Federal Acquisition Regulation: Rerepresentation of Size and Socioeconomic Status, 517-522 [2024-31404]

Download as PDF Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations debarment’’ and adding ‘‘proposed for debarment, or voluntarily excluded’’ in its place; and ■ d. Removing from paragraph (d)(4) ‘‘suspension, or proposed debarment’’ and adding ‘‘suspension, proposed debarment, or voluntary exclusion’’ in its place. The revisions read as follows: 52.209–6 Protecting the Government’s Interest When Subcontracting With Contractors Debarred, Suspended, Proposed for Debarment, or Voluntarily Excluded. * * * * * Protecting the Government’s Interest When Subcontracting With Contractors Debarred, Suspended, Proposed for Debarment, or Voluntarily Excluded (JAN 2025) * * * * * 31. Amend section 52.212–5 by— a. Revising paragraphs (b)(12), (32), and (40) and (e)(1)(xix); and ■ b. In Alternate II, revising the date of the alternate and paragraph (e)(1)(ii)(R). The revisions read as follows: ■ ■ 52.212–5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Products and Commercial Services. lotter on DSK11XQN23PROD with RULES4 * * * * * (b) * * * l (12) 52.209–6, Protecting the Government’s Interest When Subcontracting With Contractors Debarred, Suspended, Proposed for Debarment, or Voluntarily Excluded. (JAN 2025) (31 U.S.C. 6101 note). * * * * * l (32) 52.222–19, Child Labor— Cooperation with Authorities and Remedies (JAN 2025) (E.O. 13126). * * * * * l (40) 52.222–54, Employment Eligibility Verification (JAN 2025) (Executive Order 12989). (Not applicable to the acquisition of commercially available off-the-shelf items or certain other types of commercial products or commercial services as prescribed in FAR 22.1803.) * * * * * (e)(1) * * * (xix) 52.222–54, Employment Eligibility Verification (JAN 2025) (E.O. 12989). * * * * * Alternate II (JAN 2025) * * * (e)(1) * * * (ii) * * * (R) 52.222–54, Employment Eligibility Verification (JAN 2025) (Executive Order 12989). * * * * * VerDate Sep<11>2014 20:20 Jan 02, 2025 Jkt 262001 517 52.213–4 Terms and Conditions— Simplified Acquisitions (Other Than Commercial Products and Commercial Services). (ii) During the period between termination of the MOU and a decision by the suspending and debarring official whether to suspend or debar, the Contractor is excused from its obligations under paragraph (b) of this clause. If the Contractor is not suspended, debarred, or subject to a voluntary exclusion, then the Contractor must reenroll in E-Verify. * * 32. Amend section 52.213–4 by revising paragraphs (b)(1)(iii) and (b)(2)(ii) to read as follows: ■ * * * * (b) * * * (1) * * * (iii) 52.222–19, Child Labor— Cooperation with Authorities and Remedies (JAN 2025) (E.O. 13126) (Applies to contracts for supplies exceeding the micro-purchase threshold, as defined in FAR 2.101 on the date of award of this contract). * * * * * (2) * * * (ii) 52.209–6, Protecting the Government’s Interest When Subcontracting with Contractors Debarred, Suspended, Proposed for Debarment, or Voluntarily Excluded (JAN 2025) (Applies to contracts over the threshold specified in FAR 9.405– 2(b) on the date of award of this contract). * * * * * ■ 33. Amend section 52.222–19 by— ■ a. Revising the date of the clause; ■ b. Removing from paragraph (d)(2) ‘‘suspending official’’ and ‘‘Subpart’’ and adding ‘‘suspending and debarring official’’ and ‘‘subpart’’ in their places, respectively; and ■ c. Removing from paragraph (d)(3) ‘‘The debarring’’ and ‘‘Subpart’’ and adding ‘‘The suspending and debarring’’ and ‘‘subpart’’ in their places, respectively. The revision reads as follows: 52.222–19 Child Labor—Cooperation With Authorities and Remedies. * * * * * Child Labor—Cooperation With Authorities and Remedies (JAN 2025) * * * * * 34. Amend section 52.222–54 by— a. Revising the date of the clause; b. Removing from paragraph (b)(5)(i) ‘‘suspension or debarment’’ and adding ‘‘suspending and debarring’’ in its place; and ■ c. Revising paragraph (b)(5)(ii). The revisions read as follows: ■ ■ ■ 52.222–54 Employment Eligibility Verification. * * * * * Employment Eligibility Verification (JAN 2025) * * * * * (b) * * * (5) * * * PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 * * * * [FR Doc. 2024–31403 Filed 1–2–25; 8:45 am] BILLING CODE 6820–EP–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 4, 8, 16, 19, and 52 [FAC 2025–03; FAR Case 2020–016, Item II; Docket No. FAR–2020–0016; Sequence No. 1] RIN 9000–AO18 Federal Acquisition Regulation: Rerepresentation of Size and Socioeconomic Status Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. AGENCY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement regulatory changes made by the Small Business Administration to order-level size and socioeconomic status rerepresentation requirements. DATES: Effective January 17, 2025. FOR FURTHER INFORMATION CONTACT: For clarification of content, contact Ms. Dana Bowman, Procurement Analyst, at 202–803–3188 or by email at Dana.Bowman@gsa.gov. For information pertaining to status, publication schedules contact the Regulatory Secretariat Division at 202–501–4755 or GSARegSec@gsa.gov. Please cite FAC 2025–03, FAR Case 2020–016. SUPPLEMENTARY INFORMATION: SUMMARY: I. Background DoD, GSA, and NASA published a proposed rule at 88 FR 67189 on September 29, 2023, to implement regulatory changes made by the Small Business Administration (SBA) in its final rule published on October 16, 2020, at 85 FR 66146. For further details please see the proposed rule. Eight respondents submitted comments on the proposed rule. E:\FR\FM\03JAR4.SGM 03JAR4 518 Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations II. Discussion and Analysis The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows: A. Summary of Significant Changes There are no significant changes from the proposed rule. B. Analysis of Public Comments lotter on DSK11XQN23PROD with RULES4 1. Exceptions to the Rule Comment: A respondent expressed concerns that the rule requires too much work. Response: FAR subpart 4.11, System for Award Management (SAM), establishes policies and procedures for requiring registration in SAM. FAR subpart 4.12, Representations and Certifications, establishes policies and procedures for requiring submission and maintenance of representations and certifications in SAM. Offerors and contractors are required to be registered in SAM in accordance with FAR 52.204–7, System for Award Management, and to complete electronic annual representations and certifications in SAM, as part of required registration in accordance with FAR 52.204–13, System for Award Management Maintenance. All registrants are required to review and update the representations and certifications in SAM as necessary, but at least annually, to ensure they are current, accurate, and complete. This rule modifies the clause at FAR 52.219– 28, Post-award Small Business Program Rerepresentation, to require offerors to rerepresent their status for orders issued under multiple-award contracts under certain circumstances. Although this rule requires offerors to rerepresent, contractors are already required to ensure that their representations and certifications in SAM are current, accurate, and complete. Therefore, this rule only imposes an additional burden for orders requiring rerepresentation in accordance with paragraphs (c)(1) through (3) of the FAR clause at 52.219– 28. Comment: A respondent recommended that SBA create a database for small business certifications, which would allow for a check and balance of a contractor’s selfcertification and protect contracting officers in the event they are unable to verify a concern’s status. VerDate Sep<11>2014 19:45 Jan 02, 2025 Jkt 262001 Response: SBA already maintains a database of certified small business concerns. Specifically, the Dynamic Small Business Search (DSBS) database is SBA’s small business certification repository. Certifications in DSBS also appear in SAM, which is the Government’s repository for prospective and current Federal awardee information, including representations