Federal Acquisition Regulation: 8(a) Program, 76598-76600 [2022-26978]

Agencies

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

[Federal Register Volume 87, Number 240 (Thursday, December 15, 2022)]
[Proposed Rules]
[Pages 76598-76600]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26978]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 19

[FAR Case 2021-012; Docket No. FAR-2021-0012; Sequence No. 1]
RIN 9000-AO29


Federal Acquisition Regulation: 8(a) Program

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement regulatory changes made by 
the Small Business Administration (SBA) to update and clarify 
requirements associated with the 8(a) program.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat Division at the addresses shown below on or 
before February 13, 2023 to be considered in the formation of the final 
rule.

ADDRESSES: Submit comments in response to FAR Case 2021-012 to the 
Federal eRulemaking portal at https://www.regulations.gov by searching 
for ``FAR Case 2021-012''. Select the link ``Comment Now'' that 
corresponds with ``FAR Case 2021-012''. Follow the instructions 
provided on the ``Comment Now'' screen. Please include your name, 
company name (if any), and ``FAR Case 2021-012'' on your attached 
document. If your comment cannot be submitted using https://www.regulations.gov, call or email the points of contact in the FOR 
FURTHER INFORMATION CONTACT section of this document for alternate 
instructions.
    Instructions: Please submit comments only and cite ``FAR Case 2021-
012'' in all correspondence related to this case. Comments received 
generally will be posted without change to https://www.regulations.gov, 
including any personal and/or business confidential information 
provided. Public comments may be submitted as an individual, as an 
organization, or anonymously (see frequently asked questions at https://www.regulations.gov/faq). To confirm receipt of your comment(s), 
please check https://www.regulations.gov, approximately two to three 
days after submission to verify posting.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Ms. Dana Bowman, Procurement Analyst, at 202-803-3188 or by email at 
[email protected]. For information pertaining to status, publication 
schedules, or alternate instructions for submitting comments if https://www.regulations.gov cannot be used, contact the Regulatory Secretariat 
Division at 202-501-4755 or [email protected]. Please cite FAR Case 
2021-012.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA are proposing to amend the FAR to implement 
regulatory changes made by the Small Business Administration (SBA), in 
its final rule published in the Federal Register at 85 FR 66146 on 
October 16, 2020. SBA initiated a review of its regulations in response 
to the prior administration's government-wide regulatory reform 
initiative. As a result, SBA revised the 8(a) program regulations to 
more clearly articulate SBA's intent with regard to certain aspects of 
the 8(a) program to eliminate confusion and decrease burdens on 
procuring activities and 8(a) participants.

II. Discussion and Analysis

    This rule proposes to modify subparts 19.6 and 19.8 as follows:

--Modify FAR 19.601(c) to clarify that the certificate of competency 
program is not applicable to 8(a) sole-source awards (see 13 CFR 
125.5(a)(1)).
--Modify the heading at 19.804-5 to add blanket purchase agreements 
(BPAs) and add text to require that BPAs issued under part 13, 
including orders placed under part 13 BPAs, must be offered to, and 
accepted by SBA (see 13 CFR 124.503(h)).
--Modify FAR 19.805-2 to clarify 8(a) participants' eligibility 
criteria for two-step design-build competitive procurements (see 13 CFR 
124.507(d)(3)); and FAR 19.808-1 to clarify eligibility criteria for 
8(a) sole-source awards (see 13 CFR 124.501(g)).
--Revise 19.808-2 to add ``follow-on 8(a) acquisitions''.
--New text is proposed at section 19.810(a) to specify that SBA may 
appeal a contracting officer's decision that an acquisition previously 
procured under the 8(a) program is a new requirement not subject to the 
release requirements set forth in 13 CFR 124.504(d) (see 13 CFR 
124.505(a)).
--Modify the heading at 19.815 to add notification requirements.
--Add new text at 19.815(d) and 19.815(e) to address notification 
requirements when a contracting officer decides that a requirement, 
previously procured under the 8(a) program, is a new requirement and 
not a follow-on requirement to an 8(a) contract; and when the procuring 
activity intends to procure a follow-on requirement using an existing 
limited competition contracting vehicle that is not available to all 
8(a) participants and the current or previous 8(a) contract was 
available to all 8(a) participants.
--Add new text at 19.815(f) to address notification requirements when a 
mandatory source will be used for a follow-on requirement to an 8(a) 
contract (see 13 CFR 124.504(d)(4)(ii)).
--Modify 19.816(c) to add a reference to SBA's eligibility criteria.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT) and for Commercial Products, Including Commercially 
Available Off-the-Shelf (COTS) Items or for Commercial Services

    This rule does not create new solicitation provisions or contract 
clauses or impact any existing provisions or clauses.

