Federal Acquisition Regulation: Small Business Program Amendments, 9734-9739 [2023-02426]
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9734
Federal Register / Vol. 88, No. 30 / Tuesday, February 14, 2023 / Rules and Regulations
necessary’’ in its place, and adding a
sentence to the end of the paragraph.
The addition reads as follows:
32.906
Making payments.
(a) * * *
(2) * * * See 32.903(a)(5), but see
32.009–1(a).
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PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
6. Amend section 52.212–5 by—
a. Revising the date of the clause;
b. Redesignating paragraphs (a)(5) and
(6) as paragraphs (a)(6) and (7); and
adding a new paragraph (a)(5);
■ c. Redesignating paragraph (e)(1)(xxii)
as paragraph (e)(1)(xxiii); and adding a
new paragraph (e)(1)(xxii); and
■ d. In Alternate II—
■ i. Revising the date of the Alternate;
■ ii. Redesignating paragraph
(e)(1)(ii)((U) as paragraph (e)(1)(ii)(V);
and adding a new paragraph
(e)(1)(ii)((U);
The revisions and additions read as
follows:
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52.212–5 Contract Terms and Conditions
Required To Implement Statutes or
Executive Orders—Commercial Products
and Commercial Services.
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Contract Terms and Conditions
Required to Implement Statutes or
Executive Orders—Commercial
Products and Commercial Services
(MAR 2023)
(a) * * *
(5) 52.232–40, Providing Accelerated
Payments to Small Business
Subcontractors (MAR 2023) (31 U.S.C.
3903 and 10 U.S.C. 3801).
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(e)(1) * * *
(xxii) 52.232–40, Providing
Accelerated Payments to Small Business
Subcontractors (MAR 2023) (31 U.S.C.
3903 and 10 U.S.C. 3801). Flow down
required in accordance with paragraph
(c) of 52.232–40.
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Alternate II (MAR 2023). * * *
(e)(1) * * *
(ii) * * *
(U) 52.232–40, Providing Accelerated
Payments to Small Business
Subcontractors (MAR 2023) (31 U.S.C.
3903 and 10 U.S.C. 3801). Flow down
required in accordance with paragraph
(c) of 52.232–40.
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■ 7. Amend section 52.213–4 by—
■ a. Revising the date of the clause;
■ b. Redesignating paragraphs
(a)(1)(viii) and (ix) as paragraphs
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(a)(1)(ix) and (x); and adding a new
paragraph (a)(1)(viii);
■ c. Revising the newly redesignated
paragraph (a)(1)(x);
■ d. Removing paragraph (a)(2)(vi);
■ e. Redesignating paragraphs (a)(2)(vii)
through (ix) as paragraphs (a)(2)(vi)
through (viii); and
■ f. Removing from the newly
redesignated paragraph (a)(2)(vii) ‘‘(DEC
2022)’’ and adding ‘‘(MAR 2023)’’ in its
place.
The revisions and addition read as
follows:
a. Revising the date of the clause; and
b. Removing from paragraph
(c)(1)(xix) ‘‘(NOV 2021)’’ and adding
‘‘(MAR 2023)’’ in its place.
The revision reads as follows:
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52.244–6 Subcontracts for Commercial
Products and Commercial Services.
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Subcontracts for Commercial Products
and Commercial Services (MAR 2023)
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[FR Doc. 2023–02425 Filed 2–13–23; 8:45 am]
BILLING CODE 6820–EP–P
52.213–4 Terms and Conditions—
Simplified Acquisitions (Other Than
Commercial Products and Commercial
Services).
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Terms and Conditions—Simplified
Acquisitions (Other Than Commercial
Products and Commercial Services)
(MAR 2023)
(a) * * *
(1) * * *
(viii) 52.232–40, Providing
Accelerated Payments to Small Business
Subcontractors (MAR 2023) (31 U.S.C.
3903 and 10 U.S.C. 3801).
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(x) 52.233–4, Applicable Law for
Breach of Contract Claim (OCT 2004)
(Pub. L. 108–77 and 108–78 (19 U.S.C.
3805 note)).
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■ 8. Amend section 52.232–40 by
revising the date of the clause and
paragraph (a) to read as follows:
52.232–40 Providing Accelerated
Payments to Small Business
Subcontractors.
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Providing Accelerated Payments to
Small Business Subcontractors (MAR
2023)
(a)(1) In accordance with 31 U.S.C.
3903 and 10 U.S.C. 3801, within 15 days
after receipt of accelerated payments
from the Government, the Contractor
shall make accelerated payments to its
small business subcontractors under
this contract, to the maximum extent
practicable and prior to when such
payment is otherwise required under
the applicable contract or subcontract,
after receipt of a proper invoice and all
other required documentation from the
small business subcontractor.
(2) The Contractor agrees to make
such payments to its small business
subcontractors without any further
consideration from or fees charged to
the subcontractor.
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■ 9. Amend section 52.244–6 by—
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DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 19, 49, and 52
[FAC 2023–02; FAR Case 2019–008; Item
II; Docket No. 2019–0008; Sequence No. 1]
RIN 9000–AN91
Federal Acquisition Regulation: Small
Business Program Amendments
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
AGENCY:
DoD, GSA, and NASA are
issuing a final rule amending the
Federal Acquisition Regulation (FAR) to
implement several changes made to the
Small Business Administration (SBA)
regulations.
DATES: Effective March 16, 2023.
FOR FURTHER INFORMATION CONTACT: Ms.
Malissa Jones, Procurement Analyst, at
571–886–4687, or by email at
malissa.jones@gsa.gov, for clarification
of content. For information pertaining to
status or publication schedules, contact
the Regulatory Secretariat Division at
202–501–4755 or GSARegSec@gsa.gov.
Please cite FAC 2023–02, FAR Case
2019–008.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
DoD, GSA, and NASA published a
proposed rule at 87 FR 10327 on
February 24, 2022, to amend the FAR to
implement several revisions that the
Small Business Administration (SBA)
made to its regulations in its final rule
published on November 29, 2019, at 84
FR 65647. Five respondents submitted
comments in response to the proposed
rule.
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II. Discussion and Analysis
The Civilian Agency Acquisition
Council and the Defense Acquisition
Regulations Council (the Councils)
reviewed the public comments in the
development of the final rule; a minor
change was made to 19.307(d)(1)(iii) as
a result of the public comments
received. A discussion of the comments
is provided as follows:
A. Summary of Significant Changes
There are no significant changes from
the proposed rule.
B. Analysis of Public Comments
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1. Support for the Rule
Comment: One respondent expressed
support for the rule.
Response: The Councils acknowledge
the respondent’s support for the rule.
2. Negative Impacts of the Rule
Comment: One respondent expressed
concern regarding potential negative
impacts of the rule. The respondent
believes that the new rule is unfair to
8(a) program participants who spend
time and money in pursuit of long-term
contracts with the Federal Government,
specifically category management-type
contracts. The respondent indicated that
the proposed rule will shorten the
lifespan of 8(a) contracts if an 8(a)
participant graduates from the program
before the contract ends. The
respondent also indicated the proposed
rule may result in a reduction in the
number and value of long-term 8(a)
contracts for the Government and small
businesses.