and certifications. The FAR requires contracting officers to review SAM to verify the contractor’s current size and socioeconomic status. If a concern’s certification status is not reflected in SAM, contracting officers can verify a concern’s status by checking DSBS at https://dsbs.sba.gov. Comment: A respondent recommended that recertification for size or socioeconomic status for orders should not be required. Response: This rule implements regulatory changes made by SBA in its final rule published on October 16, 2020, which requires rerepresentation for orders placed against multiple-award contracts under certain circumstances. The FAR currently requires contractors to rerepresent their status under certain circumstances. This rule expands the requirement for rerepresentation to verify orders that are set aside for small businesses under certain multipleaward contracts are awarded to qualified small businesses. Comment: Some respondents indicated that the proposed rule does not consider the time it takes to award a task order. The respondents stated that the period of time from proposal submission to order award often takes 12 to 36 months. Due to the time it takes to award an order, some respondents expressed concerns that this may impact the Government’s ability to award the order as the awardee’s small business status could change during this period of time. A respondent stated that small businesses compete for and are awarded contracts for which they qualify at that time, and they should be afforded the opportunity to be awarded task orders under those contracts. The respondent indicated that a company’s size can change periodically and that a business that was small at the time of proposal submission may be large at order award. The respondents also questioned if the selected awardee would be eligible for award if its size or socioeconomic status changed between proposal submission and order award. Response: In accordance with SBA’s final rule, size and socioeconomic status are determined at the time of initial offer (or other formal response to a solicitation), which includes price, for an order issued against a multiple- PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 award contract if the contracting officer requests rerepresentation for the order. Therefore, the offeror will remain qualified for the order if its status changes between offer submittal and award of the order. Comment: A respondent asked how an offeror’s eligibility would be affected if rerepresentation is required for an order that is set aside under a multipleaward contract and the offeror is no longer small for the North American Industry Classification System (NAICS) code associated with the contract or no longer qualifies under the socioeconomic category for which it initially qualified. The respondent also asked if a woman-owned small business would lose its small business status that it had at initial award if it rerepresented as large at a later date. Lastly, the respondent asked if the goal of this proposed rule is to require small businesses to certify their size and socioeconomic status for the life of the contract. Response: A small business concern awarded a multiple-award contract that was set aside for small businesses may continue to perform under such a contract as a small business concern throughout for the life of those contracts (e.g., for the base period and up to four additional option years). However, if a contracting officer requires rerepresentation of size and/or socioeconomic status for a particular order, size and socioeconomic status is determined at the time of offer submission for the order. To clarify for the respondent, a woman-owned small business that represents as large for a particular order, under a multiple-award contract affected by this rule, would be considered large for that order. Comment: One respondent recommended that implementation of this policy be applicable to new multiple-award contracts or, alternatively, apply the policy to orders issued under multiple-award contracts after January 1, 2025. Response: In accordance with FAR 1.108(d), this policy applies to solicitations for contracts issued on or after the effective date of the final rule. The contracting officer also has the discretion to include the changes made in this final rule in solicitations for contracts issued before the effective date, provided award of the resulting contract(s) occurs on or after the effective date of the final rule. In addition, contracting officers may, at their discretion, include the changes made in this final rule in any existing contract with appropriate consideration. The final rule does not require that existing contracts be modified to add E:\FR\FM\03JAR4.SGM 03JAR4 Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations lotter on DSK11XQN23PROD with RULES4 the updated version of FAR clause 52.219–28. Comment: A respondent recommended the rule be amended to clearly define the criteria and timelines for contracting officers requesting rerepresentation of size under existing multiple-award contracts. Response: The final rule text at FAR 19.301–2(b)(2) specifies the new requirements for a contractor to rerepresent its status for orders placed against multiple-award contracts under certain circumstances in accordance with FAR clause 52.219–28. Contracting officers include FAR clause 52.219–28 in solicitations and contracts in accordance with the prescription at FAR 19.309(c)(1). The clause at FAR 52.219– 28 provides instructions to offerors and contractors regarding when rerepresentation is required; therefore, it is not necessary to provide additional instructions to contracting officers. 2. Clarifications Comment: A few respondents recommended removing ‘‘and whose socioeconomic status is not certified by the SBA’’, from the proposed rule at FAR 19.301–2(b), and in FAR clause 52.219–28. A respondent stated that the proposed FAR text does not exist in the SBA rule and that including the text would make the FAR inconsistent with SBA regulations. The respondent stated that SBA regulations require representation even if the SBA certifies the concern’s socioeconomic status. The respondent stated the rule, as written, exempts small businesses whose socioeconomic status is certified by the SBA. A respondent stated that the proposed FAR text makes the requirement appear to only apply to small businesses that are not small disadvantaged businesses while exempting small disadvantaged businesses. Response: The final rule FAR text at 19.301–2(b) and paragraph (c) of the clause at FAR 52.219–28 has been revised to adopt the recommendation. Comment: A respondent recommended clarifying when recertification is required for orders issued under a Federal Supply Schedule (FSS) contract. The respondent recommended adding the following new paragraph (b)(2)(iv) at FAR 19.301–2: A contractor generally does not need to recertify its size eligibility for orders issued under a FSS contract unless the ordering contracting officer specifically requests such recertification for that order, under paragraph (b)(3) of this section. Response: The final rule FAR text at 19.301–2(b)(3) and paragraph (c)(4) of VerDate Sep<11>2014 19:45 Jan 02, 2025 Jkt 262001 the clause at FAR 52.219–28 specifies that for the NAICS code assigned to an order under a multiple-award contract, rerepresentation is required if the contracting officer requires it for that order. This also applies to orders issued under an FSS contract. The final rule FAR text at 19.301–2(b)(2) and paragraph (c) of the clause at FAR 52.219–28 describes when a contractor must rerepresent for an order and also specifies ‘‘except for an order issued under a Federal Supply Schedule contract’’; therefore, it is not necessary to add the recommended paragraph. Comment: A respondent recommended revising the proposed rule FAR text at 19.301–2(b)(2)(i) to replace: ‘‘unless the order is issued under an unrestricted multiple-award contract with reserves’’ with ‘‘except for orders issued under a reserved portion of a multiple-award contract with reserves, in which case recertification is not required . . .’’ to clarify that recertification is not required for orders issued under the reserved portion of a multiple-award contract. The respondent recommended text they believed offered additional clarity that would assist industry in understanding recertification requirements. Response: The final rule text at FAR 19.301–2(b)(2)(i) is revised to partially adopt the respondent’s recommendation. Comment: A respondent stated that the scenario illustrated at FAR 19.301– 2(b)(2)(ii) and (iii) incorrectly suggests that it is permitted by SBA regulations. The respondent recommends revising the proposed FAR text at 19.301– 2(b)(2)(ii) and (iii) to make clear that they apply to socioeconomic category orders issued under multiple-award contracts that are set aside for small businesses. The respondent recommended editing the proposed rule FAR text at 19.301–2(b)(2)(ii) and (iii) to clarify that each paragraph is referring to a multiple-award contract that is set aside for small businesses. Response: The examples included in the final rule FAR text at 19.301– 2(b)(2)(ii) and (iii) and in paragraphs (c)(2) and (3) of the clause at FAR 52.219–28 are revised to adopt the recommendation to edit the examples for accuracy. Comment: A respondent stated that, while the proposed rule helps to explain the different circumstances under which size and socioeconomic recertification is required, it does not address unique recertification issues that arise under sole-source orders placed under the 8(a) Business Development Program. The respondent recommended that the final rule be amended to add a new PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 519 paragraph at FAR 19.301–2(b) to explain SBA’s responsibility to determine eligibility for 8(a) sole-source orders. The respondent indicated that, absent additional clarity, some contracting officers might incorrectly believe that recertification is not required for 8(a) sole-source orders. Response: This rule does not exempt contracting officers from complying with FAR subpart 19.8, Contracting with the Small Business Administration (The 8(a) Program). Contracting officers are required to follow 8(a) offer and acceptance procedures at FAR 19.804–2 and 19.804–3 for competitive and solesource 8(a) contracts and orders, respectively. SBA will determine an 8(a) participant’s eligibility during this process; therefore, it is not necessary to restate 8(a) Program requirements at FAR 19.301–2(b). Comment: A respondent recommended correcting a typographical error that references paragraph ‘‘a’’ in the proposed revision to paragraph (c) of the clause at FAR 52.219–28. Response: The final rule FAR text in paragraph (c) of the clause at FAR 52.219–28 has been revised to replace ‘‘a’’ with ‘‘c’’. 3. Negative Impacts of the Rule Comment: A few respondents indicated that the proposed rule will creates an environment of reduced competition, lower quality bidders, and will force small businesses to compete on an uneven playing field. Response: SBA’s final rule requires contractors to rerepresent their status for orders set aside for small businesses under an unrestricted multiple-award contract for which size and socioeconomic status were not relevant to the award of the underlying multipleaward contract. This distinction is important because the award of an order under such a multiple-award contract is the first time that size and socioeconomic status is relevant. Therefore, requiring a concern to represent its size and socioeconomic status encourages fair competition among small businesses. Comment: A respondent stated that the proposed rule will impose an onerous burden of new recordkeeping, reporting, and other compliance requirements on small businesses. The respondent stated that this would require a significant increase in staff time and result in additional cost to those businesses and the Government. Response: This rule revises an information collection currently approved under OMB Control Number 9000–0163. Accordingly, the Regulatory E:\FR\FM\03JAR4.SGM 03JAR4 520 Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations lotter on DSK11XQN23PROD with RULES4 Secretariat Division submitted to the Office of Management and Budget (OMB) a request for approval of a revised information collection requirement concerning 9000–0163, Rerepresentation of Size and Socioeconomic Status, that includes burden estimates for order-level rerepresentation requirements. In addition, FAR subpart 4.12, Representations and Certifications, establishes policies and procedures for requiring submission and maintenance of representations and certification via SAM. Offerors and quoters are required to complete electronic annual representations and certification in SAM, as part of required registration in accordance with FAR 4.1201. All registrants are required to review and update the representations and certifications submitted in SAM as necessary, but at least annually, to ensure they are current, accurate, and complete. Therefore, since contractors and offerors are already required to maintain and update their representations and certifications in SAM, this rule only imposes an additional burden for the orders requiring rerepresentation in accordance with paragraphs (c)(1) through (3) of the clause at FAR 52.219–28. The additional estimated total burden hours for all small businesses to rerepresent at the order level is approximately 534 hours annually. Comment: A respondent asked if the Government has a process in place for managing inaccurate data and data reporting and, if not, recommended the issue be addressed prior to the implementation of this rule to ensure accurate data is available to all taxpayers. Response: Section IV, Expected Impact of the Rule, in the preamble of the proposed rule indicated that the Federal Procurement Data System (FPDS) does not currently capture size and socioeconomic status at the order level; therefore, contracting officers will not be able to indicate the size or socioeconomic status of a small business concern at the order level. This may result in inaccurate data and data reporting. However, FPDS is anticipated to be updated to capture this data. 4. Outside the Scope of the Rule Comment: A few respondents submitted comments that were unrelated to the scope of the rule. A respondent asked for guidance on the certification for contractors under teaming arrangements and joint ventures. Another respondent recommended that the small business size standard be set at 500 employees VerDate Sep<11>2014 19:45 Jan 02, 2025 Jkt 262001 for both product and service contracts to prevent current small businesses with 250 to 300 personnel from graduating from small business status and ensuring their continued growth and development into large businesses. A respondent recommended creating a middle-market set-aside category for businesses exceeding 500 employees with an annual revenue less than $250 million per year or five times the current size standard. Another respondent objected to bailouts. Response: These comments are outside the scope of this rule. The FAR defers to SBA to establish small business size standards. C. Other Changes Conforming changes are made at FAR 4.604, 8.405–5(b), 16.505(b), 19.202– 5(c), and 19.301–2. Paragraph headings are added at 19.301–2(b), (c), (d), and (e) to describe the contents of such paragraphs and to conform with FAR drafting convention. The text at FAR 19.301–2(d)(2)(i) and (ii) is amended for clarity. III. Applicability to Contracts at or Below the Simplified Acquisition Threshold (SAT) and for Commercial Products, (Including Commercially Available Off-the-Shelf (COTS) Items) and for Commercial Services This final rule amends the clauses at FAR 52.219–28, Postaward Small Business Program Rerepresentation, and 52.212–5, Contract Terms and Conditions Required to Implement Statutes or Executive OrdersCommercial Products and Commercial Services. The clauses continue to apply to acquisitions at or below the SAT, acquisitions