Federal Acquisition Regulation: Subcontracting to Puerto Rican and Covered Territory Small Businesses, 48540-48544 [2024-12501]

Agencies

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

[Federal Register Volume 89, Number 111 (Friday, June 7, 2024)]
[Proposed Rules]
[Pages 48540-48544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-12501]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 19, 42, and 52

[FAR Case 2023-001; Docket No. FAR-2023-0001; Sequence No. 1]
RIN 9000-AO50


Federal Acquisition Regulation: Subcontracting to Puerto Rican 
and Covered Territory Small Businesses

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

ACTION: Proposed rule.

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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement regulatory changes made by 
the Small Business Administration to add incentives for certain United 
States territories under the Small Business Administration mentor-
prot[eacute]g[eacute] program.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat Division at the address shown below on or before 
August 6, 2024 to be considered in the formation of the final rule.

ADDRESSES: Submit comments in response to FAR Case 2023-001 to the 
Federal eRulemaking portal at https://www.regulations.gov by searching 
for ``FAR Case 2023-001''. Select the link ``Comment Now'' that 
corresponds with ``FAR Case 2023-001''. Follow the instructions 
provided on the ``Comment Now'' screen. Please include your name, 
company name (if any), and ``FAR Case 2023-001'' 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 2023-
001'' in all correspondence related to this case. Comments received 
generally will be posted without change to https://

[[Page 48541]]

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, publication 
schedules, or alternate instructions for submitting comments if https://www.regulations.gov cannot be used, contact the Regulatory Secretariat 
Division at 202-501-4755 or [email protected]. Please cite FAR Case 
2023-001.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA are proposing to amend the FAR to implement 
regulatory changes made by the Small Business Administration (SBA) in 
its final rule published on October 16, 2020, at 85 FR 66146, to 
implement paragraphs (a) and (d) of section 861 of the John S. McCain 
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 
(Pub. L. 115-232). Paragraphs (a) and (d) of section 861 amended 15 
U.S.C. 632(ee) and 15 U.S.C. 657r(a) to add Puerto Rico to the list of 
territories from which small businesses are eligible for preferential 
treatment under the SBA mentor-prot[eacute]g[eacute] program.
    In addition, this rule implements SBA's final rule published on 
August 19, 2022, at 87 FR 50925, to implement-paragraphs (a) and (c) of 
section 866 of the NDAA for FY 2021 (Pub. L. 116-283). Paragraphs (a) 
and (c) of section 866 amended 15 U.S.C. 632(ff) and 15 U.S.C. 657r(a) 
to add the U.S. Virgin Islands, American Samoa, Guam, and the 
Commonwealth of the Northern Mariana Islands (CNMI) to the list of 
territories from which small businesses are eligible for preferential 
treatment under the SBA mentor-prot[eacute]g[eacute] programs. Section 
866 also defines a ``covered territory business'' as a small business 
concern that has its principal office located in one of the following: 
(1) the U.S. Virgin Islands; (2) American Samoa; (3) Guam; and (4) 
CNMI. Sections 861 and 866 created two new incentives for SBA's small 
business mentor-prot[eacute]g[eacute] Program for mentor-
prot[eacute]g[eacute] pairs in which the prot[eacute]g[eacute] has its 
principal office located in the Commonwealth of Puerto Rico or is a 
covered territory business. Specifically, such a mentor that 
subcontracts to its prot[eacute]g[eacute] is able to receive positive 
consideration for the mentor's past performance evaluation and is able 
to apply costs incurred for training provided to its 
prot[eacute]g[eacute] to its subcontracting plan goals.
    In addition, this rule implements changes SBA made to its 
regulations to clarify that subcontracting plans are not required from 
firms owned by an Alaska Native Corporation (ANC) because they are 
treated as small business concerns according to statute; and to clarify 
that prime contractors may rely on a subcontractor's representations of 
its size and socioeconomic status unless the prime contractor has 
reason to doubt the representations.

