, is revised to remove considerations
associated with the evaluation factors and
subfactors of SDB concerns with the
expiration of section 7102 of the Federal
Acquisition Streamlining Act (FASA) and the
Rothe decision. Clauses associated with FAR
subparts 19.11 and 19.12 are either deleted
or revised.
3. Description of, and where feasible,
estimated of the number of small entities to
which the rule will apply.
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There are approximately 24,702 SDBs
currently listed in the Central Contractor
Registration.
4. Description of projected reporting,
recordkeeping, and other compliance
requirements of the proposed rule, including
an estimate of the classes of small entities
which will be subject to the requirement and
the type of professional skills necessary for
preparation of the report or record.
The rule will impose no new reporting or
record keeping requirements on small
entities. This proposed rule may impact
small entities because the removal of FAR
subpart 19.11, Price Evaluation Adjustment
for Small Disadvantaged Business Concerns
and FAR subpart 19.12, Small Disadvantaged
Business Participation Program may have an
effect on SDBs seeking awards as prime
contractors.
Under this proposed revision to the FAR,
Federal agencies will no longer be authorized
to apply certain procurement mechanisms
(FAR subparts 19.11 and 19.12) that had
offered a benefit for SDB prime awards. As
a practical matter, however, because the price
evaluation adjustment at issue in Rothe had
not been used for approximately a decade
before that decision, this change will not
alter the status quo for SDBs. In addition, the
Small Business Act (15 U.S.C. 644(g)(1))
establishes a 5 percent SDB government-wide
contracting goal at the prime and subcontract
levels. Further, prime contractors may
continue to receive a benefit in solicitations
that utilize factors or subfactors during
source selection for small businesses and
small disadvantaged businesses, as well as
monetary incentives as part of the incentive
subcontracting program (FAR 52.219–10).
5. Identification, to the extent practicable,
of all relevant Federal rules which may
duplicate, overlap, or conflict with the
proposed rule.
The rule does not duplicate, overlap, or
conflict with any other Federal rules.
6. Description of any significant
alternatives to the proposed rule which
accomplish the stated objectives of
applicable statutes and which minimize any
significant economic impact of the proposed
rule on small entities.
DOD, GSA, and NASA did not identify any
significant alternatives that would
accomplish the objectives of the statute of
publishing this proposed rule.
The Regulatory Secretariat will be
submitting a copy of the 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
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(FAR Case 2009–016) in
correspondence.
disadvantaged business concern’’ to
read as follows:
IV. Paperwork Reduction Act
The proposed rule does not contain
any information collection requirements
that require the approval of the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act (44 U.S.C.
chapter 35).
DOD, GSA, and NASA are proposing
to remove FAR coverage at FAR subpart
19.11, FAR subpart 19.12, and
corresponding clauses at FAR 52.219–
22, Small Disadvantaged Business
Status, FAR 52.219–23, Notice of Price
Evaluation Adjustment for Small
Disadvantaged Business Concerns, FAR
52.219–24, Small Disadvantaged
Business Participation Program—
Targets, FAR 52.219–25, Small
Disadvantaged Business Participation
Program—Disadvantaged Status and
Reporting, and FAR 52.219–26, Small
Disadvantaged Business Participation
Program—Incentive Subcontracting.
With these changes, the information
collection associated with FAR subpart
19.12, FAR 52.219–22, FAR 52.219–23,
and FAR 52.219–25 for OMB Control
number 9000–0150 will be removed,
reducing the information collection
burden imposed by the Federal
Government on the public by 15,000
burden hours.
2.101
List of Subjects in 48 CFR Parts 1, 2, 4,
12, 14, 15, 19, 22, 26, 52, and 53
Government procurement.
Dated: September 1, 2011.
Laura Auletta,
Acting Director, Office of Governmentwide
Acquisition Policy, Office of Acquisition
Policy.
Definitions.
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(b) * * *
(2) * * *
Small disadvantaged business
concern consistent with 13 CFR
124.1002, means an offeror, that is a
small business under the size standard
applicable to the acquisition; and—
(1) Not less than 51 percent of which
is unconditionally and directly owned
by one or more socially and
economically disadvantaged individuals
who are citizens of the United States,
the management and daily business
operations of which are controlled by
one or more socially and economically
disadvantaged individuals;
(2) Where the concern is owned by
one or more disadvantaged individuals,
each individual represents that their net
worth does not exceed $750,000 after
taking into account the applicable
exclusions set forth at 13 CFR
124.104(c)(2); and
(3) If it represents in writing that it
qualifies as a small disadvantaged
business (SDB) for any Federal
subcontracting program, it believes in
good faith that it is owned and
controlled by one or more socially and
economically disadvantaged individuals
and meets the SDB eligibility criteria of
13 CFR 124.1002.
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(b) * * *
(1) Block 10 if an incentive
subcontracting clause is used (the
contracting officer shall indicate the
applicable percentage);
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*
PART 14—SEALED BIDDING
14.502
[Amended]
7. Amend section 14.502 by removing
paragraph (b)(4); and redesignating
paragraphs (b)(5) through (b)(8) as
paragraphs (b)(4) through (b)(7),
respectively.
PART 15—CONTRACTING BY
NEGOTIATION
15.304
[Amended]
8. Amend section 15.304 by removing
paragraph (c)(4); and redesignating
paragraphs (c)(5) and (c)(6) as
paragraphs (c)(4) and (c)(5),
respectively.
9. Amend section 15.305 by revising
paragraph (a)(2)(v); and removing from
paragraph (a)(5) ‘‘15.304(c)(3)(ii) and
(c)(5)’’ and adding ‘‘15.304(c)(3)(ii) and
(c)(4)’’ in its place.
The revision reads as follows:
(a) * * *
(2) * * *
(v) The evaluation should include the
past performance of offerors in
complying with subcontracting plan
goals for small disadvantaged business
(SDB) concerns (see subpart 19.7).
*
*
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*
10. Amend section 15.503 by—
a. Revising the introductory text of
paragraph (a)(2)(i);
b. Removing paragraph (a)(2)(i)(B);
and
c. Redesignating paragraphs
(a)(2)(i)(C) through (a)(2)(i)(E) as
paragraphs (a)(2)(i)(B) through
(a)(2)(i)(D).
The revision reads as follows:
4. Amend section 4.1202 by removing
paragraph (k); and redesignating
paragraphs (l) through (bb) as
paragraphs (k) through (aa),
respectively.
PART 12—ACQUISITION OF
COMMERCIAL ITEMS
PART 1—FEDERAL ACQUISITION
REGULATIONS SYSTEM
12.301 Solicitation provisions and
contract clauses for the acquisition of
commercial items.
1.106
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Contract format.
*
15.305
[Amended]
5. Amend section 12.301 by revising
paragraph (b)(2) to read as follows:
*
[Amended]
2. Amend section 1.106, in the table
following the introductory text, by
removing FAR segments ‘‘19.12,’’
‘‘52.219–22,’’ ‘‘52.219–23,’’ and
‘‘52.219–25,’’ and their corresponding
OMB Control Numbers ‘‘9000–0150.’’