for commercial products (including COTS items), and acquisitions for commercial services. IV. Expected Impact of the Rule As a result of this final rule, a contractor that represented its status before contract award will be required to rerepresent its size and/or socioeconomic status for an order placed under a multiple-award contract, under certain circumstances and where rerepresentation was not previously required. The final rule validates that orders set aside for small businesses under certain multiple-award contracts are awarded to small businesses that qualify for the size and/or socioeconomic status associated with the orders. Therefore, an entity that no longer qualifies as small under the applicable NAICS code associated with an order, or that no longer qualifies for a particular socioeconomic category, PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 will not be eligible for orders placed under certain multiple-award contracts. As a result of this final rule, contracting officers will be required to verify the size and/or socioeconomic status of a small business concern prior to issuing an order under multipleaward contracts subject to this rule. Orders placed under an FSS contract are exempt from the mandatory rerepresentation requirement; however, contracting officers continue to have the discretion to require a rerepresentation for an order under an FSS contract. This final rule is also expected to prevent agencies from receiving credit toward their small business goals for awards made to firms that no longer qualify as small under the applicable NAICS code or that no longer qualify as a small business concern identified at FAR 19.000(a)(3). Existing e-business systems are impacted by this final rule as FPDS does not currently capture size and socioeconomic status at the order level; therefore, contracting officers will not be able to indicate the size or socioeconomic status of a small business concern at the order level. This may result in inaccurate data and data reporting. However, the Government anticipates that FPDS will be updated to capture this data. 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 not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. VI. Congressional Review Act 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). E:\FR\FM\03JAR4.SGM 03JAR4 Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations lotter on DSK11XQN23PROD with RULES4 VII. Regulatory Flexibility Act DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601–612. 1. Statement of the need for, and the objectives of, the rule. DoD, GSA, and NASA are issuing a final rule to amend the FAR to update the rerepresentation of size and socioeconomic status requirements for set-aside orders issued under unrestricted multiple-award contracts to align with the regulatory changes made by the Small Business Administration (SBA) in its final rule dated October 16, 2020, at 85 FR 66146. This final rule requires a business concern to rerepresent its size and/ or socioeconomic status for all set-aside orders under unrestricted multiple-award contracts, unless the contract authorized reserves of specific types of small business concerns for which size and/or socioeconomic status was required, and the order is issued against the reserved portion. Additionally, this rule requires a business concern to rerepresent its socioeconomic status for all set-aside orders for which the required socioeconomic status for the order differs from that of the underlying set-aside multiple-award contract. The updated requirements are made to clarify SBA’s regulatory provisions and eliminate confusion among small businesses and contracting activities. 2. Statement of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a statement of the assessment of the agency of such issues, and a statement of any changes made to the rules as a result of such comments. There were no significant issues raised by the public comments in response to the initial regulatory flexibility analysis. Currently, contractors are required to rerepresent their size and socioeconomic status for orders under multiple-award contracts if the contracting officer requires rerepresentation for that order or as required by the clause at FAR 52.219–28. This rule requires contractors to rerepresent their size and/or socioeconomic status for all orders issued under unrestricted multiple-award contracts (except for orders issued under Federal Supply Schedule (FSS) contracts), and for set-aside orders for which the required socioeconomic status for the order differs from that of the underlying set-aside multiple-award contract. 3. Description of and an estimate of the number of small entities to which the rule will apply. According to data from the Federal Procurement Data System (FPDS) for fiscal year (FY) 2021, FY 2022, and FY 2023, small businesses were required to rerepresent their socioeconomic status for modifications as follows: 2,006, 3,379, in and 2,842, respectively. This averages out to approximately 2,742 rerepresentation modifications per year. Additional data from FPDS indicates that agencies set aside orders under unrestricted multiple-award contracts, excluding reserve orders and orders under FSS contracts, as follows: 7,341 in FY 2021, VerDate Sep<11>2014 19:45 Jan 02, 2025 Jkt 262001 7,463 in FY 2022, and 8,336 in FY 2023, which averages out to 7,713 per year. Data from FPDS also indicates that agencies set aside orders under set-aside multiple-award contracts (other than FSS contracts) in the categories covered by this rule as follows: 2,060 in FY 2021, 1,977 in FY 2022, and 2,213 in FY 2023, which averages out to 2,083 per year. Therefore, the estimated number of small entities to which the rule will apply is 4,179. 4. Description of projected reporting, recordkeeping, and other compliance requirements of the rule. This rule includes new reporting, recordkeeping, or other compliance requirements for small entities. The Regulatory Secretariat Division has submitted to OMB a request to review and approve revisions to previously approved information collection requirements in the clause at FAR 52.219–28, Post-Award Small Business Program Rerepresentation. 5. Description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes. There are no known significant alternative approaches that would accomplish the stated objectives. Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat Division. The Regulatory Secretariat Division has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration. VIII. Paperwork Reduction Act The Paperwork Reduction Act (44 U.S.C. 3501–3521) applies. The rule contains information collection requirements. The Regulatory Secretariat Division has submitted to OMB a request to review and approve revisions to previously approved information collection requirements in the FAR clause at 52.219–28. A. OMB Control Number, Title, and Any Associated Form(s) OMB control number and title: 9000– 0163, Rerepresentation of Size and Socioeconomic Status. B. Need and Uses This rule amends FAR clause 52.219– 28 to require concerns to also rerepresent their size and/or socioeconomic status for orders placed under multiple-award contracts under certain circumstances as described in paragraph (c) of the clause and this preamble. The collected information is used by SBA, Congress, Federal agencies, and the public for various reasons such as market research, set-aside determinations, and determining if agencies are meeting statutory goals. PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 521 C. Annual Burden Public reporting burden for this collection of information is estimated to average 0.5 hours per response, including the time for reviewing instructions, searching existing data sources, gathering the data needed, and completing and reviewing the collection of information. The increase in the annual reporting burden, because of the final rule, is estimated as follows: Respondents: 835. Total annual responses: 1,069. Total response burden hours: 534. D. Public Comment to OMB on