II. Discussion and Analysis

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

--Modify FAR 19.702, 42.1501, and FAR clause 52.219-9, Small Business 
Subcontracting Plan, to implement SBA's regulations at 13 CFR 
125.9(d)(6) to provide two new incentives for SBA's mentor-
prot[eacute]g[eacute] program as follows: A mentor that subcontracts to 
its prot[eacute]g[eacute] that has its principal office located in 
Puerto Rico or that is a covered territory business may receive 
positive consideration for the mentor's past performance evaluation, 
and the mentor may apply costs incurred for training provided to its 
prot[eacute]g[eacute] toward the mentor's subcontracting plan goals. 
This rule also proposes to modify FAR 2.101 to add a definition of 
covered territory business to implement SBA's regulations at 13 CFR 
125.1.
--Modify FAR 19.702 to implement SBA's regulations at 13 CFR 
125.3(b)(2) to clarify that subcontracting plans are not required from 
entities that are treated as small business concerns by statute, such 
as ANCs.
--Modify FAR 19.703 and FAR clauses 52.219-8, Utilization of Small 
Business Concerns, and 52.219-9 to implement SBA's regulations at 13 
CFR 121.404(e) to clarify that a contractor may rely upon a 
subcontractor's representations of its size and socioeconomic status 
unless the contractor has reason to question the representations.

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 clauses at FAR 52.212-5, 52.213-4, 52.219-8, 
and 52.219-9. However, this rule does not change the applicability of 
these clauses, which continue to apply to contracts valued at or below 
the SAT, or on contracts for commercial products, including COTS items, 
or commercial services. This rule proposes to apply paragraphs (a) and 
(d) of section 861 of the John S. McCain National Defense Authorization 
Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232), and paragraphs 
(a) and (c) of section 866 of the NDAA for FY 2021 (Pub. L. 116-283), 
to acquisitions at or below the SAT and to acquisitions for commercial 
products, including COTS items, and commercial services, as the two new 
incentives for SBA's mentor-prot[eacute]g[eacute] program are available 
to all contractors in the program, regardless of the dollar value of 
the contract awarded or the commercial nature of the products and 
services procured.

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

    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 
Regulatory Council (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 intends to make 
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

    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

[[Page 48542]]

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.
    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 intends to make a determination to apply this 
statute to acquisitions for commercial products and commercial 
services. The Administrator for Federal Procurement Policy intends to 
make a determination to apply this statute to acquisitions for COTS 
items.

IV. Expected Impact of the Rule

    This proposed rule is expected to benefit mentors with an SBA-
approved mentor-prot[eacute]g[eacute] agreement that subcontract to 
covered territory small businesses and small businesses that have their 
principal office located in the Commonwealth of Puerto Rico. These 
benefits are expected to extend to covered territory small businesses 
and small businesses located in the Commonwealth of Puerto Rico, as 
mentors may be incentivized to enter into SBA-approved mentor-
prot[eacute]g[eacute] agreements with such small businesses and issue 
subcontracts to them.

V. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 (as amended by E.O. 14094) and 13563 
direct agencies to assess 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. Regulatory Flexibility Act

    DoD, GSA, and NASA do not expect this proposed 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 provides incentives to mentors with SBA-approved 
mentor-prot[eacute]g[eacute] agreements that subcontract to its 
prot[eacute]g[eacute] that has its primary office located in the 
Commonwealth of Puerto Rico or is a covered territory small business; 
therefore, the number of small entities that may be impacted is 
limited. However, an Initial Regulatory Flexibility Analysis (IRFA) has 
been performed and is summarized as follows:

    DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement regulatory changes made by 
the Small Business Administration (SBA) in its final rule published 
on October 16, 2020, at 85 FR 66146, to implement paragraphs (a) and 
(d) of section 861 of the John S. McCain National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-
232). Paragraphs (a) and (d) of section 861 amended 15 U.S.C. 
632(ee) and 15 U.S.C. 657r(a) to add Puerto Rico to the list of 
territories from which small businesses are eligible for 
preferential treatment under the SBA mentor-prot[eacute]g[eacute] 
program. In addition, this rule implements SBA's final rule 
published on August 19, 2022, at 87 FR 50925 to implement paragraphs 
(a) and (c) of section 866 of the NDAA for FY 2021 (Pub. L. 116-
283). Paragraphs (a) and (c) of section 866 amended 15 U.S.C. 
632(ff) and 15 U.S.C. 657r(a) to add the U.S. Virgin Islands, 
American Samoa, Guam, and the Commonwealth of the Northern Mariana 
Islands (CNMI) to the list of territories from which small 
businesses are eligible for preferential treatment under the SBA 
mentor-prot[eacute]g[eacute] programs. Section 866 also defines a 
``covered territory business'' as a small business concern that has 
its principal office located in one of the following: (1) the U.S. 
Virgin Islands; (2) American Samoa; (3) Guam; and (4) CNMI. Sections 
861 and 866 created two new incentives for SBA's small business 
mentor-prot[eacute]g[eacute] program for mentor-
prot[eacute]g[eacute] pairs in which the prot[eacute]g[eacute] has 
its principal office located in the Commonwealth of Puerto Rico or 
is a covered territory business. Specifically, such a mentor that 
subcontracts to its prot[eacute]g[eacute] is able to receive 
positive consideration for the mentor's past performance evaluation 
and is able to apply costs incurred for training provided to its 
prot[eacute]g[eacute] to its subcontracting plan goals.
    The objective of this rule is to implement SBA's final rules 
published on October 16, 2020, at 85 FR 66146, and on August 19, 
2022, at 87 FR 50925, which created two new incentives for SBA's 
small business mentor-prot[eacute]g[eacute] program for mentor-
prot[eacute]g[eacute] pairs in which the prot[eacute]g[eacute] has 
its principal office located in the Commonwealth of Puerto Rico or 
is a covered territory business. Such a mentor that subcontracts to 
its prot[eacute]g[eacute] is able to receive positive consideration 
for the mentor's past performance evaluation and is able to apply 
the costs incurred for training provided to its 
prot[eacute]g[eacute] to its subcontracting plan goals. 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 proposed rule will impact small businesses whose principal 
office is located in the Commonwealth of Puerto Rico or that are 
covered territory businesses that enter into SBA-approved mentor-
prot[eacute]g[eacute] agreements. In its final rule, SBA identified 
219 small businesses across the covered territories that had 
contracted with the Federal Government in FY 2021. In addition and 
according to the System for Award Management, there are 4,483 small 
businesses in the Commonwealth of Puerto Rico that are currently 
engaged in business with the Government. Although a total of 4,702 
small businesses were identified, the number of small entities that 
may be impacted by this proposed rule cannot be estimated more 
precisely as the number of entities that may enter into SBA-approved 
mentor-prot[eacute]g[eacute] agreements is unknown.
    The proposed rule does not impose any new reporting, 
recordkeeping, or other compliance requirements for small entities.
    The proposed rule does not duplicate, overlap, or conflict with 
any other Federal rules.
    There are no known significant alternative approaches to the 
proposed rule.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA, and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this proposed 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 2023-001), 
in correspondence.

VII. 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).

[[Page 48543]]

List of Subjects in 48 CFR Parts 2, 19, 42, 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 propose amending 48 CFR parts 2, 19, 
42, and 52 as set forth below:

0
1. The authority citation for 48 CFR parts 2, 19, 42, 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 adding in alphabetic order the definition 
``Covered territory business'' to read as follows:


2.101  Definitions.

* * * * *
    Covered territory business, as defined at 15 U.S.C. 632(ff) and 13 
CFR 125.1, means a small business concern that has its principal office 
located in the United States Virgin Islands, American Samoa, Guam, or 
the Commonwealth of the Northern Mariana Islands.
* * * * *

PART 19--SMALL BUSINESS PROGRAMS

0
3. Amend section 19.702 by revising paragraph (b)(1) and adding 
paragraph (e) to read as follows:


19.702  Statutory requirements.

* * * * *
    (b) * * *
    (1) From small business concerns, including entities that are 
treated as small business concerns by statute for certain purposes 
(e.g., ANCs, see 43 U.S.C. 1626(e) and 13 CFR 125.3(b)(2));
* * * * *
    (e) In accordance with 15 U.S.C. 657r(a), a mentor with an SBA-
approved mentor-prot[eacute]g[eacute] agreement (see 13 CFR 125.9) that 
provides a subcontract to its prot[eacute]g[eacute] may apply the costs 
incurred for training it provides to its prot[eacute]g[eacute] toward 
its subcontracting plan goals, provided that prot[eacute]g[eacute] is a 
covered territory business or that prot[eacute]g[eacute] has its 
principal office located in the Commonwealth of Puerto Rico.
0
4. Amend section 19.703 by revising paragraphs (a)(2)(i) and (a)(2)(ii) 
introductory text to read as follows:


