Ownership and Control of Service-Disabled Veteran-Owned Small Business Concerns, 4005-4011 [2018-01392]
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must be filed in accordance with
paragraphs (b) and (c) of this section
and 11 CFR 109.10(c) and (d), if the
independent expenditure is made in
support of or opposition to a candidate
in a presidential primary election and is
publicly distributed or otherwise
publicly disseminated in more than __
states but does not refer to any
particular state, the date of the election
is the date of the next upcoming
presidential primary election among the
presidential primary elections to be held
in the states in which the independent
expenditure is publicly distributed or
disseminated.
Alternative C
(2) Multistate independent
expenditures. (i) If an independent
expenditure is made in support of or
opposition to a candidate in a
presidential primary election and is
publicly distributed or otherwise
publicly disseminated in more than __
states but does not refer to any
particular state, the political committee
must allocate the total amount of the
expenditure among each of the states
where it is publicly distributed or
disseminated and where the
presidential primary election has yet to
occur, according to the number of
Congressional districts apportioned to
each such state relative to the total
number of Congressional districts in all
such states.
(ii) If the communication is publicly
distributed or otherwise publicly
disseminated up to and including the
20th day before the next upcoming
presidential primary election in any of
the states, and the amount calculated in
paragraph (f)(2)(i) of this section
aggregates to $10,000 or more with
respect to any of the states in that
calendar year, the political committee
must file a 48-hour report in accordance
with paragraph (b)(2) of this section.
(iii) If the communication is publicly
distributed or otherwise publicly
disseminated after the 20th day but
more than 24 hours before 12:01 a.m. of
the day of the next upcoming
presidential primary election in any of
the states, and the amount calculated in
paragraph (f)(2)(i) of this section
aggregates to $1,000 or more with
respect to any of the states, the political
committee must file a 24-hour report in
accordance with paragraph (c) of this
section.
(iv) For any report of an independent
expenditure included on a political
committee’s regular report under
paragraph (b)(1) of this section, or any
48- or 24-hour report of an independent
expenditure, the political committee
must indicate the date and amount of
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the expenditure, and list the states in
which the communication is publicly
disseminated or otherwise publicly
distributed.
§ 104.20
[Amended]
7. In § 104.20:
■ a. Redesignate paragraphs (c)(6)
through (c)(9) as paragraphs (c)(7)
through (c)(10).
■ b. Revise the heading and add new
paragraph (c)(6) to read as follows:
■
§ 104.20 Reporting electioneering
communications (52 U.S.C. 30104(f)).
*
*
*
(c) * * *
*
*
Alternatives A and B
(6) If the election identified pursuant
to paragraph (c)(5) of this section is a
presidential primary election and the
electioneering communication is
publicly distributed or otherwise
disseminated in more than __ states but
does not refer to any particular state, the
electioneering communication shall be
reported as a single communication, and
the states in which it constitutes an
electioneering communication (as
defined in 11 CFR 100.29(a)) shall be
indicated in memo text.
4005
Alternatives A and B
(iv) A statement that indicates
whether such expenditure was in
support of, or in opposition to a
candidate, together with the candidate’s
name and office sought; if the
expenditure meets the criteria set forth
in § 104.3(b)(3)(vii)(C), memo text must
be used to indicate the states in which
the communication is distributed, as
prescribed in that section;
Alternative C
(iv) A statement that indicates
whether such expenditure was in
support of, or in opposition to a
candidate, together with the candidate’s
name and office sought; if the
expenditure meets the criteria set forth
in § 104.3(b)(3)(vii)(C), the
communication must be reported in
accordance with § 104.4(f)(2);
*
*
*
*
*
On behalf of the Commission.
Dated: January 17, 2018.
Caroline C. Hunter,
Chair, Federal Election Commission.
[FR Doc. 2018–01074 Filed 1–26–18; 8:45 am]
BILLING CODE 6715–01–P
Alternative C
SMALL BUSINESS ADMINISTRATION
(6) If the election identified pursuant
to paragraph (c)(5) of this section is a
presidential primary election and the
electioneering communication is
publicly distributed or otherwise
disseminated in more than __ states but
does not refer to any particular state, the
cost of the electioneering
communication shall be allocated
among the states where it is publicly
distributed or otherwise disseminated in
accordance with § 104.4(f)(2)(A).
*
*
*
*
*
13 CFR Part 125
PART 109—COORDINATED AND
INDEPENDENT EXPENDITURES (52
U.S.C. 30101(17), 30116(A) AND (D),
AND PUBLIC LAW 107–155 SEC.
214(C))
8. The authority citation for part 109
continues to read as follows:
■
Authority: 52 U.S.C. 30101(17), 30104(c),
30111(a)(8), 30116, 30120; Sec. 214(c),
Pub. L. 107–155, 116 Stat. 81.
9. Revise paragraph (e)(1)(iv) of
§ 109.10 as follows:
■
§ 109.10 How do political committees and
other persons report independent
expenditures?
*
*
*
(e) * * *
(1) * * *
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RIN 3245–AG85
Ownership and Control of ServiceDisabled Veteran-Owned Small
Business Concerns
U.S. Small Business
Administration.
ACTION: Proposed rule.
AGENCY:
The U.S. Small Business
Administration (SBA or Agency)
proposes to amend its regulations to
implement provisions of The National
Defense Authorization Act for Fiscal
Year 2017 (NDAA 2017). The NDAA
2017 placed the responsibility for
issuing regulations relating to
ownership and control for the
Department of Veterans Affairs
verification of Veteran-Owned (VO) and
Service-Disabled Veteran-Owned
(SDVO) Small Business Concern (SBC)
with the SBA. Pursuant to NDAA 2017,
there will be one definition of
ownership and control for these
concerns, which will apply to the
Department of Veterans Affairs in its
verification and Vets First Contracting
Program procurements, and all other
government acquisitions which require
self-certification. The legislation also
provides that in certain circumstances a
SUMMARY:
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firm can qualify as VO or SDVO when
there is a surviving spouse or an
employee stock ownership plan (ESOP).
DATES: Comments must be received on
or before March 30, 2018.
ADDRESSES: You may submit comments,
identified by RIN 3245–AG85, by any of
the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• For mail, paper, disk, or CD/ROM
submissions: Brenda Fernandez, U.S.
Small Business Administration, Office
of Policy, Planning and Liaison, 409
Third Street SW, 8th Floor, Washington,
DC 20416.
• Hand Delivery/Courier: Brenda
Fernandez, U.S. Small Business
Administration, Office of Policy,
Planning and Liaison, 409 Third Street
SW, 8th Floor, Washington, DC 20416.
SBA will post all comments on
www.regulations.gov. If you wish to
submit confidential business
information (CBI) as defined in the User
Notice at www.regulations.gov, please
submit the information to Brenda
Fernandez, U.S. Small Business
Administration, Office of Policy,
Planning and Liaison, 409 Third Street
SW, 8th Floor, Washington, DC 20416,
or send an email to brenda.fernandez@
sba.gov. Highlight the information that
you consider to be CBI and explain why
you believe SBA should hold this
information as confidential. SBA will
review the information and make the
final determination on whether it will
publish the information.
FOR FURTHER INFORMATION CONTACT:
Brenda Fernandez, Office of Policy,
Planning and Liaison, 409 Third Street
SW, Washington, DC 20416; (202) 205–
7337; brenda.fernandez@sba.gov.
SUPPLEMENTARY INFORMATION: The Vets
First Contracting Program within the
Department of Veterans Affairs (VA)
was created under the Veterans Benefits,
Health Care, and Information
Technology Act of 2006 (Public Law,
P.L. 109–461). This contracting program
was created for Veteran-Owned Small
Businesses and expanded the ServiceDisabled Veteran-Owned contracting
program for VA procurements.
Approved firms are eligible to
participate in Veteran-Owned Small
Business (VOSB) and Service-Disabled
Veteran-Owned Small Business
(SDVOSB) set-asides issued by VA.
More information regarding the Vets
First Contracting Program can be found
on the Department of Veterans Affairs
website at https://www.va.gov/osdbu/
faqs/109461.asp.
The National Defense Authorization
Act of 2017 (Pub. L. 114–328), section
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1832, amended section 3(q) of the Small
Business Act (15 U.S.C. 632(q)) and
section 8127 of title 38, United States
Code, to standardize definitions for
VOSBs and SDVOSBs. This section also
requires the Secretary of Veterans
Affairs to use the regulations established
by the Small Business Administration
(SBA) for establishing ownership and
control of VOSBs and SDVOSBs. The
Secretary would continue to determine
whether individuals are veterans or
service-disabled veterans and would be
responsible for verification of applicant
firms. Challenges to the status of a
VOSB or SDVOSB based upon issues of
ownership or control would be decided
by the administrative judges at the
SBA’s Office of Hearings and Appeals
(OHA).
In drafting this proposed rule, SBA
consulted with VA in order to properly
understand VA’s positions and
implement the statutory requirements in
a way that is consistent with both SBA’s
and VA’s interpretations.
Section-by-Section Analysis
Section 125.11
In response to the NDAA 2017
changes, SBA is proposing to amend the
definitions in § 125.11 by incorporating
language from VA’s regulations and also
from SBA’s 8(a) Business Development
(BD) program regulations. SBA is
proposing to define a surviving spouse
and the requirements for a surviving
spouse-owned SDVO SBC to maintain
program eligibility. Further, SBA is
proposing to add definitions for Daily
Business Operations, Negative Control,
Participant, and Unconditional
Ownership. The added definitions are
being adopted from SBA’s 8(a) BD
regulations found in part 124. SBA is
adding a definition for Employee Stock
Ownership Plan (ESOP). This definition
is adopted from § 1832(a)(6). SBA is also
proposing to replace the definitions of
permanent caregiver, service-disabled
veteran (SDV), and surviving spouse.