Information Collection A 60-day notice was published in the Federal Register at 88 FR 67189, on September 29, 2023. A comment was received and addressed in section II. of this preamble; however, it did not change the estimate of the burden. Written comments and recommendations for this information collection revision should be sent within 30 days of publication of this rule to www.reginfo.gov/public/do/ PRAMain. Find this information collection by selecting ‘‘Currently under Review—Open for Public Comments’’ or by using the search function. E. Obtaining Copies Requesters may obtain a copy of the information collection documents from the GSA Regulatory Secretariat Division, by calling 202–501–4755 or emailing GSARegSec@gsa.gov. Please cite OMB Control Number 9000–0163, Small Business Rerepresentation. List of Subjects in 48 CFR Parts 4, 8, 16, 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 are amending 48 CFR parts 4, 8, 16, 19, and 52 as set forth below: ■ 1. The authority citation for 48 CFR parts 4, 8, 16, 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 4—ADMINISTRATIVE AND INFORMATION MATTERS 4.604 [Amended] 2. Amend section 4.604 in paragraph (b)(4) by removing the text ‘‘contracting office’’ and ‘‘Post-Award’’ and adding ■ E:\FR\FM\03JAR4.SGM 03JAR4 522 Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations ‘‘contracting officer’’ and ‘‘Postaward’’ in their places, respectively. PART 8—REQUIRED SOURCES OF SUPPLIES AND SERVICES 8.405–5 [Amended] 3. Amend section 8.405–5 in paragraph (b) by removing the text ‘‘section 19.301–2(b)(2)’’ and adding ‘‘19.301–2(b)(3)’’ in its place. ■ PART 16—TYPES OF CONTRACTS 16.505 [Amended] 4. Amend section 16.505 in paragraph (b)(9) by removing the text ‘‘section 19.301–2(b)(2)’’ and adding ‘‘19.301– 2(b)(3)’’ in its place. ■ PART 19—SMALL BUSINESS PROGRAMS 19.202–5 [Amended] 5. Amend section 19.202–5 in paragraph (c) introductory text by removing ‘‘Post Award’’ and adding ‘‘Postaward’’ in its place. ■ 6. Amend section 19.301–2 by— ■ a. Revising the section heading and paragraph (b) introductory text; ■ b. Removing from paragraphs (b)(1)(i) and (ii) ‘‘Post-Award’’ and adding ‘‘Postaward’’ in its place; ■ c. Redesignating paragraph (b)(2) as paragraph (b)(3); ■ d. Adding a new paragraph (b)(2); ■ e. Adding headings to paragraphs (c) and (d); ■ f. Revising paragraphs (d)(2)(i) and (ii); and ■ g. Adding a heading to paragraph (e). The revisions and additions read as follows: ■ 19.301–2 Rerepresentation by a contractor that represented its status as a small business concern. lotter on DSK11XQN23PROD with RULES4 * * * * * (b) Requirements. A contractor that represented its status as any of the small business concerns identified at 19.000(a)(3) before contract award is required to rerepresent its size and socioeconomic status in accordance with the clause at 52.219–28, Postaward Small Business Program Rerepresentation— * * * * * (2) For the NAICS code assigned to an order (except for an order issued under a Federal Supply Schedule contract)— (i) Set aside exclusively for a small business concern identified at 19.000(a)(3) that is issued under an unrestricted multiple-award contract, unless the order is issued under the reserved portion of an unrestricted multiple-award contract (e.g., an order VerDate Sep<11>2014 19:45 Jan 02, 2025 Jkt 262001 set aside for a woman-owned small business concern under a multipleaward contract that was not set-aside, unless the order is issued under the reserved portion of the multiple-award contract); (ii) Issued under a multiple-award contract set aside for small businesses that is further set aside for a specific socioeconomic category that differs from the underlying multiple-award contract (e.g., an order set aside for a HUBZone small business concern under a multiple-award contract that is set-aside for small businesses); or (iii) Issued under the part of the multiple-award contract that is set aside for small businesses that is further set aside for a specific socioeconomic category that differs from the underlying set-aside part of the multiple-award contract (e.g., an order set aside for a part of the multiple-award contract that is partially set-aside for small businesses); or * * * * * (c) NAICS code size standard. * * * (d) Procedures— * * * (2) * * * (i) When an order is issued under an unrestricted multiple-award contract and the contractor’s rerepresentations no longer qualifies it as a small business concern identified at 19.000(a)(3), the agency can no longer include the value of the order in its small business prime contracting goal achievements. When a contractor’s rerepresentation for an order qualifies it as a different small business concern identified at 19.000(a)(3) than what it represented for contract award, the agency can include the value of the order in its small business prime contracting goal achievement, consistent with the rerepresentation. (ii) A rerepresentation for an order issued under an unrestricted multipleaward contract does not change the size or socioeconomic status representation for the contract. (e) Size status change. * * * 19.302 [Amended] 7. Amend section 19.302 in paragraph (j) by removing ‘‘Post-Award’’ and adding ‘‘Postaward’’ in its place. ■ 19.309 [Amended] 8. Amend section 19.309 in paragraph (c)(1) by removing ‘‘Post-Award’’ and adding ‘‘Postaward’’ in its place. ■ PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 52.212–5 [Amended] Frm 00018 Fmt 4701 10. Amend section 52.219–28 by— a. Revising the section heading, clause heading and date, and paragraph (c); and ■ b. Removing from paragraph (f) ‘‘paragraph (b) and (c)’’ and ‘‘office in’’ and adding ‘‘paragraphs (b) and (c)’’ and ‘‘officer in’’ in their places, respectively. The revisions read as follows: ■ ■ 52.219–28 Postaward Small Business Program Rerepresentation. * Sfmt 9990 * * * * Postaward Small Business Program Rerepresentation (JAN 2025) * * * * * (c) If the Contractor represented its status as any of the small business concerns identified at 19.000(a)(3) prior to award of this contract, the Contractor shall rerepresent its size and socioeconomic status according to paragraph (f) of this clause or, if applicable, paragraph (h) of this clause, for the NAICS code assigned to an order (except that paragraphs (c)(1) through (3) of this clause do not apply to an order issued under a Federal Supply Schedule contract at subpart 8.4)— (1) Set aside exclusively for a small business concern identified at 19.000(a)(3) that is issued under an unrestricted multipleaward contract, unless the order is issued under the reserved portion of an unrestricted multiple-award contract (e.g., an order set aside for a woman-owned small business under a multiple-award contract that is not set-aside, unless the order is issued under the reserved portion of the multiple-award contract); (2) Issued under a multiple-award contract set aside for small businesses that is further set aside for a specific socioeconomic category that differs from the underlying multiple-award contract (e.g., an order set aside for a HUBZone small business concern under a multiple-award contract that is set aside for small businesses); (3) Issued under the part of the multipleaward contract that is set aside for small businesses that is further set aside for a specific socioeconomic category that differs from the underlying set-aside part of the multiple-award contract (e.g., an order set aside for a WOSB concern under the part of the multiple-award contract that is partially set aside for small businesses); and (4) When the Contracting Officer explicitly requires it for an order issued under a multiple-award contract, including for an order issued under a Federal Supply Schedule contract (see 8.405–5(b) and 19.301–2(b)(2)). * 9. Amend section 52.212–5 in paragraph (b)(26)(i) by removing ‘‘Post- ■ PO 00000 Award’’ and ‘‘(FEB 2024)’’ and adding ‘‘Postaward’’ and ‘‘(JAN 2025)’’ in their places, respectively. * * * * [FR Doc. 2024–31404 Filed 1–2–25; 8:45 am] BILLING CODE 6820–EP–P E:\FR\FM\03JAR4.SGM 03JAR4

