Federal Acquisition Regulation: Certification of Service-Disabled Veteran-Owned Small Businesses, 13950-13961 [2024-02797]

Agencies

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

[Federal Register Volume 89, Number 37 (Friday, February 23, 2024)]
[Rules and Regulations]
[Pages 13950-13961]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-02797]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 6, 9, 18, 19, and 52

[FAC 2024-03, FAR Case 2022-009; Item I; Docket No. FAR-2022-0009; 
Sequence No. 1]
RIN 9000-AO46


Federal Acquisition Regulation: Certification of Service-Disabled 
Veteran-Owned Small Businesses

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

ACTION: Interim rule.

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SUMMARY: DoD, GSA, and NASA are issuing an interim rule amending the 
Federal Acquisition Regulation (FAR) to implement the final rules 
published by the Small Business Administration to implement sections of 
the National Defense Authorization Acts for Fiscal Years 2021 and 2022.

DATES: 
    Effective date: February 23, 2024.
    Comment date: Interested parties should submit written comments to 
the Regulatory Secretariat Division at the address shown below on or 
before April 23, 2024, to be considered in the formation of the final 
rule.

ADDRESSES: Submit comments in response to FAC 2024-03, FAR Case

[[Page 13951]]

2022-009 to the Federal eRulemaking portal at https://www.regulations.gov by searching for ``FAR Case 2022-009''. Select the 
link ``Comment Now'' that corresponds with ``FAR Case 2022-009''. 
Follow the instructions provided on the ``Comment Now'' screen. Please 
include your name, company name (if any), and ``FAR Case 2022-009'' 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 2022-
009'' 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. Carrie Moore, Procurement Analyst, at 571-300-5917, or by email at 
[email protected]. For information pertaining to status or 
publication schedules, or alternative 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 FAC 2024-03, FAR Case 2022-009.

SUPPLEMENTARY INFORMATION:

I. Background

    This interim rule revises the FAR to implement regulatory changes 
made by the Small Business Administration (SBA) in its final rule to 
implement section 862 of the William M. (Mac) Thornberry National 
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021 (Pub. L. 
116-283; 15 U.S.C. 657f). Section 862 transfers the verification of 
small business concerns owned and controlled by veterans or service-
disabled veterans from the Department of Veterans Affairs (VA) to SBA 
as of January 1, 2023, and creates a certification requirement for 
service-disabled veteran-owned small business (SDVOSB) concerns seeking 
sole-source and set-aside awards under the SDVOSB Program across the 
Federal Government. Section 862 provides for a one-year grace period 
after the transfer date for SDVOSBs to submit an application for 
certification to SBA. During the one-year grace period, SDVOSBs may 
continue to self-represent their socioeconomic status in the System for 
Award Management (SAM).
    To implement section 862, SBA published a final rule on November 
29, 2022, at 87 FR 73400. SBA also issued a final rule on July 3, 2023, 
at 88 FR 42592, to correct its final rule published on November 29, 
2022, to modify the effect of a protest decision. In its final rule 
published on November 29, 2022, SBA removed SDVOSB requirements from 13 
CFR part 125 and established 13 CFR part 128 to implement the 
requirement for SDVOSB concerns to be certified by SBA in order to be 
eligible for set-aside or sole-source awards under the SDVOSB Program. 
SBA's final rule also specifies that concerns that submit a complete 
application for certification to SBA on or before December 31, 2023, 
and represent their SDVOSB status in SAM are eligible for awards made 
under the SDVOSB Program until SBA makes a final eligibility 
determination. Beginning January 1, 2024, SDVOSBs that are not 
certified by SBA, and do not have a pending application for 
certification, will not be eligible to receive sole-source or set-aside 
awards under the SDVOSB Program but may continue to self-represent 
their status for awards outside of the SDVOSB Program.
    When determining a concern's eligibility for a set-aside or sole-
source award under the SDVOSB Program, contracting officers must review 
the concern's SAM record for its designation as an SDVOSB certified by 
SBA. If the concern's SAM record does not reflect an SDVOSB 
certification by SBA, contracting officers shall verify that the 
concern has represented that it is an SDVOSB concern and submitted an 
application for certification to SBA on or before December 31, 2023. 
Contracting officers will verify the concern's application status 
through SBA's Veteran Small Business Certification Program database. 
The need to check this database for pending applications is expected to 
diminish as SBA reviews and dispositions the applications received on 
or before the deadline. It is anticipated that the review of all such 
applications will be completed by the time this rule is finalized and, 
if they are, the requirement to check the SBA database for pending 
applications may be removed from the final rule.
    As explained in SBA's final rule at 87 FR 73400, concerns verified 
by VA prior to the transfer date are considered to be certified by SBA 
during the time that remains in the concern's three-year term of 
eligibility. In addition, the SBA Administrator may extend a 
participant's eligibility period up to one year. Further, to facilitate 
the transition of those concerns already verified by the VA prior to 
January 1, 2023, that have an eligibility period that expires within 
the first year of the SDVOSB certification program, SBA will extend the 
eligibility of those concerns for a period of up to one year.
    As indicated in SBA's final rule and prior to the transfer of the 
certification program to SBA, veteran-owned small businesses (VOSBs) 
and SDVOSBs had to be verified by the VA's Center for Verification and 
Evaluation. There was no Governmentwide SDVOSB certification program, 
and firms seeking to be awarded SDVOSB sole-source or set-aside 
contracts with Federal agencies other than the VA were only required to 
self-represent their status in SAM; therefore, this rule amends the FAR 
to implement this Governmentwide SDVOSB certification program.
    This interim rule also partially implements section 863 of the NDAA 
for FY 2022 (Pub. L. 117-81; 15 U.S.C. 634(i)), as implemented by SBA 
in its final rule published on April 27, 2023, at 88 FR 26164. Section 
863 requires that a small business concern update its status in SAM no 
later than two days after the date of a final determination that the 
concern does not meet the requirements of the status the concern claims 
to hold. Section 863 also requires that SBA update such a concern's 
status in SAM if the concern fails to do so. This interim rule 
implements this requirement for SDVOSB concerns. The implementation of 
section 863 for the other socioeconomic programs in FAR part 19 will be 
addressed in a separate case.

II. Discussion and Analysis

    The changes to the FAR and the rationale are summarized as follows:

--Update the definition of SDVOSB concern in parts 2 and 52, in 
applicable provisions and clauses, and add that the service-disabled 
veteran is registered in the Beneficiary Identification and Records 
Locator Subsystem; update the definition of veteran-owned small 
business concerns to clarify that such a concern is not less than 51 
percent owned ``and controlled'' by one or more veterans; add a 
definition for SDVOSB concern eligible under the SDVOSB Program to 
specify that a concern must: (1) be designated in SAM as certified by 
SBA; or (2) represent in SAM that it is an

[[Page 13952]]

SDVOSB concern and have submitted a complete application for 
certification to SBA on or before December 31, 2023, in order to be 
eligible for awards made pursuant to the SDVOSB Program; and add a 
definition for the SDVOSB Program;
--Modify FAR part 19 to update citations to SBA's regulations regarding 
SDVOSB concerns from 13 CFR part 125 to 13 CFR parts 128 and 134;
--Modify FAR parts 6, 9, 18, and 19 to update SDVOSB Program 
terminology and clarify the eligibility of SDVOSB concerns for set-
asides under the SDVOSB Program;
--Modify 19.307 to: (1) add a definition of ``interested party'' to 
align with SBA's regulations at 13 CFR 134.1002(b); (2) update SDVOSB 
protest procedures in accordance with SBA's regulations at 13 CFR part 
128 and 13 CFR 134.1001 through 134.1013; (3) require a concern to 
remove its designation as an SDVOSB in SAM within two days of a SBA 
Office of Hearings and Appeals (OHA) decision that the concern is not 
an eligible SDVOSB concern, and notify concerns that SBA will update 
the concern's status in SAM if the concern fails to do so; and (4) upon 
receipt of an OHA decision that a concern is not an eligible SDVOSB 
concern, specify that the concern shall not submit an offer as an 
SDVOSB concern, or an SDVOSB concern eligible under the SDVOSB Program, 
until the concern is certified by SBA; and (5) remove SDVOSB status 
protest appeals in accordance with SBA's regulations at 13 CFR 
134.1013;
--Modify FAR subpart 19.14 to: (1) implement SBA's regulations 
regarding SDVOSB certification requirements and joint venture 
eligibility requirements at 13 CFR part 128; and (2) notify contracting 
officers of the requirement to verify SDVOSB eligibility for sole-
source or set-aside awards under the SDVOSB Program;
--Modify FAR provision 52.212-3, Offeror Representations and 
Certifications--Commercial Products and Commercial Services, FAR clause 
52.219-28, Post-Award Small Business Program Representation, and FAR 
provision 52.219-1, Small Business Program Representations, to revise 
definitions and add a representation for an SDVOSB joint venture 
eligible under the SDVOSB Program to align with the changes to FAR 
subpart 19.14;
--Modify FAR clause 52.219-8, Utilization of Small Business Concerns, 
to revise definitions, and remove the specification that a joint 
venture qualifies as a service-disabled veteran-owned small business 
concern if it complies with the requirements in 13 CFR part 125;
--Modify FAR clause 52.219-27, Notice of Service-Disabled Veteran-Owned 
Small Business Set-Aside, to revise definitions and specify SDVOSB 
certification requirements;
--Modify FAR clause 52.219-28, Post-Award Small Business Program 
Representation, to add a representation for SDVOSB joint ventures 
eligible under the SDVOSB program; and
--Make other changes to correct typographical errors and revise the 
title of FAR 19.302 to clarify that the section provides procedures for 
small business size protests.