SBA is adding a new definition for
service-disabled veteran with a
permanent and severe disability. These
definitions are being updated in
consultation with VA in an effort to
ensure consistency across programs at
both Agencies. SBA is also adding a
definition for small business concerns.
Concerns will need to meet all the
requirements of part 121, including
§ 121.105(a)(1), which requires that the
firm be organized for profit, ‘‘with a
place of business located in the United
States, and which operates primarily
within the United States or which
makes a significant contribution to the
U.S. economy through payment of taxes
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or use of American products, materials
or labor.’’ This definition will address
how to generally determine the size of
a concern. VO and SDVO SBCs will still
be required to meet size standards
corresponding to the NAICS code
assigned to each contract pursuant to
§§ 125.14 and 125.15.
In addition, SBA is proposing to add
a definition for ‘‘extraordinary
circumstances’’ under which a service
disabled veteran owner would not have
full control over a firm’s decisionmaking process, but would not render
the firm ineligible as a firm owned and
controlled by one or more service
disabled veterans. This definition will
be used to identify discrete
circumstances that SBA views as rare.
The new definition will be used to
allow minority equity holders to have
negative control over these enumerated
instances. SBA proposes five limited
circumstances in which a servicedisabled veteran owner will not have
full control over the decision making
process. Under the proposed rule, these
five circumstances would be exclusive,
and SBA would not recognize any other
facts or circumstances that would allow
negative control by individuals that are
not service-disabled.
Section 125.12
SBA is proposing to amend
§ 125.12(b), which pertains to the
requirement for ownership of a
partnership. SBA’s current regulation
requires service-disabled veterans to
own at least 51% of each type of
partnership interest. Therefore, if a
partnership had general partners and
limited partners it was required that the
service disabled veteran be both a
general and limited partner. SBA is
proposing to change the requirement so
that service-disabled veterans will need
to own at least 51% of the aggregate
voting interest in the partnership.
SBA is proposing to add § 125.12(d).
This proposed paragraph incorporates
the new statutory language with regard
to public companies and ownership.
Specifically, it should be noted that this
language does not include any equity
held by an ESOP when determining
ownership for a publicly owned
business.
SBA is proposing to add a new
§ 125.12(g). This new paragraph and its
subparagraphs would provide clarity
with regard to requirements for
dividends and distributions. SBA’s
existing regulations require that
ownership must also entail all the
privileges and benefits of ownership.
This new paragraph is adopted from
SBA’s 8(a) BD regulations in part 124.
In general, one’s right to receive
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benefits, compensation, and the
ultimate value of one’s equity should be
consistent with the purported amount of
equity. For example, it is not consistent
with SBA’s regulations for a firm to state
that a service-disabled veteran owns 60
percent of the equity but records show
that he or she is entitled only to a
smaller amount of the firm’s profit, or
that the residual value of that equity is
less than 60 percent if the firm is sold.
SBA is proposing to add new
§§ 125.12(h) and (i). Pursuant to
proposed § 125.12(h), ownership
decisions would be decided without
regard to community property laws.
This provision is similar to SBA’s
ownership regulations for women
owned businesses. See 13 CFR 127.201.
SBA is also adopting regulations to
allow firms owned by surviving spouses
of service-disabled veterans to remain
eligible for the program, and § 125.12(i)
provides the guidelines for this
continued eligibility. Basically, this
provision would allow the transfer of
ownership in a SDVO SBC from a
serviced-disabled veteran to his or her
spouse upon the death of the servicedisabled veteran without adversely
affecting the firm’s status as a SDVO
SBC.
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Section 125.13
SBA is proposing to add several new
paragraphs to § 125.13. These proposed
paragraphs incorporate provisions from
SBA’s 8(a) BD program and VA’s former
ownership and control regulations. SBA
has always used 8(a) BD program
regulations for guidance on eligibility
issues for SDVO SBCs, and SBA will
continue to do so. SBA proposing to
adopt some but not all of its 8(a) BD
regulations should not be interpreted as
SBA abandoning this position. SBA is
adding these specific regulations to add
clarity and consistency, but SBA will
continue to rely on part 124 for
guidance. Many of the newly
incorporated regulations deal with
control by non-service-disabled
veterans. These changes are intended to
provide more clarity about the roles that
non-service-disabled veterans can serve
without creating control issues that may
affect the concern’s eligibility.
SBA is proposing to add language to
describe how to determine if an SDV
controls the Board of Directors in
§ 125.13(e). This language is adopted
from SBA’s 8(a) BD regulations and is
being added to provide more clarity.
SBA is proposing language that will
require firms to provide notification of
supermajority voting requirements in
§ 125.13(f). This regulation will simplify
the procedures for reviewing eligibility
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criteria related to super majority
requirements.
Proposed §§ 125.13(h), (i), and (j)
adopt policies and language from SBA’s
8(a) BD program and VA’s regulations.
These provisions provide guidance on
when SBA may find that a non-servicedisabled veteran controls the firm.
These regulations add more clarity and
detail to specific issues such as quorum
requirements and loan arrangements
with non-service-disabled veterans.
SBA is proposing to add rebuttable
presumptions § 125.13(k) and (l).
Proposed § 125.13(k) would add a
rebuttable presumption that a person
not working for a firm regularly during
normal working hours does not control
the firm. This is not a full time devotion
requirement. It just makes clear that this
is a factor that SBA will consider, but
is clearly rebuttable by providing
evidence of control. Similarly, proposed
§ 125.13(l) would add a rebuttable
presumption regarding place of work. In
this case, it deals with an SDV owner
who does not live or work nears the
firm’s headquarters or its worksites.
SBA will assume that this indicates a
lack of control. The main issue in these
instances is over delegation of authority
to non-SDV individuals who do work at
the office and who are at the work sites.
SBA’s regulations require control over
day to day operations and remote
observation and over delegation is not
the same as control. As noted in this
proposed rule, this is a rebuttable
presumption.
SBA is proposing to add § 125.13(m),
an exception to the control requirements
in ‘‘extraordinary circumstances.’’ As
noted above, SBA is proposing a new
definition for extraordinary
circumstances that includes a limited
and exhaustive list of five
circumstances. This proposed rule will
allow an exception to the general
requirement that SDVs control long term
decision making.
SBA is proposing to add § 125.13(n),
an exception to the control requirements
when an individual in the reserves is
recalled to active duty. SBA and VA do
not think a firm owned by an SDV
should lose its status due to the
necessary military commitments of its
owner when serving the nation.
Sections 125.22 and 125.23
SBA is proposing to make changes to
§§ 125.22 and 125.23 to correct cross
citations that were not updated when
SBA renumbered its regulations. SBA is
also proposing to update the values for
sole source awards contained in
§ 125.23 in order to be consistent with
the inflationary adjustments made to
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those amounts in the Federal
Acquisition Regulation (FAR).
Compliance With Executive Orders
12866, 12988, 13132, and 13771, the
Paperwork Reduction Act (44 U.S.C.
Ch. 35), and the Regulatory Flexibility
Act (5 U.S.C. 601–612)
Executive Order 12866
OMB has determined that this rule
does not constitute a ‘‘significant
regulatory action’’ under Executive
Order 12866. This rule is also not a
major rule under the Congressional
Review Act, 5 U.S.C. 800. This proposed
rule would amend the rules concerning
ownership and control of VO and SDVO
SBCs. As such, the rule has no effect on
the amount or dollar value of any
Federal contract requirements or of any
financial assistance provided through
SBA or VA. Therefore, the rule is not
likely to have an annual economic effect
of $100 million or more, result in a
major increase in costs or prices, or have
a significant adverse effect on
competition or the United States
economy. In addition, this rule does not
create a serious inconsistency or
otherwise interfere with an action taken
or planned by another agency,
materially alter the budgetary impact of
entitlements, grants, user fees, loan
programs or the rights and obligations of
such recipients, nor raise novel legal or
policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
This rule is part of a joint effort by the
VA and SBA to reduce the regulatory
burden on the veteran business
community. This rule will consolidate
ownership and control requirements in
one regulation thus eliminating
duplicate functions. Prior to the
enactment of this regulation business
owners had the burden of complying
with both regulations. This regulation
will eliminate that burden. The single
rule will help streamline the verification
and certification processes which will
save business owners time and money.
This will also lead to less confusion.
Executive Order 12988
This action meets applicable
standards set forth in section 3(a) and
3(b)(2) of Executive Order 12988, Civil
Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce
burden. The action does not have
retroactive or preemptive effect.
Executive Order 13132
This rule does not have Federalism
implications as defined in Executive
Order 13132. It will not have substantial
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direct effects on the States, on the
relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government, as specified in the
Executive Order. As such it does not
warrant the preparation of a Federalism
Assessment.
Executive Order 13771
This proposed rule is expected to be
an Executive Order 13771 deregulatory
action. Details on the estimated cost
savings of this proposed rule can be
found in the rule’s economic analysis.
This rule is part of a joint effort by the
VA and SBA to reduce the regulatory
burden on the veteran business
community. This rule will consolidate
ownership and control requirements in
one regulation thus eliminating
duplicate functions. Prior to the
enactment of this regulation business
owners had the burden of complying
with both regulations. This regulation
will eliminate that burden. The single
rule will help streamline the verification
and certification processes which will
save business owners time and money.