IV. Expected Impact of the Rule

    This proposed rule implements SBA's final rule issued on October 
16, 2020 (85 FR 66146) to update and clarify requirements associated 
with the 8(a) program. The changes are intended to clarify 8(a) program 
requirements and eliminate confusion among 8(a) concerns and procuring 
activities. The proposed rule will require contracting officers to 
submit BPAs issued under FAR part 13 and FAR part 13 BPA orders in the 
8(a) Program to SBA for acceptance. Contracting officers will also be 
required to notify SBA of follow-on, non-8(a) procurements, and should 
notify SBA when a mandatory source

[[Page 76599]]

will be utilized for a follow-on to an 8(a) contract. This proposed 
rule also clarifies eligibility requirements under the 8(a) program, 
which will assist both the Government and 8(a) concerns. The proposed 
rule also clarifies that the SBA certificate of competency program does 
not apply to 8(a) sole-source awards; therefore, contracting officers 
will no longer be required to submit these actions to SBA. Given that 
this proposed rule clarifies 8(a) program requirements and reduces 
ambiguities for small business entities and procuring activities, any 
impact is expected to be beneficial to both Government and contractors 
and offerors. Any cost to the Government is not expected to be 
significant.

V. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993.

VI. Congressional Review Act

    As required by the Congressional Review Act (5 U.S.C. 801-808) 
before an interim or final rule takes effect, DoD, GSA, and NASA will 
send the rule and the ``Submission of Federal Rules Under the 
Congressional Review Act'' form to each House of the Congress and to 
the Comptroller General of the United States. A major rule cannot take 
effect until 60 days after it is published in the Federal Register. 
This rule is not anticipated to be a major rule under 5 U.S.C. 804.

VII. Regulatory Flexibility Act

    DoD, GSA, and NASA do not expect this rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612, because 
this proposed rule clarifies 8(a) program requirements and is expected 
to assist both small entities and the Government in implementing the 
8(a) program. However, an Initial Regulatory Flexibility Analysis 
(IRFA) has been performed and is summarized as follows:

    DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to update and clarify requirements 
associated with the 8(a) program to align it with the regulatory 
changes made by the Small Business Administration (SBA) in its final 
rule dated October 16, 2020 (85 FR 66146).
    The objective of this rule is to implement SBA regulatory 
changes made to the 8(a) program. SBA initiated a review of its 
regulations in response to the prior administration's government-
wide regulatory reform initiative. As a result, SBA revised its 8(a) 
program regulations to eliminate confusion among small businesses 
and procuring activities. The proposed rule clarifies that the 
certificate of competency program is not applicable to 8(a) sole-
source awards. Additionally, the proposed rule adds a requirement 
for the contracting officer to submit an offering letter to SBA for, 
and for SBA to accept, blanket purchase agreements (BPAs) under FAR 
part 13 and orders placed under part 13 BPAs. The rule also 
clarifies an 8(a) concern's eligibility for two-step design-build 
acquisitions and sole-source awards made under the 8(a) program. The 
rule also requires the procuring activity to submit a notification 
to SBA when a contracting officer determines that a procurement, 
previously procured under the 8(a) program, is a new requirement 
that is not subject to SBA release requirements. A notification is 
also required when the procuring activity intends to procure a 
follow-on to an 8(a) procurement using an existing limited 
competition contract vehicle, not available to all 8(a) program 
participants, when the current or previous 8(a) contract was not a 
limited competition contracting vehicle. The legal basis for this 
rule is 40 U.S.C. 121(c), 10 U.S.C. chapter 137, and 51 U.S.C. 
20113.
    This proposed rule will impact small businesses who are 8(a) 
program participants and the Government by clarifying the 8(a) 
program regulations and ensuring follow-on requirements to 8(a) 
procurements remain in the 8(a) program when appropriate. Based on 
data in the System for Award Management, the estimated number of 
8(a) small businesses is 5,659 and the estimated number of 8(a) 
joint ventures is 521. Therefore, the estimated number of total 
small entities to which the rule applies is 6,180. According to the 
Federal Procurement Data System, 8,037 8(a) sole-source awards and 
1,224 8(a) set-aside awards were made in fiscal year (FY) 2019; 
7,473 8(a) sole-source awards and 1,088 8(a) set-aside awards were 
made in FY 2020; and 6,369 8(a) sole-source awards and 1,251 8(a) 
set-aside awards were made in FY 2021. This averages out to 7,293 
8(a) sole-source awards and 1,187 set-aside awards made in the last 
three fiscal years.
    The proposed rule does not impose any new reporting, 
recordkeeping, or other compliance requirements for small entities.
    The proposed rule does not duplicate, overlap, or conflict with 
any other Federal rules.
    There are no known significant alternative approaches to the 
proposed rule.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA, and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by the rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAR Case 2021-012), 
in correspondence.