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 the following provisions and clauses at FAR: 
52.212-3, Offeror Representations and Certifications--Commercial 
Products and Commercial Services; 52.212-5, Contract Terms and 
Conditions Required To Implement Statutes or Executive Orders--
Commercial Products and Commercial Services; 52.213-4, Terms and 
Conditions--Simplified Acquisitions (Other Than Commercial Products and 
Commercial Services); 52.219-1, Small Business Program Representations; 
52.219-8, Utilization of Small Business Concerns; 52.219-27, Notice of 
Service-Disabled Veteran-Owned Small Business Set-Aside; 52.219-28, 
Post-Award Small Business Program Rerepresentation; and 52.244-6, 
Subcontracts for Commercial Products and Commercial Services. These 
provisions and clauses continue to apply to acquisitions at or below 
the SAT and to acquisitions for commercial products, including COTS 
items, and commercial services.
    This rule applies section 862 of the NDAA for FY 2021 and section 
863 of the NDAA for FY 2022, as implemented by this interim rule, to 
contracts at or below the SAT and/or for commercial products (including 
COTS items) or commercial services.

A. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold

    The statute at 41 U.S.C. 1905 governs the applicability of laws to 
acquisitions at or below the SAT. Section 1905 generally limits the 
applicability of new laws when agencies are making acquisitions at or 
below the SAT, but provides that such acquisitions will not be exempt 
from a provision of law under certain circumstances, including when the 
Federal Acquisition Regulation (FAR) Council makes a written 
determination and finding that it would not be in the best interest of 
the Federal Government to exempt contracts and subcontracts in amounts 
not greater than the SAT from the provision of law. The FAR Council has 
made a determination to apply this statute to acquisitions at or below 
the SAT.

B. Applicability to Contracts for the Acquisition of Commercial 
Products and Commercial Services, Including Commercially Available Off-
The-Shelf (COTS) Items

    The statute at 41 U.S.C. 1906 governs the applicability of laws to 
contracts for the acquisition of commercial products and commercial 
services, and is intended to limit the applicability of laws to 
contracts for the acquisition of commercial products and commercial 
services. Section 1906 provides that if the FAR Council makes a written 
determination that it is not in the best interest of the Federal 
Government to exempt commercial contracts, the provision of law will 
apply to contracts for the acquisition of commercial products and 
commercial services.
    The statute at 41 U.S.C. 1907 states that acquisitions of COTS 
items will be exempt from certain provisions of law unless the 
Administrator for Federal Procurement Policy makes a written 
determination and finds that it would not be in the best interest of 
the Federal Government to exempt contracts for the procurement of COTS 
items. The FAR Council has made a determination to apply this statute 
to acquisitions for commercial products and commercial services. The 
Administrator for Federal Procurement Policy has made a determination 
to apply this statute to acquisitions for COTS items.

IV. Expected Impact of the Rule

    This interim rule is expected to impact Government and contractor 
operations.
    As a result of this interim rule, effective January 1, 2024, 
contracting officers will be required to check SAM to verify that a 
concern is designated as an SDVOSB certified by SBA for sole-source or 
set-aside awards under the SDVOSB Program. If the concern is not 
designated in SAM as a certified SDVOSB, the contracting officer will 
be required to check SBA's Veteran Small Business Certification Program 
database to determine if the concern submitted an application for 
certification to SBA

[[Page 13953]]

on or before December 31, 2023. If a concern submitted an application 
for certification to SBA on or before December 31, 2023, and 
represented its status as an SDVOSB concern in SAM, contracting 
officers may rely on a concern's representation in SAM.
    A small business concern that pursues a sole-source or set-aside 
award under the SDVOSB program will be required to be certified by SBA 
effective January 1, 2024, or the concern must have both submitted a 
complete application for certification to SBA on or before December 31, 
2023, and represented its status as an SDVOSB concern in SAM. A small 
business concern that submits a complete application for certification 
to SBA on or before December 31, 2023, may continue to represent its 
status as an SDVOSB in SAM until SBA makes its final eligibility 
determination. This interim rule will not impact current participants 
in the VA's VIP Verification Program as the requirements for the new 
SBA certification program are nearly identical to those of the VA. The 
only change that will impact small businesses is the certification 
requirement for SDVOSB concerns. As indicated in SBA's final rule, SBA 
does not anticipate the requirement for SBA certification to 
significantly impact small business concerns seeking SDVOSB 
certification. To minimize the potential impact on small businesses, 
SDVOSB concerns previously certified by the VA are reflected as 
certified in the SBA Veteran Small Business Certification Program 
database during the time that remains in the firm's three-year term of 
eligibility. To facilitate the transition of those firms already 
verified by the VA prior to the transfer date that have an eligibility 
period that expires in the first year of the Program, SBA extended the 
eligibility of those verified firms for an additional period of one 
year. The one-year grace period allows concerns that are not yet 
certified by the SBA to continue to represent their status as an SDVOSB 
in SAM while preparing their applications for SDVOSB certification. 
Furthermore, SBA did not change the documentation requirements for 
certification. Additionally, firms that represent their status in SAM 
likely have the documentation necessary for certification as that 
documentation is necessary to be able to represent their status as an 
SDVOSB in SAM. Therefore, concerns will only have to enter the 
information already in hand to apply to be included in SBA's Veteran 
Small Business Certification Program database.
    The public cost associated with obtaining SDVOSB certification is 
accounted for under SBA's final rule implementing the certification 
requirements (87 FR 73400). SBA's final rule advises concerns that, 
effective January 1, 2024, only a certified SDVOSB or a concern that 
has submitted a complete application for certification to SBA on or 
before December 31, 2023, may seek a set-aside or sole-source award 
under the SDVOSB Program. SBA estimates it will take a concern 
approximately one hour to complete the application process.
    Small business concerns will also be required to update SAM within 
two days of an SBA determination of ineligibility. Small business 
concerns are already required to update representations in SAM at least 
annually and ensure that representations are current, accurate, and 
complete. SBA's final rule published on April 27, 2023, at 88 FR 26164, 
advised small business concerns of the requirement to remove their 
designation from SAM within two days of an SBA decision regarding 
ineligibility.
    Given SBA's notice to small business concerns, the cost to the 
public associated with the FAR implementation of SBA's final rules is 
de minimis and is limited to the cost of regulatory familiarization.

V. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 (as amended by E.O 14094) and 13563 
direct agencies to assess the costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). E.O. 13563 emphasizes the importance of 
quantifying both costs and benefits, of reducing costs, of harmonizing 
rules, and of promoting flexibility. This is a significant regulatory 
action and, therefore, was subject to review under section 6(b) of E.O. 
12866, Regulatory Planning and Review, dated September 30, 1993.

VI. Congressional Review Act

    Pursuant to the Congressional Review Act, DoD, GSA, and NASA will 
send this rule to each House of the Congress and to the Comptroller 
General of the United States. The Office of Information and Regulatory 
Affairs (OIRA) in the Office of Management and Budget has determined 
that this rule does not meet the definition in 5 U.S.C. 804(2).