PART 2—DEFINITIONS OF WORDS
AND TERMS
3. Amend section 2.101 in paragraph
(b)(2) in the definition ‘‘Small
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12.303
4.1202
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).
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Alternate I in solicitations issued by
DoD, NASA, or the Coast Guard.
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6. Amend section 12.303 by revising
paragraph (b)(1) to read as follows:
PART 4—ADMINISTRATIVE MATTERS
Therefore, DoD, GSA, and NASA
propose amending 48 CFR parts 1, 2, 4,
12, 14, 15, 19, 22, 26, 52, and 53 as set
forth below:
1. The authority citation for 48 CFR
parts 1, 2, 4, 12, 14, 15, 19, 22, 26, 52,
and 53 continues to read as follows:
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(b) * * *
(2) The provision at 52.212–3, Offeror
Representations and Certifications—
Commercial Items. This provision
provides a single, consolidated list of
representations and certifications for the
acquisition of commercial items and is
attached to the solicitation for offerors
to complete. This provision may not be
tailored except in accordance with
subpart 1.4. Use the provision with its
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Proposal evaluation.
15.503 Notifications to unsuccessful
offerors.
(a) * * *
(2) * * *
(i) In addition to the notice in
paragraph (a)(1) of this section, the
contracting officer shall notify each
offeror in writing prior to award and
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upon completion of negotiations and
determinations of responsibility—
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PART 19—SMALL BUSINESS
PROGRAMS
11. Amend section 19.000 by—
a. Revising the introductory text of
paragraph (a);
b. Removing paragraphs (a)(8) through
(a)(10); and
c. Redesignating paragraphs (a)(11)
and (a)(12) as paragraphs (a)(9) and
(a)(10), respectively.
The revision reads as follows:
19.000
Scope of part.
(a) This part implements the
acquisition-related sections of the Small
Business Act (15 U.S.C. 631, et seq.),
applicable sections of the Armed
Services Procurement Act (10 U.S.C.
2302, et seq.), the Federal Property and
Administrative Services Act (41 U.S.C.
252), and Executive Order 12138, May
18, 1979. It covers—
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*
19.201
[Amended]
12. Amend section 19.201 by—
a. Removing paragraph (b);
b. Redesignating paragraphs (c)
through (e) as paragraphs (b) through
(d), respectively; and
c. Removing paragraph (f).
19.202–6
19.309
[Amended]
13. Amend section 19.202–6 by
removing paragraph (a)(3); and
redesignating paragraphs (a)(4) through
(a)(6) as paragraphs (a)(3) through (a)(5),
respectively.
14. Revise section 19.304 to read as
follows:
19.304
Disadvantaged business status.
The contracting officer may accept an
offeror’s representation that it is an SDB
concern. The provision at 52.219–1,
Small Business Program
Representations, or 52.212–3(c)(4),
Offeror Representations and
Certifications—Commercial Items, is
used to collect SDB data.
15. Revise section 19.305 to read as
follows:
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19.305 Protests and reviews of
disadvantaged business status.
(a) This section applies to protests
and reviews of a small business
concern’s disadvantaged status as a
prime contractor or subcontractor. An
SBA review of a firm’s small
disadvantaged business (SDB) status
differs from a formal protest at 19.703.
(1) A representation of SDB status on
a Federal prime contract will be deemed
a misrepresentation of SDB status if the
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firm does not meet the requirements of
13 CFR 124.1001(b).
(2) Any person or entity that
misrepresents a firm’s status as a ‘‘small
business concern owned and controlled
by socially and economically
disadvantaged individuals’’ (‘‘SDB
status’’) in order to obtain an 8(d) (15
U.S.C. 637(d)) contracting opportunity
will be subject to the penalties imposed
by section 16(d) of the Small Business
Act, 15 U.S.C. 645(d), as well as any
other penalty authorized by law.
(3) SBA may initiate the review of
SDB status on any firm that has
represented itself to be an SDB on a
subcontract to a Federal prime contract
whenever it receives credible
information calling into question the
SDB status of the firm.
(b) Requests for an SBA review of SDB
status may be forwarded to the Small
Business Administration, Assistant
Administrator for SDBCE, 409 Third
Street, SW, Washington, DC 20416.
(c) Protests of a small business
concern’s disadvantaged status as a
subcontractor are processed under
19.703(a)(2). Protests of a concern’s size
as a prime contractor are processed
under 19.302. Protests of a concern’s
size as a subcontractor are processed
under 19.703(b).
[Amended]
16. Amend section 19.309 by
removing paragraph (b); and
redesignating paragraphs (c) and (d) as
paragraphs (b) and (c), respectively.
17. Amend section 19.703 by revising
paragraph (a)(2) to read as follows:
19.703 Eligibility requirements for
participating in the program.
(a) * * *
(2) In connection with a subcontract,
the contracting officer or the SBA may
protest the disadvantaged status of a
proposed subcontractor. Such protests
will be processed in accordance with 13
CFR 124.1007 through 124.1014. Other
interested parties may submit
information to the contracting officer or
the SBA in an effort to persuade the
contracting officer or the SBA to initiate
a protest. Such protests, in order to be
considered timely, must be submitted to
the SBA prior to completion of
performance by the intended
subcontractor.
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19.705–1
[Amended]
18. Amend section 19.705–1 by
removing the second sentence.
19.708
[Amended]
19. Amend section 19.708 in
paragraphs (c)(1), (c)(2), and (c)(3) by
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removing ‘‘business, HUBZone small
business, and’’ and adding ‘‘business,
HUBZone small business, small
disadvantaged business, and’’ in its
place.
Subpart 19.11—[Removed and
Reserved]
20a. Remove and reserve subpart
19.11, consisting of sections 19.1101
through 19.1104.
Subpart 19.12—[Removed and
Reserved]
20b. Remove and reserve subpart
19.12, consisting of sections 19.1201
through 19.1204.
21. Amend section 19.1307 by
revising paragraph (d) to read as
follows:
19.1307 Price evaluation preference for
HUBZone small business concerns.
*
*
*
*
*
(d) A concern that is a HUBZone
small business concern shall receive the
benefit of the HUBZone small business
price evaluation preference. The
applicable price evaluation preference
shall be calculated independently
against an offeror’s base offer. The
individual preference shall be added to
the base offer to arrive at the total
evaluated price for that offer.
*
*
*
*
*
PART 22—APPLICATION OF LABOR
LAWS TO GOVERNMENT
ACQUISITIONS
22.1006
[Amended]
22. Amend section 22.1006 by—
a. Removing from paragraph
(a)(2)(i)(C) ‘‘52.204–8(c)(2)(iii) or (iv)’’
and adding ‘‘52.204–8(c)(2)(ii) or (iii)’’
in its place;
b. Removing from paragraph (e)(2)(i)
‘‘52.204–8(c)(2)(iii)’’ and adding
‘‘52.204–8(c)(2)(ii)’’ in its place; and
c. Removing from paragraph (e)(4)(i)
‘‘52.204–8(c)(2)(iv)’’ and adding
‘‘52.204–8(c)(2)(iii)’’ in its place.
PART 26—OTHER SOCIOECONOMIC
PROGRAMS
26.304
[Amended]
23. Amend section 26.304 by
removing the last sentence.