VIII. Paperwork Reduction Act

    This rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C. 3501-3521).

List of Subjects in 48 CFR Part 19

    Government procurement.

William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.

    Therefore, DoD, GSA, and NASA propose amending 48 CFR part 19 as 
set forth below:

PART 19--SMALL BUSINESS PROGRAMS

0
1. The authority citation for 48 CFR part 19 continues to read as 
follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.


19.601  [Amended]

0
2. Amend section 19.601 by--
0
a. Removing from paragraph (b) the phrase ``Small Business 
Administration (SBA)'' and adding in its place ``SBA''; and
0
b. Removing from the first sentence of paragraph (c) the phrase 
``Government acquisitions.'' and adding in its place ``Government 
acquisitions except for 8(a) sole-source awards.'' and removing from 
the second sentence of paragraph (c) the word ``also''.
0
3. Revise section 19.804-5 to read as follows:


19.804-5  Basic ordering agreements and blanket purchase agreements.

    (a) The contracting office shall submit an offering letter for, and 
SBA must accept, each order under a basic ordering agreement (BOA) or a 
blanket purchase agreement (BPA) issued under part 13 (see 13.303), in 
addition to the

[[Page 76600]]

agency offering and SBA accepting the BOA or BPA itself.
    (b) SBA will not accept for award on a sole-source basis any order 
that would cause the total dollar amount of orders issued under a 
specific BOA or BPA to exceed the competitive threshold amount in 
19.805-1.
    (c) Once an 8(a) participant's program term expires, the 
participant otherwise exits the 8(a) program, or becomes other than 
small for the NAICS code assigned under the BOA or the BPA, SBA will 
not accept new orders under the BOA or BPA for the participant.
0
4. Amend section 19.805-2 by--
0
a. Revising the second sentence in paragraph (b) introductory text;
0
b. Redesignating paragraph (b)(2) as paragraph (b)(3); and
0
c. Adding a new paragraph (b)(2).
    The revision and addition reads as follows:


19.805-2  Procedures.

* * * * *
    (b) * * * Eligibility is based on section 8(a) program criteria 
(see 13 CFR 124.501(g) and 19.816(c)).
* * * * *
    (2) For a two-step design-build procurement, an 8(a) participant 
must be eligible for award under the 8(a) program on the initial date 
for receipt of phase one offers specified in the solicitation (see 13 
CFR 124.507(d)(3)).
* * * * *
0
5. Amend section 19.808-1 by--
0
a. Redesignating paragraph (e) as paragraph (f);
0
b. Adding a new paragraph (e);
0
c. Removing from the newly redesignated paragraph (f) the phrase ``sole 
source award'' and adding in its place ``sole-source award''.
    The addition reads as follows:


19.808-1  Sole source.