VII. Regulatory Flexibility Act

    DoD, GSA, and NASA do not expect this interim 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 rule simply implements the requirements of SBA's 
regulations and does not impose any additional compliance burden on 
applicable small business entities. However, an Initial Regulatory 
Flexibility Analysis (IRFA) has been performed and is summarized as 
follows:

    DoD, GSA, and NASA are amending the Federal Acquisition 
Regulation (FAR) to implement regulatory changes made by the Small 
Business Administration (SBA) in its final rule published on 
November 29, 2022, at 87 FR 73400, and a correction published on 
July 3, 2023, at 88 FR 42592, to implement section 862 of the 
William M. (Mac) Thornberry National Defense Authorization Act 
(NDAA) for Fiscal Year (FY) 2021 (Pub. L. 116-283; 15 U.S.C. 657f); 
and April 27, 2023, at 88 FR 26164 to implement section 863 of the 
NDAA for FY 2022 (Pub. L. 117-81; 15 U.S.C. 634).
    The objective of this rule is to implement SBA's Governmentwide 
certification program for SDVOSB concerns, update SDVOSB protest 
procedures, and to require an SDVOSB concern determined ineligible 
by SBA to update its status in the System for Award Management (SAM) 
within two days of the eligibility determination. Promulgation of 
the FAR is authorized by 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. The legal basis for this rule is as stated in the 
preceding paragraph.
    This interim rule impacts small business concerns that seek a 
sole-source or set-aside award under the SDVOSB Program. Effective 
January 1, 2024, an SDVOSB concern must be certified as an SDVOSB 
concern by SBA, or have both represented that it is an SDVOSB 
concern in SAM and submitted a complete application for 
certification to SBA on or before December 31, 2023, in order to be 
eligible for these types of awards. SBA has minimized the impact on 
SDVOSB concerns by accepting verifications of eligibility already 
determined by the Department of Veterans Affairs (VA). SBA granted a 
one-year extension on certification for VA verified firms and by 
providing firms that represent their status in SAM a one-year grace 
period to apply for certification. In addition, this rule impacts 
SDVOSB concerns that SBA determines are not eligible for SDVOSB 
certification, as these concerns will be ineligible for set-aside 
and sole-source awards under the SDVOSB Program. A concern 
determined ineligible for SDVOSB certification, however, may 
continue to represent its SDVOSB status in SAM and be eligible for 
set-aside and sole-source awards outside of the SDVOSB Program.
    The cost to concerns seeking SDVOSB certification should be de 
minimis because the eligibility documentation requirements currently 
exist under the VA's verification program. In addition, the initial 
application, program examination, and recertification requirement 
will remain the same under

[[Page 13954]]

SBA's management of the program. Firms likely have the documentation 
required for application, examination, and recertification through 
the transferred program because either such documentation was 
already required for certification through the VA's verification 
program, or such documentation is likely needed for a firm to 
represent its status as an SDVOSB in SAM. Further, SBA anticipates 
that the application process should only require one hour of the 
concern's time. The cost to concerns to update their status in SAM 
is de minimis as concerns are already responsible for maintaining 
their representations in SAM to ensure that they are current, 
accurate, and complete.
    According to SAM, there are 32,284 concerns registered as 
SDVOSBs. Of the 32,284 SDVOSB concerns registered in SAM, 10,635 are 
already verified SDVOSBs in VA's verification program, which leaves 
21,649 SDVOSB concerns that represent their socioeconomic status in 
SAM. Of the 21,649 that represent their socioeconomic status as an 
SDVOSB in SAM, 181 are veteran-owned small business concerns that 
are SDVOSB certified in the VA's certification database. Therefore, 
there are 21,468 SDVOSBs that represent their status in SAM that are 
not currently in the VA's verification program and that may submit 
an application for certification to SBA. However, the number of 
SDVOSB concerns that will submit applications for certification is 
unknown as is the number of potential new SDVOSB entrants; 
therefore, the number of small business entities impacted by this 
rule may be greater than or less than the 21,468 SDVOSBs that 
currently represent their status in SAM.
    Effective January 1, 2024, this interim rule requires small 
business concerns that submit an offer for a set-aside or sole-
source requirement under the SDVOSB Program to either be certified 
by SBA, or have both submitted an application for certification to 
SBA on or before December 31, 2023, and represented their SDVOSB 
status in SAM. Concerns found ineligible to be a certified SDVOSB by 
SBA must update their status in SAM within two days of the 
eligibility determination. SDVOSB protests will be decided by OHA 
instead of SBA's Director of Government Contracting.
    SBA implemented a certification and information collection 
platform that replicates the VA's Center for Verification and 
Evaluation currently approved information collection and 
recordkeeping requirements under OMB Control Number 2900-0675.
    The interim rule does not duplicate, overlap, or conflict with 
any other Federal rules.
    There are no known significant alternative approaches to the 
interim rule which would accomplish the stated objectives of the 
applicable statutes and which would minimize any significant 
economic impact of this interim rule on small entities, as the 
economic impact is not anticipated to be significant.

    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 2022-009), 
in correspondence.

VIII. Paperwork Reduction Act

    This interim 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). These 
changes to the FAR do not impose additional information collection 
requirements to the associated paperwork burdens previously approved 
under Office of Management and Budget (OMB) Control Numbers 2900-0675, 
VETBIZ Vendor Information Pages Verification Program; 9000-0136, 
Commercial Acquisitions; FAR Sections Affected: 52.212-3(b)(2); 9000-
0034, Examination of Records by Comptroller General and Contract Audit: 
FAR Section(s) Affected: 52.212-5(d), 52.214-26, 52.215-2; and 9000-
0163, Small Business Size Rerepresentation; FAR Sections Affected: 
19.301 and 52.219-28.

IX. Determination To Issue an Immediately Effective Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense, the Administrator of General Services, and the 
Administrator of the National Aeronautics and Space Administration that 
urgent and compelling reasons exist to promulgate this interim rule 
effective immediately without prior opportunity for public comment, see 
41 U.S.C. 1707(d). This action is necessary because section 862 of the 
William M. (Mac) Thornberry National Defense Authorization Act for FY 
2021 (Pub. L. 116-283; 15 U.S.C. 657f): (1) transferred the 
responsibility for verifying the status of small business concerns 
owned and controlled by veterans or service-disabled veterans from the 
Department of Veterans Affairs (VA) to the Small Business 
Administration (SBA) as of January 1, 2023; and (2) established a 
Governmentwide certification requirement for service-disabled veteran-
owned small businesses (SDVOSB) concerns seeking sole-source and set-
aside contract awards under the SDVOSB Program beginning on January 1, 
2024. The transfer of this responsibility also requires that all SDVOSB 
protests now be decided by a judge.
    SBA published a final rule on November 29, 2022, and a correction 
to its final rule on July 3, 2023, to implement section 862 and codify 
these requirements in their agency regulations at title 13 of the Code 
of Federal Regulations. SBA's rule was published for public comment and 
SBA considered those public comments in the drafting of their final 
rule. As of January 1, 2023, SBA is processing applications for SDVOSB 
certification in accordance with their regulations.
    Beginning January 1, 2024, contracting officers can only award set-
aside or sole-source contracts to SDVOSB concerns that have been 
certified by SBA, or have both submitted a complete application for 
certification to SBA on or before December 31, 2023, and represented 
their SDVOSB status in SAM. For these types of awards, contracting 
officers will no longer be able to accept an offeror's representation 
in SAM that they are an SDVOSB concern. Additionally, all SDVOSB 
protests will be handled in accordance with SBA's updated regulations, 
which require SBA's Office of Hearings and Appeals (OHA) to decide 
SDVOSB protests.
    Current guidance in the Federal Acquisition Regulation (FAR) 
regarding SDVOSB set-aside and sole-source requirements and SDVOSB 
protest procedures is not aligned with the current statute and SBA's 
regulations. The FAR permits contracting officers to accept an 
offeror's self-representation that they are an SDVOSB concern, which 
conflicts with section 862 and SBA's regulations, which impose the 
Governmentwide SDVOSB certification requirement on offerors and 
contract awards beginning January 1, 2024.
    FAR guidance on SDVOSB protests and appeals is also not aligned 
with section 862 and SBA's regulations. Currently, the FAR advises 
contracting officers and offerors that SDVOSB status protests should be 
submitted to and will be decided by SBA's Director, Office of 
Government Contracting. This guidance conflicts with the SBA 
regulations that require OHA to now hear and decide these protests. The 
FAR also provides processes and procedures to offerors and contracting 
officers on SDVOSB status protest appeals; however, this guidance also 
conflicts with SBA's revised regulations, which do not have a process 
to appeal an SDVOSB status protest decision, as OHA's decisions are