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
24. Amend section 52.204–8 by—
a. Revising the date of the provision;
b. Revising paragraph (c)(1)(xxi);
c. Removing paragraph (c)(2)(i); and
d. Redesignating paragraphs (c)(2)(ii)
through (c)(2)(vii) as (c)(2)(i) through
(c)(2)(vi), respectively.
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52.219–1 Small Business Program
Representations.
The revised text reads as follows:
52.204–8 Annual Representations and
Certifications.
*
*
Small Business Program Representations
(Date)
*
*
*
*
Annual Representations and Certifications
(Date)
*
*
*
*
*
(c) * * *
(1) * * *
(xxi) 52.226–2, Historically Black College
or University and Minority Institution
Representation. This provision applies to
solicitations for research, studies, supplies,
or services of the type normally acquired
from higher educational institutions.
*
*
*
*
*
25. Amend section 52.212–3 by—
a. Revising the date of the provision;
b. Removing paragraph (c)(10);
c. Redesignating paragraph (c)(11) as
paragraph (c)(10);
d. Removing from the newly
redesignated paragraph (c)(10)(ii)
‘‘representation in paragraph (c)(11)(i)’’
and adding ‘‘representation in
paragraph (c)(10)(i)’’ in its place;
e. Revising Alternate I; and
f. Removing Alternate II.
The revised text reads as follows:
52.212–3 Offeror Representations and
Certifications—Commercial Items.
*
*
*
*
*
*
*
*
*
*
*
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*
*
*
Contract Terms and Conditions Required To
Implement Statutes or Executive Orders—
Commercial Items (Date)
*
*
*
*
*
27. Amend section 52.219–1 by
revising the date of the provision; and
adding in paragraph (c), in alphabetical
order, the definition ‘‘Small
disadvantaged business concern.’’
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*
*
*
*
*
*
28. Amend section 52.219–2 by
revising the introductory paragraph to
read as follows:
52.219–2
Equal Low Bids.
As prescribed in 19.309(b), insert the
following provision:
*
*
*
*
*
29. Amend section 52.219–4 by
revising the date of the clause, and
paragraph (b)(3) to read as follows:
52.219–4 Notice of Price Evaluation
Preference for HUBZone Small Business
Concerns.
*
*
*
*
*
*
*
*
*
*
*
*
*
*
31. Amend section 52.219–10 by revising
the date of the clause; and removing from
paragraph (b) ‘‘business, HUBZone small
business, and’’ and adding ‘‘business,
HUBZone small business, small
disadvantaged business, and’’ in its place.
The revised text reads as follows:
52.219–10
Program.
Incentive Subcontracting
*
*
*
*
*
Incentive Subcontracting Program (Date)
*
Notice of Price Evaluation Preference for
HUBZone Small Business Concerns (Date)
*
*
*
*
52.219–22, 52.219–23, 52.219–24, 52.219–25,
and 52.219–26 [Removed and Reserved]
32. Remove and reserve sections
52.219–22, 52.219–23, 52.219–24,
52.219–25, and 52.219–26.
33. Amend section 52.219–28 by
revising the introductory paragraph to
read as follows:
As prescribed in 19.309(c), insert the
following clause:
*
*
*
*
*
34. Amend section 52.226–2 by
revising the date of the provision, and
in paragraph (a) by revising the
definition ‘‘Historically black college or
university’’ to read as follows:
*
*
*
*
30. Amend section 52.219–8 by
revising the date of the clause, and in
paragraph (c), revising the definition
‘‘Small disadvantaged business
concern’’ to read as follows:
52.212–5 Contract Terms and Conditions
Required To Implement Statutes or
Executive Orders—Commercial Items.
*
*
*
*
*
26. Amend section 52.212–5 by—
a. Revising the date of the clause;
b. Removing paragraphs (b)(17),
(b)(18), and (b)(19); and
c. Redesignating paragraphs (b)(20)
through (b)(49) as paragraphs (b)(17)
through (b)(46), respectively.
*
*
*
(i) Not less than 51 percent of which is
unconditionally and directly owned by one
or more socially and economically
disadvantaged individuals who are citizens
of the United States, the management and
daily business operations of which are
controlled by one or more socially and
economically disadvantaged individuals; and
(ii) Where the concern is owned by one or
more disadvantaged individuals, each
individual represents that their net worth
does not exceed $750,000 after taking into
account the applicable exclusions set forth at
13 CFR 124.104(c)(2); or
(2) It represents in writing that it qualifies
as a small disadvantaged business (SDB) for
any Federal subcontracting program, and
believes in good faith that it is owned and
controlled by one or more socially and
economically disadvantaged individuals and
meets the SDB eligibility criteria of 13 CFR
124.1002.
(b) * * *
(3) A concern that is a HUBZone small
business concern will receive the benefit of
the HUBZone small business price evaluation
preference. The applicable price evaluation
preference shall be calculated independently
against an offeror’s base offer. The individual
preference amounts shall be added together
to arrive at the total evaluated price for that
offer.
*
Alternate I (Date). As prescribed in
12.301(b)(2), add the following paragraph
(c)(11) to the basic provision:
(11) (Complete if the offeror has
represented itself as disadvantaged in
paragraph (c)(4) of this provision.)
*
*
*
Small disadvantaged business concern
means a small business concern—
Not less than 51 percent of which is
unconditionally and directly owned by one
or more socially and economically
disadvantaged individuals who are citizens
of the United States, the management and
daily business operations of which are
controlled by one or more socially and
economically disadvantaged individuals (as
defined at 13 CFR subpart B, 124.1002).
*
Offeror Representations and Certifications—
Commercial Items (Date)
*
*
*
55853
52.219–8 Utilization of Small Business
Concerns.
*
*
*
*
*
Utilization of Small Business Concerns
(Date)
*
*
*
*
*
(c) * * *
Small disadvantaged business concern
means a small business concern that
represents, as part of its offer that it meets the
criteria—
(1) Consistent with 13 CFR subpart B,
124.1002, and means a small business
concern—
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52.219–28 Post-Award Small Business
Program Rerepresentation.
52.226–2 Historically Black College or
University and Minority Institution
Representation.
*
*
*
*
*
Historically Black College or University and
Minority Institution Representation (Date)
(a) * * *
Historically black college or university
means an institution determined by the
Secretary of Education to meet the
requirements of 34 CFR 608.2 and includes
any nonprofit research institution that was an
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integral part of such a college or university
before November 14, 1986.
*
*
*
*
*
PART 53—FORMS
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35. Revise section 53.219 to read as
follows:
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53.219
Small business programs.
The following standard form is
prescribed for use in reporting small
business (including Alaska Native
Corporations and Indian tribes), veteranowned small business, service-disabled
veteran-owned small business,
HUBZone small business, small
disadvantaged business (including
Alaska Native Corporations and Indian
tribes), and women-owned small
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business subcontracting data, as
specified in part 19: SF 294, (Rev.
(Date)) Subcontracting Report for
Individual Contracts. SF 294 is
authorized for local reproduction.
36. Amend section 53.301–294 by
revising the form to read as follows:
53.301–294 Subcontracting Report for
Individual Contracts.