* * * * *
    (e) A concern must be a current participant in the 8(a) program at 
the time of an 8(a) sole-source award.
* * * * *


19.808-2  [Amended]

0
6. Amend section 19.808-2 by--
0
a. Removing from the first sentence the phrase ``8(a) acquisitions'' 
and adding in its place ``8(a) acquisitions, including follow-on 8(a) 
acquisitions,''; and
0
b. Removing from the second sentence the phrase ``negotiations among'' 
and adding in its place ``negotiations among eligible''.
0
7. Amend section 19.810 by adding paragraph (a)(4) to read as follows:


19.810  SBA appeals.

    (a) * * *
    (4) A contracting officer's decision that an acquisition previously 
procured under the 8(a) program is a new requirement not subject to the 
release requirements at 13 CFR 124.504(d)(1) (see 19.815(a) and 
(d)(1)).
* * * * *
0
8. Revise section 19.815 to read as follows:


19.815  Release and notification requirements for non-8(a) procurement.

    (a) Once a requirement has been accepted by SBA into the 8(a) 
program, any follow-on requirements (see definition at 13 CFR 124.3) 
shall remain in the 8(a) program unless--
    (1) SBA agrees to release the requirement from the 8(a) program for 
a follow-on, non-8(a) procurement in accordance with 13 CFR 124.504(d) 
(see paragraph (b) of this section); or
    (2) There is a mandatory source (see 8.002 or 8.003; also see 
paragraph (f) of this section).
    (b) To obtain release of a follow-on, non-8(a) procurement, (other 
than a mandatory source listed at 8.002 or 8.003), the contracting 
officer shall make a written request to, and receive concurrence from, 
the SBA Associate Administrator for Business Development.
    (c)(1) The written request to the SBA Associate Administrator for 
Business Development shall indicate--
    (i) Whether the agency has achieved its small disadvantaged 
business goal;
    (ii) Whether the agency has achieved its HUBZone, SDVOSB, WOSB, or 
small business goal(s); and
    (iii) Whether the requirement is critical to the business 
development of the 8(a) contractor that is currently performing the 
requirement.
    (2) Generally, a requirement that was previously accepted into the 
8(a) program will only be released for procurements outside the 8(a) 
program when the contracting activity agency agrees to set aside the 
requirement under the small business, HUBZone, SDVOSB, or WOSB 
programs.
    (3) The requirement that a follow-on procurement must be released 
from the 8(a) program in order for it to be fulfilled outside the 8(a) 
program does not apply to task or delivery orders offered to and 
accepted into the 8(a) program, where the basic contract was not 
accepted into the 8(a) program.
    (d)(1) When a contracting officer decides that a requirement 
previously procured under the 8(a) program is a new requirement and not 
a follow-on requirement to an 8(a) contract(s), the contracting officer 
shall submit a written notice to the SBA Associate Administrator for 
Business Development that the agency intends to procure the requirement 
outside the 8(a) program (see 19.810(a)(4)).
    (2) The written notice shall include a copy of the acquisition 
plan, if available; performance work statement (PWS); statement of work 
(SOW) or statement of objectives (SOO); and the values of the existing 
8(a) contract(s) and the new contract requirement.
    (e)(1) When a contracting officer decides to procure a follow-on 
requirement to an 8(a) contract using an existing, limited competition 
contracting vehicle that is not available to all 8(a) participants and 
the current or previous 8(a) contract was available to all 8(a) 
participants, the contracting officer must submit a written notice to 
the SBA Associate Administrator for Business Development.
    (2) The written notice shall include a copy of the acquisition 
plan, if available; PWS; SOW or SOO; and the values of both contracts.
    (f)(1) When a mandatory source will be used for a follow-on 
requirement to an 8(a) contract, the contracting officer should notify 
the SBA Associate Administrator for Business Development at least 30 
days prior to the end of the contract or order in accordance with 13 
CFR 124.504(d)(4)(ii).
    (2) The written notice should include a copy of the acquisition 
plan, if available; PWS; SOW or SOO; and the values of both contracts.


19.816  [Amended]

0
9. Amend section 19.816 by removing from paragraph (c) the word 
``criteria'' and adding in its place ``criteria (see 13 CFR 
124.507(d))''.

[FR Doc. 2022-26978 Filed 12-14-22; 8:45 am]
BILLING CODE 6820-EP-P