Agencies

[Federal Register Volume 90, Number 2 (Friday, January 3, 2025)]
[Rules and Regulations]
[Pages 517-522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-31404]


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

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 4, 8, 16, 19, and 52

[FAC 2025-03; FAR Case 2020-016, Item II; Docket No. FAR-2020-0016; 
Sequence No. 1]
RIN 9000-AO18


Federal Acquisition Regulation: Rerepresentation of Size and 
Socioeconomic Status

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

ACTION: Final rule.

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

SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to implement regulatory changes 
made by the Small Business Administration to order-level size and 
socioeconomic status rerepresentation requirements.

DATES: Effective January 17, 2025.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Ms. Dana Bowman, Procurement Analyst, at 202-803-3188 or by email at 
[email protected]. For information pertaining to status, publication 
schedules contact the Regulatory Secretariat Division at 202-501-4755 
or [email protected]. Please cite FAC 2025-03, FAR Case 2020-016.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA published a proposed rule at 88 FR 67189 on 
September 29, 2023, to implement regulatory changes made by the Small 
Business Administration (SBA) in its final rule published on October 
16, 2020, at 85 FR 66146. For further details please see the proposed 
rule. Eight respondents submitted comments on the proposed rule.

[[Page 518]]

II. Discussion and Analysis

    The Civilian Agency Acquisition Council and the Defense Acquisition 
Regulations Council (the Councils) reviewed the public comments in the 
development of the final rule. A discussion of the comments and the 
changes made to the rule as a result of those comments are provided as 
follows:

A. Summary of Significant Changes

    There are no significant changes from the proposed rule.

B. Analysis of Public Comments

1. Exceptions to the Rule
    Comment: A respondent expressed concerns that the rule requires too 
much work.
    Response: FAR subpart 4.11, System for Award Management (SAM), 
establishes policies and procedures for requiring registration in SAM. 
FAR subpart 4.12, Representations and Certifications, establishes 
policies and procedures for requiring submission and maintenance of 
representations and certifications in SAM. Offerors and contractors are 
required to be registered in SAM in accordance with FAR 52.204-7, 
System for Award Management, and to complete electronic annual 
representations and certifications in SAM, as part of required 
registration in accordance with FAR 52.204-13, System for Award 
Management Maintenance. All registrants are required to review and 
update the representations and certifications in SAM as necessary, but 
at least annually, to ensure they are current, accurate, and complete. 
This rule modifies the clause at FAR 52.219-28, Post-award Small 
Business Program Rerepresentation, to require offerors to rerepresent 
their status for orders issued under multiple-award contracts under 
certain circumstances. Although this rule requires offerors to 
rerepresent, contractors are already required to ensure that their 
representations and certifications in SAM are current, accurate, and 
complete. Therefore, this rule only imposes an additional burden for 
orders requiring rerepresentation in accordance with paragraphs (c)(1) 
through (3) of the FAR clause at 52.219-28.
    Comment: A respondent recommended that SBA create a database for 
small business certifications, which would allow for a check and 
balance of a contractor's self-certification and protect contracting 
officers in the event they are unable to verify a concern's status.
    Response: SBA already maintains a database of certified small 
business concerns. Specifically, the Dynamic Small Business Search 
(DSBS) database is SBA's small business certification repository. 
Certifications in DSBS also appear in SAM, which is the Government's 
repository for prospective and current Federal awardee information, 
including representations and certifications. The FAR requires 
contracting officers to review SAM to verify the contractor's current 
size and socioeconomic status. If a concern's certification status is 
not reflected in SAM, contracting officers can verify a concern's 
status by checking DSBS at https://dsbs.sba.gov.
    Comment: A respondent recommended that recertification for size or 
socioeconomic status for orders should not be required.
    Response: This rule implements regulatory changes made by SBA in 
its final rule published on October 16, 2020, which requires 
rerepresentation for orders placed against multiple-award contracts 
under certain circumstances. The FAR currently requires contractors to 
rerepresent their status under certain circumstances. This rule expands 
the requirement for rerepresentation to verify orders that are set 
aside for small businesses under certain multiple-award contracts are 
awarded to qualified small businesses.
    Comment: Some respondents indicated that the proposed rule does not 
consider the time it takes to award a task order. The respondents 
stated that the period of time from proposal submission to order award 
often takes 12 to 36 months. Due to the time it takes to award an 
order, some respondents expressed concerns that this may impact the 
Government's ability to award the order as the awardee's small business 
status could change during this period of time. A respondent stated 
that small businesses compete for and are awarded contracts for which 
they qualify at that time, and they should be afforded the opportunity 
to be awarded task orders under those contracts. The respondent 
indicated that a company's size can change periodically and that a 
business that was small at the time of proposal submission may be large 
at order award. The respondents also questioned if the selected awardee 
would be eligible for award if its size or socioeconomic status changed 
between proposal submission and order award.
    Response: In accordance with SBA's final rule, size and 
socioeconomic status are determined at the time of initial offer (or 
other formal response to a solicitation), which includes price, for an 
order issued against a multiple-award contract if the contracting 
officer requests rerepresentation for the order. Therefore, the offeror 
will remain qualified for the order if its status changes between offer 
submittal and award of the order.
    Comment: A respondent asked how an offeror's eligibility would be 
affected if rerepresentation is required for an order that is set aside 
under a multiple-award contract and the offeror is no longer small for 
the North American Industry Classification System (NAICS) code 
associated with the contract or no longer qualifies under the 
socioeconomic category for which it initially qualified. The respondent 
also asked if a woman-owned small business would lose its small 
business status that it had at initial award if it rerepresented as 
large at a later date. Lastly, the respondent asked if the goal of this 
proposed rule is to require small businesses to certify their size and 
socioeconomic status for the life of the contract.
    Response: A small business concern awarded a multiple-award 
contract that was set aside for small businesses may continue to 
perform under such a contract as a small business concern throughout 
for the life of those contracts (e.g., for the base period and up to 
four additional option years). However, if a contracting officer 
requires rerepresentation of size and/or socioeconomic status for a 
particular order, size and socioeconomic status is determined at the 
time of offer submission for the order. To clarify for the respondent, 
a woman-owned small business that represents as large for a particular 
order, under a multiple-award contract affected by this rule, would be 
considered large for that order.
    Comment: One respondent recommended that implementation of this 
policy be applicable to new multiple-award contracts or, alternatively, 
apply the policy to orders issued under multiple-award contracts after 
January 1, 2025.
    Response: In accordance with FAR 1.108(d), this policy applies to 
solicitations for contracts issued on or after the effective date of 
the final rule. The contracting officer also has the discretion to 
include the changes made in this final rule in solicitations for 
contracts issued before the effective date, provided award of the 
resulting contract(s) occurs on or after the effective date of the 
final rule. In addition, contracting officers may, at their discretion, 
include the changes made in this final rule in any existing contract 
with appropriate consideration. The final rule does not require that 
existing contracts be modified to add