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[FR Doc. 2011–22944 Filed 9–8–11; 8:45 am]
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55858
Federal Register / Vol. 76, No. 175 / Friday, September 9, 2011 / Proposed Rules
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
49 CFR Part 571
Federal Motor Vehicle Safety
Standards No. 121; Air Brake Systems
National Highway Traffic
Safety Administration (NHTSA), DOT.
AGENCY:
Denial of Petition for
Rulemaking.
ACTION:
This Notice denies the
petition for rulemaking from William B.
Trescott, in which the petitioner
requested that the National Highway
Traffic Safety Administration (NHTSA)
vacate Federal Motor Vehicle Safety
Standard (FMVSS) No. 121, Air Brake
Systems by removing requirements for
antilock brake systems (ABS) for newlymanufactured vehicles equipped with
air-brake systems; or that the agency
require a driver-controllable switch that
would allow the driver to deactivate the
ABS on air-braked vehicles; or that the
agency require the automatic
deactivation of ABS on air braked
vehicles when the vehicles are traveling
at speeds greater than 55 mph. The
petitioner claims that an agency report
shows that ABS on tractor-trailers
increases fatal crash involvements, and
also that ABS allows incompetent truck
drivers to drive trucks. The agency
reviewed these claims and found them
to be without merit, and concludes that
the agency report cited by the petitioner
does not support the conclusion that
safety would be improved by allowing
ABS to be deactivated. Rather, the data
supports the conclusion that removing
ABS from trucks would result in an
increase in crashes.
SUMMARY:
For
non-legal issues, you may contact Mr.
Jeffrey Woods, Office of Crash
Avoidance Standards, NHTSA, 1200
New Jersey Avenue, SE., Washington,
DC 20590 (Telephone: 202–366–6206)
(FAX: 202–366–7002). For legal issues,
you may contact Mr. David Jasinski,
Office of the Chief Counsel, NHTSA,
1200 New Jersey Avenue, SE.,
Washington, DC 20590 (Telephone:
202–366–2992) (Fax: 202–366–3820).
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FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Trescott Petition
II. Summary of the ABS Effectiveness Study
Results
III. ABS Requirements
IV. Agency Analysis of the Petition
V. Agency Decision
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I. Trescott Petition
On October 27, 2010, the agency
received a petition for rulemaking from
William B. Trescott of Bay City, Texas,
requesting that FMVSS No. 121, Air
Brake Systems, either be vacated
entirely or amended to require one of
two options regarding antilock brake
systems that are required for air-braked
vehicles. The first option would be to
require automatic deactivation of the
antilock brake system (ABS) when
vehicles are travelling at speeds faster
than 55 mph, and the second option
would be to require an ABS deactivation
switch to allow the driver to disable the
ABS. The petition cited data from a
recent NHTSA report, ‘‘The
Effectiveness of ABS in Heavy Truck
Tractors and Trailers,’’ 1 and stated that
it showed no statistically significant
benefits of ABS in reducing fatal truck
crashes. The petition stated that the best
estimate of a reduction in all crash types
by having ABS on the tractor was only
three percent, and that ABS increased
overall fatalities by one percent. The
petition cited several tables in the report
describing both reductions and
increases in certain types of crashes. For
example, the petition cited Table 2,
Reduction in response group crashes
based on tractor and trailer ABS
equipment, Florida state data, of the
report which summarized state data
from Florida showing a 30 percent
decrease in single vehicle rollover
crashes for tractors and trailers
equipped with ABS, and a 21 percent
increase in two vehicle front-to-rear
crashes with the truck as the striking
vehicle for tractors and trailers
equipped with ABS. From Table 4,
Reduction in response group crashes on
wet roads based on tractor and trailer
ABS equipment, Florida state data, the
petition cited the 67 percent reduction
in jackknife crashes on wet roads for
tractors and trailers equipped with ABS.
The petition stated that there is no
doubt that ABS prevents jackknife
crashes.
The petition cited specific roadway
type, speed, and locality data that are
contained in the report as follows. Table
17, Number of crashes and reduction for
ABS-equipped tractors according to type
of locality and speed of road, FARS
data, indicates an 11 percent increase in
fatal crashes on rural, high-speed roads
for ABS-equipped tractors, while the
data in Table 18, Number of crashes and
reduction for ABS-equipped tractors on
roads that are not high-speed, FARS
data, show fatal crash reductions of 23
1 Report No. DOT HS 811 339, July 2010,
available at https://www-nrd.nhtsa.dot.gov/Pubs/
811339.pdf.
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55859
percent on all roads that are not high
speed for tractors with ABS. Table 19,
Number of crashes and reduction for
ABS-equipped tractors on roads that are
rural and high-speed according to
whether the road is an interstate or not,
FARS data, shows an eight percent
increase in fatal crashes on rural
interstate roads for ABS-equipped
tractors, and a three percent decrease in
fatal crashes on other non-interstate
rural high speed roads for ABSequipped tractors. Table 20, Crash
reductions for all crash mechanisms by
locality and road type, FARS, shows a
30 percent increase in fatal, two-vehicle
rear impact crashes with the truck as the
striking vehicle, for tractors equipped
with ABS on rural interstate highways.
On the basis of these data, the petition
stated that long-haul truckers who
operate primarily in rural areas should
disable their ABS and the agency should
issue a recall order to that effect.
However, the recall order should not
apply to drivers who operate primarily
in urban areas, and further, it may be
safest for truckers to turn off their ABS
when exceeding 55 mph and to leave it
on the rest of the time.
The petition stated that an
unintended consequence of preventing
jackknife crashes through the use of
ABS is that incompetent drivers, who
prior to the introduction of ABS would
have been fired for the occurrence of a
jackknife, were instead being retained
and subsequently their continued
driving resulted in increases in other
types of crashes. The petition cited a 29
percent increase in two-vehicle rear end
crashes on wet or icy roads with the
truck as the striking vehicle, from Table
4, Reduction in response group crashes
on wet roads based on tractor and
trailer ABS equipment, Florida state
data, for tractors and trailers equipped
with ABS, as an example of
incompetent truck driver retention. The
petition also cited a 21 percent increase
in single vehicle crash truck occupant
fatalities in 1997, the same year that
ABS was mandated on newlymanufactured tractors, and concluded
that this increase in fatalities was an
unintended side effect of less qualified
drivers being hired that was made
possible by ABS. The petition reasoned
that trucking fleets realized cost savings
because ABS reduced truck tire damage
during panic stops, which thereby
allowed the fleets to hire less qualified
drivers who were subsequently involved
in more crashes.
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]]>Agencies
[Federal Register Volume 76, Number 175 (Friday, September 9, 2011)]
[Proposed Rules]
[Pages 55849-55859]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-22944]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 2, 4, 12, 14, 15, 19, 22, 26, 52, and 53
[FAR Case 2009-016; Docket 2011-0090; Sequence 1]
RIN 9000-AM05
Federal Acquisition Regulation; Constitutionality of Federal
Contracting Programs for Minority-Owned and Other Small Businesses
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to address the impact of the decision in
Rothe Development Corporation vs. the DoD and the U.S. Department of
the Air Force (USAF) on small disadvantaged business concerns and
certain institutions of higher education.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat at one of the addresses shown below on or before
November 8, 2011 to be considered in the formation of the final rule.