This will also lead to less confusion.
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Paperwork Reduction Act
The SBA has determined that this rule
does not impose additional reporting or
recordkeeping requirements under the
Paperwork Reduction Act, 44 U.S.C.
Chapter 35. However, this rule does
include an information collection for
the VA and the OMB approval number
for this collection is 2900–0675.
Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980
(RFA), 5 U.S.C. 601–612, as amended,
requires Federal agencies to consider
the potential impact of regulations on
small entities during rulemaking. Small
entities include small businesses, small
not-for-profit organizations, and small
governmental jurisdictions. Section 605
of the RFA allows an agency to certify
a rule, in lieu of preparing an analysis,
if the rulemaking is not expected to
have a significant economic impact on
a substantial number of small entities.
This proposed rule will merge SBA
and VA regulations concerning
ownership and control of VO and SDVO
SBCs as directed by Congress. The
proposed regulation is not attempting
new regulation, but to streamline two
already existing regulations into a single
regulatory framework. While SBA does
not anticipate that this proposed rule
would have a significant economic
impact on any small business, we do
welcome comments from any small
business setting out how and to what
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degree this proposed rule would affect
it economically.
There are approximately 21,000 firms
registered as SDVO SBCs in SAM and
approximately 13,000 firms that have
been certified by the VA. To a large
extent SBA’s and the VA’s ownership
and control rules were substantially
similar in terms of the regulatory
language, and in many instances
identical. Thus the vast majority of
these firms will not be impacted by this
rule. For example, this rule will not
impact firms that are 100% owned and
control by an SDV. To the extent there
are differences in SBA’s and the VA’s
ownership and control rules, this rule
will reduce cost and positively impact
all SDVO firms, because there will be
one set of criteria to measure SDV
ownership and control throughout the
Federal government. Further, SBA’s
current rules do not ignore ESOPs when
determining ownership, which means
firms that are majority owned by ESOPs
are not eligible for SDVO set-asides or
sole source awards. We have no data on
the number of firms that this rule will
be impact, but the number is very small.
After consulting with industry
representatives, many firms owned by
ESOPs are entirely owned by the ESOP,
especially those that operate in
industries with employee based size
standards. Those firms will still not
qualify if this rule is finalized because
there is still a 51% SDV ownership
requirement of the remaining ownership
interest, not including ESOPs. However,
some firms that intend to institute an
ESOP may do so in way that allows the
firm to qualify under this rule, once it
is finalized. With respect to surviving
spouse, SBA’s current rules do not
recognize ownership or control by a
surviving spouse. Although the VA does
allow firms owned and controlled by
surviving spouses to qualify under its
certification program, the number of
firms that qualify under the exception is
extremely small. To the extent firms
qualify under the surviving spouse
exception the benefit will be positive,
not negative. Firms that were previously
not eligible to continue as SDVO firms
will be able to continue for a period of
time, when and if this rule is finalized.
Therefore, the Administrator of SBA
determines, under 5 U.S.C. 605(b), that
this proposed rule would not have a
significant economic impact on a
substantial number of small entities.
List of Subjects in 13 CFR Part 125
Government contracts, Government
procurement, Reporting and
recordkeeping requirements, Small
businesses, Technical assistance,
Veterans.
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Accordingly, for the reasons stated in
the preamble, SBA proposes to amend
13 CFR part 125 as follows:
PART 125—GOVERNMENT
CONTRACTING PROGRAMS
1. The authority citation for part 125
is revised to read as follows:
■
Authority: 15 U.S.C. 632(p), (q), 634(b)(6),
637, 644, 657(f), 657q; and 657s; 38 U.S.C.
501 and 8127.
■
2. Revise § 125.11 to read as follows:
§ 125.11 What definitions are important in
the Service-Disabled Veteran-Owned
(SDVO) Small Business Concern (SBC)
program?
Contracting officer has the meaning
given such term in section 27(f)(5) of the
Office of Federal Procurement Policy
Act (41 U.S.C. 423(f)(5)).
Daily business operations include, but
are not limited to, the marketing,
production, sales, and administrative
functions of the firm, as well as the
supervision of the executive team, the
implementation of policies and the
setting of the strategic direction of the
firm.
ESOP has the meaning given the term
‘‘employee stock ownership plan’’ in
section 4975(e)(7) of the Internal
Revenue Code of 1986 (26 U.S.C.
4975(e)(7)).
Extraordinary circumstances. For
purposes of this part, extraordinary
circumstances are only the following:
(1) Adding a new equity stakeholder;
(2) Dissolution of the company;
(3) Sale of the company;
(4) The merger of the company; and
(5) Company declaring bankruptcy.
Negative control has the same
meaning as that set forth in
§ 121.103(a)(3) of this chapter.
Participant means a veteran-owned
small business concern that has verified
status in the Vendor Information Pages
database, available at https://
www.vip.vetbiz.gov/.
Permanent caregiver, for purposes of
this part, is the spouse, or an individual,
18 years of age or older, who is legally
designated, in writing, to undertake
responsibility for managing the wellbeing of the service-disabled veteran
with a permanent and severe disability,
as determined by Department of
Veterans Affairs’ Veterans Benefits
Administration, to include housing,
health and safety. A permanent
caregiver may, but does not need to,
reside in the same household as the
service-disabled veteran with a
permanent and severe disability. In the
case of a service-disabled veteran with
a permanent and severe disability
lacking legal capacity, the permanent
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caregiver shall be a parent, guardian, or
person having legal custody. There may
be no more than one permanent
caregiver per service-disabled veteran
with a permanent and severe disability.
(1) A permanent caregiver may be
appointed, in a number of ways,
including:
(i) By a court of competent
jurisdiction;
(ii) By the Department of Veterans
Affairs, National Caregiver Support
Program, as the Primary Family
Caregiver of a Veteran participating in
the Program of Comprehensive
Assistance for Family Caregivers (this
designation is subject to the Veteran and
the caregiver meeting other specific
criteria as established by law and the
Secretary and may be revoked if the
eligibility criteria do not continue to be
met); or
(iii) By a legal designation.
(2) Any appointment of a permanent
caregiver must in all cases be
accompanied by a written determination
from the Department of Veterans Affairs
that the veteran has a permanent and
total service-connected disability as set
forth in 38 CFR 3.340 for purposes of
receiving disability compensation or a
disability pension. The appointment
must also delineate why the permanent
caregiver is given the appointment,
must include the consent of the veteran
to the appointment and how the
appointment would contribute to
managing the veteran’s well-being.
Small business concern owned and
controlled by service-disabled veterans
(also known as a Service-Disabled
Veteran-Owned SBC) means any of the
following:
(1) A small business concern—
(i) Not less than 51 percent of which
is owned by one or more servicedisabled veterans or, in the case of any
publicly owned business, not less than
51 percent of the stock (not including
any stock owned by an ESOP) of which
is owned by one or more servicedisabled veterans; and
(ii) The management and daily
business operations of which are
controlled by one or more servicedisabled veterans or, in the case of a
veteran with permanent and severe
disability, the spouse or permanent
caregiver of such veteran;
(2) A small business concern—
(i) Not less than 51 percent of which
is owned by one or more servicedisabled veterans with a disability that
is rated by the Secretary of Veterans
Affairs as a permanent and total
disability who are unable to manage the
daily business operations of such
concern; or
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(ii) In the case of a publicly owned
business, not less than 51 percent of the
stock (not including any stock owned by
an ESOP) of which is owned by one or
more such veterans.
Service-connected has the meaning
given that term in 38 U.S.C. 101(16).
Service-disabled veteran is a veteran
who possesses either a valid disability
rating letter issued by the Department of
Veterans Affairs, establishing a serviceconnected rating between 0 and 100
percent, or a valid disability
determination from the Department of
Defense or is registered in the
Beneficiary Identification and Records
Locator Subsystem maintained by
Department of Veterans Affairs’
Veterans Benefits Administration as a
service-disabled veteran. Reservists or
members of the National Guard disabled
from a disease or injury incurred or
aggravated in line of duty or while in
training status also qualify.
Service-disabled veteran with a
permanent and severe disability means
a veteran with a service-connected
disability that has been determined by
the Department of Veterans Affairs, in
writing, to have a permanent and total
service-connected disability as set forth
in 38 CFR 3.340 for purposes of
receiving disability compensation or a
disability pension.
Small business concern means a
concern that, with its affiliates, meets
the size standard corresponding to the
NAICS code for its primary industry,
pursuant to part 121 of this chapter.
Surviving spouse has the meaning
given the term in 38 U.S.C. 101(3).
Unconditional ownership means
ownership that is not subject to
conditions precedent, conditions
subsequent, executory agreements,
voting trusts, restrictions on or
assignments of voting rights, or other
arrangements causing or potentially
causing ownership benefits to go to
another (other than after death or
incapacity). The pledge or encumbrance
of stock or other ownership interest as
collateral, including seller-financed
transactions, does not affect the
unconditional nature of ownership if
the terms follow normal commercial
practices and the owner retains control
absent violations of the terms.
Veteran has the meaning given the
term in 38 U.S.C. 101(2). Reservists or
members of the National Guard called to
Federal active duty or disabled from a
disease or injury incurred or aggravated
in line of duty or while in training
status also qualify as a veteran.