[[Page 13955]]

final, and no appeal process is available to protesters.
    Rulemaking is necessary to align the FAR with the statute and SBA's 
regulations; however, the rulemaking process cannot facilitate a 
proposed and final rule by the statutory deadline of January 1, 2024. 
To properly implement the statute, the rulemaking must be sequential. 
The SBA regulations must be implemented first, followed by FAR 
regulatory changes that reflect the requirements of SBA.
    The consequences of missing the statutory deadline would be 
significant. If the FAR is not updated to implement the statute and 
SBA's regulations, individual agencies will implement the new 
requirements on their own. Having each agency implement its own 
interpretation of section 862 and SBA's SDVOSB regulations may result 
in an inconsistent application of these requirements across the Federal 
Government. Inconsistency in the application of these regulations will:
    (1) Put agencies at a high risk for protests of SDVOSB awards if an 
award is made to an SDVOSB that is no longer eligible for an award 
under SBA regulations, but appears eligible under FAR or agency 
guidance;
    (2) Negate, minimize, or put at risk SDVOSB status protest rights 
of interested parties through the dissemination of inaccurate or 
incomplete information;
    (3) Cause undue confusion and frustration for small businesses 
attempting to win an SDVOSB award, protest the SDVOSB status of an 
awardee, or appeal a protest decision of an awardee's SDVOSB status due 
to inconsistent application of the statute and regulations across the 
Federal Government;
    (4) Harm small businesses eligible for an SDVOSB set-aside or sole-
source award through an increase in improper awards to entities no 
longer eligible for such awards, as well as the loss of opportunity, 
income, and experience that comes with a Federal contract;
    (5) Jeopardize the ability of the Government to meet its mission 
needs and, for DoD, impact the ability to meet the needs of the 
warfighter to deter war and ensure the security of the United States, 
because an increase in granted protests of an awardee's SDVOSB status 
will delay contract awards due to the need for the Government to 
resolicit and re-evaluate offers; and
    (6) Negatively impact agency small business goals due to improper 
awards and inconsistent application of statute, SBA regulations, FAR 
regulations, and agency guidance.
    Issuing an interim rule will allow the Government to issue, in a 
timely manner, a single set of policies and procedures that accurately 
and thoroughly implement the SDVOSB certification requirement that 
takes effect on January 1, 2024, which will ensure consistent 
implementation across the entirety of the Federal Government. An 
interim rule will ensure the Government and small businesses avoid the 
negative impacts discussed above, while providing the public an 
opportunity to review and comment on the rule during its 
implementation.
    The public reviewed and commented on SBA's implementation of 
section 862 and SBA considered those comments in finalizing their rule. 
This rule simply implements SBA's requirements, so there is little risk 
that the interim rule will impose a requirement on the public that they 
have not already had the opportunity to comment on. However, pursuant 
to 41 U.S.C. 1707 and FAR 1.501-3(b), the Department of Defense, 
General Services Administration, and National Aeronautics and Space 
Administration will consider public comments received in response to 
this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 2, 6, 9, 18, 19, 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 2, 6, 9, 18, 19, 
and 52 as set forth below:

0
1. The authority citation for 48 CFR parts 2, 6, 9, 18, 19, 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 2--DEFINITIONS OF WORDS AND TERMS

0
2. Amend section 2.101 by--
0
a. Removing paragraphs (a) and (b) and adding introductory text in 
their place;
0
b. Removing the definition of ``Service-disabled veteran-owned small 
business concern'' and adding the definition of ``Service-disabled 
veteran-owned small business (SDVOSB) concern'' in its place;
0
c. Adding in alphabetical order the definitions of ``Service-disabled 
veteran-owned small business (SDVOSB) concern eligible under the SDVOSB 
Program'' and ``Service-disabled veteran-owned small business (SDVOSB) 
Program''; and
0
d. Revising paragraph (1) of the definition ``Veteran-owned small 
business concern''.
    The revisions and additions read as follows:


2.101   Definitions.

    A word or a term, defined in this section, has the same meaning 
throughout this chapter (the Federal Acquisition Regulation (FAR)) 
unless the context in which the word or term is used clearly requires a 
different meaning or another FAR part, subpart, or section provides a 
different definition for the particular part or portion of the part. If 
a word or term that is defined in this section is defined differently 
in another part, subpart, or section of this chapter, the definition in 
this section includes a cross-reference to the other definitions and 
that part, subpart, or section applies to the word or term when used in 
that part, subpart, or section.
* * * * *
    Service-disabled veteran-owned small business (SDVOSB) concern 
means a small business concern--
    (1)(i) Not less than 51 percent of which is owned and controlled by 
one or more service-disabled veterans or, in the case of any publicly 
owned business, not less than 51 percent of the stock of which is owned 
by one or more service-disabled veterans; and
    (ii) The management and daily business operations of which are 
controlled by one or more service-disabled veterans or, in the case of 
a service-disabled veteran with permanent and severe disability, the 
spouse or permanent caregiver of such veteran; or
    (2) A small business concern eligible under the SDVOSB Program in 
accordance with 13 CFR part 128 (see subpart 19.14).
    (3) Service-disabled veteran, as used in this definition, means a 
veteran as defined in 38 U.S.C. 101(2), with a disability that is 
service-connected, as defined in 38 U.S.C. 101(16), and who is 
registered in the Beneficiary Identification and Records Locator 
Subsystem, or successor system that is maintained by the Department of 
Veterans Affairs' Veterans Benefits Administration, as a service-
disabled veteran.
    Service-disabled veteran-owned small business (SDVOSB) concern 
eligible under the SDVOSB Program means an SDVOSB concern that--

[[Page 13956]]

    (1) Effective January 1, 2024, is designated in the System for 
Award Management (SAM) as certified by the Small Business 
Administration (SBA) in accordance with 13 CFR 128.300; or
    (2) Has represented that it is an SDVOSB concern in SAM and 
submitted a complete application for certification to SBA on or before 
December 31, 2023.
    Service-disabled veteran-owned small business (SDVOSB) Program 
means a program that authorizes contracting officers to limit 
competition, including award on a sole-source basis, to SDVOSB concerns 
eligible under the SDVOSB Program.
* * * * *
    Veteran-owned small business concern * * *
    (1) Not less than 51 percent of which is owned and controlled by 
one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case 
of any publicly owned business, not less than 51 percent of the stock 
of which is owned by one or more veterans; and
* * * * *

PART 6--COMPETITION REQUIREMENTS

0
3. Amend section 6.206 by--
0
a. Revising the section heading; and
0
b. Removing from paragraphs (a) and (b) ``small business concerns'' and 
adding ``small business concerns eligible under the SDVOSB Program'' in 
its place.
    The revision reads as follows:


6.206  Set-asides for service-disabled veteran-owned small business 
(SDVOSB) concerns eligible under the SDVOSB Program.

* * * * *

PART 9--CONTRACTOR QUALIFICATIONS

0
4. Amend section 9.104-3 by revising paragraph (d)(2) to read as 
follows:


9.104-3  Application of standards.

* * * * *
    (d) * * *
    (2) Limitations on subcontracting. A small business that is unable 
to comply with the limitations on subcontracting may be considered 
nonresponsible (see 52.219-3, Notice of HUBZone Set-Aside or Sole-
Source Award; 52.219-4, Notice of Price Evaluation Preference for 
HUBZone Small Business Concerns; 52.219-14, Limitations on 
Subcontracting; 52.219-27, Notice of Set-Aside for, or Sole-Source 
Award to, Service-Disabled Veteran-Owned Small Business (SDVOSB) 
Concerns Eligible Under the SDVOSB Program; 52.219-29, Notice of Set-
Aside for, or Sole-Source Award to, Economically Disadvantaged Women-
Owned Small Business Concerns; and 52.219-30, Notice of Set-Aside for, 
or Sole-Source Award to, Women-Owned Small Business Concerns Eligible 
Under the Women-Owned Small Business Program). A small business that 
has not agreed to comply with the limitations on subcontracting may be 
considered nonresponsive.