ADDRESSES: Submit comments in response to FAR Case 2009-016 by any of
the following methods:
Regulations.gov: https://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by inputting ``FAR Case
2009-016'' under the heading ``Enter Keyword or ID'' and selecting
``Search.'' Select the link ``Submit a Comment'' that corresponds with
``FAR Case 2009-016.'' Follow the instructions provided at the ``Submit
a Comment'' screen. Please include your name, company name (if any),
and ``FAR Case 2009-016'' 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 FAR Case 2009-
016, 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 FAR Case 2009-
016.
SUPPLEMENTARY INFORMATION:
I. Background
In November 1998, Rothe Development Corporation (RDC) filed suit
against DoD and the USAF (Rothe), in the U.S. District Court for the
Western District of Texas. In its complaint, RDC challenged the
constitutionality of section 1207 of the National Defense Authorization
Act of 1987, Public Law 99-661 (10 U.S.C. 2323), alleging that it
violated the right to equal protection under the Due Process Clause of
the Fifth Amendment to the United States Constitution. RDC's initial
complaint against the DoD/USAF focused on the reauthorization of
section 1207 in 1992. On September 25, 2007, the U.S. District Court
for the Western District of Texas entered a judgment in favor of DoD.
However, RDC appealed the court's ruling and on November 4, 2008, the
U.S. Court of Appeals for the Federal Circuit decided in its favor
(Rothe Dev. Corp. v. DoD, 545 F.3d 1023 (Fed. Cir. November 4, 2008)).
The U.S. Court of Appeals for the Federal Circuit found 10 U.S.C. 2323
unconstitutional. A District court decision mandated by the U.S. Court
of Appeals was issued on February 27, 2009, enjoining all application
of 10 U.S.C. 2323 (Rothe Dev. Corp. v. DoD, 606 F. Supp. 2d 648 (W.D.
Tex. 2009)).
Section 1207 of the National Defense Authorization Act of 1987,
Public Law 99-661, codified at 10 U.S.C. 2323, established the DoD,
NASA, and the U.S. Coast Guard (USCG), Small Disadvantaged Business
(SDB) Participation Program. The purpose of the program was to ensure
that SDBs could fully participate in the Federal contracting process.
Section 1207 provided the authority for DoD, NASA, and USCG contracting
officers to apply a price adjustment of up to 10 percent to afford SDBs
a competitive price advantage when competing in a full and open
competition and assist in achieving a 5 percent SDB goal. Section 1207
serves as the statutory underpinning for FAR subpart 19.11, Price
Evaluation Adjustment for Small Disadvantaged Business Concerns, as
well as some of FAR subpart 19.12, Small Disadvantaged Business
Participation Program, and certain associated FAR clauses.
A. FAR Revisions
DOD, GSA, and NASA are proposing to amend the FAR to remove
coverage at FAR subpart 19.11, FAR subpart 19.12, corresponding clauses
at FAR 52.219-22, Small Disadvantaged Business Status, FAR 52.219-23,
Notice of Price Evaluation Adjustment for Small Disadvantaged Business
Concerns, FAR 52.219-24, Small Disadvantaged Business Participation
Program--Targets, FAR 52.219-25, Small Disadvantaged Business
Participation Program--Disadvantaged Status and Reporting, and FAR
52.219-26, Small Disadvantaged Business Participation Program--
Incentive Subcontracting, and to remove references to FAR subpart
19.11, 19.12, and corresponding clauses in FAR parts 1, 2, 4, 12, 14,
15, 19, 22, 26, 52, and 53.
Certain authorities in FAR subpart 19.12 and supporting clauses
addressing the award of subcontracts to SDBs that are rooted in the
Small Business Act, rather than in section 1207, were not at issue in
the Rothe decision, and therefore retain their legal status. These
include the authority to (1) provide monetary incentives to prime
contractors to encourage subcontracting opportunities to SDBs and (2)
use an evaluation factor or subfactor to evaluate the participation of
small businesses as subcontractors. Because these authorities are not
affected by the Rothe decision, the coverage in FAR subpart 19.12
addressing subcontracting (with the exception of the coverage at FAR
19.1202 on the use of factors or subfactors to evaluate SDB subcontract
participation) has been retained but moved to FAR subpart 19.7, which
already addresses subcontracting issues generally, including the use of
monetary incentives to encourage subcontracting opportunities. As a
result, this realignment consolidates coverage on subcontracting with
small business programs in one place.
With respect to FAR 19.1202, Evaluation factor or subfactor, FAR
subpart 19.7 is currently silent on its use. Nothing in this rulemaking
precludes an agency from using evaluation factors and subfactors for
subcontracting during source selections. The Small Business
Administration's
[[Page 55850]]
(SBA) regulations (13 CFR 125.3(g)) allow the application of evaluation
factors and subfactors to subcontracting with any of the small business
programs, including, but not limited to, SDBs. The Federal Acquisition
Regulatory Council will confer with SBA to evaluate the need for
guidance in the FAR on the use of evaluation factors and subfactors for
subcontracting.
B. Standard Form (SF) 294, Subcontracting Report for Individual
Contracts
DOD, GSA, and NASA are proposing to revise the SF 294,
Subcontracting Report for Individual Contracts to remove references to
DOD and the USCG collecting subcontract award data for Historically
Black Colleges and Universities (HBCUs) and Minority Instructions
(MIs). In addition, conforming changes are made to reflect that the
threshold for contractors to submit small business subcontracting plans
was increased from $550,000 to $650,000 (from $1.0 million to $1.5
million for construction).
II. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 13563 and 12866 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
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.
III. Regulatory Flexibility Act
This 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 DOD, GSA, and NASA are
proposing to implement changes in the FAR necessitated by the impact of
the decision in Rothe. The court in Rothe found 10 U.S.C. 2323
unconstitutional, thus impacting some SDBs. This rule proposes to
delete FAR subpart 19.11, Price Evaluation Adjustment for Small
Disadvantaged Business Concerns, FAR subpart 19.12, Small Disadvantaged
Business Participation Program, and associated clauses and references,
and reincorporate certain provisions of FAR subpart 19.12 addressing
SDB subcontracting in FAR subpart 19.7. This proposed rule may impact
small entities because the removal of FAR subpart 19.11, Price
Evaluation Adjustment for Small Disadvantaged Business Concerns and FAR
subpart 19.12, Small Disadvantaged Business Participation Program may
have an effect on SDBs seeking awards as prime contractors.
Under this proposed revision to the FAR, Federal agencies will no
longer be authorized to apply certain procurement mechanisms (FAR
subparts 19.11 and 19.12) that had offered a benefit for SDB prime
awards. As a practical matter, however, because the price evaluation
adjustment at issue in Rothe had not been used for approximately a
decade before that decision, this change will not alter the status quo
for SDBs. In addition, the Small Business Act (15 U.S.C. 644(g)(1))
establishes a 5 percent SDB governmentwide contracting goal at the
prime and subcontract levels. Further, prime contractors may continue
to receive a benefit in solicitations that utilize factors or
subfactors during source selection for small businesses and small
disadvantaged businesses, as well as monetary incentives as part of the
incentive subcontracting program (FAR 52.219-10).