Veteran owned small business
concern means a small business
concern:
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4009
(1) Not less than 51 percent of which
is owned by one or more veterans or, in
the case of any publicly owned
business, not less than 51 percent of the
stock of which is owned by one or more
veterans; and
(2) The management and daily
business operations of which are
controlled by one or more veterans. All
of the provisions of Subpart B apply for
purposes of determining ownership and
control.
■ 3. Amend § 125.12 by:
■ a. Revising the introductory text;
■ b. Revising the first sentence in
paragraph (b);
■ c. Adding a sentence at the end of
paragraph (d); and
■ d. Adding paragraphs (g) through (i).
The revisions and additions read as
follows:
§ 125.12 Who does SBA consider to own
an SDVO SBC?
Generally, a concern must be at least
51% unconditionally and directly
owned by one or more service-disabled
veterans. More specifically:
*
*
*
*
*
(b) * * * In the case of a concern
which is a partnership, at least 51% of
aggregate voting interest must be
unconditionally owned by one or more
service-disabled veterans. * * *
*
*
*
*
*
(d) * * * In the case of a publicly
owned business, not less than 51
percent of the stock (not including any
stock owned by an ESOP) must be
unconditionally owned by one or more
veterans.
*
*
*
*
*
(g) Dividends and distributions. One
or more service-disabled veterans must
be entitled to receive:
(1) At least 51 percent of the annual
distribution of profits paid to the
owners of a corporation, partnership, or
limited liability company concern;
(2) 100 percent of the value of each
share of stock owned by them in the
event that the stock or member interest
is sold; and
(3) At least 51 percent of the retained
earnings of the concern and 100 percent
of the unencumbered value of each
share of stock or member interest owned
in the event of dissolution of the
corporation, partnership, or limited
liability company.
(4) An eligible individual’s ability to
share in the profits of the concern must
be commensurate with the extent of his/
her ownership interest in that concern.
(h) Community property. Ownership
will be determined without regard to
community property laws.
(i) Surviving spouse. (1) A small
business concern owned and controlled
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by one or more service-disabled
veterans immediately prior to the death
of a service-disabled veteran who was
the owner of the concern, the death of
whom causes the concern to be less than
51 percent owned by one or more
service-disabled veterans, will continue
to qualify as a small business concern
owned and controlled by servicedisabled veterans during the time period
if:
(i) The surviving spouse of the
deceased veteran acquires such
veteran’s ownership interest in such
concern;
(ii) Such veteran had a serviceconnected disability (as defined in 38
U.S.C. 101(16)) rated as 100 percent
disabling under the laws administered
by the Secretary of Veterans Affairs or
such veteran died as a result of a
service-connected disability; and
(iii) For a participant, immediately
prior to the death of such veteran, and
during the period described in
paragraph (i)(2) of this section, the small
business concern is included in the
database described in 38 U.S.C. 8127(f).
(2) The time period described in
paragraph (i)(1)(iii) of this section is the
time period beginning on the date of the
veteran’s death and ending on the
earlier of—
(i) The date on which the surviving
spouse remarries;
(ii) The date on which the surviving
spouse relinquishes an ownership
interest in the small business concern;
or
(iii) The date that is 10 years after the
date of the death of the veteran.
■ 4. Amend § 125.13 by revising
paragraph (e) and adding paragraphs (f)
through (n) to read as follows:
§ 125.13 Who does SBA consider to
control an SDVO SBC?
sradovich on DSK3GMQ082PROD with PROPOSALS
*
*
*
*
*
(e) Control over a corporation. One or
more service-disabled veterans (or in the
case of a veteran with permanent and
severe disability, the spouse or
permanent caregiver of such veteran)
must control the Board of Directors of
the concern.
(1) SBA will deem service-disabled
veteran individuals to control the Board
of Directors where:
(i) A single service-disabled veteran
individual owns 100% of all voting
stock of an applicant or concern;
(ii) A single service-disabled veteran
individual owns at least 51% of all
voting stock of an applicant or concern,
the individual is on the Board of
Directors and no super majority voting
requirements exist for shareholders to
approve corporation actions. Where
super majority voting requirements are
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provided for in the concern’s articles of
incorporation, its by-laws, or by state
law, the service-disabled veteran
individual must own at least the percent
of the voting stock needed to overcome
any such super majority voting
requirements; or
(iii) More than one service-disabled
veteran shareholder seeks to qualify the
concern (i.e., no one individual owns
51%), each such individual is on the
Board of Directors, together they own at
least 51% of all voting stock of the
concern, no super majority voting
requirements exist, and the servicedisabled veteran shareholders can
demonstrate that they have made
enforceable arrangements to permit one
of them to vote the stock of all as a block
without a shareholder meeting. Where
the concern has super majority voting
requirements, the service-disabled
veteran shareholders must own at least
that percentage of voting stock needed
to overcome any such super majority
ownership requirements. In the case of
super majority ownership requirements,
the service-disabled veteran
shareholders can demonstrate that they
have made enforceable arrangements to
permit one of them to vote the stock of
all as a block without a shareholder
meeting.
(2) Where an applicant or concern
does not meet the requirements set forth
in paragraph (e)(1) of this section, the
service-disabled veteran individual(s)
upon whom eligibility is based must
control the Board of Directors through
actual numbers of voting directors or,
where permitted by state law, through
weighted voting (e.g., in a concern
having a two-person Board of Directors
where one individual on the Board is
service-disabled veteran and one is not,
the service-disabled veteran vote must
be weighted—worth more than one
vote—in order for the concern to be
eligible). Where a concern seeks to
comply with this paragraph:
(i) Provisions for the establishment of
a quorum cannot permit non-servicedisabled veteran Directors to control the
Board of Directors, directly or
indirectly;
(ii) Any Executive Committee of
Directors must be controlled by servicedisabled veteran directors unless the
Executive Committee can only make
recommendations to and cannot
independently exercise the authority of
the Board of Directors.
(3) Non-voting, advisory, or honorary
Directors may be appointed without
affecting service-disabled veteran
individuals’ control of the Board of
Directors.
(4) Arrangements regarding the
structure and voting rights of the Board
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of Directors must comply with
applicable state law.
(f) Super majority requirements. One
or more service-disabled veterans must
meet all super majority voting
requirements. An applicant must inform
the Department of Veterans Affairs,
when applicable, of any super majority
voting requirements provided for in its
articles of incorporation, its by-laws, by
state law, or otherwise. Similarly, after
being verified, a participant must inform
the Department of Veterans Affairs of
changes regarding super majority voting
requirements.
(g) Licenses. A firm must obtain and
keep current any and all required
permits, licenses, and charters, required
to operate the business.
(h) Unexercised rights. A servicedisabled veteran owner’s unexercised
right to cause a change in the control or
management of the applicant concern
does not in itself constitute control and
management, regardless of how quickly
or easily the right could be exercised.
(i) Control by non-service-disabled
veterans. Non-service-disabled veteran
individuals or entities may not control
the firm. Non-service-disabled veteran
individuals or entities may be found to
control or have the power to control a
firm in any of the following
circumstances, which are illustrative
only and not inclusive:
(1) Be a former employer or a
principal of a former employer, unless
it is determined that the relationship
between the former employer or
principal and the eligible individual or
concern does not give the former
employer actual control over the
concern and such relationship is in the
best interests of the concern
(2) In circumstances where nonservice-disabled veterans receive
compensation from the firm in any form
as directors, officers or employees,
including dividends, that exceeds the
compensation to be received by the
highest officer (usually CEO or
President). The highest ranking officer
may elect to take a lower amount than
the total compensation and distribution
of profits that are received by a nonveteran only upon demonstrating that it
helps the concern.
(3) In circumstances where the
concern is co-located with another firm
in the same or similar line of business,
and that firm or an owner, director,
officer, or manager, or a direct relative
of an owner, director, officer, or
manager of that firm owns an equity
interest in the firm.
(4) In circumstances where the
concern shares employees, resources,
equipment, or any type of services,
whether by oral or written agreement
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with another firm in the same or similar
line of business, and that firm or an
owner, director, officer, or manager, or
a direct relative of an owner, director,
officer, or manager of that firm owns an
equity interest in the concern.
(5) A non-service-disabled veteran
individual or entity, having an equity
interest in the concern, provides critical
financial or bonding support.
(6) In circumstances where a critical
license is held by a non-service-disabled
individual, or other entity, the nonservice-disabled individual or entity
may be found to control the firm. A
critical license is considered any license
that would normally be required of
firms operating in the same field or
industry, regardless of whether a
specific license is required on a specific
contract.
(7) Business relationships exist with
non-service-disabled veteran
individuals or entities which cause such
dependence that the applicant or
concern cannot exercise independent
business judgment without great
economic risk.
(j) Critical financing. A non-servicedisabled veteran individual or entity
may be found to control the concern
through loan arrangements with the
concern or the service-disabled
veteran(s). Providing a loan or a loan
guaranty on commercially reasonable
terms does not, by itself, give a nonservice-disabled veteran individual or
entity the power to control a firm, but
when taken into consideration with
other factors may be used to find that a
non-service-disabled firm or individual
controls the concern.
(k) Normal business hours. There is a
rebuttable presumption that a servicedisabled veteran does not control the
firm when the service-disabled veteran
is not able to work for the firm during
the normal working hours that
businesses in that industry normally
work. This may include, but is not
limited to, other full-time or part-time
employment, being a full-time or parttime student, or any other activity or
obligation that prevents the servicedisabled veteran from actively working
for the firm during normal business
operating hours.
