Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments; Correction, 2957-2960 [2021-00270]
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Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations
VI. Severity of Violations
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27. Section 1017.29 is amended by
revising paragraph (c) to read as follows:
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(b) * * *
(1) * * * A Severity Level I violation
would be subject to a base civil penalty of up
to 100% of the maximum base civil penalty
of $100,535.
(2) * * * A Severity Level II violation
would be subject to a base civil penalty up
to 50% of the maximum base civil penalty
($50,267).
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IX. Enforcement Actions
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(e) * * *
(1) DOE may assess civil penalties of up to
$100,535 per violation per day on contractors
(and their subcontractors and suppliers) that
are indemnified by the Price-Anderson Act,
42 U.S.C. 2210(d). See 10 CFR 851.5(a).
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Civil penalty.
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(c) Amount of penalty. The Director
may propose imposition of a civil
penalty for violation of a requirement of
a regulation under paragraph (a) of this
section or a compliance order issued
under paragraph (b) of this section, not
to exceed $278,786 for each violation.
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PART 1050—FOREIGN GIFTS AND
DECORATIONS
Notice of Violation
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§ 1017.29
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28. The authority citation for part
1050 continues to read as follows:
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Authority: The Constitution of the United
States, Article I, Section 9; 5 U.S.C. 7342; 22
U.S.C. 2694; 42 U.S.C. 7254 and 7262; 28
U.S.C. 2461 note.
PART 1013—PROGRAM FRAUD CIVIL
REMEDIES AND PROCEDURES
29. Section 1050.303 is amended by
revising the last sentence in paragraph
(d) to read as follows:
24. The authority citation for part
1013 continues to reads as follows:
§ 1050.303
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Authority: 31 U.S.C. 3801–3812; 28 U.S.C.
2461 note.
25. Section 1013.3 is amended by
revising paragraphs (a)(1)(iv) and
(b)(1)(ii) to read as follows:
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§ 1013.3 Basis for civil penalties and
assessments.
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PART 1017—IDENTIFICATION AND
PROTECTION OF UNCLASSIFIED
CONTROLLED NUCLEAR
INFORMATION
26. The authority citation for part
1017 continues to read as follows:
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Authority: 42 U.S.C. 7101 et seq.; 50
U.S.C. 2401 et seq.; 42 U.S.C. 2168; 28 U.S.C.
2461 note.
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(d) * * * The court in which such
action is brought may assess a civil
penalty against such employee in any
amount not to exceed the retail value of
the gift improperly solicited or received
plus $21,135.
[FR Doc. 2021–00439 Filed 1–13–21; 8:45 am]
(a) * * *
(1) * * *
(iv) Is for payment for the provision
of property or services which the person
has not provided as claimed, shall be
subject, in addition to any other remedy
that may be prescribed by law, to a civil
penalty of not more than $11,803 for
each such claim.
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(b) * * *
(1) * * *
(ii) Contains or is accompanied by an
express certification or affirmation of
the truthfulness and accuracy of the
contents of the statement, shall be
subject, in addition to any other remedy
that may be prescribed by law, to a civil
penalty of not more than $11,803 for
each such statement.
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Enforcement.
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BILLING CODE 6450–01–P
SMALL BUSINESS ADMINISTRATION
13 CFR Part 121, 124, 125, 126, and 127
RIN 3245–AG94
Consolidation of Mentor-Prote´ge´
Programs and Other Government
Contracting Amendments; Correction
U.S. Small Business
Administration.
ACTION: Correcting amendments.
AGENCY:
The U.S. Small Business
Administration (SBA) is correcting
regulations that published in the
Federal Register on October 16, 2020.
The rule merged the 8(a) Business
Development (BD) Mentor-Prote´ge´
Program and the All Small MentorProte´ge´ Program to eliminate confusion
and remove unnecessary duplication of
functions within SBA. This document is
making several technical corrections to
the regulations.
DATES: Effective January 14, 2021.
FOR FURTHER INFORMATION CONTACT:
Mark Hagedorn, U.S. Small Business
Administration, Office of General
SUMMARY:
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Counsel, 409 Third Street SW,
Washington, DC 20416; (202) 205–7625;
mark.hagedorn@sba.gov.
SUPPLEMENTARY INFORMATION: In
response to the President’s directive to
simplify regulations, on October 16,
2020, SBA published a final rule
revising the regulations pertaining to the
8(a) BD and size programs in order to
further reduce unnecessary or excessive
burdens on small businesses and to
eliminate confusion or more clearly
delineate SBA’s intent in certain
regulations. (85 FR 66146). This is the
second set of corrections. The first set of
corrections was published in the
Federal Register on November 16, 2020.
(85 FR 72916). This document augments
those corrections.
First, in amending § 121.404(a) to
provide clarification as to the time at
which size is determined for multiple
award contracts, SBA inadvertently
deleted the general rule that size is
determined as of the date of the concern
submits a written self-certification that
it is small to the procuring activity as
part of its initial offer or response which
includes price. In other words, in
amending the exception to the general
rule for multiple award contracts, the
final rule inadvertently deleted the
general rule itself. That was not SBA’s
intent and SBA did not intend to make
any substantive changes to the general
rule itself. This rule adds back the
general rule language to § 121.404(a).