An Initial Regulatory Flexibility Analysis (IRFA) has been
prepared. The analysis is summarized as follows:
1. Description of the reasons why action by the agency is being
considered.
This proposed rule implements changes in the FAR necessitated by
the impact of the decision in Rothe Development Corporation vs. the
U.S. Department of Defense and the U.S. Department of the Air Force
(545 F. 3rd 1023 (Fed. Cir. November 4, 2008)).
2. Succinct statement of the objectives of, and legal basis for,
the proposed rule.
The Court found 10 U.S.C. 2323 unconstitutional, thus impacting
SDBs and certain institutions of higher education (i.e., HBCUs/MIs).
As a result of the Rothe decision, DOD, GSA, and NASA propose to
revise the FAR to delete FAR subpart 19.11, Price Evaluation
Adjustment for Small Disadvantaged Business Concerns, for DoD, NASA,
and USCG. FAR subpart 19.12, Small Disadvantaged Business
Participation Program, is revised to remove considerations
associated with the evaluation factors and subfactors of SDB
concerns with the expiration of section 7102 of the Federal
Acquisition Streamlining Act (FASA) and the Rothe decision. Clauses
associated with FAR subparts 19.11 and 19.12 are either deleted or
revised.
3. Description of, and where feasible, estimated of the number
of small entities to which the rule will apply.
There are approximately 24,702 SDBs currently listed in the
Central Contractor Registration.
4. Description of projected reporting, recordkeeping, and other
compliance requirements of the proposed rule, including an estimate
of the classes of small entities which will be subject to the
requirement and the type of professional skills necessary for
preparation of the report or record.
The rule will impose no new reporting or record keeping
requirements on small entities. This proposed rule may impact small
entities because the removal of FAR subpart 19.11, Price Evaluation
Adjustment for Small Disadvantaged Business Concerns and FAR subpart
19.12, Small Disadvantaged Business Participation Program may have
an effect on SDBs seeking awards as prime contractors.
Under this proposed revision to the FAR, Federal agencies will
no longer be authorized to apply certain procurement mechanisms (FAR
subparts 19.11 and 19.12) that had offered a benefit for SDB prime
awards. As a practical matter, however, because the price evaluation
adjustment at issue in Rothe had not been used for approximately a
decade before that decision, this change will not alter the status
quo for SDBs. In addition, the Small Business Act (15 U.S.C.
644(g)(1)) establishes a 5 percent SDB government-wide contracting
goal at the prime and subcontract levels. Further, prime contractors
may continue to receive a benefit in solicitations that utilize
factors or subfactors during source selection for small businesses
and small disadvantaged businesses, as well as monetary incentives
as part of the incentive subcontracting program (FAR 52.219-10).
5. Identification, to the extent practicable, of all relevant
Federal rules which may duplicate, overlap, or conflict with the
proposed rule.
The rule does not duplicate, overlap, or conflict with any other
Federal rules.
6. Description of any significant alternatives to the proposed
rule which accomplish the stated objectives of applicable statutes
and which minimize any significant economic impact of the proposed
rule on small entities.
DOD, GSA, and NASA did not identify any significant alternatives
that would accomplish the objectives of the statute of publishing
this proposed rule.
The Regulatory Secretariat will be submitting a copy of the 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
[[Page 55851]]
(FAR Case 2009-016) in correspondence.
IV. Paperwork Reduction Act
The proposed rule does not contain any information collection
requirements that require the approval of the Office of Management and
Budget (OMB) under the Paperwork Reduction Act (44 U.S.C. chapter 35).
DOD, GSA, and NASA are proposing to remove FAR coverage at FAR
subpart 19.11, FAR subpart 19.12, and corresponding clauses at FAR
52.219-22, Small Disadvantaged Business Status, FAR 52.219-23, Notice
of Price Evaluation Adjustment for Small Disadvantaged Business
Concerns, FAR 52.219-24, Small Disadvantaged Business Participation
Program--Targets, FAR 52.219-25, Small Disadvantaged Business
Participation Program--Disadvantaged Status and Reporting, and FAR
52.219-26, Small Disadvantaged Business Participation Program--
Incentive Subcontracting. With these changes, the information
collection associated with FAR subpart 19.12, FAR 52.219-22, FAR
52.219-23, and FAR 52.219-25 for OMB Control number 9000-0150 will be
removed, reducing the information collection burden imposed by the
Federal Government on the public by 15,000 burden hours.
List of Subjects in 48 CFR Parts 1, 2, 4, 12, 14, 15, 19, 22, 26,
52, and 53
Government procurement.
Dated: September 1, 2011.
Laura Auletta,
Acting Director, Office of Governmentwide Acquisition Policy, Office of
Acquisition Policy.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 1, 2,
4, 12, 14, 15, 19, 22, 26, 52, and 53 as set forth below:
1. The authority citation for 48 CFR parts 1, 2, 4, 12, 14, 15, 19,
22, 26, 52, and 53 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 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
1.106 [Amended]
2. Amend section 1.106, in the table following the introductory
text, by removing FAR segments ``19.12,'' ``52.219-22,'' ``52.219-23,''
and ``52.219-25,'' and their corresponding OMB Control Numbers ``9000-
0150.''
PART 2--DEFINITIONS OF WORDS AND TERMS
3. Amend section 2.101 in paragraph (b)(2) in the definition
``Small disadvantaged business concern'' to read as follows:
2.101 Definitions.
* * * * *
(b) * * *
(2) * * *
Small disadvantaged business concern consistent with 13 CFR
124.1002, means an offeror, that is a small business under the size
standard applicable to the acquisition; and--
(1) Not less than 51 percent of which is unconditionally and
directly owned by one or more socially and economically disadvantaged
individuals who are citizens of the United States, the management and
daily business operations of which are controlled by one or more
socially and economically disadvantaged individuals;
(2) Where the concern is owned by one or more disadvantaged
individuals, each individual represents that their net worth does not
exceed $750,000 after taking into account the applicable exclusions set
forth at 13 CFR 124.104(c)(2); and
(3) If it represents in writing that it qualifies as a small
disadvantaged business (SDB) for any Federal subcontracting program, it
believes in good faith that it is owned and controlled by one or more
socially and economically disadvantaged individuals and meets the SDB
eligibility criteria of 13 CFR 124.1002.
* * * * *
PART 4--ADMINISTRATIVE MATTERS
4.1202 [Amended]
4. Amend section 4.1202 by removing paragraph (k); and
redesignating paragraphs (l) through (bb) as paragraphs (k) through
(aa), respectively.
PART 12--ACQUISITION OF COMMERCIAL ITEMS
5. Amend section 12.301 by revising paragraph (b)(2) to read as
follows:
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(b) * * *
(2) The provision at 52.212-3, Offeror Representations and
Certifications--Commercial Items. This provision provides a single,
consolidated list of representations and certifications for the
acquisition of commercial items and is attached to the solicitation for
offerors to complete. This provision may not be tailored except in
accordance with subpart 1.4. Use the provision with its Alternate I in
solicitations issued by DoD, NASA, or the Coast Guard.