(l) Close proximity. There is rebuttable
presumption that a service-disabled
veteran does not control the firm if that
individual is not located within a
reasonable commute to firm’s
headquarters and/or job-sites locations,
regardless of the firm’s industry. The
service-disabled veteran’s ability to
answer emails, communicate by
telephone, or to communicate at a
distance by other technological means,
while delegating the responsibility of
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managing the concern to others is not by
itself a reasonable rebuttal.
(m) Exception for ‘‘extraordinary
circumstances.’’ SBA will not find that
a lack of control exists where a servicedisabled veteran does not have the
unilateral power and authority to make
decisions in ‘‘extraordinary
circumstances.’’ The only circumstances
in which this exception applies are
those articulated in the definition.
(n) Exception for reservists recalled to
active duty. Notwithstanding the
provisions of this section requiring a
service-disabled veteran to control the
daily business operations and long-term
strategic planning of a concern, where a
service-disabled veteran individual
upon whom eligibility is based is a
reserve component member in the
United States military who has been
recalled to active duty, the concern may
elect to designate in writing one or more
individuals to control the concern on
behalf of the service-disabled veteran
during the period of active duty. The
concern will not be considered
ineligible based on the absence of the
service-disabled veteran during the
period of active duty. The concern must
keep records evidencing the active duty
and the written designation of control,
and provide those documents to VA,
and if requested to SBA.
■ 5. Amend § 125.22 by revising
paragraph (a) to read as follows:
§ 125.22 When may a contracting officer
set-aside a procurement for SDVO SBCs?
(a) The contracting officer first must
review a requirement to determine
whether it is excluded from SDVO
contracting pursuant to § 125.21.
*
*
*
*
*
■ 6. Amend § 125.23 by revising
paragraphs (a) and (b) to read as follows:
§ 125.23 When may a contracting officer
award sole source contracts to SDVO
SBCs?
*
*
*
*
*
(a) None of the provisions of § 125.21
or § 125.22 apply;
(b) The anticipated award price of the
contract (including options) will not
exceed $6,500,000 in the case of a
contract assigned a NAICS code for
manufacturing, or $4,000,000 in the case
of any other contract opportunity;
*
*
*
*
*
Dated: January 18, 2018.
Linda E. McMahon,
Administrator.
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NATIONAL LABOR RELATIONS
BOARD
29 CFR Parts 101 and 102
RIN 3142–AA12
Representation-Case Procedures
AGENCY:
National Labor Relations
Board.
Request for information;
extension of time to submit responses.
ACTION:
The National Labor Relations
Board (the Board) published a Request
for Information in the Federal Register
on December 14, 2017, seeking
information from the public regarding
its representation election regulations,
with a specific focus on amendments to
the Board’s representation case
procedures adopted by the Board’s final
rule published on December 15, 2014.
The date to submit responses to the
request for information is extended for
three days as a result of the lapse in
appropriations for the Federal
government. The Board is also granting
an additional 30 days to file responses
to the request for information.
DATES: Responses to the request for
information must be received by the
Board on or before March 19, 2018. No
late responses will be accepted.
Responses are limited to 25 pages.
ADDRESSES: Electronic responses may be
submitted by going to www.nlrb.gov and
following the link to submit responses
to this request for information. The
Board encourages electronic filing. If
you do not have the ability to submit
your response electronically, responses
may be submitted by mail to: Roxanne
Rothschild, Deputy Executive Secretary,
National Labor Relations Board, 1015
Half Street SE, Washington, DC 20570.
SUMMARY:
Dated: January 24, 2018.
Roxanne Rothschild,
Deputy Executive Secretary.
[FR Doc. 2018–01622 Filed 1–26–18; 8:45 am]
BILLING CODE P
DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation
and Enforcement
30 CFR Part 901
[SATS No. AL–081–FOR; Docket ID: OSM–
2017–0006; S1D1S SS08011000 SX064A000
189S180110; S2D2S SS08011000
SX064A000 18XS501520]
Alabama Regulatory Program
[FR Doc. 2018–01392 Filed 1–26–18; 8:45 am]
BILLING CODE 8025–01–P
4011
Office of Surface Mining
Reclamation and Enforcement, Interior.
AGENCY:
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[Federal Register Volume 83, Number 19 (Monday, January 29, 2018)]
[Proposed Rules]
[Pages 4005-4011]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-01392]
=======================================================================
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Part 125
RIN 3245-AG85
Ownership and Control of Service-Disabled Veteran-Owned Small
Business Concerns
AGENCY: U.S. Small Business Administration.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Small Business Administration (SBA or Agency)
proposes to amend its regulations to implement provisions of The
National Defense Authorization Act for Fiscal Year 2017 (NDAA 2017).
The NDAA 2017 placed the responsibility for issuing regulations
relating to ownership and control for the Department of Veterans
Affairs verification of Veteran-Owned (VO) and Service-Disabled
Veteran-Owned (SDVO) Small Business Concern (SBC) with the SBA.
Pursuant to NDAA 2017, there will be one definition of ownership and
control for these concerns, which will apply to the Department of
Veterans Affairs in its verification and Vets First Contracting Program
procurements, and all other government acquisitions which require self-
certification. The legislation also provides that in certain
circumstances a
[[Page 4006]]
firm can qualify as VO or SDVO when there is a surviving spouse or an
employee stock ownership plan (ESOP).
DATES: Comments must be received on or before March 30, 2018.
ADDRESSES: You may submit comments, identified by RIN 3245-AG85, by any
of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
For mail, paper, disk, or CD/ROM submissions: Brenda
Fernandez, U.S. Small Business Administration, Office of Policy,
Planning and Liaison, 409 Third Street SW, 8th Floor, Washington, DC
20416.
Hand Delivery/Courier: Brenda Fernandez, U.S. Small
Business Administration, Office of Policy, Planning and Liaison, 409
Third Street SW, 8th Floor, Washington, DC 20416.
SBA will post all comments on www.regulations.gov. If you wish to
submit confidential business information (CBI) as defined in the User
Notice at www.regulations.gov, please submit the information to Brenda
Fernandez, U.S. Small Business Administration, Office of Policy,
Planning and Liaison, 409 Third Street SW, 8th Floor, Washington, DC
20416, or send an email to [email protected]. Highlight the
information that you consider to be CBI and explain why you believe SBA
should hold this information as confidential. SBA will review the
information and make the final determination on whether it will publish
the information.
FOR FURTHER INFORMATION CONTACT: Brenda Fernandez, Office of Policy,
Planning and Liaison, 409 Third Street SW, Washington, DC 20416; (202)
205-7337; [email protected].
SUPPLEMENTARY INFORMATION: The Vets First Contracting Program within
the Department of Veterans Affairs (VA) was created under the Veterans
Benefits, Health Care, and Information Technology Act of 2006 (Public
Law, P.L. 109-461). This contracting program was created for Veteran-
Owned Small Businesses and expanded the Service-Disabled Veteran-Owned
contracting program for VA procurements. Approved firms are eligible to
participate in Veteran-Owned Small Business (VOSB) and Service-Disabled
Veteran-Owned Small Business (SDVOSB) set-asides issued by VA. More
information regarding the Vets First Contracting Program can be found
on the Department of Veterans Affairs website at https://www.va.gov/osdbu/faqs/109461.asp.
The National Defense Authorization Act of 2017 (Pub. L. 114-328),
section 1832, amended section 3(q) of the Small Business Act (15 U.S.C.
632(q)) and section 8127 of title 38, United States Code, to
standardize definitions for VOSBs and SDVOSBs. This section also
requires the Secretary of Veterans Affairs to use the regulations
established by the Small Business Administration (SBA) for establishing
ownership and control of VOSBs and SDVOSBs. The Secretary would
continue to determine whether individuals are veterans or service-
disabled veterans and would be responsible for verification of
applicant firms. Challenges to the status of a VOSB or SDVOSB based
upon issues of ownership or control would be decided by the
administrative judges at the SBA's Office of Hearings and Appeals
(OHA).
In drafting this proposed rule, SBA consulted with VA in order to
properly understand VA's positions and implement the statutory
requirements in a way that is consistent with both SBA's and VA's
interpretations.
Section-by-Section Analysis
Section 125.11
In response to the NDAA 2017 changes, SBA is proposing to amend the
definitions in Sec. 125.11 by incorporating language from VA's
regulations and also from SBA's 8(a) Business Development (BD) program
regulations. SBA is proposing to define a surviving spouse and the
requirements for a surviving spouse-owned SDVO SBC to maintain program
eligibility. Further, SBA is proposing to add definitions for Daily
Business Operations, Negative Control, Participant, and Unconditional
Ownership. The added definitions are being adopted from SBA's 8(a) BD
regulations found in part 124. SBA is adding a definition for Employee
Stock Ownership Plan (ESOP). This definition is adopted from Sec.
1832(a)(6). SBA is also proposing to replace the definitions of
permanent caregiver, service-disabled veteran (SDV), and surviving
spouse. SBA is adding a new definition for service-disabled veteran
with a permanent and severe disability. These definitions are being
updated in consultation with VA in an effort to ensure consistency
across programs at both Agencies. SBA is also adding a definition for
small business concerns. Concerns will need to meet all the
requirements of part 121, including Sec. 121.105(a)(1), which requires
that the firm be organized for profit, ``with a place of business
located in the United States, and which operates primarily within the
United States or which makes a significant contribution to the U.S.
economy through payment of taxes or use of American products, materials
or labor.'' This definition will address how to generally determine the
size of a concern. VO and SDVO SBCs will still be required to meet size
standards corresponding to the NAICS code assigned to each contract
pursuant to Sec. Sec. 125.14 and 125.15.