Second, the final rule eliminated the
requirement that 8(a) Participants
seeking to be awarded a competitive 8(a)
contract as a joint venture submit the
joint venture agreement to SBA for
review and approval prior to contract
award. The preamble to the final rule
explained that such approval is no
longer necessary because the size
protest process has worked well to
ensure that small business joint venture
partners control performance on non8(a) contracts with their large business
mentors and could work similarly to
monitor a joint venturing activity on
competitive 8(a) contracts. To this end,
where another offeror believes that a
joint venture between a prote´ge´ and its
large business mentor has not complied
with the applicable control regulations,
it may protest the size of the joint
venture. The appropriate Area Office of
SBA’s Office of Government Contracting
would then review the joint venture
agreement to determine whether it
meets the requirements of SBA’s
regulations. If that Office determines
that the applicable regulations were not
followed, the joint venture would lose
its exclusion from affiliation, be found
to be other than small, and, thus,
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ineligible for an award as a small
business. Because size protests are
authorized for competitive 8(a)
contracts, SBA reasoned that prior
approval is no longer necessary for joint
venture agreements seeking to be
awarded such contracts.
The final rule inadvertently did not
adequately address how the Area Office
will review certain joint venture
agreements to perform 8(a) contracts
formed outside the Mentor-Prote´ge´
Program, such as a joint venture
between an 8(a) Participant and one or
more other small business concerns.
Currently, an unsuccessful offeror, SBA,
or a contracting officer may protest the
status of the apparent successful offeror
for a Service-Disabled Veteran Owned
(SDVO), Historically Underutilized
Business Zone (HUBZone), WomenOwned Small Business (WOSB), or
Economically-Disadvantaged WomenOwned Small Business (EDWOSB)
contract. In determining the status
eligibility of a joint venture apparent
awardee, SBA will review the joint
venture agreement to assess whether it
complies with the formal requirements
to receive and perform the award as a
joint venture. If the joint venture does
not comply with these requirements,
SBA will sustain the protest and deem
the joint venture ineligible for award.
However, there is no existing regulatory
process for an unsuccessful offeror,
SBA, or a contracting officer to
challenge whether a joint venture meets
the formal requirements to receive and
perform a competitive 8(a) contract. To
this end, the eligibility of a Participant
for a sole source or competitive 8(a)
requirement may not be challenged by
a disappointed offeror or any other party
because SBA reviews the apparent
successful offeror’s eligibility for award
in connection with each 8(a) contract. In
addition, prior to the final rule, where
the apparent successful offeror was a
joint venture, the joint venture had to be
approved by SBA prior to or concurrent
with the contract eligibility review. In
eliminating SBA’s role to review and
approve joint ventures formed to
perform competitive 8(a) contracts, it
was not SBA’s intent to allow 8(a)
contract benefits to flow to joint
ventures that do not meet the applicable
regulatory requirements. To the
contrary, as noted above, SBA
envisioned that the size protest process
would work to ensure compliance with
the formal 8(a) joint venture
requirements. However, in the context
of a joint venture between an 8(a)
Participant and one or more other small
business concerns, the current size
protest procedures are not adequate.
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Under SBA’s size regulations, a joint
venture is small if each of the partners
to the joint venture individually qualify
as small. Thus, a joint venture that does
not comply with the applicable
requirements set forth in § 124.513(c)
and (d) could still qualify as small even
though the 8(a) partner to the joint
venture was not the lead or controlling
partner. This rule amends
§ 121.103(h)(1)(i) to implement SBA’s
intent that a joint venture must meet the
requirements of § 124.513(c) and (d) in
order to be eligible for a competitive 8(a)
procurement and to make joint ventures
in the 8(a) program consistent with
those in the HUBZone, WOSB and
SDVO programs. Additionally, SBA
inadvertently left out conforming
revisions in the final rule to remove
references to SBA’s now obsolete review
and approval of joint ventures formed to
receive and perform competitive 8(a)
contracts. Specifically, the final rule did
not make corresponding changes to
§ 124.513(a), (f), (g), (h), and (j), leaving
inconsistency with respect to the
requirement for SBA approval. This rule
corrects this inconsistency by removing
or clarifying references to joint venture
approval in § 124.513(a), (f), (g), (h), and
(j).
Third, the final rule added a new
§ 124.501(k) to clearly make the bona
fide office requirement applicable to
both sole source and competitive 8(a)
awards and better defined the
geographical area in which an office
needs to be in order to meet the bona
fide place of business requirement.
Although SBA intended to allow an
office in the geographic area served by
a contiguous SBA district office to meet
the bona fide place of business
requirement, the final regulatory
provision did not make that clear. This
rule corrects that ambiguity.
Fourth, the final rule clarified a
procuring activity’s responsibilities
when evaluating the past performance,
experience, business systems and
certifications of an entity submitting an
offer for a small business contract as a
joint venture. Specifically, the final rule
amended § 125.8(e) to provide that
when evaluating such offers, the
procuring activity should not require a
small business prote´ge´ partner to the
joint venture to individually meet any
evaluation or responsibility criteria as
those required of other offerors
generally. SBA inadvertently left out
conforming revisions in the final rule to
§§ 124.513, 125.18, 126.616, and
127.506 to address the evaluation of
past performance, experience, business
systems and certifications of a joint
venture formed outside SBA’s MentorProte´ge´ Program to pursue a contract
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set-aside or reserved for 8(a)
Participants, SDVO small business
concerns, HUBZone small business
concerns, WOSB concerns, or EDWOSB
concerns. This rule corrects the
inconsistency by revising §§ 124.513,
125.18, 126.616, and 127.506 to
incorporate this clarification.