19.703  Eligibility requirements for participating in the program.

    (a) * * *
    (2)(i) Unless the prime contractor has reason to question the 
representation, it may accept a subcontractor's written representations 
of its size and socioeconomic status as a small business, small 
disadvantaged business, veteran-owned small business, service-disabled 
veteran-owned small business, HUBZone small business, or a women-owned 
small business, if the subcontractor represents that the size and 
socioeconomic status representation with its offer are current, 
accurate, and complete as of the date of the offer for the 
subcontracts; or
    (ii) Unless the prime contractor has reason to question the 
representation, it may accept a subcontractor's representation of its 
size and socioeconomic status as a small business, small disadvantaged 
business, veteran-owned small business, service-disabled veteran-owned 
small business, HUBZone small business, or a women-owned small business 
in the System for Award Management (SAM) if--
* * * * *

PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES

0
5. Amend section 42.1501 by revising paragraph (a)(5) to read as 
follows:


42.1501  General.

    (a) * * *
    (5) Complying with the requirements of the small business 
subcontracting plan (see 19.705-7(b)), including favorable 
consideration of a mentor with an SBA-approved mentor-
prot[eacute]g[eacute] agreement (see 13 CFR 125.9) that subcontracts to 
its prot[eacute]g[eacute], and that prot[eacute]g[eacute] is a covered 
territory business or that prot[eacute]g[eacute]'s principal office is 
located in the Commonwealth of Puerto Rico (see 15 U.S.C. 657r(a));
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
6. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (b)(20) ``(FEB 2024)'' and adding ``(DATE)'' 
in its place;
0
c. Removing from paragraphs (b)(21)(i) and (v) ``(SEP 2023)'' and 
adding ``(DATE)'' in their places, respectively;
0
d. In Alternate II:
0
i. Revising the date of the Alternate; and
0
ii. Removing from paragraph (e)(1)(ii)(H) ``(FEB 2024)'' and adding 
``(DATE)'' 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 (DATE)

* * * * *
    Alternate II (DATE). * * *
* * * * *
0
7. Amend section 52.213-4 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (a)(2)(vii) ``(FEB 2024)'' and adding 
``(DATE)'' 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) (DATE)

* * * * *
0
8. Amend section 52.219-8 by revising the date of the clause and 
paragraphs (e)(1) and (2) introductory text to read as follows:


52.219-8  Utilization of Small Business Concerns.

* * * * *

Utilization of Small Business Concerns (DATE)

* * * * *
    (e)(1) Unless the Contractor has reason to question the 
representation, it may accept a subcontractor's written representations 
of its size and socioeconomic status as a small business, small 
disadvantaged business, veteran-owned small business, service-disabled 
veteran-owned small business, or a women-owned small business if the 
subcontractor represents that the size and socioeconomic status 
representations with its offer are current, accurate, and complete as 
of the date of the offer for the subcontract.
    (2) Unless the Contractor has reason to question the 
representation, it may accept a subcontractor's representations of its 
size and socioeconomic status as a small business, small disadvantaged 
business, veteran-owned small business, service-disabled veteran-owned 
small business, or a women-owned small

[[Page 48544]]

business in the System for Award Management (SAM) if--
* * * * *
0
9. Amend section 52.219-9 by--
0
a. Revising the date of the clause;
0
b. Revising paragraphs (c)(2)(i), (c)(2)(ii) introductory text, and 
(d)(1) introductory text;
0
c. In Alternate IV:
0
i. Revising the date of the Alternate; and
0
ii. Revising paragraphs (c)(2)(i), (c)(2)(ii) introductory text, (d)(1) 
introductory text, and (d)(15).
    The revisions read as follows:


52.219-9  Small Business Subcontracting Plan.