Response: The Councils acknowledge
the respondent’s concerns regarding the
impact this rule will have on 8(a)
participants and the Government with
regard to long-term 8(a) contracts. As a
result of this rule, the Government will
not be able to exercise a fifth-year
option on a long-term contract if the
contractor is no longer eligible under
the 8(a) program. However, this rule
implements several revisions SBA made
to its regulations in its final rule
published on November 29, 2019, at 84
FR 65647. SBA modified 13 CFR
124.521(e)(2) to require contracting
officers to verify that a business concern
continues to be an eligible 8(a)
participant no more than 120 days prior
to the end of the fifth year of the
contract, and no more than 120 days
prior to exercising an option, and where
a concern no longer qualifies the rule
precludes contracting officers from
exercising the option. In its final rule,
SBA pointed out that Congress intended
that 8(a) program participation be
limited to nine years, and for 8(a)
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participants to leave the program and go
on to participate successfully and
independently in the Government
contracting arena. Therefore, allowing
contracting officers to continue to
exercise options for 8(a) program
participants under these circumstances
would not meet Congress’ intent.
3. Clarifications
a. Clarify SBA Requirements for 8(a)
Eligibility Prior To Exercising the Fifth
(5th) Option Year
Comment: One respondent asked if an
8(a) participant is not eligible for the
award of a fifth year option, can SBA
authorize an extension to an 8(a)
participant’s program term to allow
agencies time for re-procurement.
Response: An 8(a) participant’s
eligibility is determined in accordance
with SBA’s regulations and a
participant’s status is reflected in DSBS.
Comment: One respondent asked if
current procurements are grandfathered
from this rule.
Response: In accordance with FAR
1.108(d), FAR changes made by this rule
apply to solicitations issued on or after
the effective date of the change unless
otherwise specified.
Comment: One respondent requested
that eligibility verification be changed
from ‘‘no more than 120 days prior’’ to
‘‘no less than 120 days prior’’.
Response: This rule is consistent with
13 CFR 124.521(e)(2) and implements
SBA’s final rule at 84 FR 65647 (see
comment category 2).
b. Clarify SBA Protest Procedures and
Applicability
Comment: One respondent asked if an
8(a) contractor that did not receive the
award could protest the exercise of an
option during the 6th, 7th, or 8th year
of a contract if they suspect the
contractor has graduated from the 8(a)
program.
Response: Protests of small business
representations and rerepresentations by
an 8(a) contractor are made in
accordance with FAR 19.813, Protesting
a small business representation or
rerepresentation. This rule does not
make changes to FAR 19.302.
Comment: One respondent indicated
that the addition of ‘‘sole source’’ at
FAR 19.306(d)(1)(iv) and
19.308(d)(1)(iii) is inconsistent with
SBA regulations regarding the new
ostensible subcontractor protest grounds
(e.g., HUBZone and WOSB/EDWOSB
protests (13 CFR 126.601(d) and 13 CFR
127.504(g)).
Response: Although the ostensible
subcontractor protest grounds in SBA’s
regulations at 13 CFR 126.601(d) and 13
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CFR 127.504(g) do not include ‘‘or sole
source’’, SBA did include ‘‘sole source’’
when describing the ostensible
subcontractor rule in its final rule
published on November 29, 2019 at 84
FR 65647, to make clear that the
ostensible subcontractor rule applies to
set-aside and sole source contracts.
Comment: One respondent
recommended that ‘‘or order’’ be added
to FAR 19.307(d)(1)(iii) following ‘‘solesource service contract’’ to be consistent
with SBA’s regulations at 13 CFR
125.18(f).
Response: The Councils adopted the
recommendation and conforming edits
were made at FAR 19.306(d) and
19.308(d).
c. Clarify Date of Size Representation
Comment: One respondent indicated
that the size determination for
contractors under Federal Supply
Schedule Multiple-Award Schedule
contracts should be determined as of the
date of each response to a request for
quotation instead of the date of the
initial offer for the multiple-award
schedule contract.
Response: This rule implements
SBA’s final rule at 84 FR 65647 dated
November 29, 2019, which clarified that
SBA determines size as of the date of
initial offer for the multiple-award
contract, whether or not the offer
includes price. Therefore, this rule is
consistent with SBA’s regulations at 13
CFR 121.404(a)(1)(iv), which specify the
timing of SBA’s size determination.
Comment: One respondent
recommended that the words ‘‘or the
price is evaluated’’ at FAR 19.102(a)(4),
19.301–1(b), and 19.301–1(e)(1) be
deleted to be consistent with 13 CFR
121.404(a)(1)(iv).
Response: SBA’s final rule published
at 84 FR 65647 dated November 29,
2019, clarified that when an agency uses
indefinite delivery, indefinite quantity
(IDIQ), multiple-award contracts that do
not require offerors to include price,
size will be determined as of the date of
the initial offer which may not include
price. The phrase ‘‘may not’’ here means
‘‘might not.’’ This rule adds the words
‘‘or the price is evaluated’’ at
19.102(a)(4), 19.301–1(b), and 19.301–
1(e)(1) to clarify SBA’s intent.
d. Clarify the Language in the Proposed
FAR Rule to More Closely Align With
SBA’s Regulations
Comment: While recognizing that the
proposed rule is likely sufficient, one
respondent recommended that the rule
be amended to include ‘‘which is found
at section 121.201, footnote 18’’ from
SBA’s regulation regarding the size
standard for Information Technology
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Value-added Reseller under NAICS
Code 541519.
Response: The proposed rule
included the size standard for
nonmanufacturers and the size standard
for information technology value added
resellers under NAICS code 541519. In
addition, FAR 19.102(a) includes a
reference to SBA’s Small business size
standards and corresponding (NAICS)
codes at 13 CFR 121.201 and provides
the website for NAICS codes at https://
www.sba.gov/document/support--tablesize-standards. The 150 employee size is
easy to find in the SBA size standards;
therefore, it is not necessary to include
a reference to 13 CFR 121.201 and
footnote 18 in the FAR text associated
with this rule.
Comment: One respondent
recommended including ‘‘IDIQ’’ in the
proposed rule for consistency with SBA
regulations in referencing multipleaward contracts.
Response: Although SBA’s regulations
reference IDIQ after multiple-award
contract, FAR 19.504 provides guidance
on placing orders under multiple-award
contracts; therefore, it is not necessary
to add IDIQ at FAR 19.504(b). In
addition, the definition of multipleaward contract at FAR 2.101 indicates
that this kind of contract is an IDIQ
contract.
IV. Expected Impact of the Rule
4. Outside the Scope
Comment: One respondent asked
what acquisition options agencies have
if an 8(a) participant is not eligible for
the award of an option under a longterm 8(a) contract.
Response: This is outside of the scope
of this rule.
V. Executive Orders 12866 and 13563
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C. Other Changes
Minor editorial changes were made at
FAR 19.306(d), 19.307(d), and
19.308(d)(2).
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 amends several solicitation
provisions and contract clauses at FAR
52.204–8, 52.212–1, 52.212–5, 52.219–1,
52.219–18, and 52.219–28. However,
this rule does not impose any new
requirements on contracts at or below
the SAT or for commercial products, or
for commercial services, including
commercially available off-the-shelf
(COTS) items. The clauses continue to
apply to acquisitions at or below the
SAT, to acquisitions for commercial
products and commercial services
including COTS items.
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This rule will impact the operations
of the Government and contractors as
described in this section.
This rule will impact the Government
with regard to long-term 8(a) contracts.
Contracting officers will not be able to
exercise options past the fifth year of
long-term 8(a) contracts if the 8(a)
contractor no longer qualifies for the
8(a) program. Contractors who are 8(a)
participants with long-term contracts
may find that the Government cannot
exercise a fifth-year option on that
contract if the contractor is no longer
eligible for the 8(a) program.