List of Subjects
13 CFR Part 121
Administrative practice and
procedure, Government procurement,
Government property, Grant programs—
business, Individuals with disabilities,
Loan programs—business, Small
businesses.
13 CFR Part 124
Administrative practice and
procedure, Government procurement,
Government property, Small businesses.
13 CFR Part 125
Government contracts, Government
procurement, Reporting and
recordkeeping requirements, Small
businesses, Technical assistance.
13 CFR Part 126
Administrative practice and
procedure, Government procurement,
Penalties, Reporting and recordkeeping
requirements, Small businesses.
13 CFR Part 127
Government contracts, Reporting and
recordkeeping requirements, Small
businesses.
Accordingly, 13 CFR parts 121, 124,
125, 126, and 127 are corrected by
making the following correcting
amendments:
PART 121—SMALL BUSINESS SIZE
REGULATIONS
1. The authority citation for part 121
continues to read as follows:
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Authority: 15 U.S.C. 632, 634(b)(6),
636(a)(36), 662, and 694a(9); Pub. L. 116–136,
Section 1114.
2. Amend § 121.103 by adding a
sentence to the end of paragraph
(h)(1)(i) to read as follows:
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§ 121.103 How does SBA determine
affiliation?
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(h) * * *
(1) * * *
(i) * * * For a competitive 8(a)
procurement, a joint venture between an
8(a) Participant and one or more other
small business concerns (including two
firms approved by SBA to be a mentor
and prote´ge´ under § 125.9 of this
chapter) must also meet the
requirements of § 124.513(c) and (d) of
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this chapter as of the date of the final
proposal revision for negotiated
acquisitions and final bid for sealed
bidding in order to be eligible for award.
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3. Amend § 121.404 by adding
introductory text to paragraph (a) to
read as follows:
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§ 121.404 When is the size status of a
business concern determined?
(a) Time of size. SBA determines the
size status of a concern, including its
affiliates, as of the date the concern
submits a written self-certification that
it is small to the procuring activity as
part of its initial offer or response which
includes price.
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PART 124—8(a) BUSINESS
DEVELOPMENT/SMALL
DISADVANTAGED BUSINESS STATUS
DETERMINATIONS
4. The authority citation for part 124
continues to read as follows:
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Authority: 15 U.S.C. 634(b)(6), 636(j),
637(a), 637(d), 644 and Pub. L. 99–661, Pub.
L. 100–656, sec. 1207, Pub. L. 101–37, Pub.
L. 101–574, section 8021, Pub. L. 108–87,
Pub. L. 116–260, sec. 330, and 42 U.S.C.
9815.
5. Amend § 124.501 by revising the
introductory text to paragraph (k) to
read as follows:
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§ 124.501 What general provisions apply
to the award of 8(a) contracts?
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(k) In order to be awarded a sole
source or competitive 8(a) construction
contract, a Participant must have a bona
fide place of business within the
applicable geographic location
determined by SBA. This will generally
be the geographic area serviced by the
SBA district office, a Metropolitan
Statistical Area (MSA), a contiguous
county (whether in the same or different
state), or the geographical area serviced
by a contiguous SBA district office to
where the work will be performed. SBA
may determine that a Participant with a
bona fide place of business anywhere
within the state (if the state is serviced
by more than one SBA district office),
one or more other SBA district offices
(in the same or another state), or another
nearby area is eligible for the award of
an 8(a) construction contract.
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6. Amend § 124.513 by revising
paragraph (a)(1), the second sentence of
paragraph (a)(2), and paragraphs (f), (g),
(h), and (j) to read as follows:
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§ 124.513 Under what circumstances can a
joint venture be awarded an 8(a) contract?
(a) * * *
(1) A Participant may enter into a
joint venture agreement with one or
more other small business concerns,
whether or not 8(a) Participants, for the
purpose of performing one or more
specific 8(a) contracts.
(2) * * * However, where SBA
concludes that an 8(a) Participant brings
very little to the joint venture
relationship in terms of resources and
expertise other than its 8(a) status, SBA
will not approve the joint venture to
receive an 8(a) sole source contract
award and will find the joint venture to
be ineligible for a competitive 8(a)
award if it is determined to be the
apparent successful offeror.
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(f) Capabilities, past performance,
and experience. When evaluating the
capabilities, past performance,
experience, business systems, and
certifications of an entity submitting an
offer for an 8(a) contract as a joint
venture established pursuant to this
section, a procuring activity must
consider work done and qualifications
held individually by each partner to the
joint venture as well as any work done
by the joint venture itself previously. A
procuring activity may not require the
8(a) Participant to individually meet the
same evaluation or responsibility
criteria as that required of other offerors
generally. The partners to the joint
venture in the aggregate must
demonstrate the past performance,
experience, business systems, and
certifications necessary to perform the
contract.