PART 18--EMERGENCY ACQUISITIONS


18.116  [Amended]

0
5. Amend section 18.116 by removing ``concerns on a sole'' and adding 
``concerns eligible under the SDVOSB Program on a sole'' in its place.

PART 19--SMALL BUSINESS PROGRAMS


19.000   [Amended]

0
6. Amend section 19.000 by removing from paragraph (a)(3) ``veteran-
owned small business concerns'' and adding ``veteran-owned small 
business (SDVOSB) concerns eligible under the SDVOSB Program'' in its 
place.


19.201  [Amended]

0
7. Amend section 19.201 by removing from paragraph (c)(10) ``subpart 
19.14 as a'' and ``set-aside, or under subpart 19.15'' and adding 
``subpart 19.14 as a set-aside for'' and ``(SDVOSB) concerns eligible 
under the SDVOSB Program, or under subpart 19.15'' in their place, 
respectively.

0
8. Amend section 19.202-6 by revising paragraph (a)(4) to read as 
follows:


19.202-6  Determination of fair market price.

    (a) * * *
    (4) Set-asides for SDVOSB concerns eligible under the SDVOSB 
Program (see subpart 19.14); and
* * * * *

0
9. Amend section 19.203 by--
0
a. In paragraph (a):
0
i. Adding a heading; and
0
ii. Removing the word ``Procurement''; and
0
b. Removing from the end of paragraph (c) ``125, and 126'' and adding 
``126, 127, and 128'' in its place.
    The addition reads as follows:


19.203  Relationship among small business programs.

    (a) General. * * *
* * * * *


19.304   [Amended]

0
10. Amend section 19.304 by removing from paragraph (b) ``52.212-
3(c)(4)'' and adding ``52.212-3(c)(5)'' in its place.

0
11. Amend section 19.307 by--
0
a. Adding paragraph (a);
0
b. Revising paragraphs (b), (d)(1) introductory text, and (d)(1)(i);
0
c. Removing the period at the end of paragraph (d)(1)(iii) and adding 
``; or'' in its place;
0
d. Adding paragraph (d)(1)(iv);
0
e. Removing from paragraph (d)(2) ``SBA (see 13 CFR 125.25(b))'' and 
adding ``OHA (see 13 CFR 134.1005)'' in its place;
0
f. Revising the introductory text of paragraph (e)(1);
0
g. Removing from the end of paragraph (e)(1)(i) ``or'';
0
h. Removing from the end of paragraph (e)(1)(ii) ``offeror for 
negotiated acquisitions).'' and adding ``offeror (for negotiated 
acquisitions);'' in its place;
0
i. Adding paragraphs (e)(1)(iii) and (iv);
0
j. Revising paragraph (e)(2);
0
k. Adding a heading for paragraph (f);
0
l. Revising paragraph (f)(1);
0
m. Removing from the paragraph (f)(2) introductory text ``SBA'' and 
adding ``OHA'' in its place;
0
n. Removing from paragraph (f)(2)(ii) ``fax number,'';
0
o. Removing from paragraph (f)(2)(vi) ``offer'' and adding ``initial 
offer that included price'' in its place;
0
p. Revising paragraphs (g), (h), and (i); and
0
q. Removing paragraphs (j) through (m).
    The revisions and additions read as follows:


19.307   Protesting a firm's status as a service-disabled veteran-owned 
small business concern.

    (a) Definition. Interested party, as used in this section, has the 
meaning given in 13 CFR 134.1002(b).
    (b) General. (1) For sole source acquisitions, the contracting 
officer, the Department of Veterans Affairs (VA), or SBA may protest 
the apparently successful offeror's service-disabled veteran-owned 
small business (SDVOSB) status. For all other acquisitions, any 
interested party may protest the apparently successful offeror's 
service-disabled veteran-owned small business status.
    (2) SBA's protest regulations are found in 13 CFR 128.500 and 13 
CFR part 134.
* * * * *
    (d) * * *

[[Page 13957]]

    (1) OHA will consider protests challenging the SDVOSB status or the 
ownership and control of a concern if--
    (i) For status protests, the protester presents evidence supporting 
the contention that the owner(s) cannot provide documentation from the 
VA to show that they meet the definition of ``service-disabled 
veteran'' or ``service-disabled veteran with a permanent and severe 
disability'' as set forth in 13 CFR 128.102; or
* * * * *
    (iv) For joint venture protests, the protester presents evidence 
that the managing SDVOSB joint venture partner does not meet the 
requirements at 13 CFR 128.402.
* * * * *
    (e) * * * (1) An interested party (except contracting officers 
should see paragraph (f)(1) of this section) shall submit its protest 
to the contracting officer--
* * * * *
    (iii) To be received by close of business on the fifth business day 
after notification by the contracting officer of the intended awardee 
for an order that is set aside for SDVOSBs under a multiple-award 
contract that was not totally or partially set aside or reserved for 
SDVOSB concerns. This paragraph (e)(1)(iii) does not apply to an order 
issued under a Federal Supply Schedule (FSS) contract; or
    (iv) To be received by the close of the fifth business day after 
notification by the contracting officer of the intended awardee for a 
blanket purchase agreement that is set aside for SDVOSBs under a 
multiple-award contract that was not totally or partially set aside or 
reserved for SDVOSB concerns. This paragraph (e)(1)(iv) does not apply 
to a blanket purchase agreement issued under a FSS contract.
    (2) Any protest received after the designated time limits is 
untimely, except--
    (i) The VA or SBA may file an SDVOSB status protest at any time; 
and
    (ii) The contracting officer, SBA, or VA may file an SDVOSB status 
protest at any time after the apparent awardee has been identified or 
after bid opening, whichever applies.
    (f) Forwarding protests to SBA. (1) The contracting officer shall 
forward all protests to the U.S. Small Business Administration, Office 
of Hearings and Appeals, 409 Third Street SW, Washington, DC 20416, or 
by email at [email protected], marked ``Attn: SDVOSB Status Protest''.
* * * * *
    (g) Notification by OHA. OHA will notify the protester, the 
protested concern, SBA's Director of Government Contracting (D/GC), SBA 
Counsel, and the contracting officer of the date OHA received the 
protest.
    (h) Before OHA decision. (1) After receiving a protest involving 
the apparent successful offeror's status as an SDVOSB concern, the 
contracting officer shall either--
    (i) Withhold award of the contract until OHA determines the status 
of the protested concern; or
    (ii) Award the contract after receipt of the protest but before OHA 
issues its decision if the contracting officer determines in writing 
that an award must be made to protect the public interest. The 
contracting officer shall notify OHA and SBA D/GC in writing of the 
determination and a copy shall be included in the contract file.
    (2) OHA will determine the merits of the status protest.
    (3) OHA does not have a standard timeline for issuing decisions.
    (i) After OHA decision. OHA will notify the contracting officer, 
the protester, and the protested concern of its decision. The decision 
is effective immediately and is final.
    (1) If the contracting officer has withheld contract award and OHA 
has determined that the protested concern is an eligible SDVOSB or 
dismissed all protests against the protested concern, then the 
contracting officer may award the contract to the protested concern.
    (2) If the contracting officer has withheld contract award, and OHA 
has sustained the protest and determined that the concern is not an 
SDVOSB, then the contracting officer shall not award the contract to 
the protested concern.
    (3) If the contracting officer has made a written determination in 
accordance with paragraph (h)(1)(ii) of this section, the contract has 
been awarded, and the OHA decision to sustain the protest is received 
after award--
    (i) The contracting officer shall terminate the contract, unless 
the contracting officer has made a written determination that 
termination is not in the best interests of the Government. However, 
the contracting officer shall not exercise any options or award further 
task or delivery orders;
    (ii) The contracting officer shall update FPDS to reflect the final 
OHA decision; and
    (iii) The concern must remove its designation in the System for 
Award Management (SAM) as an SDVOSB concern within 2 days of the OHA 
decision. SBA will update the concern's SDVOSB status in SAM if the 
concern fails to do so. The concern shall not submit an offer as a 
SDVOSB concern or an SDVOSB concern eligible under the SDVOSB Program, 
until the concern is designated as an SDVOSB by SBA in the SBA Veteran 
Small Business Certification Program database at https://veterans.certify.sba.gov.
    (4) A concern found to be ineligible may not submit future offers 
as an SDVOSB concern until the concern is designated as an SDVOSB by 
SBA in the SBA Veteran Small Business Certification Program database at 
https://veterans.certify.sba.gov.