Offerors who are information
technology value-added resellers should
be able to more easily understand the
size standard that applies to them.
The ‘‘ostensible subcontractor rule’’ is
implemented in this rule as a new
ground for protest. Small business
contractors must not be overly reliant on
non-similarly situated small business
subcontractors or have such a
subcontractor perform primary and vital
requirements of the contract. Therefore,
a small business contractor must have
the necessary expertise within its own
organization.
This rule is not expected to result in
any costs to contractors or offerors.
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. The Office of
Information and Regulatory Affairs
(OIRA) in the Office of Management and
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Budget has determined that this is not
a major rule under 5 U.S.C. 804.
VII. Regulatory Flexibility Act
DoD, GSA, and NASA have prepared
a Final Regulatory Flexibility Analysis
(FRFA) consistent with the Regulatory
Flexibility Act, 5 U.S.C. 601–612. The
FRFA is summarized as follows:
DoD, GSA, and NASA are issuing a final
rule to amend the Federal Acquisition
Regulation (FAR) to implement several
revisions made to the Small Business
Administration (SBA) regulations in SBA’s
final rule published on November 29, 2019,
at 84 FR 65647. The revisions address the
point in the procurement process at which
small business size status is determined for
offers for multiple-award contracts. SBA
generally determines size status at the time
of initial offer including price. However, for
a solicitation for a multiple-award contract
that does not require offers to include price
or where price is not evaluated, SBA will
determine size as of the date of initial offer,
whether or not the offer includes price or the
price is evaluated. The revisions also address
the eligibility requirements for 8(a)
participants under long-term contracts (i.e.,
with a duration of more than five years
including option periods). For long-term 8(a)
contracts, contracting officers will be
required to verify in the Dynamic Small
Business Search (DSBS) or the System for
Award Management (SAM) that the
contractor is still an SBA-certified 8(a)
participant no more than 120 days prior to
the end of the fifth year of the contract. If the
contractor is no longer an SBA-certified 8(a)
participant, the contracting officer shall not
exercise the option. In addition, SBA’s
revisions specified that the size standard for
information technology value added resellers
under North American Industry
Classification System (NAICS) code 541519
is 150 employees. The revisions also address
SBA’s new grounds for a socioeconomic
status protest based on an allegation that a
contractor is unduly reliant on a small, nonsimilarly situated entity subcontractor or if
such subcontractor performs the primary and
vital requirements of the contract (the
‘‘ostensible subcontractor rule’’).
There were no significant issues raised by
the public comments in response to the
initial regulatory flexibility analysis.
This rule will apply to small entities that
do business with the Federal Government.
According to the data in SAM, as of January
2022, 420,000 of the active entity
registrations are for entities that are small
business concerns for at least one NAICS
code. This rule will impact 8(a) participants
who are Federal contractors with contracts
that have a duration of more than five years,
including options. An analysis of the data in
the Federal Procurement Data System (FPDS)
indicates that, for fiscal years 2019 through
2021, an average of 326 long-term contracts
(i.e., greater than five years) were awarded to
279 unique entities each year under the 8(a)
program. The rule may reduce the number of
long-term contracts awarded to 8(a)
participants by agencies that are concerned
about having a contract in place beyond the
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fifth year. Contracts outside the 8(a) program
will not have such obstacles to continued
performance. However, SBA pointed out that
Congress intended that 8(a) program
participation be limited to nine years, and for
8(a) participants to leave the program and go
on to participate successfully and
independently in the Government
contracting arena. Therefore, allowing
contracting officers to continue to exercise
options for 8(a) program participants under
these circumstances would not meet
Congressional intent.
This rule will affect information
technology value added resellers under
NAICS code 54159. An analysis of the data
in FPDS shows that, for fiscal years 2019
through 2021, an average of 699 unique large
businesses and 1,129 unique small
businesses were awarded contracts each year
under NAICS code 541519.
This rule does not include any new
reporting, recordkeeping, or other
compliance requirements for small entities.
This rule does not duplicate, overlap, or
conflict with any other Federal rules.
There are no known significant alternative
approaches that would accomplish the stated
objectives.
Interested parties may obtain a copy
of the FRFA from the Regulatory
Secretariat Division. The Regulatory
Secretariat Division has submitted a
copy of the FRFA to the Chief Counsel
for Advocacy of the Small Business
Administration.
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 Parts 19, 49,
and 52
Government procurement.
William F. Clark,
Director, Office of Government-wide
Acquisition Policy, Office of Acquisition
Policy, Office of Government-wide Policy.
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Therefore, DoD, GSA, and NASA
amend 48 CFR parts 19, 49, and 52 as
set forth below:
■ 1. The authority citation for 48 CFR
parts 19, 49, and 52 continues to read
as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 4 and 10 U.S.C. chapter 137 legacy
provisions (see 10 U.S.C. 3016); and 51
U.S.C. 20113.
PART 19—SMALL BUSINESS
PROGRAMS
2. Amend section 19.102 by revising
the last sentence of paragraph (a)(1) and
adding paragraphs (a)(3) and (4) to read
as follows:
■
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19.102 Small business size standards and
North American Industry Classification
System codes.
(a) * * *
(1) * * * They are also available at
https://www.sba.gov/document/support-table-size-standards.
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(3) SBA determines the size status of
a concern, including its affiliates, as of
the date the concern represents that it is
small to the contracting officer as part
of its initial offer, which includes price.
(4) When an agency uses a solicitation
for a multiple-award contract that does
not require offers for the contract to
include price, SBA determines size as of
the date of initial offer for the multipleaward contract, whether or not the offer
includes price or the price is evaluated.
(See 13 CFR 121.404(a)(1)(iv)).
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19.301–1
[Amended]
3. Amend section 19.301–1 by—
a. Removing from paragraph (b)
introductory text the phrase ‘‘initial
offer’’ and adding ‘‘initial offer,
(whether or not the offer includes price
or the price is evaluated)’’ in its place;
and
■ b. Removing from paragraph (e)(1) the
phrase ‘‘for the contract’’ and adding
‘‘for the contract (whether or not the
offer includes price or the price is
evaluated (see 13 CFR
121.404(a)(1)(iv)),’’ in its place.
■ 4. Amend section 19.306 by adding
paragraph (d)(3) to read as follows:
■
■
19.306 Protesting a firm’s status as a
HUBZone small business concern.
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(d) * * *
(3) SBA will consider protests for
HUBZone set-aside or sole-source
service contracts or orders, if a
HUBZone prime contractor is unduly
reliant on a small entity subcontractor
that is not a similarly-situated entity as
defined in 13 CFR 125.1, or if such
subcontractor performs the primary and
vital requirements of the contract. For
allegations that the prime contractor is
unduly reliant on an other-than-small
subcontractor, see size protests at
19.302, and 13 CFR 121.103(h)(2),
which treats the pair as joint venturers
for size determination purposes (the
‘‘ostensible subcontractor rule’’).
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■ 5. Amend section 19.307 by—
■ a. Removing from paragraph (d)(1)
introductory text the phrase ‘‘service
disabled’’ and adding ‘‘service–
disabled’’ in its place;
■ b. Removing from paragraph (d)(1)(i)
the phrases ‘‘service disabled’’ and
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9737
‘‘125.8; or’’ and adding ‘‘servicedisabled’’ and ‘‘125.12;’’ in their places,
respectively;
■ c. Removing from paragraph (d)(1)(ii)
the phrase ‘‘such veteran.’’ and adding
‘‘such veteran; or’’ in its place; and
■ d. Adding paragraph (d)(1)(iii).