(g) Contract execution. Where an 8(a)
award will be made to a joint venture,
the procuring activity will execute an
8(a) contract in the name of the joint
venture entity or the 8(a) Participant,
but in either case will identify the
award as one to an 8(a) joint venture or
an 8(a) mentor-protege joint venture, as
appropriate.
(h) Amendments to joint venture
agreement. Where SBA has approved a
joint venture for a sole source 8(a)
contract, all amendments to the joint
venture agreement must be approved by
SBA.
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(j) Certification of compliance. Prior
to the performance of any 8(a) contract
by a joint venture, the 8(a) BD
Participant to the joint venture must
submit a written certification to the
contracting officer and SBA, signed by
an authorized official of each partner to
the joint venture, stating as follows:
(1) The parties have entered into a
joint venture agreement that fully
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complies with paragraph (c) of this
section; and
(2) The parties will perform the
contract in compliance with the joint
venture agreement and with the
performance of work requirements set
forth in paragraph (d) of this section.
(3) For a sole source 8(a) contract, the
parties have obtained SBA’s approval of
the joint venture agreement and any
addendum to that agreement and that
there have been no modifications to the
agreement that SBA has not approved.
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PART 125—GOVERNMENT
CONTRACTING PROGRAMS
7. The authority citation for part 125
continues to read as follows:
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Authority: 15 U.S.C. 632(p), (q), 634(b)(6),
637, 644, 657f, 657q, 657r, and 657s; 38
U.S.C. 501 and 8127.
8. Revise § 125.18(b)(5) to read as
follows:
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§ 125.18 What requirements must an
SDVO SBC meet to submit an offer on a
contract?
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(b) * * *
(5) Capabilities, past performance,
and experience. When evaluating the
capabilities, past performance,
experience, business systems, and
certifications of an entity submitting an
offer for an SDVO contract as a joint
venture established pursuant to this
section, a procuring activity must
consider work done and qualifications
held individually by each partner to the
joint venture as well as any work done
by the joint venture itself previously. A
procuring activity may not require the
SDVO SBC to individually meet the
same evaluation or responsibility
criteria as that required of other offerors
generally. The partners to the joint
venture in the aggregate must
demonstrate the past performance,
experience, business systems, and
certifications necessary to perform the
contract.
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PART 126—HUBZONE PROGRAM
9. The authority citation for part 126
continues to read as follows:
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Authority: 15 U.S.C. 632(a), 632(j), 632(p),
644 and 657a; Pub. L. 111–240, 24 Stat. 2504.
10. Revise § 126.616(f) to read as
follows:
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§ 126.616 What requirements must a joint
venture satisfy to submit an offer and be
eligible to perform on a HUBZone contract?
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(f) Capabilities, past performance,
and experience. When evaluating the
capabilities, past performance,
experience, business systems, and
certifications of an entity submitting an
offer for a HUBZone contract as a joint
venture established pursuant to this
section, a procuring activity must
consider work done and qualifications
held individually by each partner to the
joint venture as well as any work done
by the joint venture itself previously. A
procuring activity may not require the
HUBZone small business concern to
individually meet the same evaluation
or responsibility criteria as that required
of other offerors generally. The partners
to the joint venture in the aggregate
must demonstrate the past performance,
experience, business systems, and
certifications necessary to perform the
contract.
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PART 127—WOMEN–OWNED SMALL
BUSINESS FEDERAL CONTRACT
PROGRAM
13 CFR Part 127
RIN 3245–AG75
Women-Owned Small Business and
Economically Disadvantaged WomenOwned Small Business Certification;
Correction
U.S. Small Business
Administration.
ACTION: Correcting amendment.
AGENCY:
The U.S. Small Business
Administration (SBA or Agency) is
correcting regulations that published in
the Federal Register on May 11, 2020.
The final rule amended SBA’s
regulations to implement a statutory
requirement to certify Women-Owned
Small Business Concerns (WOSBs) and
Economically-Disadvantaged WomenOwned Small Business Concerns
(EDWOSBs), as well as to clarify
existing regulations. This document
makes corrections to the final
regulations.
SUMMARY:
11. The authority citation for part 127
continues to read as follows:
DATES:
Authority: 15 U.S.C. 632, 634(b)(6),
637(m), 644 and 657r.
Brenda Fernandez, Office of Policy,
Planning and Liaison, 409 Third Street
SW, Washington, DC 20416; (202) 205–
7337; brenda.fernandez@sba.gov.
SUPPLEMENTARY INFORMATION: This is a
correction to a final rule published in
the Federal Register on May 11, 2020
(85 FR 27650). SBA is correcting dates
that were inadvertently transposed in
one of the examples to 13 CFR 127.400.
Additionally, SBA is correcting the
language in two of the examples to 13
CFR 127.400 to ensure the examples
accurately illustrate the application of
the new regulatory provisions.
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12. Amend § 127.506 by revising
paragraph (f) to read as follows:
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§ 127.506 May a joint venture submit an
offer on an EDWOSB or WOSB
requirement?