19.308  [Amended]

0
12. Amended section 19.308 by removing from the introductory text of 
paragraph (i) ``SBA's Office of Hearings and Appeals (OHA)'' and adding 
``OHA'' in its place.


19.502-8   [Amended]

0
13. Amend section 19.502-8 by removing from paragraph (b) 
``19.1405(d)'' and adding ``19.1405(e)'' in its place.

0
14. Amend section 19.702 by revising the introductory text to read as 
follows:


19.702   Statutory requirements.

    Any contractor receiving a contract with a value greater than the 
simplified acquisition threshold must agree in the contract that small 
business, veteran-owned small business (VOSB), service-disabled 
veteran-owned small business (SDVOSB), HUBZone small business, small 
disadvantaged business (SDB), and women-owned small business (WOSB) 
concerns will have the maximum practicable opportunity to participate 
in contract performance consistent with its efficient performance. It 
is further the policy of the United States that its prime contractors 
establish procedures to ensure the timely payment of amounts due 
pursuant to the terms of their subcontracts with small business, VOSB 
concerns, SDVOSB concerns, HUBZone small business concerns, SDB 
concerns, and WOSB concerns.
* * * * *

0
15. Revise subpart 19.14 heading to read as follows:

Subpart 19.14--Service-Disabled Veteran-Owned Small Business 
Program

* * * * *


19.1401   [Amended]

0
16. Amend section 19.1401 by--
0
a. Removing from paragraph (a) ``(SDVOSB) Procurement Program'' and 
adding ``(SDVOSB) Program'' in its place; and
0
b. Removing from paragraph (b) ``Service-Disabled Veteran-Owned

[[Page 13958]]

Small Business Program'' and adding ``SDVOSB Program'' in its place.

0
17. Revise section 19.1403 to read as follows:


19.1403   Status.

    (a) Status as an SDVOSB concern is determined by SBA in accordance 
with 13 CFR part 128; also see 19.307.
    (b) For an SDVOSB concern that seeks an SDVOSB set-aside or sole-
source contract, the contracting officer shall verify that the 
offeror--
    (1) Effective January 1, 2024, is designated in the System for 
Award Management (SAM) as an SDVOSB concern certified by SBA; or
    (2) Has represented that it is an SDVOSB concern in SAM and 
submitted an application for certification to SBA on or before December 
31, 2023. Pending applications for certification are in the SBA Veteran 
Small Business Certification Program database at https://veterans.certify.sba.gov.
    (c) If there is a decision issued by SBA as a result of a current 
eligibility examination finding that the concern did not qualify as an 
SDVOSB concern eligible under the SDVOSB Program or SBA denies a 
concern's application for SDVOSB certification, the concern must update 
its SDVOSB status in SAM within 2 days of SBA's final decision to 
reflect that the concern is not an eligible SDVOSB. SBA will update the 
concern's SDVOSB status in SAM within 2 days of the concern's failure 
to make the update.
    (d) Effective January 1, 2024, a joint venture may be considered an 
SDVOSB concern eligible under the SDVOSB Program if--
    (1) The joint venture qualifies as small under 19.301-1(a)(2)(i);
    (2) The managing SDVOSB joint venture partner--
    (i) Is designated in SAM as an SDVOSB concern certified by SBA; or
    (ii) Has represented that it is an SDVOSB concern in SAM and 
submitted an application for certification to SBA on or before December 
31, 2023. Pending applications for certification are in the SBA Veteran 
Small Business Certification database at https://veterans.certify.sba.gov; and
    (3) The joint venture complies with the requirements of 13 CFR 
128.402.

0
18. Amend section 19.1405 by--
0
a. Revising the section heading and paragraph (b);
0
b. Redesignating paragraphs (c) and (d) as paragraphs (d) and (e) and 
adding a new paragraph (c);
0
c. Revising newly redesignated paragraph (d); and
0
d. Removing from the second sentence of newly redesignated paragraph 
(e) ``service-disabled veteran-owned small business'' and adding 
``SDVOSB'' in its place.
    The revisions and addition read as follows:


19.1405  Set-aside procedures.

* * * * *
    (b) A contracting officer may restrict competition to SDVOSB 
concerns eligible under the SDVOSB Program if there is a reasonable 
expectation based on market research that--
    (1) Two or more SDVOSB concerns eligible under the SDVOSB Program 
will submit offers; and
    (2) Award will be made at a fair market price.
    (c) Effective January 1, 2024, the contracting officer shall--
    (1) Verify that offers received are eligible for consideration for 
award by checking if the offeror--
    (i) Is designated in SAM as an SDVOSB concern certified by SBA; or
    (ii) Has represented that it is an SDVOSB concern in SAM and 
submitted an application for certification to SBA on or before December 
31, 2023. Pending applications for certification are in the SBA Veteran 
Small Business Certification database at https://veterans.certify.sba.gov;
    (2) Proceed with the offer evaluation, if the offeror meets the 
criteria in paragraph (c)(1)(i) or (ii) of this section; or
    (3) Remove the offeror from consideration, if the offeror does not 
meet the criteria in paragraph (c)(1)(i) or (ii) of this section, as 
the offeror is not eligible for award.
    (d) If the contracting officer receives only one acceptable offer 
from an SDVOSB concern eligible under the SDVOSB Program in response to 
a set-aside, the contracting officer should make an award to that 
concern. If the contracting officer receives no acceptable offers from 
SDVOSB concerns eligible under the SDVOSB Program, the SDVOSB set-aside 
shall be withdrawn and the requirement, if still valid, set aside for 
small business concerns, as appropriate (see 19.203).
* * * * *

0
19. Amend section 19.1406 by--
0
a. Revising the section heading;
0
b. Redesignating paragraph (b) as paragraph (c) and adding a new 
paragraph (b); and
0
c. Revising newly redesignated paragraph (c).
    The revisions and addition read as follows:


19.1406   Sole-source awards.

* * * * *
    (b) Effective January 1, 2024, a contracting officer shall only 
award a sole-source contract to a concern that--
    (1) Is designated in SAM as an SDVOSB concern certified by SBA; or
    (2) Has represented that it is an SDVOSB concern in SAM and 
submitted an application for certification to SBA on or before December 
31, 2023. Pending applications for certification are in the SBA Veteran 
Small Business Certification Program database at https://veterans.certify.sba.gov.
    (c) The SBA has the right to appeal the contracting officer's 
decision not to make an SDVOSB sole-source award.

0
20. Amend section 19.1408 by revising the first sentence of paragraph 
(a) to read as follows:


19.1408  Contract clauses.

    (a) The contracting officer shall insert the clause at 52.219-27, 
Notice of Set-Aside for, or Sole-Source Award to, Service-Disabled 
Veteran-Owned Small Business (SDVOSB) Concerns Eligible Under the 
SDVOSB Program, in solicitations and contracts for acquisitions that 
are set aside or awarded on a sole-source basis to, service-disabled 
veteran-owned small business concerns under 19.1405 and 19.1406. * * *
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
21. Amend section 52.212-3 by--
0
a. Revising the date of the provision;
0
b. In paragraph (a):
0
i. Removing the definition of ``Service-disabled veteran-owned small 
business concern'' and adding the definition of ``Service-disabled 
veteran-owned small business (SDVOSB) concern'' in its place;
0
ii. Adding in alphabetical order the definitions of ``Service-disabled 
veteran-owned small business (SDVOSB) concern eligible under the SDVOSB 
Program'' and ``Service-disabled veteran-owned small business (SDVOSB) 
Program''; and
0
iii. Removing from paragraph (1) in the definition of ``Veteran-owned 
small business concern'' the text ``51 percent of which is owned'' and 
adding the text ``51 percent of which is owned and controlled'' in its 
place;
0
c. Revising paragraph (c)(3);
0
d. Redesignating paragraphs (c)(4) through (10) as paragraphs (c)(5) 
through (11) and adding a new paragraph (c)(4);
0
e. Revising the note following newly redesignated paragraph (c)(8); and

[[Page 13959]]

0
f. In Alternate I:
0
i. Revising the date of the alternate; and
0
ii. Removing from the introductory text ``(c)(11)'' and adding 
``(c)(12)'' in its place;
0
iii. Redesignating paragraph (c)(11) as paragraph (c)(12); and
0
iv. Removing from newly redesignated paragraph (c)(12) introductory 
text ``(c)(4)'' and adding ``(c)(5)'' in its place.
    The revisions and additions read as follows:


52.212-3   Offeror Representations and Certifications--Commercial 
Products and Commercial Services.