The addition reads as follows:
19.307 Protesting a firm’s status as a
service-disabled veteran-owned small
business concern.
*
*
*
*
*
(d) * * *
(1) * * *
(iii) For set-aside or sole-source
service contract or order ostensible
subcontractor protests, the protester
presents credible evidence of the alleged
undue reliance on a small entity
subcontractor that is not a similarlysituated entity as defined in 13 CFR
125.1, or credible evidence that the
small non-similarly situated entity is
performing the primary and vital
requirements of the contract. For
allegations that the prime contractor is
unduly reliant on an other-than-small
subcontractor, see size protests at
19.302, and 13 CFR 121.103(h)(2),
which treats the pair as joint venturers
for size determination purposes (the
‘‘ostensible subcontractor rule’’).
*
*
*
*
*
■ 6. Amend section 19.308 by—
■ a. Removing from the end of
paragraph (d)(1)(i) the word ‘‘or’’;
■ b. Removing from the end of
paragraph (d)(1)(ii) the phrase
‘‘EDWOSB contract.’’ and adding
‘‘EDWOSB contract; or’’ in its place; and
■ c. Adding paragraph (d)(1)(iii).
The addition reads as follows:
19.308 Protesting a firm’s status as an
economically disadvantaged women-owned
small business concern or women-owned
small business concern eligible under the
Women-Owned Small Business Program.
*
*
*
*
*
(d) * * *
(1) * * *
(iii) For WOSB or EDWOSB set-aside
or sole-source service contracts or
orders, the protest presents evidence
that the prime contractor is unduly
reliant on a small entity subcontractor
that is not a similarly-situated entity as
defined in 13 CFR 125.1, or a protest
alleging that such subcontractor is
performing the primary and vital
requirements of a set-aside or solesource WOSB or EDWOSB contract. For
allegations that the prime contractor is
unduly reliant on an other-than-small
subcontractor, see size protests at
19.302, and 13 CFR 121.103(h)(2),
which treats the pair as joint venturers
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for size determination purposes (the
‘‘ostensible subcontractor rule’’).
*
*
*
*
*
■ 7. Amend section 19.504 by—
■ a. Removing from the paragraph (b)
heading the phrase ‘‘partial set-aside
contracts.’’, and adding the phrase ‘‘setaside contracts-’’ in its place;
■ b. Redesignating paragraphs (b)(1) and
(2) as paragraphs (b)(2)(i) and (ii),
respectively;
■ c. Adding a new paragraph (b)(1); and
■ d. Adding a paragraph heading to the
newly redesignated paragraph (b)(2).
The addition and revision read as
follows:
19.504 Orders under multiple-award
contracts.
*
*
*
*
*
(b) * * *
(1) Orders under total set-aside
contracts. Under a total small business
set-aside, contracting officers may at
their discretion set aside orders for any
of the small business socioeconomic
concerns identified in 19.000(a)(3)
provided that the requirements at
paragraph (a) of this section, 19.502–
2(b), and the specific program eligibility
requirements are met.
(2) Orders under partial set-aside
contracts.
*
*
*
*
*
19.505
[Amended]
8. Amend section 19.505 by removing
from paragraphs (c)(1)(ii) and (c)(2)(i)
the phrase ‘‘500 employees’’ and adding
‘‘500 employees, or 150 employees for
information technology value-added
resellers under NAICS code 541519’’ in
its place.
■ 9. Amend section 19.802 by adding
two sentences at the end to read as
follows:
■
ddrumheller on DSK120RN23PROD with RULES3
19.802 Determining eligibility for the 8(a)
program.
* * * SBA designates the concern as
an 8(a) participant in the Dynamic
Small Business Search (DSBS) at
https://web.sba.gov/pro-net/search/dsp_
dsbs.cfm. SBA’s designation also
appears in the System for Award
Management (SAM).
■ 10. Amend section 19.804–1 by—
■ a. Removing from the end of
paragraph (a)(1) the word ‘‘and’’;
■ b. Redesignating paragraph (a)(2) as
paragraph (a)(3); and
■ c. Adding a new paragraph (a)(2).
The addition reads as follows:
19.804–1
Agency evaluation.
(a) * * *
(2) Length of contract, including
option periods (see 19.812(d)); and
*
*
*
*
*
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11. Amend section 19.812 by—
a. Redesignating paragraph (d) as
paragraph (e); and
■ b. Adding a new paragraph (d).
The addition reads as follows:
■
■
19.812
Contract administration.
*
*
*
*
*
(d) For 8(a) contracts exceeding 5
years including options, the contracting
officer shall verify in DSBS or SAM that
the concern is an SBA-certified 8(a)
participant no more than 120 days prior
to the end of the fifth year of the
contract. If the concern is not an SBAcertified 8(a) participant, the contracting
officer shall not exercise the option (see
13 CFR 124.521(e)(2)).
*
*
*
*
*
PART 49—TERMINATION OF
CONTRACTS
49.402–3
[Amended]
12. Amend section 49.402–3 by
removing from paragraph (e)(4) the
phrase ‘‘Small Business Administration
Regional’’ and adding ‘‘Small Business
Administration Area’’ in its place.
■
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
information technology value-added
resellers under NAICS code 541519,’’ in
its place.
The revision reads as follows:
52.212–1 Instructions to Offerors—
Commercial Products and Commercial
Services.
*
*
*
*
*
Instructions to Offerors—Commercial
Products and Commercial Services
(MAR 2023)
*
*
*
*
*
15. Amend section 52.212–5 by—
a. Revising the date of the clause; and
b. Removing from paragraph (b)(22)(i)
the date ‘‘(OCT 2022)’’ and adding
‘‘(MAR 2023)’’ in its place.
The revision reads as follows:
■
■
■
52.212–5 Contract Terms and Conditions
Required To Implement Statutes or
Executive Orders—Commercial Products
and Commercial Services.
*
*
*
*
*
Contract Terms and Conditions
Required To Implement Statutes or
Executive Orders—Commercial
Products and Commercial Services
(MAR 2023)
*
*
*
*
*
16. Amend section 52.219–1 by—
a. Revising the date of the provision;
b. Removing from paragraph (b)(3)
introductory text the phrase ‘‘500
employees’’ and adding ‘‘500
employees, or 150 employees for
information technology value-added
resellers under NAICS code 541519,’’ in
its place;
■ c. In Alternate II:
■ i. Revising the date of Alternate II; and
■ ii. Removing from paragraph (b)(2)
introductory text the phrase ‘‘500
employees’’ and adding ‘‘500
employees, or 150 employees for
information technology value-added
resellers under NAICS code 541519,’’ in
its place.
The revisions read as follows:
■
■
■
13. Amend section 52.204–8 by—
a. Revising the date of the provision;
b. Removing from paragraph (a)(3)
introductory text the phrase ‘‘500
employees’’ and adding ‘‘500
employees, or 150 employees for
information technology value-added
resellers under NAICS code 541519,’’ in
its place;
■ c. In Alternate I:
■ i. Revising the date of Alternate I; and
■ ii. Removing from paragraph (a)(2)
introductory text the phrase ‘‘500
employees’’ and adding ‘‘500
employees, or 150 employees for
information technology value-added
resellers under NAICS code 541519,’’ in
its place.
The revisions read as follows:
■
■
■
52.204–8 Annual Representations and
Certifications.