* * * * *
6. Amend section 12.303 by revising paragraph (b)(1) to read as
follows:
12.303 Contract format.
* * * * *
(b) * * *
(1) Block 10 if an incentive subcontracting clause is used (the
contracting officer shall indicate the applicable percentage);
* * * * *
PART 14--SEALED BIDDING
14.502 [Amended]
7. Amend section 14.502 by removing paragraph (b)(4); and
redesignating paragraphs (b)(5) through (b)(8) as paragraphs (b)(4)
through (b)(7), respectively.
PART 15--CONTRACTING BY NEGOTIATION
15.304 [Amended]
8. Amend section 15.304 by removing paragraph (c)(4); and
redesignating paragraphs (c)(5) and (c)(6) as paragraphs (c)(4) and
(c)(5), respectively.
9. Amend section 15.305 by revising paragraph (a)(2)(v); and
removing from paragraph (a)(5) ``15.304(c)(3)(ii) and (c)(5)'' and
adding ``15.304(c)(3)(ii) and (c)(4)'' in its place.
The revision reads as follows:
15.305 Proposal evaluation.
(a) * * *
(2) * * *
(v) The evaluation should include the past performance of offerors
in complying with subcontracting plan goals for small disadvantaged
business (SDB) concerns (see subpart 19.7).
* * * * *
10. Amend section 15.503 by--
a. Revising the introductory text of paragraph (a)(2)(i);
b. Removing paragraph (a)(2)(i)(B); and
c. Redesignating paragraphs (a)(2)(i)(C) through (a)(2)(i)(E) as
paragraphs (a)(2)(i)(B) through (a)(2)(i)(D).
The revision reads as follows:
15.503 Notifications to unsuccessful offerors.
(a) * * *
(2) * * *
(i) In addition to the notice in paragraph (a)(1) of this section,
the contracting officer shall notify each offeror in writing prior to
award and
[[Page 55852]]
upon completion of negotiations and determinations of responsibility--
* * * * *
PART 19--SMALL BUSINESS PROGRAMS
11. Amend section 19.000 by--
a. Revising the introductory text of paragraph (a);
b. Removing paragraphs (a)(8) through (a)(10); and
c. Redesignating paragraphs (a)(11) and (a)(12) as paragraphs
(a)(9) and (a)(10), respectively.
The revision reads as follows:
19.000 Scope of part.
(a) This part implements the acquisition-related sections of the
Small Business Act (15 U.S.C. 631, et seq.), applicable sections of the
Armed Services Procurement Act (10 U.S.C. 2302, et seq.), the Federal
Property and Administrative Services Act (41 U.S.C. 252), and Executive
Order 12138, May 18, 1979. It covers--
* * * * *
19.201 [Amended]
12. Amend section 19.201 by--
a. Removing paragraph (b);
b. Redesignating paragraphs (c) through (e) as paragraphs (b)
through (d), respectively; and
c. Removing paragraph (f).
19.202-6 [Amended]
13. Amend section 19.202-6 by removing paragraph (a)(3); and
redesignating paragraphs (a)(4) through (a)(6) as paragraphs (a)(3)
through (a)(5), respectively.
14. Revise section 19.304 to read as follows:
19.304 Disadvantaged business status.
The contracting officer may accept an offeror's representation that
it is an SDB concern. The provision at 52.219-1, Small Business Program
Representations, or 52.212-3(c)(4), Offeror Representations and
Certifications--Commercial Items, is used to collect SDB data.
15. Revise section 19.305 to read as follows:
19.305 Protests and reviews of disadvantaged business status.
(a) This section applies to protests and reviews of a small
business concern's disadvantaged status as a prime contractor or
subcontractor. An SBA review of a firm's small disadvantaged business
(SDB) status differs from a formal protest at 19.703.
(1) A representation of SDB status on a Federal prime contract will
be deemed a misrepresentation of SDB status if the firm does not meet
the requirements of 13 CFR 124.1001(b).
(2) Any person or entity that misrepresents a firm's status as a
``small business concern owned and controlled by socially and
economically disadvantaged individuals'' (``SDB status'') in order to
obtain an 8(d) (15 U.S.C. 637(d)) contracting opportunity will be
subject to the penalties imposed by section 16(d) of the Small Business
Act, 15 U.S.C. 645(d), as well as any other penalty authorized by law.
(3) SBA may initiate the review of SDB status on any firm that has
represented itself to be an SDB on a subcontract to a Federal prime
contract whenever it receives credible information calling into
question the SDB status of the firm.
(b) Requests for an SBA review of SDB status may be forwarded to
the Small Business Administration, Assistant Administrator for SDBCE,
409 Third Street, SW, Washington, DC 20416.
(c) Protests of a small business concern's disadvantaged status as
a subcontractor are processed under 19.703(a)(2). Protests of a
concern's size as a prime contractor are processed under 19.302.
Protests of a concern's size as a subcontractor are processed under
19.703(b).
19.309 [Amended]
16. Amend section 19.309 by removing paragraph (b); and
redesignating paragraphs (c) and (d) as paragraphs (b) and (c),
respectively.
17. Amend section 19.703 by revising paragraph (a)(2) to read as
follows:
19.703 Eligibility requirements for participating in the program.
(a) * * *
(2) In connection with a subcontract, the contracting officer or
the SBA may protest the disadvantaged status of a proposed
subcontractor. Such protests will be processed in accordance with 13
CFR 124.1007 through 124.1014. Other interested parties may submit
information to the contracting officer or the SBA in an effort to
persuade the contracting officer or the SBA to initiate a protest. Such
protests, in order to be considered timely, must be submitted to the
SBA prior to completion of performance by the intended subcontractor.
* * * * *
19.705-1 [Amended]
18. Amend section 19.705-1 by removing the second sentence.
19.708 [Amended]
19. Amend section 19.708 in paragraphs (c)(1), (c)(2), and (c)(3)
by removing ``business, HUBZone small business, and'' and adding
``business, HUBZone small business, small disadvantaged business, and''
in its place.
Subpart 19.11--[Removed and Reserved]
20a. Remove and reserve subpart 19.11, consisting of sections
19.1101 through 19.1104.
Subpart 19.12--[Removed and Reserved]
20b. Remove and reserve subpart 19.12, consisting of sections
19.1201 through 19.1204.
21. Amend section 19.1307 by revising paragraph (d) to read as
follows:
19.1307 Price evaluation preference for HUBZone small business
concerns.
* * * * *
(d) A concern that is a HUBZone small business concern shall
receive the benefit of the HUBZone small business price evaluation
preference. The applicable price evaluation preference shall be
calculated independently against an offeror's base offer. The
individual preference shall be added to the base offer to arrive at the
total evaluated price for that offer.