[[Page 519]]

the updated version of FAR clause 52.219-28.
    Comment: A respondent recommended the rule be amended to clearly 
define the criteria and timelines for contracting officers requesting 
rerepresentation of size under existing multiple-award contracts.
    Response: The final rule text at FAR 19.301-2(b)(2) specifies the 
new requirements for a contractor to rerepresent its status for orders 
placed against multiple-award contracts under certain circumstances in 
accordance with FAR clause 52.219-28. Contracting officers include FAR 
clause 52.219-28 in solicitations and contracts in accordance with the 
prescription at FAR 19.309(c)(1). The clause at FAR 52.219-28 provides 
instructions to offerors and contractors regarding when 
rerepresentation is required; therefore, it is not necessary to provide 
additional instructions to contracting officers.
2. Clarifications
    Comment: A few respondents recommended removing ``and whose 
socioeconomic status is not certified by the SBA'', from the proposed 
rule at FAR 19.301-2(b), and in FAR clause 52.219-28. A respondent 
stated that the proposed FAR text does not exist in the SBA rule and 
that including the text would make the FAR inconsistent with SBA 
regulations. The respondent stated that SBA regulations require 
representation even if the SBA certifies the concern's socioeconomic 
status. The respondent stated the rule, as written, exempts small 
businesses whose socioeconomic status is certified by the SBA. A 
respondent stated that the proposed FAR text makes the requirement 
appear to only apply to small businesses that are not small 
disadvantaged businesses while exempting small disadvantaged 
businesses.
    Response: The final rule FAR text at 19.301-2(b) and paragraph (c) 
of the clause at FAR 52.219-28 has been revised to adopt the 
recommendation.
    Comment: A respondent recommended clarifying when recertification 
is required for orders issued under a Federal Supply Schedule (FSS) 
contract. The respondent recommended adding the following new paragraph 
(b)(2)(iv) at FAR 19.301-2: A contractor generally does not need to 
recertify its size eligibility for orders issued under a FSS contract 
unless the ordering contracting officer specifically requests such 
recertification for that order, under paragraph (b)(3) of this section.
    Response: The final rule FAR text at 19.301-2(b)(3) and paragraph 
(c)(4) of the clause at FAR 52.219-28 specifies that for the NAICS code 
assigned to an order under a multiple-award contract, rerepresentation 
is required if the contracting officer requires it for that order. This 
also applies to orders issued under an FSS contract. The final rule FAR 
text at 19.301-2(b)(2) and paragraph (c) of the clause at FAR 52.219-28 
describes when a contractor must rerepresent for an order and also 
specifies ``except for an order issued under a Federal Supply Schedule 
contract''; therefore, it is not necessary to add the recommended 
paragraph.
    Comment: A respondent recommended revising the proposed rule FAR 
text at 19.301-2(b)(2)(i) to replace: ``unless the order is issued 
under an unrestricted multiple-award contract with reserves'' with 
``except for orders issued under a reserved portion of a multiple-award 
contract with reserves, in which case recertification is not required . 
. .'' to clarify that recertification is not required for orders issued 
under the reserved portion of a multiple-award contract. The respondent 
recommended text they believed offered additional clarity that would 
assist industry in understanding recertification requirements.
    Response: The final rule text at FAR 19.301-2(b)(2)(i) is revised 
to partially adopt the respondent's recommendation.
    Comment: A respondent stated that the scenario illustrated at FAR 
19.301-2(b)(2)(ii) and (iii) incorrectly suggests that it is permitted 
by SBA regulations. The respondent recommends revising the proposed FAR 
text at 19.301-2(b)(2)(ii) and (iii) to make clear that they apply to 
socioeconomic category orders issued under multiple-award contracts 
that are set aside for small businesses. The respondent recommended 
editing the proposed rule FAR text at 19.301-2(b)(2)(ii) and (iii) to 
clarify that each paragraph is referring to a multiple-award contract 
that is set aside for small businesses.
    Response: The examples included in the final rule FAR text at 
19.301-2(b)(2)(ii) and (iii) and in paragraphs (c)(2) and (3) of the 
clause at FAR 52.219-28 are revised to adopt the recommendation to edit 
the examples for accuracy.
    Comment: A respondent stated that, while the proposed rule helps to 
explain the different circumstances under which size and socioeconomic 
recertification is required, it does not address unique recertification 
issues that arise under sole-source orders placed under the 8(a) 
Business Development Program. The respondent recommended that the final 
rule be amended to add a new paragraph at FAR 19.301-2(b) to explain 
SBA's responsibility to determine eligibility for 8(a) sole-source 
orders. The respondent indicated that, absent additional clarity, some 
contracting officers might incorrectly believe that recertification is 
not required for 8(a) sole-source orders.
    Response: This rule does not exempt contracting officers from 
complying with FAR subpart 19.8, Contracting with the Small Business 
Administration (The 8(a) Program). Contracting officers are required to 
follow 8(a) offer and acceptance procedures at FAR 19.804-2 and 19.804-
3 for competitive and sole-source 8(a) contracts and orders, 
respectively. SBA will determine an 8(a) participant's eligibility 
during this process; therefore, it is not necessary to restate 8(a) 
Program requirements at FAR 19.301-2(b).
    Comment: A respondent recommended correcting a typographical error 
that references paragraph ``a'' in the proposed revision to paragraph 
(c) of the clause at FAR 52.219-28.
    Response: The final rule FAR text in paragraph (c) of the clause at 
FAR 52.219-28 has been revised to replace ``a'' with ``c''.
3. Negative Impacts of the Rule
    Comment: A few respondents indicated that the proposed rule will 
creates an environment of reduced competition, lower quality bidders, 
and will force small businesses to compete on an uneven playing field.
    Response: SBA's final rule requires contractors to rerepresent 
their status for orders set aside for small businesses under an 
unrestricted multiple-award contract for which size and socioeconomic 
status were not relevant to the award of the underlying multiple-award 
contract. This distinction is important because the award of an order 
under such a multiple-award contract is the first time that size and 
socioeconomic status is relevant. Therefore, requiring a concern to 
represent its size and socioeconomic status encourages fair competition 
among small businesses.
    Comment: A respondent stated that the proposed rule will impose an 
onerous burden of new recordkeeping, reporting, and other compliance 
requirements on small businesses. The respondent stated that this would 
require a significant increase in staff time and result in additional 
cost to those businesses and the Government.
    Response: This rule revises an information collection currently 
approved under OMB Control Number 9000-0163. Accordingly, the 
Regulatory