In addition, SBA is proposing to add a definition for
``extraordinary circumstances'' under which a service disabled veteran
owner would not have full control over a firm's decision-making
process, but would not render the firm ineligible as a firm owned and
controlled by one or more service disabled veterans. This definition
will be used to identify discrete circumstances that SBA views as rare.
The new definition will be used to allow minority equity holders to
have negative control over these enumerated instances. SBA proposes
five limited circumstances in which a service-disabled veteran owner
will not have full control over the decision making process. Under the
proposed rule, these five circumstances would be exclusive, and SBA
would not recognize any other facts or circumstances that would allow
negative control by individuals that are not service-disabled.
Section 125.12
SBA is proposing to amend Sec. 125.12(b), which pertains to the
requirement for ownership of a partnership. SBA's current regulation
requires service-disabled veterans to own at least 51% of each type of
partnership interest. Therefore, if a partnership had general partners
and limited partners it was required that the service disabled veteran
be both a general and limited partner. SBA is proposing to change the
requirement so that service-disabled veterans will need to own at least
51% of the aggregate voting interest in the partnership.
SBA is proposing to add Sec. 125.12(d). This proposed paragraph
incorporates the new statutory language with regard to public companies
and ownership. Specifically, it should be noted that this language does
not include any equity held by an ESOP when determining ownership for a
publicly owned business.
SBA is proposing to add a new Sec. 125.12(g). This new paragraph
and its subparagraphs would provide clarity with regard to requirements
for dividends and distributions. SBA's existing regulations require
that ownership must also entail all the privileges and benefits of
ownership. This new paragraph is adopted from SBA's 8(a) BD regulations
in part 124. In general, one's right to receive
[[Page 4007]]
benefits, compensation, and the ultimate value of one's equity should
be consistent with the purported amount of equity. For example, it is
not consistent with SBA's regulations for a firm to state that a
service-disabled veteran owns 60 percent of the equity but records show
that he or she is entitled only to a smaller amount of the firm's
profit, or that the residual value of that equity is less than 60
percent if the firm is sold.
SBA is proposing to add new Sec. Sec. 125.12(h) and (i). Pursuant
to proposed Sec. 125.12(h), ownership decisions would be decided
without regard to community property laws. This provision is similar to
SBA's ownership regulations for women owned businesses. See 13 CFR
127.201. SBA is also adopting regulations to allow firms owned by
surviving spouses of service-disabled veterans to remain eligible for
the program, and Sec. 125.12(i) provides the guidelines for this
continued eligibility. Basically, this provision would allow the
transfer of ownership in a SDVO SBC from a serviced-disabled veteran to
his or her spouse upon the death of the service-disabled veteran
without adversely affecting the firm's status as a SDVO SBC.
Section 125.13
SBA is proposing to add several new paragraphs to Sec. 125.13.
These proposed paragraphs incorporate provisions from SBA's 8(a) BD
program and VA's former ownership and control regulations. SBA has
always used 8(a) BD program regulations for guidance on eligibility
issues for SDVO SBCs, and SBA will continue to do so. SBA proposing to
adopt some but not all of its 8(a) BD regulations should not be
interpreted as SBA abandoning this position. SBA is adding these
specific regulations to add clarity and consistency, but SBA will
continue to rely on part 124 for guidance. Many of the newly
incorporated regulations deal with control by non-service-disabled
veterans. These changes are intended to provide more clarity about the
roles that non-service-disabled veterans can serve without creating
control issues that may affect the concern's eligibility.
SBA is proposing to add language to describe how to determine if an
SDV controls the Board of Directors in Sec. 125.13(e). This language
is adopted from SBA's 8(a) BD regulations and is being added to provide
more clarity.
SBA is proposing language that will require firms to provide
notification of supermajority voting requirements in Sec. 125.13(f).
This regulation will simplify the procedures for reviewing eligibility
criteria related to super majority requirements.
Proposed Sec. Sec. 125.13(h), (i), and (j) adopt policies and
language from SBA's 8(a) BD program and VA's regulations. These
provisions provide guidance on when SBA may find that a non-service-
disabled veteran controls the firm. These regulations add more clarity
and detail to specific issues such as quorum requirements and loan
arrangements with non-service-disabled veterans.
SBA is proposing to add rebuttable presumptions Sec. 125.13(k) and
(l). Proposed Sec. 125.13(k) would add a rebuttable presumption that a
person not working for a firm regularly during normal working hours
does not control the firm. This is not a full time devotion
requirement. It just makes clear that this is a factor that SBA will
consider, but is clearly rebuttable by providing evidence of control.
Similarly, proposed Sec. 125.13(l) would add a rebuttable presumption
regarding place of work. In this case, it deals with an SDV owner who
does not live or work nears the firm's headquarters or its worksites.
SBA will assume that this indicates a lack of control. The main issue
in these instances is over delegation of authority to non-SDV
individuals who do work at the office and who are at the work sites.
SBA's regulations require control over day to day operations and remote
observation and over delegation is not the same as control. As noted in
this proposed rule, this is a rebuttable presumption.
SBA is proposing to add Sec. 125.13(m), an exception to the
control requirements in ``extraordinary circumstances.'' As noted
above, SBA is proposing a new definition for extraordinary
circumstances that includes a limited and exhaustive list of five
circumstances. This proposed rule will allow an exception to the
general requirement that SDVs control long term decision making.
SBA is proposing to add Sec. 125.13(n), an exception to the
control requirements when an individual in the reserves is recalled to
active duty. SBA and VA do not think a firm owned by an SDV should lose
its status due to the necessary military commitments of its owner when
serving the nation.
Sections 125.22 and 125.23
SBA is proposing to make changes to Sec. Sec. 125.22 and 125.23 to
correct cross citations that were not updated when SBA renumbered its
regulations. SBA is also proposing to update the values for sole source
awards contained in Sec. 125.23 in order to be consistent with the
inflationary adjustments made to those amounts in the Federal
Acquisition Regulation (FAR).
Compliance With Executive Orders 12866, 12988, 13132, and 13771, the
Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory
Flexibility Act (5 U.S.C. 601-612)
Executive Order 12866
OMB has determined that this rule does not constitute a
``significant regulatory action'' under Executive Order 12866. This
rule is also not a major rule under the Congressional Review Act, 5
U.S.C. 800. This proposed rule would amend the rules concerning
ownership and control of VO and SDVO SBCs. As such, the rule has no
effect on the amount or dollar value of any Federal contract
requirements or of any financial assistance provided through SBA or VA.
Therefore, the rule is not likely to have an annual economic effect of
$100 million or more, result in a major increase in costs or prices, or
have a significant adverse effect on competition or the United States
economy. In addition, this rule does not create a serious inconsistency
or otherwise interfere with an action taken or planned by another
agency, materially alter the budgetary impact of entitlements, grants,
user fees, loan programs or the rights and obligations of such
recipients, nor raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
This rule is part of a joint effort by the VA and SBA to reduce the
regulatory burden on the veteran business community. This rule will
consolidate ownership and control requirements in one regulation thus
eliminating duplicate functions. Prior to the enactment of this
regulation business owners had the burden of complying with both
regulations. This regulation will eliminate that burden. The single
rule will help streamline the verification and certification processes
which will save business owners time and money. This will also lead to
less confusion.
Executive Order 12988
This action meets applicable standards set forth in section 3(a)
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden. The action does not
have retroactive or preemptive effect.
Executive Order 13132
This rule does not have Federalism implications as defined in
Executive Order 13132. It will not have substantial
[[Page 4008]]
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government, as specified
in the Executive Order. As such it does not warrant the preparation of
a Federalism Assessment.
Executive Order 13771
This proposed rule is expected to be an Executive Order 13771
deregulatory action. Details on the estimated cost savings of this
proposed rule can be found in the rule's economic analysis. This rule
is part of a joint effort by the VA and SBA to reduce the regulatory
burden on the veteran business community. This rule will consolidate
ownership and control requirements in one regulation thus eliminating
duplicate functions. Prior to the enactment of this regulation business
owners had the burden of complying with both regulations. This
regulation will eliminate that burden. The single rule will help
streamline the verification and certification processes which will save
business owners time and money. This will also lead to less confusion.
Paperwork Reduction Act
The SBA has determined that this rule does not impose additional
reporting or recordkeeping requirements under the Paperwork Reduction
Act, 44 U.S.C. Chapter 35. However, this rule does include an
information collection for the VA and the OMB approval number for this
collection is 2900-0675.
Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. Small entities include
small businesses, small not-for-profit organizations, and small
governmental jurisdictions. Section 605 of the RFA allows an agency to
certify a rule, in lieu of preparing an analysis, if the rulemaking is
not expected to have a significant economic impact on a substantial
number of small entities.
This proposed rule will merge SBA and VA regulations concerning
ownership and control of VO and SDVO SBCs as directed by Congress. The
proposed regulation is not attempting new regulation, but to streamline
two already existing regulations into a single regulatory framework.
While SBA does not anticipate that this proposed rule would have a
significant economic impact on any small business, we do welcome
comments from any small business setting out how and to what degree
this proposed rule would affect it economically.