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(f) Capabilities, past performance,
and experience. When evaluating the
capabilities, past performance,
experience, business systems, and
certifications of an entity submitting an
offer for an EDWOSB or WOSB contract
as a joint venture established pursuant
to this section, a procuring activity must
consider work done and qualifications
held individually by each partner to the
joint venture as well as any work done
by the joint venture itself previously. A
procuring activity may not require the
EDWOSB or WOSB small business
concern to individually meet the same
evaluation or responsibility criteria as
that required of other offerors generally.
The partners to the joint venture in the
aggregate must demonstrate the past
performance, experience, business
systems, and certifications necessary to
perform the contract.
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Francis C. Spampinato,
Associate Administrator, Government
Contracting and Business Development.
Effective January 14, 2021.
FOR FURTHER INFORMATION CONTACT:
List of Subjects in 13 CFR Part 127
Government contracts, Reporting and
recordkeeping requirements, Small
businesses.
Accordingly, 13 CFR part 127 is
corrected by making the following
correcting amendments:
PART 127—WOMEN-OWNED SMALL
BUSINESS FEDERAL CONTRACT
PROGRAM
1. The authority citation for part 127
continues to read as follows:
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Authority: 15 U.S.C. 632, 634(b)(6),
637(m), 644 and 657r.
2. Amend § 127.400 by revising
paragraph (b)(1) to read as follows:
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[FR Doc. 2021–00270 Filed 1–13–21; 8:45 am]
§ 127.400 How does a concern maintain its
WOSB or EDWOSB certification?
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(b) * * *
(1) SBA or a third-party certifier will
conduct a program examination three
years after the concern’s initial WOSB
or EDWOSB certification (whether by
SBA or a third-party certifier) or three
years after the date of the concern’s last
program examination, whichever date is
later.
Example 1 to paragraph (b)(1).
Concern A is certified by SBA to be
eligible for the WOSB program on July
20, 2021. Concern A will be considered
a certified WOSB that is eligible to
receive WOSB contracts (as long as it is
small for the size standard
corresponding to the NAICS code
assigned to the contract) through July
19, 2022. To participate in the WOSB
Program the following year, Concern A
must recertify its eligibility to SBA
between June 20, 2022, and July 19,
2022. Concern A will be considered a
certified WOSB that is eligible to receive
WOSB contracts (as long as it is small
for the size standard corresponding to
the NAICS code assigned to the
contract) through July 19, 2023. To
participate in the WOSB Program the
following year, Concern A must
recertify its eligibility to SBA between
June 20, 2023, and July 19, 2023.
Concern A will be considered a certified
WOSB that is eligible to receive WOSB
contracts (as long as it is small for the
size standard corresponding to the
NAICS code assigned to the contract)
through July 19, 2024. To participate in
the WOSB Program the following year,
Concern A must recertify its eligibility
to SBA between June 20, 2024, and July
19, 2024. Because three years will have
elapsed since its application and
original certification, SBA will conduct
a program examination of Concern A at
that time. In addition to its
representation that it continues to be an
eligible WOSB, Concern A must provide
additional information as requested by
SBA to demonstrate that it continues to
meet all the eligibility requirements of
the WOSB Program.
Example 2 to paragraph (b)(1).
Concern B is certified by a third-party
certifier to be eligible for the WOSB
program on September 27, 2021.
Concern B will be considered a certified
WOSB that is eligible to receive WOSB
contracts (as long as it is small for the
size standard corresponding to the
NAICS code assigned to the contract)
through September 26, 2022. To
participate in the WOSB Program the
following year, Concern B must recertify
its eligibility to SBA between August 28,
2022, and September 26, 2022. Concern
B will be considered a certified WOSB
that is eligible to receive WOSB
contracts (as long as it is small for the
E:\FR\FM\14JAR1.SGM
14JAR1
]]>Agencies
[Federal Register Volume 86, Number 9 (Thursday, January 14, 2021)]
[Rules and Regulations]
[Pages 2957-2960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00270]
=======================================================================
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 121, 124, 125, 126, and 127
RIN 3245-AG94
Consolidation of Mentor-Prot[eacute]g[eacute] Programs and Other
Government Contracting Amendments; Correction
AGENCY: U.S. Small Business Administration.
ACTION: Correcting amendments.
-----------------------------------------------------------------------
SUMMARY: The U.S. Small Business Administration (SBA) is correcting
regulations that published in the Federal Register on October 16, 2020.
The rule merged the 8(a) Business Development (BD) Mentor-
Prot[eacute]g[eacute] Program and the All Small Mentor-
Prot[eacute]g[eacute] Program to eliminate confusion and remove
unnecessary duplication of functions within SBA. This document is
making several technical corrections to the regulations.
DATES: Effective January 14, 2021.
FOR FURTHER INFORMATION CONTACT: Mark Hagedorn, U.S. Small Business
Administration, Office of General Counsel, 409 Third Street SW,
Washington, DC 20416; (202) 205-7625; [email protected].
SUPPLEMENTARY INFORMATION: In response to the President's directive to
simplify regulations, on October 16, 2020, SBA published a final rule
revising the regulations pertaining to the 8(a) BD and size programs in
order to further reduce unnecessary or excessive burdens on small
businesses and to eliminate confusion or more clearly delineate SBA's
intent in certain regulations. (85 FR 66146). This is the second set of
corrections. The first set of corrections was published in the Federal
Register on November 16, 2020. (85 FR 72916). This document augments
those corrections.