* * * * *
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.1006 [Amended]
22. Amend section 22.1006 by--
a. Removing from paragraph (a)(2)(i)(C) ``52.204-8(c)(2)(iii) or
(iv)'' and adding ``52.204-8(c)(2)(ii) or (iii)'' in its place;
b. Removing from paragraph (e)(2)(i) ``52.204-8(c)(2)(iii)'' and
adding ``52.204-8(c)(2)(ii)'' in its place; and
c. Removing from paragraph (e)(4)(i) ``52.204-8(c)(2)(iv)'' and
adding ``52.204-8(c)(2)(iii)'' in its place.
PART 26--OTHER SOCIOECONOMIC PROGRAMS
26.304 [Amended]
23. Amend section 26.304 by removing the last sentence.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
24. Amend section 52.204-8 by--
a. Revising the date of the provision;
b. Revising paragraph (c)(1)(xxi);
c. Removing paragraph (c)(2)(i); and
d. Redesignating paragraphs (c)(2)(ii) through (c)(2)(vii) as
(c)(2)(i) through (c)(2)(vi), respectively.
[[Page 55853]]
The revised text reads as follows:
52.204-8 Annual Representations and Certifications.
* * * * *
Annual Representations and Certifications (Date)
* * * * *
(c) * * *
(1) * * *
(xxi) 52.226-2, Historically Black College or University and
Minority Institution Representation. This provision applies to
solicitations for research, studies, supplies, or services of the
type normally acquired from higher educational institutions.
* * * * *
25. Amend section 52.212-3 by--
a. Revising the date of the provision;
b. Removing paragraph (c)(10);
c. Redesignating paragraph (c)(11) as paragraph (c)(10);
d. Removing from the newly redesignated paragraph (c)(10)(ii)
``representation in paragraph (c)(11)(i)'' and adding ``representation
in paragraph (c)(10)(i)'' in its place;
e. Revising Alternate I; and
f. Removing Alternate II.
The revised text reads as follows:
52.212-3 Offeror Representations and Certifications--Commercial Items.
* * * * *
Offeror Representations and Certifications--Commercial Items (Date)
* * * * *
Alternate I (Date). As prescribed in 12.301(b)(2), add the
following paragraph (c)(11) to the basic provision:
(11) (Complete if the offeror has represented itself as
disadvantaged in paragraph (c)(4) of this provision.)
* * * * *
26. Amend section 52.212-5 by--
a. Revising the date of the clause;
b. Removing paragraphs (b)(17), (b)(18), and (b)(19); and
c. Redesignating paragraphs (b)(20) through (b)(49) as paragraphs
(b)(17) through (b)(46), respectively.
52.212-5 Contract Terms and Conditions Required To Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required To Implement Statutes or
Executive Orders--Commercial Items (Date)
* * * * *
27. Amend section 52.219-1 by revising the date of the provision;
and adding in paragraph (c), in alphabetical order, the definition
``Small disadvantaged business concern.''
52.219-1 Small Business Program Representations.
* * * * *
Small Business Program Representations (Date)
* * * * *
Small disadvantaged business concern means a small business
concern--
Not less than 51 percent of which is unconditionally and
directly owned by one or more socially and economically
disadvantaged individuals who are citizens of the United States, the
management and daily business operations of which are controlled by
one or more socially and economically disadvantaged individuals (as
defined at 13 CFR subpart B, 124.1002).
* * * * *
28. Amend section 52.219-2 by revising the introductory paragraph
to read as follows:
52.219-2 Equal Low Bids.
As prescribed in 19.309(b), insert the following provision:
* * * * *
29. Amend section 52.219-4 by revising the date of the clause, and
paragraph (b)(3) to read as follows:
52.219-4 Notice of Price Evaluation Preference for HUBZone Small
Business Concerns.
* * * * *
Notice of Price Evaluation Preference for HUBZone Small Business
Concerns (Date)
* * * * *
(b) * * *
(3) A concern that is a HUBZone small business concern will
receive the benefit of the HUBZone small business price evaluation
preference. The applicable price evaluation preference shall be
calculated independently against an offeror's base offer. The
individual preference amounts shall be added together to arrive at
the total evaluated price for that offer.
* * * * *
30. Amend section 52.219-8 by revising the date of the clause, and
in paragraph (c), revising the definition ``Small disadvantaged
business concern'' to read as follows:
52.219-8 Utilization of Small Business Concerns.
* * * * *
Utilization of Small Business Concerns (Date)
* * * * *
(c) * * *
Small disadvantaged business concern means a small business
concern that represents, as part of its offer that it meets the
criteria--
(1) Consistent with 13 CFR subpart B, 124.1002, and means a
small business concern--
(i) Not less than 51 percent of which is unconditionally and
directly owned by one or more socially and economically
disadvantaged individuals who are citizens of the United States, the
management and daily business operations of which are controlled by
one or more socially and economically disadvantaged individuals; and
(ii) Where the concern is owned by one or more disadvantaged
individuals, each individual represents that their net worth does
not exceed $750,000 after taking into account the applicable
exclusions set forth at 13 CFR 124.104(c)(2); or
(2) It represents in writing that it qualifies as a small
disadvantaged business (SDB) for any Federal subcontracting program,
and believes in good faith that it is owned and controlled by one or
more socially and economically disadvantaged individuals and meets
the SDB eligibility criteria of 13 CFR 124.1002.
* * * * *
31. Amend section 52.219-10 by revising the date of the clause;
and removing from paragraph (b) ``business, HUBZone small business,
and'' and adding ``business, HUBZone small business, small
disadvantaged business, and'' in its place. The revised text reads
as follows:
52.219-10 Incentive Subcontracting Program.
* * * * *
Incentive Subcontracting Program (Date)
* * * * *
52.219-22, 52.219-23, 52.219-24, 52.219-25, and 52.219-26 [Removed and
Reserved]
32. Remove and reserve sections 52.219-22, 52.219-23, 52.219-24,
52.219-25, and 52.219-26.
33. Amend section 52.219-28 by revising the introductory paragraph
to read as follows:
52.219-28 Post-Award Small Business Program Rerepresentation.
As prescribed in 19.309(c), insert the following clause:
* * * * *
34. Amend section 52.226-2 by revising the date of the provision,
and in paragraph (a) by revising the definition ``Historically black
college or university'' to read as follows:
52.226-2 Historically Black College or University and Minority
Institution Representation.
* * * * *
Historically Black College or University and Minority Institution
Representation (Date)
(a) * * *
Historically black college or university means an institution
determined by the Secretary of Education to meet the requirements of
34 CFR 608.2 and includes any nonprofit research institution that
was an
[[Page 55854]]
integral part of such a college or university before November 14,
1986.
* * * * *
PART 53--FORMS
35. Revise section 53.219 to read as follows:
53.219 Small business programs.
The following standard form is prescribed for use in reporting
small business (including Alaska Native Corporations and Indian
tribes), veteran-owned small business, service-disabled veteran-owned
small business, HUBZone small business, small disadvantaged business
(including Alaska Native Corporations and Indian tribes), and women-
owned small business subcontracting data, as specified in part 19: SF
294, (Rev. (Date)) Subcontracting Report for Individual Contracts. SF
294 is authorized for local reproduction.
36. Amend section 53.301-294 by revising the form to read as
follows:
53.301-294 Subcontracting Report for Individual Contracts.
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[FR Doc. 2011-22944 Filed 9-8-11; 8:45 am]
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