There are approximately 21,000 firms registered as SDVO SBCs in SAM
and approximately 13,000 firms that have been certified by the VA. To a
large extent SBA's and the VA's ownership and control rules were
substantially similar in terms of the regulatory language, and in many
instances identical. Thus the vast majority of these firms will not be
impacted by this rule. For example, this rule will not impact firms
that are 100% owned and control by an SDV. To the extent there are
differences in SBA's and the VA's ownership and control rules, this
rule will reduce cost and positively impact all SDVO firms, because
there will be one set of criteria to measure SDV ownership and control
throughout the Federal government. Further, SBA's current rules do not
ignore ESOPs when determining ownership, which means firms that are
majority owned by ESOPs are not eligible for SDVO set-asides or sole
source awards. We have no data on the number of firms that this rule
will be impact, but the number is very small. After consulting with
industry representatives, many firms owned by ESOPs are entirely owned
by the ESOP, especially those that operate in industries with employee
based size standards. Those firms will still not qualify if this rule
is finalized because there is still a 51% SDV ownership requirement of
the remaining ownership interest, not including ESOPs. However, some
firms that intend to institute an ESOP may do so in way that allows the
firm to qualify under this rule, once it is finalized. With respect to
surviving spouse, SBA's current rules do not recognize ownership or
control by a surviving spouse. Although the VA does allow firms owned
and controlled by surviving spouses to qualify under its certification
program, the number of firms that qualify under the exception is
extremely small. To the extent firms qualify under the surviving spouse
exception the benefit will be positive, not negative. Firms that were
previously not eligible to continue as SDVO firms will be able to
continue for a period of time, when and if this rule is finalized.
Therefore, the Administrator of SBA determines, under 5 U.S.C.
605(b), that this proposed rule would not have a significant economic
impact on a substantial number of small entities.
List of Subjects in 13 CFR Part 125
Government contracts, Government procurement, Reporting and
recordkeeping requirements, Small businesses, Technical assistance,
Veterans.
Accordingly, for the reasons stated in the preamble, SBA proposes
to amend 13 CFR part 125 as follows:
PART 125--GOVERNMENT CONTRACTING PROGRAMS
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1. The authority citation for part 125 is revised to read as follows:
Authority: 15 U.S.C. 632(p), (q), 634(b)(6), 637, 644, 657(f),
657q; and 657s; 38 U.S.C. 501 and 8127.
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2. Revise Sec. 125.11 to read as follows:
Sec. 125.11 What definitions are important in the Service-Disabled
Veteran-Owned (SDVO) Small Business Concern (SBC) program?
Contracting officer has the meaning given such term in section
27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C.
423(f)(5)).
Daily business operations include, but are not limited to, the
marketing, production, sales, and administrative functions of the firm,
as well as the supervision of the executive team, the implementation of
policies and the setting of the strategic direction of the firm.
ESOP has the meaning given the term ``employee stock ownership
plan'' in section 4975(e)(7) of the Internal Revenue Code of 1986 (26
U.S.C. 4975(e)(7)).
Extraordinary circumstances. For purposes of this part,
extraordinary circumstances are only the following:
(1) Adding a new equity stakeholder;
(2) Dissolution of the company;
(3) Sale of the company;
(4) The merger of the company; and
(5) Company declaring bankruptcy.
Negative control has the same meaning as that set forth in Sec.
121.103(a)(3) of this chapter.
Participant means a veteran-owned small business concern that has
verified status in the Vendor Information Pages database, available at
https://www.vip.vetbiz.gov/.
Permanent caregiver, for purposes of this part, is the spouse, or
an individual, 18 years of age or older, who is legally designated, in
writing, to undertake responsibility for managing the well-being of the
service-disabled veteran with a permanent and severe disability, as
determined by Department of Veterans Affairs' Veterans Benefits
Administration, to include housing, health and safety. A permanent
caregiver may, but does not need to, reside in the same household as
the service-disabled veteran with a permanent and severe disability. In
the case of a service-disabled veteran with a permanent and severe
disability lacking legal capacity, the permanent
[[Page 4009]]
caregiver shall be a parent, guardian, or person having legal custody.
There may be no more than one permanent caregiver per service-disabled
veteran with a permanent and severe disability.
(1) A permanent caregiver may be appointed, in a number of ways,
including:
(i) By a court of competent jurisdiction;
(ii) By the Department of Veterans Affairs, National Caregiver
Support Program, as the Primary Family Caregiver of a Veteran
participating in the Program of Comprehensive Assistance for Family
Caregivers (this designation is subject to the Veteran and the
caregiver meeting other specific criteria as established by law and the
Secretary and may be revoked if the eligibility criteria do not
continue to be met); or
(iii) By a legal designation.
(2) Any appointment of a permanent caregiver must in all cases be
accompanied by a written determination from the Department of Veterans
Affairs that the veteran has a permanent and total service-connected
disability as set forth in 38 CFR 3.340 for purposes of receiving
disability compensation or a disability pension. The appointment must
also delineate why the permanent caregiver is given the appointment,
must include the consent of the veteran to the appointment and how the
appointment would contribute to managing the veteran's well-being.
Small business concern owned and controlled by service-disabled
veterans (also known as a Service-Disabled Veteran-Owned SBC) means any
of the following:
(1) A small business concern--
(i) Not less than 51 percent of which is owned by one or more
service-disabled veterans or, in the case of any publicly owned
business, not less than 51 percent of the stock (not including any
stock owned by an ESOP) of which is owned by one or more service-
disabled veterans; and
(ii) The management and daily business operations of which are
controlled by one or more service-disabled veterans or, in the case of
a veteran with permanent and severe disability, the spouse or permanent
caregiver of such veteran;
(2) A small business concern--
(i) Not less than 51 percent of which is owned by one or more
service-disabled veterans with a disability that is rated by the
Secretary of Veterans Affairs as a permanent and total disability who
are unable to manage the daily business operations of such concern; or
(ii) In the case of a publicly owned business, not less than 51
percent of the stock (not including any stock owned by an ESOP) of
which is owned by one or more such veterans.
Service-connected has the meaning given that term in 38 U.S.C.
101(16).
Service-disabled veteran is a veteran who possesses either a valid
disability rating letter issued by the Department of Veterans Affairs,
establishing a service-connected rating between 0 and 100 percent, or a
valid disability determination from the Department of Defense or is
registered in the Beneficiary Identification and Records Locator
Subsystem maintained by Department of Veterans Affairs' Veterans
Benefits Administration as a service-disabled veteran. Reservists or
members of the National Guard disabled from a disease or injury
incurred or aggravated in line of duty or while in training status also
qualify.
Service-disabled veteran with a permanent and severe disability
means a veteran with a service-connected disability that has been
determined by the Department of Veterans Affairs, in writing, to have a
permanent and total service-connected disability as set forth in 38 CFR
3.340 for purposes of receiving disability compensation or a disability
pension.
Small business concern means a concern that, with its affiliates,
meets the size standard corresponding to the NAICS code for its primary
industry, pursuant to part 121 of this chapter.
Surviving spouse has the meaning given the term in 38 U.S.C.
101(3).
Unconditional ownership means ownership that is not subject to
conditions precedent, conditions subsequent, executory agreements,
voting trusts, restrictions on or assignments of voting rights, or
other arrangements causing or potentially causing ownership benefits to
go to another (other than after death or incapacity). The pledge or
encumbrance of stock or other ownership interest as collateral,
including seller-financed transactions, does not affect the
unconditional nature of ownership if the terms follow normal commercial
practices and the owner retains control absent violations of the terms.
Veteran has the meaning given the term in 38 U.S.C. 101(2).
Reservists or members of the National Guard called to Federal active
duty or disabled from a disease or injury incurred or aggravated in
line of duty or while in training status also qualify as a veteran.
Veteran owned small business concern means a small business
concern:
(1) Not less than 51 percent of which is owned by one or more
veterans or, in the case of any publicly owned business, not less than
51 percent of the stock of which is owned by one or more veterans; and
(2) The management and daily business operations of which are
controlled by one or more veterans. All of the provisions of Subpart B
apply for purposes of determining ownership and control.
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3. Amend Sec. 125.12 by:
0
a. Revising the introductory text;
0
b. Revising the first sentence in paragraph (b);
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c. Adding a sentence at the end of paragraph (d); and
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d. Adding paragraphs (g) through (i).
The revisions and additions read as follows:
Sec. 125.12 Who does SBA consider to own an SDVO SBC?
Generally, a concern must be at least 51% unconditionally and
directly owned by one or more service-disabled veterans. More
specifically:
* * * * *
(b) * * * In the case of a concern which is a partnership, at least
51% of aggregate voting interest must be unconditionally owned by one
or more service-disabled veterans. * * *
* * * * *
(d) * * * In the case of a publicly owned business, not less than
51 percent of the stock (not including any stock owned by an ESOP) must
be unconditionally owned by one or more veterans.
* * * * *
(g) Dividends and distributions. One or more service-disabled
veterans must be entitled to receive:
(1) At least 51 percent of the annual distribution of profits paid
to the owners of a corporation, partnership, or limited liability
company concern;
(2) 100 percent of the value of each share of stock owned by them
in the event that the stock or member interest is sold; and
(3) At least 51 percent of the retained earnings of the concern and
100 percent of the unencumbered value of each share of stock or member
interest owned in the event of dissolution of the corporation,
partnership, or limited liability company.
(4) An eligible individual's ability to share in the profits of the
concern must be commensurate with the extent of his/her ownership
interest in that concern.
(h) Community property. Ownership will be determined without regard
to community property laws.