* * * * *

Offeror Representations and Certifications--Commercial Products and 
Commercial Services (FEB 2024)

* * * * *
    (a) * * *
    Service-disabled veteran-owned small business (SDVOSB) concern 
means a small business concern--
    (1)(i) Not less than 51 percent of which is owned and controlled 
by one or more service-disabled veterans or, in the case of any 
publicly owned business, not less than 51 percent of the stock of 
which is owned by one or more service-disabled veterans; and
    (ii) The management and daily business operations of which are 
controlled by one or more service-disabled veterans or, in the case 
of a service-disabled veteran with permanent and severe disability, 
the spouse or permanent caregiver of such veteran; or
    (2) A small business concern eligible under the SDVOSB Program 
in accordance with 13 CFR part 128 (see subpart 19.14).
    (3) Service-disabled veteran, as used in this definition, means 
a veteran as defined in 38 U.S.C. 101(2), with a disability that is 
service-connected, as defined in 38 U.S.C. 101(16), and who is 
registered in the Beneficiary Identification and Records Locator 
Subsystem, or successor system that is maintained by the Department 
of Veterans Affairs' Veterans Benefits Administration, as a service-
disabled veteran.
    Service-disabled veteran-owned small business (SDVOSB) concern 
eligible under the SDVOSB Program means an SDVOSB concern that--
    (1) Effective January 1, 2024, is designated in the System for 
Award Management (SAM) as certified by the Small Business 
Administration (SBA) in accordance with 13 CFR 128.300; or
    (2) Has represented that it is an SDVOSB concern in SAM and 
submitted a complete application for certification to SBA on or 
before December 31, 2023.
    Service-disabled veteran-owned small business (SDVOSB) Program 
means a program that authorizes contracting officers to limit 
competition, including award on a sole-source basis, to SDVOSB 
concerns eligible under the SDVOSB Program.
* * * * *
    (c) * * *
    (3) SDVOSB concern. [Complete only if the offeror represented 
itself as a veteran-owned small business concern in paragraph (c)(2) 
of this provision.] The offeror represents that it [square] is, 
[square] is not an SDVOSB concern.
    (4) SDVOSB concern joint venture eligible under the SDVOSB 
Program. The offeror represents that it [square] is, [square] is not 
an SDVOSB joint venture eligible under the SDVOSB Program that 
complies with the requirements of 13 CFR 128.402. [Complete only if 
the offeror represented itself as an SDVOSB concern in paragraph 
(c)(3) of this provision.] [The offeror shall enter the name and 
unique entity identifier of each party to the joint venture:__.]
* * * * *
    (8) * * *

    Note to paragraphs (c)(9) and (10): Complete paragraphs (c)(9) 
and (10) only if this solicitation is expected to exceed the 
simplified acquisition threshold.

* * * * *
    Alternate I (FEB 2024). * * *
* * * * *

0
22. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (b)(20) ``(SEP 2023)'' and adding ``(FEB 
2024)'' in its place;
0
c. Revising paragraph (b)(25);
0
d. Removing from paragraph (b)(26)(i) ``(SEP 2023)'' and adding ``(FEB 
2024)'' in its place;
0
e. Removing from paragraph (e)(1)(viii) ``(SEP 2023)'' and adding 
``(FEB 2024)'' in its place; and
0
f. In Alternate II:
0
i. Revising the date of the alternate; and
0
ii. Removing from paragraph (e)(1)(ii)(H) ``(SEP 2023)'' and adding 
``(FEB 2024)'' in its place.
    The revisions read 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 (FEB 
2024)

* * * * *
    (b) * * *
    (25) 52.219-27, Notice of Set-Aside for, or Sole-Source Award 
to, Service-Disabled Veteran-Owned Small Business (SDVOSB) Concerns 
Eligible Under the SDVOSB Program (FEB 2024) (15 U.S.C. 657f).
* * * * *
    Alternate II (FEB 2024). * * *
* * * * *

0
23. Amend section 52.213-4 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (a)(2)(vii) ``(DEC 2023)'' and adding ``(FEB 
2024)'' in its place.
    The revision reads as follows:


52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Products and Commercial Services).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Products and Commercial Services) (FEB 2024)

* * * * *

0
24. Amend section 52.219-1 by--
0
a. Revising the date of the provision;
0
b. In paragraph (a):
0
i. Removing the definition of ``Service-disabled veteran-owned small 
business concern'' and adding the definition of ``Service-disabled 
veteran-owned small business (SDVOSB) concern'' in its place; and
0
ii. Adding in alphabetical order the definitions of ``Service-disabled 
veteran-owned small business (SDVOSB) concern eligible under the SDVOSB 
Program'' and ``Service-disabled veteran-owned small business (SDVOSB) 
Program'';
0
c. Revising paragraphs (c)(6) and (7);
0
d. Redesignating paragraphs (c)(8) as paragraph (c)(9) and adding a new 
paragraph (c)(8);
0
e. Revising the introductory text of newly redesignated paragraph 
(c)(9); and
0
f. In Alternate I:
0
i. Revising the date of the alternate;
0
ii. Removing from the introductory text ``(c)(9)'' and adding 
``(c)(10)'' in its place; and
0
iii. Redesignating paragraph (c)(9) as paragraph (c)(10).
    The revisions and additions read as follows:


52.219-1  Small Business Program Representations.

* * * * *

Small Business Program Representations (FEB 2024)

    (a) * * *
    Service-disabled veteran-owned small business (SDVOSB) concern 
means a small business concern--
    (1)(i) Not less than 51 percent of which is owned and controlled 
by one or more service-disabled veterans or, in the case of any 
publicly owned business, not less than 51 percent of the stock of 
which is owned by one or more service-disabled veterans; and
    (ii) The management and daily business operations of which are 
controlled by one or more service-disabled veterans or, in the case 
of a service-disabled veteran with permanent and severe disability, 
the spouse or permanent caregiver of such veteran or;
    (2) A small business concern eligible under the SDVOSB Program 
in accordance with 13 CFR part 128 (see subpart 19.14).
    (3) Service-disabled veteran, as used in this definition, means 
a veteran as defined in 38 U.S.C. 101(2), with a disability that is

[[Page 13960]]

service-connected, as defined in 38 U.S.C. 101(16), and who is 
registered in the Beneficiary Identification and Records Locator 
Subsystem, or successor system that is maintained by the Department 
of Veterans Affairs' Veterans Benefits Administration, as a service-
disabled veteran.
    Service-disabled veteran-owned small business (SDVOSB) concern 
eligible under the SDVOSB Program means an SDVOSB concern that--
    (1) Effective January 1, 2024, is designated in the System for 
Award Management (SAM) as certified by the Small Business 
Administration (SBA) in accordance with 13 CFR 128.300; or
    (2) Has represented that it is an SDVOSB concern in SAM and 
submitted a complete application for certification to SBA on or 
before December 31, 2023.
    Service-disabled veteran-owned small business (SDVOSB) Program 
means a program that authorizes contracting officers to limit 
competition, including award on a sole-source basis, to SDVOSB 
concerns eligible under the SDVOSB Program.
* * * * *
    (c) * * *
    (6) Veteran-owned small business concern. [Complete only if the 
offeror represented itself as a small business concern in paragraph 
(c)(1) of this provision.] The offeror represents as part of its 
offer that it [square] is, [square] is not a veteran-owned small 
business concern.
    (7) SDVOSB concern. [Complete only if the offeror represented 
itself as a veteran-owned small business concern in paragraph (c)(6) 
of this provision.] The offeror represents as part of its offer that 
it [square] is, [square] is not an SDVOSB concern.
    (8) SDVOSB joint venture eligible under the SDVOSB Program. 
[Complete only if the offeror represented itself as a SDVOSB concern 
in paragraph (c)(7) of this provision]. The offeror represents as 
part of its offer that it [square] is, [square] is not a SDVOSB 
joint venture eligible under the SDVOSB Program that complies with 
the requirements of 13 CFR 128.402. [The offeror shall enter the 
name and unique entity identifier of each party to the joint 
venture:__.
    (9) HUBZone small business concern. [Complete only if the 
offeror represented itself as a small business concern in paragraph 
(c)(1) of this provision.] The offeror represents, as part of its 
offer, that--
* * * * *
    Alternate I (FEB 2024). * * *
* * * * *

0
25. Amend section 52.219-8 by--
0
a. Revising the date of the clause;
0
b. In paragraph (a):
0
i. Removing the definition of ``Service-disabled veteran-owned small 
business concern'' and adding the definition of ``Service-disabled 
veteran-owned small business (SDVOSB) concern'' in its place; and
0
ii. Adding in alphabetical order the definitions of ``Service-disabled 
veteran-owned small business (SDVOSB) concern eligible under the SDVOSB 
Program'' and ``Service-disabled veteran-owned small business (SDVOSB) 
Program'';
0
iii. Removing from paragraph (1) in the definition of ``Veteran-owned 
small business concern'' the text ``51 percent of which is owned'' and 
adding the text ``51 percent of which is owned and controlled'' in its 
place;
0
c. Adding to the end of paragraph (c)(1)(ii) ``(See 13 CFR 
125.9(d).)''; and
0
d. Revising paragraph (c)(2).
    The revisions and additions read as follows:


52.219-8  Utilization of Small Business Concerns.