52.219–1 Small Business Program
Representations.
*
*
*
*
*
*
*
*
*
*
Annual Representations and
Certifications (Mar 2023)
Small Business Program
Representations (MAR 2023)
*
*
*
*
*
*
Alternate I ([MAR 2023 * * *
*
*
*
*
*
■ 14. Amend section 52.212–1 by—
■ a. Revising the date of the provision;
and
■ b. Removing from paragraph (a)
introductory text the phrase ‘‘500
employees’’ and adding ‘‘500
employees, or 150 employees for
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*
*
*
*
Alternate II (MAR 2023) * * *
*
*
*
*
*
■ 17. Amend section 52.219–18 by—
■ a. Revising the date of Alternate I; and
■ b. Removing from paragraph (iii) in
Alternate I the phrase ‘‘Regional
Office(s)’’ and adding ‘‘Area Office(s)’’
in its place.
The revision reads as follows:
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52.219–18 Notification of Competition
Limited to Eligible 8(a) Participants.
*
*
*
*
*
Alternate I (MAR 2023)
*
*
*
*
*
■ 18. Amend section 52.219–28 by—
■ a. Revising the date of the clause; and
■ b. Removing from paragraph (e)
introductory text the phrase ‘‘500
employees’’ and adding ‘‘500
employees, or 150 employees for
information technology value-added
resellers under NAICS code 541519,’’ in
its place.
The revision reads as follows:
Division (MVCB), at 202–501–4755 or
GSARegSec@gsa.gov. Please cite FAC
2023–02, Technical Amendments.
This
document makes an editorial change to
48 CFR part 2.
SUPPLEMENTARY INFORMATION:
List of Subjects in 48 CFR Part 2
Government procurement.
William F. Clark,
Director, Office of Government-wide
Acquisition Policy, Office of Acquisition
Policy, Office of Government-wide Policy.
52.219–28 Post-Award Small Business
Program Rerepresentation.
Therefore, DoD, GSA, and NASA
amend 48 CFR part 2 as set forth below:
*
■
*
*
*
*
1. The authority citation for 48 CFR
part 2 continues to read as follows:
Post-Award Small Business Program
Rerepresentation (MAR 2023)
BILLING CODE 6820–EP–P
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 4 and 10 U.S.C. chapter 137 legacy
provisions (see 10 U.S.C. 3016); and 51
U.S.C. 20113.
DEPARTMENT OF DEFENSE
PART 2—DEFINITIONS OF WORDS
AND TERMS
*
*
*
*
*
[FR Doc. 2023–02426 Filed 2–13–23; 8:45 am]
2.101
GENERAL SERVICES
ADMINISTRATION
[Amended]
2. Amend section 2.101, in paragraph
(b), in the definition of ‘‘Contingency
operation’’ by removing from paragraph
(2) the phrase ‘‘Chapter 15 of title 10 of
the United States Code,’’ and adding the
phrase ‘‘Chapter 13 of title 10 of the
United States Code, and section 3713 of
title 14 of the United States Code,’’ in
its place.
■
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Part 2
[FAC 2023–02; Item III; Docket No. FAR–
2023–0052; Sequence No. 1]
Federal Acquisition Regulation;
Technical Amendments
[FR Doc. 2023–02427 Filed 2–13–23; 8:45 am]
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
AGENCY:
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Chapter 1
[Docket No. FAR–2023–0051, Sequence No.
1]
Federal Acquisition Regulation;
Federal Acquisition Circular 2023–02;
Small Entity Compliance Guide
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Small Entity Compliance Guide
(SECG).
AGENCY:
This document is issued
under the joint authority of DoD, GSA,
and NASA. This Small Entity
Compliance Guide has been prepared in
accordance with section 212 of the
Small Business Regulatory Enforcement
Fairness Act of 1996. It consists of a
summary of the rules appearing in
Federal Acquisition Circular (FAC)
2023–02, which amends the Federal
Acquisition Regulation (FAR).
Interested parties may obtain further
information regarding these rules by
referring to FAC 2023–02, which
precedes this document.
DATES: February 14, 2023.
ADDRESSES: The FAC, including the
SECG, is available at https://
www.regulations.gov.
SUMMARY:
For
clarification of content, contact the
analyst whose name appears in the table
below. Please cite FAC 2023–02 and the
FAR Case number. For information
pertaining to status or publication
schedules, contact the Regulatory
Secretariat Division at 202–501–4755 or
GSARegSec@gsa.gov. An asterisk (*)
next to a rule indicates that a regulatory
flexibility analysis has been prepared.
FOR FURTHER INFORMATION CONTACT:
This document makes an
amendment to the Federal Acquisition
Regulation (FAR) in order to make
needed editorial changes.
DATES: Effective: February 14, 2023.
FOR FURTHER INFORMATION CONTACT: Ms.
Lois Mandell, Regulatory Secretariat
SUMMARY:
ddrumheller on DSK120RN23PROD with RULES3
RULES LISTED IN FAC 2023–02
Item
Subject
I * ................................
II * ...............................
III ................................
Accelerated Payments Applicable to Contracts with Certain Small Business Concerns .....
Small Business Program Amendments ................................................................................
Technical Amendments.
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2020–007
2019–008
Analyst
Delgado.
Jones.
]]>Agencies
[Federal Register Volume 88, Number 30 (Tuesday, February 14, 2023)]
[Rules and Regulations]
[Pages 9734-9739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-02426]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 19, 49, and 52
[FAC 2023-02; FAR Case 2019-008; Item II; Docket No. 2019-0008;
Sequence No. 1]
RIN 9000-AN91
Federal Acquisition Regulation: Small Business Program Amendments
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the
Federal Acquisition Regulation (FAR) to implement several changes made
to the Small Business Administration (SBA) regulations.
DATES: Effective March 16, 2023.
FOR FURTHER INFORMATION CONTACT: Ms. Malissa Jones, Procurement
Analyst, at 571-886-4687, or by email at [email protected], for
clarification of content. For information pertaining to status or
publication schedules, contact the Regulatory Secretariat Division at
202-501-4755 or [email protected]. Please cite FAC 2023-02, FAR Case
2019-008.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published a proposed rule at 87 FR 10327 on
February 24, 2022, to amend the FAR to implement several revisions that
the Small Business Administration (SBA) made to its regulations in its
final rule published on November 29, 2019, at 84 FR 65647. Five
respondents submitted comments in response to the proposed rule.
[[Page 9735]]
II. Discussion and Analysis
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council (the Councils) reviewed the public comments in the
development of the final rule; a minor change was made to
19.307(d)(1)(iii) as a result of the public comments received. A
discussion of the comments is provided as follows:
A. Summary of Significant Changes
There are no significant changes from the proposed rule.
B. Analysis of Public Comments
1. Support for the Rule
Comment: One respondent expressed support for the rule.
Response: The Councils acknowledge the respondent's support for the
rule.
2. Negative Impacts of the Rule
Comment: One respondent expressed concern regarding potential
negative impacts of the rule. The respondent believes that the new rule
is unfair to 8(a) program participants who spend time and money in
pursuit of long-term contracts with the Federal Government,
specifically category management-type contracts. The respondent
indicated that the proposed rule will shorten the lifespan of 8(a)
contracts if an 8(a) participant graduates from the program before the
contract ends. The respondent also indicated the proposed rule may
result in a reduction in the number and value of long-term 8(a)
contracts for the Government and small businesses.