First, in amending Sec. 121.404(a) to provide clarification as to
the time at which size is determined for multiple award contracts, SBA
inadvertently deleted the general rule that size is determined as of
the date of the concern submits a written self-certification that it is
small to the procuring activity as part of its initial offer or
response which includes price. In other words, in amending the
exception to the general rule for multiple award contracts, the final
rule inadvertently deleted the general rule itself. That was not SBA's
intent and SBA did not intend to make any substantive changes to the
general rule itself. This rule adds back the general rule language to
Sec. 121.404(a).
Second, the final rule eliminated the requirement that 8(a)
Participants seeking to be awarded a competitive 8(a) contract as a
joint venture submit the joint venture agreement to SBA for review and
approval prior to contract award. The preamble to the final rule
explained that such approval is no longer necessary because the size
protest process has worked well to ensure that small business joint
venture partners control performance on non-8(a) contracts with their
large business mentors and could work similarly to monitor a joint
venturing activity on competitive 8(a) contracts. To this end, where
another offeror believes that a joint venture between a
prot[eacute]g[eacute] and its large business mentor has not complied
with the applicable control regulations, it may protest the size of the
joint venture. The appropriate Area Office of SBA's Office of
Government Contracting would then review the joint venture agreement to
determine whether it meets the requirements of SBA's regulations. If
that Office determines that the applicable regulations were not
followed, the joint venture would lose its exclusion from affiliation,
be found to be other than small, and, thus,
[[Page 2958]]
ineligible for an award as a small business. Because size protests are
authorized for competitive 8(a) contracts, SBA reasoned that prior
approval is no longer necessary for joint venture agreements seeking to
be awarded such contracts.
The final rule inadvertently did not adequately address how the
Area Office will review certain joint venture agreements to perform
8(a) contracts formed outside the Mentor-Prot[eacute]g[eacute] Program,
such as a joint venture between an 8(a) Participant and one or more
other small business concerns. Currently, an unsuccessful offeror, SBA,
or a contracting officer may protest the status of the apparent
successful offeror for a Service-Disabled Veteran Owned (SDVO),
Historically Underutilized Business Zone (HUBZone), Women-Owned Small
Business (WOSB), or Economically-Disadvantaged Women-Owned Small
Business (EDWOSB) contract. In determining the status eligibility of a
joint venture apparent awardee, SBA will review the joint venture
agreement to assess whether it complies with the formal requirements to
receive and perform the award as a joint venture. If the joint venture
does not comply with these requirements, SBA will sustain the protest
and deem the joint venture ineligible for award. However, there is no
existing regulatory process for an unsuccessful offeror, SBA, or a
contracting officer to challenge whether a joint venture meets the
formal requirements to receive and perform a competitive 8(a) contract.
To this end, the eligibility of a Participant for a sole source or
competitive 8(a) requirement may not be challenged by a disappointed
offeror or any other party because SBA reviews the apparent successful
offeror's eligibility for award in connection with each 8(a) contract.
In addition, prior to the final rule, where the apparent successful
offeror was a joint venture, the joint venture had to be approved by
SBA prior to or concurrent with the contract eligibility review. In
eliminating SBA's role to review and approve joint ventures formed to
perform competitive 8(a) contracts, it was not SBA's intent to allow
8(a) contract benefits to flow to joint ventures that do not meet the
applicable regulatory requirements. To the contrary, as noted above,
SBA envisioned that the size protest process would work to ensure
compliance with the formal 8(a) joint venture requirements. However, in
the context of a joint venture between an 8(a) Participant and one or
more other small business concerns, the current size protest procedures
are not adequate. Under SBA's size regulations, a joint venture is
small if each of the partners to the joint venture individually qualify
as small. Thus, a joint venture that does not comply with the
applicable requirements set forth in Sec. 124.513(c) and (d) could
still qualify as small even though the 8(a) partner to the joint
venture was not the lead or controlling partner. This rule amends Sec.
121.103(h)(1)(i) to implement SBA's intent that a joint venture must
meet the requirements of Sec. 124.513(c) and (d) in order to be
eligible for a competitive 8(a) procurement and to make joint ventures
in the 8(a) program consistent with those in the HUBZone, WOSB and SDVO
programs. Additionally, SBA inadvertently left out conforming revisions
in the final rule to remove references to SBA's now obsolete review and
approval of joint ventures formed to receive and perform competitive
8(a) contracts. Specifically, the final rule did not make corresponding
changes to Sec. 124.513(a), (f), (g), (h), and (j), leaving
inconsistency with respect to the requirement for SBA approval. This
rule corrects this inconsistency by removing or clarifying references
to joint venture approval in Sec. 124.513(a), (f), (g), (h), and (j).
Third, the final rule added a new Sec. 124.501(k) to clearly make
the bona fide office requirement applicable to both sole source and
competitive 8(a) awards and better defined the geographical area in
which an office needs to be in order to meet the bona fide place of
business requirement. Although SBA intended to allow an office in the
geographic area served by a contiguous SBA district office to meet the
bona fide place of business requirement, the final regulatory provision
did not make that clear. This rule corrects that ambiguity.