* * * * *

Small Business Subcontracting Plan (DATE)

* * * * *
    (c) * * *
    (2)(i) Unless the Contractor has reason to question the 
representations, it may accept a subcontractor's written 
representations of its size and socioeconomic status as a small 
business, small disadvantaged business, veteran-owned small business, 
service-disabled veteran-owned small business, or a women-owned small 
business if the subcontractor represents that the size and 
socioeconomic status representations with its offer are current, 
accurate, and complete as of the date of the offer for the subcontract.
    (ii) Unless the Contractor has reason to question the 
representations, it may accept a subcontractor's representations of its 
size and socioeconomic status as a small business, small disadvantaged 
business, veteran-owned small business, service-disabled veteran-owned 
small business, or a women-owned small business in the System for Award 
Management (SAM) if--
* * * * *
    (d) * * *
    (1) Separate goals, expressed in terms of total dollars 
subcontracted, and as a percentage of total planned subcontracting 
dollars, for the use of small business, veteran-owned small business, 
service-disabled veteran-owned small business, HUBZone small business, 
small disadvantaged business, and women-owned small business concerns 
as subcontractors. For individual subcontracting plans, and if required 
by the Contracting Officer, goals shall also be expressed in terms of 
percentage of total contract dollars, in addition to the goals 
expressed as a percentage of total subcontract dollars. The Offeror 
shall include all subcontracts that contribute to contract performance, 
and may include a proportionate share of products and services that are 
normally allocated as indirect costs. In accordance with 15 U.S.C. 
657r(a), an Offeror that is a mentor with an SBA-approved mentor-
prot[eacute]g[eacute] agreement (see 13 CFR 125.9) that provides a 
subcontract to its prot[eacute]g[eacute] may apply the costs incurred 
for training it provides to its prot[eacute]g[eacute] toward its 
subcontracting plan goals, provided that prot[eacute]g[eacute] is a 
covered territory business or that prot[eacute]g[eacute] has its 
principal office located in the Commonwealth of Puerto Rico. In 
accordance with 43 U.S.C. 1626--
* * * * *
    (15) Assurances that the Contractor will pay its small business 
subcontractors on time and in accordance with the terms and conditions 
of the underlying subcontract, and notify the contracting officer when 
the prime contractor makes either a reduced or an untimely payment to a 
small business subcontractor (see 52.242-5).
* * * * *
    Alternate IV (DATE). * * *
    (c) * * *
    (2)(i) Unless the Contractor has reason to question the 
representations, it may accept a subcontractor's written 
representations of its size and socioeconomic status as a small 
business, small disadvantaged business, veteran-owned small business, 
service-disabled veteran-owned small business, or a women-owned small 
business if the subcontractor represents that the size and 
socioeconomic status representations with its offer are current, 
accurate, and complete as of the date of the offer for the subcontract.
    (ii) Unless the Contractor has reason to question the 
representations, it may accept a subcontractor's representations of its 
size and socioeconomic status as a small business, small disadvantaged 
business, veteran-owned small business, service-disabled veteran-owned 
small business, or a women-owned small business in the System for Award 
Management (SAM) if--
* * * * *
    (d) * * *
    (1) Separate goals, expressed in terms of total dollars 
subcontracted and as a percentage of total planned subcontracting 
dollars, for the use of small business, veteran-owned small business, 
service-disabled veteran-owned small business, HUBZone small business, 
small disadvantaged business, and women-owned small business concerns 
as subcontractors. For individual subcontracting plans, and if required 
by the Contracting Officer, goals shall also be expressed in terms of 
percentage of total contract dollars, in addition to the goals 
expressed as a percentage of total subcontract dollars. The Contractor 
shall include all subcontracts that contribute to contract performance, 
and may include a proportionate share of products and services that are 
normally allocated as indirect costs. In accordance with 15 U.S.C. 
657r(a), a Contractor that is a mentor with an SBA-approved mentor-
prot[eacute]g[eacute] agreement (see 13 CFR 125.9) that provides a 
subcontract to its prot[eacute]g[eacute] may apply the costs incurred 
for training it provides to its prot[eacute]g[eacute] toward its 
subcontracting plan goals, provided that prot[eacute]g[eacute] is a 
covered territory business or that prot[eacute]g[eacute] has its 
principal office located in the Commonwealth of Puerto Rico. In 
accordance with 43 U.S.C. 1626--
* * * * *
0
10. Amend section 52.244-6 by--
0
a. Revising the date of the clause; and
0
b. Removing from paragraph (c)(1)(x) ``(FEB 2024)'' and adding 
``(DATE)'' 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 (DATE)

* * * * *
[FR Doc. 2024-12501 Filed 6-6-24; 8:45 am]
BILLING CODE 6820-EP-P