Response: The Councils acknowledge the respondent's concerns
regarding the impact this rule will have on 8(a) participants and the
Government with regard to long-term 8(a) contracts. As a result of this
rule, the Government will not be able to exercise a fifth-year option
on a long-term contract if the contractor is no longer eligible under
the 8(a) program. However, this rule implements several revisions SBA
made to its regulations in its final rule published on November 29,
2019, at 84 FR 65647. SBA modified 13 CFR 124.521(e)(2) to require
contracting officers to verify that a business concern continues to be
an eligible 8(a) participant no more than 120 days prior to the end of
the fifth year of the contract, and no more than 120 days prior to
exercising an option, and where a concern no longer qualifies the rule
precludes contracting officers from exercising the option. In its final
rule, SBA pointed out that Congress intended that 8(a) program
participation be limited to nine years, and for 8(a) participants to
leave the program and go on to participate successfully and
independently in the Government contracting arena. Therefore, allowing
contracting officers to continue to exercise options for 8(a) program
participants under these circumstances would not meet Congress' intent.
3. Clarifications
a. Clarify SBA Requirements for 8(a) Eligibility Prior To Exercising
the Fifth (5th) Option Year
Comment: One respondent asked if an 8(a) participant is not
eligible for the award of a fifth year option, can SBA authorize an
extension to an 8(a) participant's program term to allow agencies time
for re-procurement.
Response: An 8(a) participant's eligibility is determined in
accordance with SBA's regulations and a participant's status is
reflected in DSBS.
Comment: One respondent asked if current procurements are
grandfathered from this rule.
Response: In accordance with FAR 1.108(d), FAR changes made by this
rule apply to solicitations issued on or after the effective date of
the change unless otherwise specified.
Comment: One respondent requested that eligibility verification be
changed from ``no more than 120 days prior'' to ``no less than 120 days
prior''.
Response: This rule is consistent with 13 CFR 124.521(e)(2) and
implements SBA's final rule at 84 FR 65647 (see comment category 2).
b. Clarify SBA Protest Procedures and Applicability
Comment: One respondent asked if an 8(a) contractor that did not
receive the award could protest the exercise of an option during the
6th, 7th, or 8th year of a contract if they suspect the contractor has
graduated from the 8(a) program.
Response: Protests of small business representations and
rerepresentations by an 8(a) contractor are made in accordance with FAR
19.813, Protesting a small business representation or rerepresentation.
This rule does not make changes to FAR 19.302.
Comment: One respondent indicated that the addition of ``sole
source'' at FAR 19.306(d)(1)(iv) and 19.308(d)(1)(iii) is inconsistent
with SBA regulations regarding the new ostensible subcontractor protest
grounds (e.g., HUBZone and WOSB/EDWOSB protests (13 CFR 126.601(d) and
13 CFR 127.504(g)).
Response: Although the ostensible subcontractor protest grounds in
SBA's regulations at 13 CFR 126.601(d) and 13 CFR 127.504(g) do not
include ``or sole source'', SBA did include ``sole source'' when
describing the ostensible subcontractor rule in its final rule
published on November 29, 2019 at 84 FR 65647, to make clear that the
ostensible subcontractor rule applies to set-aside and sole source
contracts.
Comment: One respondent recommended that ``or order'' be added to
FAR 19.307(d)(1)(iii) following ``sole-source service contract'' to be
consistent with SBA's regulations at 13 CFR 125.18(f).
Response: The Councils adopted the recommendation and conforming
edits were made at FAR 19.306(d) and 19.308(d).
c. Clarify Date of Size Representation
Comment: One respondent indicated that the size determination for
contractors under Federal Supply Schedule Multiple-Award Schedule
contracts should be determined as of the date of each response to a
request for quotation instead of the date of the initial offer for the
multiple-award schedule contract.
Response: This rule implements SBA's final rule at 84 FR 65647
dated November 29, 2019, which clarified that SBA determines size as of
the date of initial offer for the multiple-award contract, whether or
not the offer includes price. Therefore, this rule is consistent with
SBA's regulations at 13 CFR 121.404(a)(1)(iv), which specify the timing
of SBA's size determination.
Comment: One respondent recommended that the words ``or the price
is evaluated'' at FAR 19.102(a)(4), 19.301-1(b), and 19.301-1(e)(1) be
deleted to be consistent with 13 CFR 121.404(a)(1)(iv).
Response: SBA's final rule published at 84 FR 65647 dated November
29, 2019, clarified that when an agency uses indefinite delivery,
indefinite quantity (IDIQ), multiple-award contracts that do not
require offerors to include price, size will be determined as of the
date of the initial offer which may not include price. The phrase ``may
not'' here means ``might not.'' This rule adds the words ``or the price
is evaluated'' at 19.102(a)(4), 19.301-1(b), and 19.301-1(e)(1) to
clarify SBA's intent.
d. Clarify the Language in the Proposed FAR Rule to More Closely Align
With SBA's Regulations
Comment: While recognizing that the proposed rule is likely
sufficient, one respondent recommended that the rule be amended to
include ``which is found at section 121.201, footnote 18'' from SBA's
regulation regarding the size standard for Information Technology
[[Page 9736]]
Value-added Reseller under NAICS Code 541519.
Response: The proposed rule included the size standard for
nonmanufacturers and the size standard for information technology value
added resellers under NAICS code 541519. In addition, FAR 19.102(a)
includes a reference to SBA's Small business size standards and
corresponding (NAICS) codes at 13 CFR 121.201 and provides the website
for NAICS codes at https://www.sba.gov/document/support--table-size-standards. The 150 employee size is easy to find in the SBA size
standards; therefore, it is not necessary to include a reference to 13
CFR 121.201 and footnote 18 in the FAR text associated with this rule.
Comment: One respondent recommended including ``IDIQ'' in the
proposed rule for consistency with SBA regulations in referencing
multiple-award contracts.
Response: Although SBA's regulations reference IDIQ after multiple-
award contract, FAR 19.504 provides guidance on placing orders under
multiple-award contracts; therefore, it is not necessary to add IDIQ at
FAR 19.504(b). In addition, the definition of multiple-award contract
at FAR 2.101 indicates that this kind of contract is an IDIQ contract.
4. Outside the Scope
Comment: One respondent asked what acquisition options agencies
have if an 8(a) participant is not eligible for the award of an option
under a long-term 8(a) contract.
Response: This is outside of the scope of this rule.
C. Other Changes
Minor editorial changes were made at FAR 19.306(d), 19.307(d), and
19.308(d)(2).
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 amends several solicitation provisions and contract
clauses at FAR 52.204-8, 52.212-1, 52.212-5, 52.219-1, 52.219-18, and
52.219-28. However, this rule does not impose any new requirements on
contracts at or below the SAT or for commercial products, or for
commercial services, including commercially available off-the-shelf
(COTS) items. The clauses continue to apply to acquisitions at or below
the SAT, to acquisitions for commercial products and commercial
services including COTS items.
IV. Expected Impact of the Rule
This rule will impact the operations of the Government and
contractors as described in this section.
This rule will impact the Government with regard to long-term 8(a)
contracts. Contracting officers will not be able to exercise options
past the fifth year of long-term 8(a) contracts if the 8(a) contractor
no longer qualifies for the 8(a) program. Contractors who are 8(a)
participants with long-term contracts may find that the Government
cannot exercise a fifth-year option on that contract if the contractor
is no longer eligible for the 8(a) program.
Offerors who are information technology value-added resellers
should be able to more easily understand the size standard that applies
to them.