Fourth, the final rule clarified a procuring activity's
responsibilities when evaluating the past performance, experience,
business systems and certifications of an entity submitting an offer
for a small business contract as a joint venture. Specifically, the
final rule amended Sec. 125.8(e) to provide that when evaluating such
offers, the procuring activity should not require a small business
prot[eacute]g[eacute] partner to the joint venture to individually meet
any evaluation or responsibility criteria as those required of other
offerors generally. SBA inadvertently left out conforming revisions in
the final rule to Sec. Sec. 124.513, 125.18, 126.616, and 127.506 to
address the evaluation of past performance, experience, business
systems and certifications of a joint venture formed outside SBA's
Mentor-Prot[eacute]g[eacute] Program to pursue a contract set-aside or
reserved for 8(a) Participants, SDVO small business concerns, HUBZone
small business concerns, WOSB concerns, or EDWOSB concerns. This rule
corrects the inconsistency by revising Sec. Sec. 124.513, 125.18,
126.616, and 127.506 to incorporate this clarification.
List of Subjects
13 CFR Part 121
Administrative practice and procedure, Government procurement,
Government property, Grant programs--business, Individuals with
disabilities, Loan programs--business, Small businesses.
13 CFR Part 124
Administrative practice and procedure, Government procurement,
Government property, Small businesses.
13 CFR Part 125
Government contracts, Government procurement, Reporting and
recordkeeping requirements, Small businesses, Technical assistance.
13 CFR Part 126
Administrative practice and procedure, Government procurement,
Penalties, Reporting and recordkeeping requirements, Small businesses.
13 CFR Part 127
Government contracts, Reporting and recordkeeping requirements,
Small businesses.
Accordingly, 13 CFR parts 121, 124, 125, 126, and 127 are corrected
by making the following correcting amendments:
PART 121--SMALL BUSINESS SIZE REGULATIONS
0
1. The authority citation for part 121 continues to read as follows:
Authority: 15 U.S.C. 632, 634(b)(6), 636(a)(36), 662, and
694a(9); Pub. L. 116-136, Section 1114.
0
2. Amend Sec. 121.103 by adding a sentence to the end of paragraph
(h)(1)(i) to read as follows:
Sec. 121.103 How does SBA determine affiliation?
* * * * *
(h) * * *
(1) * * *
(i) * * * For a competitive 8(a) procurement, a joint venture
between an 8(a) Participant and one or more other small business
concerns (including two firms approved by SBA to be a mentor and
prot[eacute]g[eacute] under Sec. 125.9 of this chapter) must also meet
the requirements of Sec. 124.513(c) and (d) of
[[Page 2959]]
this chapter as of the date of the final proposal revision for
negotiated acquisitions and final bid for sealed bidding in order to be
eligible for award.
* * * * *
0
3. Amend Sec. 121.404 by adding introductory text to paragraph (a) to
read as follows:
Sec. 121.404 When is the size status of a business concern
determined?
(a) Time of size. SBA determines the size status of a concern,
including its affiliates, as of the date the concern submits a written
self-certification that it is small to the procuring activity as part
of its initial offer or response which includes price.
* * * * *
PART 124--8(a) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS
STATUS DETERMINATIONS
0
4. The authority citation for part 124 continues to read as follows:
Authority: 15 U.S.C. 634(b)(6), 636(j), 637(a), 637(d), 644 and
Pub. L. 99-661, Pub. L. 100-656, sec. 1207, Pub. L. 101-37, Pub. L.
101-574, section 8021, Pub. L. 108-87, Pub. L. 116-260, sec. 330,
and 42 U.S.C. 9815.
0
5. Amend Sec. 124.501 by revising the introductory text to paragraph
(k) to read as follows:
Sec. 124.501 What general provisions apply to the award of 8(a)
contracts?
* * * * *
(k) In order to be awarded a sole source or competitive 8(a)
construction contract, a Participant must have a bona fide place of
business within the applicable geographic location determined by SBA.
This will generally be the geographic area serviced by the SBA district
office, a Metropolitan Statistical Area (MSA), a contiguous county
(whether in the same or different state), or the geographical area
serviced by a contiguous SBA district office to where the work will be
performed. SBA may determine that a Participant with a bona fide place
of business anywhere within the state (if the state is serviced by more
than one SBA district office), one or more other SBA district offices
(in the same or another state), or another nearby area is eligible for
the award of an 8(a) construction contract.
* * * * *
0
6. Amend Sec. 124.513 by revising paragraph (a)(1), the second
sentence of paragraph (a)(2), and paragraphs (f), (g), (h), and (j) to
read as follows:
Sec. 124.513 Under what circumstances can a joint venture be awarded
an 8(a) contract?
(a) * * *
(1) A Participant may enter into a joint venture agreement with one
or more other small business concerns, whether or not 8(a)
Participants, for the purpose of performing one or more specific 8(a)
contracts.
(2) * * * However, where SBA concludes that an 8(a) Participant
brings very little to the joint venture relationship in terms of
resources and expertise other than its 8(a) status, SBA will not
approve the joint venture to receive an 8(a) sole source contract award
and will find the joint venture to be ineligible for a competitive 8(a)
award if it is determined to be the apparent successful offeror.