(i) Surviving spouse. (1) A small business concern owned and
controlled
[[Page 4010]]
by one or more service-disabled veterans immediately prior to the death
of a service-disabled veteran who was the owner of the concern, the
death of whom causes the concern to be less than 51 percent owned by
one or more service-disabled veterans, will continue to qualify as a
small business concern owned and controlled by service-disabled
veterans during the time period if:
(i) The surviving spouse of the deceased veteran acquires such
veteran's ownership interest in such concern;
(ii) Such veteran had a service-connected disability (as defined in
38 U.S.C. 101(16)) rated as 100 percent disabling under the laws
administered by the Secretary of Veterans Affairs or such veteran died
as a result of a service-connected disability; and
(iii) For a participant, immediately prior to the death of such
veteran, and during the period described in paragraph (i)(2) of this
section, the small business concern is included in the database
described in 38 U.S.C. 8127(f).
(2) The time period described in paragraph (i)(1)(iii) of this
section is the time period beginning on the date of the veteran's death
and ending on the earlier of--
(i) The date on which the surviving spouse remarries;
(ii) The date on which the surviving spouse relinquishes an
ownership interest in the small business concern; or
(iii) The date that is 10 years after the date of the death of the
veteran.
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4. Amend Sec. 125.13 by revising paragraph (e) and adding paragraphs
(f) through (n) to read as follows:
Sec. 125.13 Who does SBA consider to control an SDVO SBC?
* * * * *
(e) Control over a corporation. One or more service-disabled
veterans (or in the case of a veteran with permanent and severe
disability, the spouse or permanent caregiver of such veteran) must
control the Board of Directors of the concern.
(1) SBA will deem service-disabled veteran individuals to control
the Board of Directors where:
(i) A single service-disabled veteran individual owns 100% of all
voting stock of an applicant or concern;
(ii) A single service-disabled veteran individual owns at least 51%
of all voting stock of an applicant or concern, the individual is on
the Board of Directors and no super majority voting requirements exist
for shareholders to approve corporation actions. Where super majority
voting requirements are provided for in the concern's articles of
incorporation, its by-laws, or by state law, the service-disabled
veteran individual must own at least the percent of the voting stock
needed to overcome any such super majority voting requirements; or
(iii) More than one service-disabled veteran shareholder seeks to
qualify the concern (i.e., no one individual owns 51%), each such
individual is on the Board of Directors, together they own at least 51%
of all voting stock of the concern, no super majority voting
requirements exist, and the service-disabled veteran shareholders can
demonstrate that they have made enforceable arrangements to permit one
of them to vote the stock of all as a block without a shareholder
meeting. Where the concern has super majority voting requirements, the
service-disabled veteran shareholders must own at least that percentage
of voting stock needed to overcome any such super majority ownership
requirements. In the case of super majority ownership requirements, the
service-disabled veteran shareholders can demonstrate that they have
made enforceable arrangements to permit one of them to vote the stock
of all as a block without a shareholder meeting.
(2) Where an applicant or concern does not meet the requirements
set forth in paragraph (e)(1) of this section, the service-disabled
veteran individual(s) upon whom eligibility is based must control the
Board of Directors through actual numbers of voting directors or, where
permitted by state law, through weighted voting (e.g., in a concern
having a two-person Board of Directors where one individual on the
Board is service-disabled veteran and one is not, the service-disabled
veteran vote must be weighted--worth more than one vote--in order for
the concern to be eligible). Where a concern seeks to comply with this
paragraph:
(i) Provisions for the establishment of a quorum cannot permit non-
service-disabled veteran Directors to control the Board of Directors,
directly or indirectly;
(ii) Any Executive Committee of Directors must be controlled by
service-disabled veteran directors unless the Executive Committee can
only make recommendations to and cannot independently exercise the
authority of the Board of Directors.
(3) Non-voting, advisory, or honorary Directors may be appointed
without affecting service-disabled veteran individuals' control of the
Board of Directors.
(4) Arrangements regarding the structure and voting rights of the
Board of Directors must comply with applicable state law.
(f) Super majority requirements. One or more service-disabled
veterans must meet all super majority voting requirements. An applicant
must inform the Department of Veterans Affairs, when applicable, of any
super majority voting requirements provided for in its articles of
incorporation, its by-laws, by state law, or otherwise. Similarly,
after being verified, a participant must inform the Department of
Veterans Affairs of changes regarding super majority voting
requirements.
(g) Licenses. A firm must obtain and keep current any and all
required permits, licenses, and charters, required to operate the
business.
(h) Unexercised rights. A service-disabled veteran owner's
unexercised right to cause a change in the control or management of the
applicant concern does not in itself constitute control and management,
regardless of how quickly or easily the right could be exercised.
(i) Control by non-service-disabled veterans. Non-service-disabled
veteran individuals or entities may not control the firm. Non-service-
disabled veteran individuals or entities may be found to control or
have the power to control a firm in any of the following circumstances,
which are illustrative only and not inclusive:
(1) Be a former employer or a principal of a former employer,
unless it is determined that the relationship between the former
employer or principal and the eligible individual or concern does not
give the former employer actual control over the concern and such
relationship is in the best interests of the concern
(2) In circumstances where non-service-disabled veterans receive
compensation from the firm in any form as directors, officers or
employees, including dividends, that exceeds the compensation to be
received by the highest officer (usually CEO or President). The highest
ranking officer may elect to take a lower amount than the total
compensation and distribution of profits that are received by a non-
veteran only upon demonstrating that it helps the concern.
(3) In circumstances where the concern is co-located with another
firm in the same or similar line of business, and that firm or an
owner, director, officer, or manager, or a direct relative of an owner,
director, officer, or manager of that firm owns an equity interest in
the firm.
(4) In circumstances where the concern shares employees, resources,
equipment, or any type of services, whether by oral or written
agreement
[[Page 4011]]
with another firm in the same or similar line of business, and that
firm or an owner, director, officer, or manager, or a direct relative
of an owner, director, officer, or manager of that firm owns an equity
interest in the concern.
(5) A non-service-disabled veteran individual or entity, having an
equity interest in the concern, provides critical financial or bonding
support.
(6) In circumstances where a critical license is held by a non-
service-disabled individual, or other entity, the non-service-disabled
individual or entity may be found to control the firm. A critical
license is considered any license that would normally be required of
firms operating in the same field or industry, regardless of whether a
specific license is required on a specific contract.
(7) Business relationships exist with non-service-disabled veteran
individuals or entities which cause such dependence that the applicant
or concern cannot exercise independent business judgment without great
economic risk.
(j) Critical financing. A non-service-disabled veteran individual
or entity may be found to control the concern through loan arrangements
with the concern or the service-disabled veteran(s). Providing a loan
or a loan guaranty on commercially reasonable terms does not, by
itself, give a non-service-disabled veteran individual or entity the
power to control a firm, but when taken into consideration with other
factors may be used to find that a non-service-disabled firm or
individual controls the concern.
(k) Normal business hours. There is a rebuttable presumption that a
service-disabled veteran does not control the firm when the service-
disabled veteran is not able to work for the firm during the normal
working hours that businesses in that industry normally work. This may
include, but is not limited to, other full-time or part-time
employment, being a full-time or part-time student, or any other
activity or obligation that prevents the service-disabled veteran from
actively working for the firm during normal business operating hours.
(l) Close proximity. There is rebuttable presumption that a
service-disabled veteran does not control the firm if that individual
is not located within a reasonable commute to firm's headquarters and/
or job-sites locations, regardless of the firm's industry. The service-
disabled veteran's ability to answer emails, communicate by telephone,
or to communicate at a distance by other technological means, while
delegating the responsibility of managing the concern to others is not
by itself a reasonable rebuttal.
(m) Exception for ``extraordinary circumstances.'' SBA will not
find that a lack of control exists where a service-disabled veteran
does not have the unilateral power and authority to make decisions in
``extraordinary circumstances.'' The only circumstances in which this
exception applies are those articulated in the definition.
(n) Exception for reservists recalled to active duty.
Notwithstanding the provisions of this section requiring a service-
disabled veteran to control the daily business operations and long-term
strategic planning of a concern, where a service-disabled veteran
individual upon whom eligibility is based is a reserve component member
in the United States military who has been recalled to active duty, the
concern may elect to designate in writing one or more individuals to
control the concern on behalf of the service-disabled veteran during
the period of active duty. The concern will not be considered
ineligible based on the absence of the service-disabled veteran during
the period of active duty. The concern must keep records evidencing the
active duty and the written designation of control, and provide those
documents to VA, and if requested to SBA.
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5. Amend Sec. 125.22 by revising paragraph (a) to read as follows:
Sec. 125.22 When may a contracting officer set-aside a procurement
for SDVO SBCs?
(a) The contracting officer first must review a requirement to
determine whether it is excluded from SDVO contracting pursuant to
Sec. 125.21.
* * * * *
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6. Amend Sec. 125.23 by revising paragraphs (a) and (b) to read as
follows:
Sec. 125.23 When may a contracting officer award sole source
contracts to SDVO SBCs?
* * * * *
(a) None of the provisions of Sec. 125.21 or Sec. 125.22 apply;
(b) The anticipated award price of the contract (including options)
will not exceed $6,500,000 in the case of a contract assigned a NAICS
code for manufacturing, or $4,000,000 in the case of any other contract
opportunity;
* * * * *
Dated: January 18, 2018.
Linda E. McMahon,
Administrator.
[FR Doc. 2018-01392 Filed 1-26-18; 8:45 am]
BILLING CODE 8025-01-P