The ``ostensible subcontractor rule'' is implemented in this rule
as a new ground for protest. Small business contractors must not be
overly reliant on non-similarly situated small business subcontractors
or have such a subcontractor perform primary and vital requirements of
the contract. Therefore, a small business contractor must have the
necessary expertise within its own organization.
This rule is not expected to result in any costs to contractors or
offerors.
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. The
Office of Information and Regulatory Affairs (OIRA) in the Office of
Management and Budget has determined that this is not a major rule
under 5 U.S.C. 804.
VII. Regulatory Flexibility Act
DoD, GSA, and NASA have prepared a Final Regulatory Flexibility
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5
U.S.C. 601-612. The FRFA is summarized as follows:
DoD, GSA, and NASA are issuing a final rule to amend the Federal
Acquisition Regulation (FAR) to implement several revisions made to
the Small Business Administration (SBA) regulations in SBA's final
rule published on November 29, 2019, at 84 FR 65647. The revisions
address the point in the procurement process at which small business
size status is determined for offers for multiple-award contracts.
SBA generally determines size status at the time of initial offer
including price. However, for a solicitation for a multiple-award
contract that does not require offers to include price or where
price is not evaluated, SBA will determine size as of the date of
initial offer, whether or not the offer includes price or the price
is evaluated. The revisions also address the eligibility
requirements for 8(a) participants under long-term contracts (i.e.,
with a duration of more than five years including option periods).
For long-term 8(a) contracts, contracting officers will be required
to verify in the Dynamic Small Business Search (DSBS) or the System
for Award Management (SAM) that the contractor is still an SBA-
certified 8(a) participant no more than 120 days prior to the end of
the fifth year of the contract. If the contractor is no longer an
SBA-certified 8(a) participant, the contracting officer shall not
exercise the option. In addition, SBA's revisions specified that the
size standard for information technology value added resellers under
North American Industry Classification System (NAICS) code 541519 is
150 employees. The revisions also address SBA's new grounds for a
socioeconomic status protest based on an allegation that a
contractor is unduly reliant on a small, non-similarly situated
entity subcontractor or if such subcontractor performs the primary
and vital requirements of the contract (the ``ostensible
subcontractor rule'').
There were no significant issues raised by the public comments
in response to the initial regulatory flexibility analysis.
This rule will apply to small entities that do business with the
Federal Government. According to the data in SAM, as of January
2022, 420,000 of the active entity registrations are for entities
that are small business concerns for at least one NAICS code. This
rule will impact 8(a) participants who are Federal contractors with
contracts that have a duration of more than five years, including
options. An analysis of the data in the Federal Procurement Data
System (FPDS) indicates that, for fiscal years 2019 through 2021, an
average of 326 long-term contracts (i.e., greater than five years)
were awarded to 279 unique entities each year under the 8(a)
program. The rule may reduce the number of long-term contracts
awarded to 8(a) participants by agencies that are concerned about
having a contract in place beyond the
[[Page 9737]]
fifth year. Contracts outside the 8(a) program will not have such
obstacles to continued performance. However, SBA pointed out that
Congress intended that 8(a) program participation be limited to nine
years, and for 8(a) participants to leave the program and go on to
participate successfully and independently in the Government
contracting arena. Therefore, allowing contracting officers to
continue to exercise options for 8(a) program participants under
these circumstances would not meet Congressional intent.
This rule will affect information technology value added
resellers under NAICS code 54159. An analysis of the data in FPDS
shows that, for fiscal years 2019 through 2021, an average of 699
unique large businesses and 1,129 unique small businesses were
awarded contracts each year under NAICS code 541519.
This rule does not include any new reporting, recordkeeping, or
other compliance requirements for small entities.
This rule does not duplicate, overlap, or conflict with any
other Federal rules.
There are no known significant alternative approaches that would
accomplish the stated objectives.
Interested parties may obtain a copy of the FRFA from the
Regulatory Secretariat Division. The Regulatory Secretariat Division
has submitted a copy of the FRFA to the Chief Counsel for Advocacy of
the Small Business Administration.
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 Parts 19, 49, and 52
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 amend 48 CFR parts 19, 49, and 52 as
set forth below:
0
1. The authority citation for 48 CFR parts 19, 49, and 52 continues to
read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C.
chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C.
20113.
PART 19--SMALL BUSINESS PROGRAMS
0
2. Amend section 19.102 by revising the last sentence of paragraph
(a)(1) and adding paragraphs (a)(3) and (4) to read as follows:
19.102 Small business size standards and North American Industry
Classification System codes.
(a) * * *
(1) * * * They are also available at https://www.sba.gov/document/support--table-size-standards.
* * * * *
(3) SBA determines the size status of a concern, including its
affiliates, as of the date the concern represents that it is small to
the contracting officer as part of its initial offer, which includes
price.
(4) When an agency uses a solicitation for a multiple-award
contract that does not require offers for the contract to include
price, SBA determines size as of the date of initial offer for the
multiple-award contract, whether or not the offer includes price or the
price is evaluated. (See 13 CFR 121.404(a)(1)(iv)).
* * * * *
19.301-1 [Amended]
0
3. Amend section 19.301-1 by--
0
a. Removing from paragraph (b) introductory text the phrase ``initial
offer'' and adding ``initial offer, (whether or not the offer includes
price or the price is evaluated)'' in its place; and
0
b. Removing from paragraph (e)(1) the phrase ``for the contract'' and
adding ``for the contract (whether or not the offer includes price or
the price is evaluated (see 13 CFR 121.404(a)(1)(iv)),'' in its place.
0
4. Amend section 19.306 by adding paragraph (d)(3) to read as follows:
19.306 Protesting a firm's status as a HUBZone small business concern.
* * * * *
(d) * * *
(3) SBA will consider protests for HUBZone set-aside or sole-source
service contracts or orders, if a HUBZone prime contractor is unduly
reliant on a small entity subcontractor that is not a similarly-
situated entity as defined in 13 CFR 125.1, or if such subcontractor
performs the primary and vital requirements of the contract. For
allegations that the prime contractor is unduly reliant on an other-
than-small subcontractor, see size protests at 19.302, and 13 CFR
121.103(h)(2), which treats the pair as joint venturers for size
determination purposes (the ``ostensible subcontractor rule'').
* * * * *
0
5. Amend section 19.307 by--
0
a. Removing from paragraph (d)(1) introductory text the phrase
``service disabled'' and adding ``service-disabled'' in its place;
0
b. Removing from paragraph (d)(1)(i) the phrases ``service disabled''
and ``125.8; or'' and adding ``service-disabled'' and ``125.12;'' in
their places, respectively;
0
c. Removing from paragraph (d)(1)(ii) the phrase ``such veteran.'' and
adding ``such veteran; or'' in its place; and
0
d. Adding paragraph (d)(1)(iii).
The addition reads as follows:
19.307 Protesting a firm's status as a service-disabled veteran-owned
small business concern.
* * * * *
(d) * * *
(1) * * *
(iii) For set-aside or sole-source service contract or order
ostensible subcontractor protests, the protester presents credible
evidence of the alleged undue reliance on a small entity subcontractor
that is not a similarly-situated entity as defined in 13 CFR 125.1, or
credible evidence that the small non-similarly situated entity is
performing the primary and vital requirements of the contract. For
allegations that the prime contractor is unduly reliant on an other-
than-small subcontractor, see size protests at 19.302, and 13 CFR
121.103(h)(2), which treats the pair as joint venturers for size
determination purposes (the ``ostensible subcontractor rule'').