* * * * *
(f) Capabilities, past performance, and experience. When evaluating
the capabilities, past performance, experience, business systems, and
certifications of an entity submitting an offer for an 8(a) contract as
a joint venture established pursuant to this section, a procuring
activity must consider work done and qualifications held individually
by each partner to the joint venture as well as any work done by the
joint venture itself previously. A procuring activity may not require
the 8(a) Participant to individually meet the same evaluation or
responsibility criteria as that required of other offerors generally.
The partners to the joint venture in the aggregate must demonstrate the
past performance, experience, business systems, and certifications
necessary to perform the contract.
(g) Contract execution. Where an 8(a) award will be made to a joint
venture, the procuring activity will execute an 8(a) contract in the
name of the joint venture entity or the 8(a) Participant, but in either
case will identify the award as one to an 8(a) joint venture or an 8(a)
mentor-protege joint venture, as appropriate.
(h) Amendments to joint venture agreement. Where SBA has approved a
joint venture for a sole source 8(a) contract, all amendments to the
joint venture agreement must be approved by SBA.
* * * * *
(j) Certification of compliance. Prior to the performance of any
8(a) contract by a joint venture, the 8(a) BD Participant to the joint
venture must submit a written certification to the contracting officer
and SBA, signed by an authorized official of each partner to the joint
venture, stating as follows:
(1) The parties have entered into a joint venture agreement that
fully complies with paragraph (c) of this section; and
(2) The parties will perform the contract in compliance with the
joint venture agreement and with the performance of work requirements
set forth in paragraph (d) of this section.
(3) For a sole source 8(a) contract, the parties have obtained
SBA's approval of the joint venture agreement and any addendum to that
agreement and that there have been no modifications to the agreement
that SBA has not approved.
* * * * *
PART 125--GOVERNMENT CONTRACTING PROGRAMS
0
7. The authority citation for part 125 continues to read as follows:
Authority: 15 U.S.C. 632(p), (q), 634(b)(6), 637, 644, 657f,
657q, 657r, and 657s; 38 U.S.C. 501 and 8127.
0
8. Revise Sec. 125.18(b)(5) to read as follows:
Sec. 125.18 What requirements must an SDVO SBC meet to submit an
offer on a contract?
* * * * *
(b) * * *
(5) Capabilities, past performance, and experience. When evaluating
the capabilities, past performance, experience, business systems, and
certifications of an entity submitting an offer for an SDVO contract as
a joint venture established pursuant to this section, a procuring
activity must consider work done and qualifications held individually
by each partner to the joint venture as well as any work done by the
joint venture itself previously. A procuring activity may not require
the SDVO SBC to individually meet the same evaluation or responsibility
criteria as that required of other offerors generally. The partners to
the joint venture in the aggregate must demonstrate the past
performance, experience, business systems, and certifications necessary
to perform the contract.
* * * * *
PART 126--HUBZONE PROGRAM
0
9. The authority citation for part 126 continues to read as follows:
Authority: 15 U.S.C. 632(a), 632(j), 632(p), 644 and 657a; Pub.
L. 111-240, 24 Stat. 2504.
0
10. Revise Sec. 126.616(f) to read as follows:
Sec. 126.616 What requirements must a joint venture satisfy to
submit an offer and be eligible to perform on a HUBZone contract?
* * * * *
[[Page 2960]]
(f) Capabilities, past performance, and experience. When evaluating
the capabilities, past performance, experience, business systems, and
certifications of an entity submitting an offer for a HUBZone contract
as a joint venture established pursuant to this section, a procuring
activity must consider work done and qualifications held individually
by each partner to the joint venture as well as any work done by the
joint venture itself previously. A procuring activity may not require
the HUBZone small business concern to individually meet the same
evaluation or responsibility criteria as that required of other
offerors generally. The partners to the joint venture in the aggregate
must demonstrate the past performance, experience, business systems,
and certifications necessary to perform the contract.
* * * * *
PART 127--WOMEN-OWNED SMALL BUSINESS FEDERAL CONTRACT PROGRAM
0
11. The authority citation for part 127 continues to read as follows:
Authority: 15 U.S.C. 632, 634(b)(6), 637(m), 644 and 657r.
0
12. Amend Sec. 127.506 by revising paragraph (f) to read as follows:
Sec. 127.506 May a joint venture submit an offer on an EDWOSB or
WOSB requirement?
* * * * *
(f) Capabilities, past performance, and experience. When evaluating
the capabilities, past performance, experience, business systems, and
certifications of an entity submitting an offer for an EDWOSB or WOSB
contract as a joint venture established pursuant to this section, a
procuring activity must consider work done and qualifications held
individually by each partner to the joint venture as well as any work
done by the joint venture itself previously. A procuring activity may
not require the EDWOSB or WOSB small business concern to individually
meet the same evaluation or responsibility criteria as that required of
other offerors generally. The partners to the joint venture in the
aggregate must demonstrate the past performance, experience, business
systems, and certifications necessary to perform the contract.
* * * * *
Francis C. Spampinato,
Associate Administrator, Government Contracting and Business
Development.
[FR Doc. 2021-00270 Filed 1-13-21; 8:45 am]
BILLING CODE 8026-03-P