* * * * *

Utilization of Small Business Concerns (FEB 2024)

    (a) * * *
    Service-disabled veteran-owned small business (SDVOSB) concern 
means a small business concern--
    (1)(i) Not less than 51 percent of which is owned and controlled 
by one or more service-disabled veterans or, in the case of any 
publicly owned business, not less than 51 percent of the stock of 
which is owned by one or more service-disabled veterans; and
    (ii) The management and daily business operations of which are 
controlled by one or more service-disabled veterans or, in the case 
of a service-disabled veteran with permanent and severe disability, 
the spouse or permanent caregiver of such veteran; or
    (2) A small business concern eligible under the SDVOSB Program 
in accordance with 13 CFR part 128 (see subpart 19.14).
    (3) Service-disabled veteran, as used in this definition, means 
a veteran, as defined in 38 U.S.C. 101(2), with a disability that is 
service-connected, as defined in 38 U.S.C. 101(16), and who is 
registered in the Beneficiary Identification and Records Locator 
Subsystem, or successor system that is maintained by the Department 
of Veterans Affairs' Veterans Benefits Administration, as a service-
disabled veteran.
    Service-disabled veteran-owned small business (SDVOSB) concern 
eligible under the SDVOSB Program means an SDVOSB concern that--
    (1) Effective January 1, 2024, is designated in the System for 
Award Management (SAM) as certified by the Small Business 
Administration (SBA) in accordance with 13 CFR 128.300; or
    (2) Has represented that it is an SDVOSB concern in SAM and 
submitted a complete application for certification to SBA on or 
before December 31, 2023.
    Service-disabled veteran-owned small business (SDVOSB) Program 
means a program that authorizes contracting officers to limit 
competition, including award on a sole-source basis, to SDVOSB 
concerns eligible under the SDVOSB Program.
* * * * *
    (c) * * *
    (2) A joint venture qualifies as a HUBZone small business 
concern if it complies with the requirements in 13 CFR 126.616(a) 
through (c).
* * * * *

0
26. Revise section 52.219-27 to read as follows:


52.219-27  Notice of Set-Aside for, or Sole-Source Award to, Service-
Disabled Veteran-Owned Small Business (SDVOSB) Concerns Eligible Under 
the SDVOSB Program.

    As prescribed in 19.1408, insert the following clause:

Notice of Set-Aside for, or Sole-Source Award to, Service-Disabled 
Veteran-Owned Small Business (SDVOSB) Concerns Eligible Under the 
SDVOSB Program (FEB 2024)

    (a) Definition. Service-disabled veteran-owned small business 
(SDVOSB) concern means a small business concern--
    (1)(i) Not less than 51 percent of which is owned and controlled 
by one or more service-disabled veterans or, in the case of any 
publicly owned business, not less than 51 percent of the stock of 
which is owned by one or more service-disabled veterans; and
    (ii) The management and daily business operations of which are 
controlled by one or more service-disabled veterans or, in the case 
of a service-disabled veteran with permanent and severe disability, 
the spouse or permanent caregiver of such veteran; or
    (2) A small business concern eligible under the SDVOSB Program 
in accordance with 13 CFR part 128 (see subpart 19.14).
    (3) Service-disabled veteran, as used in this definition, means 
a veteran as defined in 38 U.S.C. 101(2), with a disability that is 
service-connected, as defined in 38 U.S.C. 101(16) and who is 
registered in the Beneficiary Identification and Records Locator 
Subsystem, or successor system that is maintained by the Department 
of Veterans Affairs' Veterans Benefits Administration, as a service-
disabled veteran.
    Service-disabled veteran-owned small business (SDVOSB) concern 
eligible under the SDVOSB Program means an SDVOSB concern that--
    (1) Effective January 1, 2024, is designated in the System for 
Award Management (SAM) as certified by the Small Business 
Administration (SBA) in accordance with 13 CFR 128.300; or
    (2) Has represented that it is an SDVOSB concern in SAM and 
submitted a complete application for certification to SBA on or 
before December 31, 2023.
    Service-disabled veteran-owned small business (SDVOSB)-Program 
means a program that authorizes contracting officers to limit 
competition, including award on a sole-source basis, to SDVOSB 
concerns eligible under the SDVOSB Program.
    (b) Applicability. This clause applies only to--
    (1) Contracts that have been set aside for, or awarded on a 
sole-source basis to, SDVOSB concerns eligible under the SDVOSB 
Program;
    (2) Part or parts of a multiple-award contract that have been 
set aside for SDVOSB concerns eligible under the SDVOSB Program;

[[Page 13961]]

    (3) Orders set aside for SDVOSB concerns eligible under the 
SDVOSB Program, under multiple-award contracts as described in 
8.405-5 and 16.505(b)(2)(i)(F); and
    (4) Orders issued directly to SDVOSB concerns eligible under the 
SDVOSB Program, under multiple-award contracts as described in 
19.504(c)(1)(ii).
    (c) General. (1) Effective January 1, 2024, for SDVOSB set-aside 
or sole-source procurements, offers are solicited only from, and 
awards resulting from this solicitation will be made only to, 
concerns--
    (i) Designated in SAM as an SDVOSB concern certified by SBA; or
    (ii) That have represented their status as an SDVOSB in SAM and 
submitted a complete application for certification to SBA on or 
before December 31, 2023.
    (2) Offers received from concerns that do not meet the criteria 
of paragraph (c)(1)(i) or (ii) of this clause, shall not be 
considered.
    (d) A joint venture may be considered an SDVOSB concern if the 
managing partner of the joint venture complies with the criteria 
defined in paragraph (a) of this clause and 13 CFR 128.402.
    (e) In a joint venture that complies with paragraph (d) of this 
clause, the SDVOSB party or parties to the joint venture shall 
perform at least 40 percent of the work performed by the joint 
venture. Work performed by the SDVOSB party or parties to the joint 
venture must be more than administrative functions.


(End of clause)


0
27. Amend section 52.219-28 by--
0
a. Revising the date of the clause; and
0
b. Redesignating paragraph (h)(8) as paragraph (h)(9) and adding a new 
paragraph (h)(8).
    The revision and addition read as follows:


52.219-28   Post-Award Small Business Program Rerepresentation.

* * * * *

Post-Award Small Business Program Rerepresentation (FEB 2024)

* * * * *
    (h) * * *
    (8) Service-disabled veteran-owned small business (SDVOSB) joint 
venture eligible under the SDVOSB Program. The Contractor represents 
that it [square] is, [square] is not an SDVOSB joint venture 
eligible under the SDVOSB Program that complies with the 
requirements of 13 CFR 128.402. [The Contractor shall enter the name 
and unique entity identifier of each party to the joint venture: 
__.]
* * * * *

0
28. Amend section 52.244-6 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (c)(1)(x) ``(SEP 2023)'' and adding ``(FEB 
2024)'' in its place.
    The revision reads as follows:


52.244-6   Subcontracts for Commercial Products and Commercial 
Services.

* * * * *

Subcontracts for Commercial Products and Commercial Services (FEB 2024)

* * * * *
[FR Doc. 2024-02797 Filed 2-22-24; 8:45 am]
BILLING CODE 6820-EP-P