* * * * *
0
6. Amend section 19.308 by--
0
a. Removing from the end of paragraph (d)(1)(i) the word ``or'';
0
b. Removing from the end of paragraph (d)(1)(ii) the phrase ``EDWOSB
contract.'' and adding ``EDWOSB contract; or'' in its place; and
0
c. Adding paragraph (d)(1)(iii).
The addition reads as follows:
19.308 Protesting a firm's status as an economically disadvantaged
women-owned small business concern or women-owned small business
concern eligible under the Women-Owned Small Business Program.
* * * * *
(d) * * *
(1) * * *
(iii) For WOSB or EDWOSB set-aside or sole-source service contracts
or orders, the protest presents evidence that the prime contractor is
unduly reliant on a small entity subcontractor that is not a similarly-
situated entity as defined in 13 CFR 125.1, or a protest alleging that
such subcontractor is performing the primary and vital requirements of
a set-aside or sole-source WOSB or EDWOSB contract. For allegations
that the prime contractor is unduly reliant on an other-than-small
subcontractor, see size protests at 19.302, and 13 CFR 121.103(h)(2),
which treats the pair as joint venturers
[[Page 9738]]
for size determination purposes (the ``ostensible subcontractor
rule'').
* * * * *
0
7. Amend section 19.504 by--
0
a. Removing from the paragraph (b) heading the phrase ``partial set-
aside contracts.'', and adding the phrase ``set-aside contracts-'' in
its place;
0
b. Redesignating paragraphs (b)(1) and (2) as paragraphs (b)(2)(i) and
(ii), respectively;
0
c. Adding a new paragraph (b)(1); and
0
d. Adding a paragraph heading to the newly redesignated paragraph
(b)(2).
The addition and revision read as follows:
19.504 Orders under multiple-award contracts.
* * * * *
(b) * * *
(1) Orders under total set-aside contracts. Under a total small
business set-aside, contracting officers may at their discretion set
aside orders for any of the small business socioeconomic concerns
identified in 19.000(a)(3) provided that the requirements at paragraph
(a) of this section, 19.502-2(b), and the specific program eligibility
requirements are met.
(2) Orders under partial set-aside contracts.
* * * * *
19.505 [Amended]
0
8. Amend section 19.505 by removing from paragraphs (c)(1)(ii) and
(c)(2)(i) the phrase ``500 employees'' and adding ``500 employees, or
150 employees for information technology value-added resellers under
NAICS code 541519'' in its place.
0
9. Amend section 19.802 by adding two sentences at the end to read as
follows:
19.802 Determining eligibility for the 8(a) program.
* * * SBA designates the concern as an 8(a) participant in the
Dynamic Small Business Search (DSBS) at https://web.sba.gov/pro-net/search/dsp_dsbs.cfm. SBA's designation also appears in the System for
Award Management (SAM).
0
10. Amend section 19.804-1 by--
0
a. Removing from the end of paragraph (a)(1) the word ``and'';
0
b. Redesignating paragraph (a)(2) as paragraph (a)(3); and
0
c. Adding a new paragraph (a)(2).
The addition reads as follows:
19.804-1 Agency evaluation.
(a) * * *
(2) Length of contract, including option periods (see 19.812(d));
and
* * * * *
0
11. Amend section 19.812 by--
0
a. Redesignating paragraph (d) as paragraph (e); and
0
b. Adding a new paragraph (d).
The addition reads as follows:
19.812 Contract administration.
* * * * *
(d) For 8(a) contracts exceeding 5 years including options, the
contracting officer shall verify in DSBS or SAM that the concern is an
SBA-certified 8(a) participant no more than 120 days prior to the end
of the fifth year of the contract. If the concern is not an SBA-
certified 8(a) participant, the contracting officer shall not exercise
the option (see 13 CFR 124.521(e)(2)).
* * * * *
PART 49--TERMINATION OF CONTRACTS
49.402-3 [Amended]
0
12. Amend section 49.402-3 by removing from paragraph (e)(4) the phrase
``Small Business Administration Regional'' and adding ``Small Business
Administration Area'' in its place.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
13. Amend section 52.204-8 by--
0
a. Revising the date of the provision;
0
b. Removing from paragraph (a)(3) introductory text the phrase ``500
employees'' and adding ``500 employees, or 150 employees for
information technology value-added resellers under NAICS code 541519,''
in its place;
0
c. In Alternate I:
0
i. Revising the date of Alternate I; and
0
ii. Removing from paragraph (a)(2) introductory text the phrase ``500
employees'' and adding ``500 employees, or 150 employees for
information technology value-added resellers under NAICS code 541519,''
in its place.
The revisions read as follows:
52.204-8 Annual Representations and Certifications.
* * * * *
Annual Representations and Certifications (Mar 2023)
* * * * *
Alternate I ([MAR 2023 * * *
* * * * *
0
14. Amend section 52.212-1 by--
0
a. Revising the date of the provision; and
0
b. Removing from paragraph (a) introductory text the phrase ``500
employees'' and adding ``500 employees, or 150 employees for
information technology value-added resellers under NAICS code 541519,''
in its place.
The revision reads as follows:
52.212-1 Instructions to Offerors--Commercial Products and Commercial
Services.
* * * * *
Instructions to Offerors--Commercial Products and Commercial Services
(MAR 2023)
* * * * *
0
15. Amend section 52.212-5 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (b)(22)(i) the date ``(OCT 2022)'' and
adding ``(MAR 2023)'' in its place.
The revision reads as follows:
52.212-5 Contract Terms and Conditions Required To Implement Statutes
or Executive Orders--Commercial Products and Commercial Services.
* * * * *
Contract Terms and Conditions Required To Implement Statutes or
Executive Orders--Commercial Products and Commercial Services (MAR
2023)
* * * * *
0
16. Amend section 52.219-1 by--
0
a. Revising the date of the provision;
0
b. Removing from paragraph (b)(3) introductory text the phrase ``500
employees'' and adding ``500 employees, or 150 employees for
information technology value-added resellers under NAICS code 541519,''
in its place;
0
c. In Alternate II:
0
i. Revising the date of Alternate II; and
0
ii. Removing from paragraph (b)(2) introductory text the phrase ``500
employees'' and adding ``500 employees, or 150 employees for
information technology value-added resellers under NAICS code 541519,''
in its place.
The revisions read as follows:
52.219-1 Small Business Program Representations.
* * * * *
Small Business Program Representations (MAR 2023)
* * * * *
Alternate II (MAR 2023) * * *
* * * * *
0
17. Amend section 52.219-18 by--
0
a. Revising the date of Alternate I; and
0
b. Removing from paragraph (iii) in Alternate I the phrase ``Regional
Office(s)'' and adding ``Area Office(s)'' in its place.
The revision reads as follows:
[[Page 9739]]
52.219-18 Notification of Competition Limited to Eligible 8(a)
Participants.
* * * * *
Alternate I (MAR 2023)
* * * * *
0
18. Amend section 52.219-28 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (e) introductory text the phrase ``500
employees'' and adding ``500 employees, or 150 employees for
information technology value-added resellers under NAICS code 541519,''
in its place.
The revision reads as follows:
52.219-28 Post-Award Small Business Program Rerepresentation.
* * * * *
Post-Award Small Business Program Rerepresentation (MAR 2023)
* * * * *
[FR Doc. 2023-02426 Filed 2-13-23; 8:45 am]
BILLING CODE 6820-EP-P