[[Page 520]]

Secretariat Division submitted to the Office of Management and Budget 
(OMB) a request for approval of a revised information collection 
requirement concerning 9000-0163, Rerepresentation of Size and 
Socioeconomic Status, that includes burden estimates for order-level 
rerepresentation requirements. In addition, FAR subpart 4.12, 
Representations and Certifications, establishes policies and procedures 
for requiring submission and maintenance of representations and 
certification via SAM. Offerors and quoters are required to complete 
electronic annual representations and certification in SAM, as part of 
required registration in accordance with FAR 4.1201. All registrants 
are required to review and update the representations and 
certifications submitted in SAM as necessary, but at least annually, to 
ensure they are current, accurate, and complete. Therefore, since 
contractors and offerors are already required to maintain and update 
their representations and certifications in SAM, this rule only imposes 
an additional burden for the orders requiring rerepresentation in 
accordance with paragraphs (c)(1) through (3) of the clause at FAR 
52.219-28. The additional estimated total burden hours for all small 
businesses to rerepresent at the order level is approximately 534 hours 
annually.
    Comment: A respondent asked if the Government has a process in 
place for managing inaccurate data and data reporting and, if not, 
recommended the issue be addressed prior to the implementation of this 
rule to ensure accurate data is available to all taxpayers.
    Response: Section IV, Expected Impact of the Rule, in the preamble 
of the proposed rule indicated that the Federal Procurement Data System 
(FPDS) does not currently capture size and socioeconomic status at the 
order level; therefore, contracting officers will not be able to 
indicate the size or socioeconomic status of a small business concern 
at the order level. This may result in inaccurate data and data 
reporting. However, FPDS is anticipated to be updated to capture this 
data.
4. Outside the Scope of the Rule
    Comment: A few respondents submitted comments that were unrelated 
to the scope of the rule.
    A respondent asked for guidance on the certification for 
contractors under teaming arrangements and joint ventures. Another 
respondent recommended that the small business size standard be set at 
500 employees for both product and service contracts to prevent current 
small businesses with 250 to 300 personnel from graduating from small 
business status and ensuring their continued growth and development 
into large businesses. A respondent recommended creating a middle-
market set-aside category for businesses exceeding 500 employees with 
an annual revenue less than $250 million per year or five times the 
current size standard. Another respondent objected to bailouts.
    Response: These comments are outside the scope of this rule. The 
FAR defers to SBA to establish small business size standards.

C. Other Changes

    Conforming changes are made at FAR 4.604, 8.405-5(b), 16.505(b), 
19.202-5(c), and 19.301-2. Paragraph headings are added at 19.301-2(b), 
(c), (d), and (e) to describe the contents of such paragraphs and to 
conform with FAR drafting convention. The text at FAR 19.301-2(d)(2)(i) 
and (ii) is amended for clarity.

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

    This final rule amends the clauses at FAR 52.219-28, Postaward 
Small Business Program Rerepresentation, and 52.212-5, Contract Terms 
and Conditions Required to Implement Statutes or Executive Orders-
Commercial Products and Commercial Services. The clauses continue to 
apply to acquisitions at or below the SAT, acquisitions for commercial 
products (including COTS items), and acquisitions for commercial 
services.

IV. Expected Impact of the Rule

    As a result of this final rule, a contractor that represented its 
status before contract award will be required to rerepresent its size 
and/or socioeconomic status for an order placed under a multiple-award 
contract, under certain circumstances and where rerepresentation was 
not previously required. The final rule validates that orders set aside 
for small businesses under certain multiple-award contracts are awarded 
to small businesses that qualify for the size and/or socioeconomic 
status associated with the orders. Therefore, an entity that no longer 
qualifies as small under the applicable NAICS code associated with an 
order, or that no longer qualifies for a particular socioeconomic 
category, will not be eligible for orders placed under certain 
multiple-award contracts.
    As a result of this final rule, contracting officers will be 
required to verify the size and/or socioeconomic status of a small 
business concern prior to issuing an order under multiple-award 
contracts subject to this rule.
    Orders placed under an FSS contract are exempt from the mandatory 
rerepresentation requirement; however, contracting officers continue to 
have the discretion to require a rerepresentation for an order under an 
FSS contract.
    This final rule is also expected to prevent agencies from receiving 
credit toward their small business goals for awards made to firms that 
no longer qualify as small under the applicable NAICS code or that no 
longer qualify as a small business concern identified at FAR 
19.000(a)(3).
    Existing e-business systems are impacted by this final rule as FPDS 
does not currently capture size and socioeconomic status at the order 
level; therefore, contracting officers will not be able to indicate the 
size or socioeconomic status of a small business concern at the order 
level. This may result in inaccurate data and data reporting. However, 
the Government anticipates that FPDS will be updated to capture this 
data.

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 not a significant 
regulatory action and, therefore, was not subject to review under 
section 6(b) of E.O. 12866, Regulatory Planning and Review, dated 
September 30, 1993.

VI. Congressional Review Act

    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).

[[Page 521]]

VII. Regulatory Flexibility Act

    DoD, GSA, and NASA have prepared a Final Regulatory Flexibility 
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 
U.S.C. 601-612.

    1. Statement of the need for, and the objectives of, the rule.
    DoD, GSA, and NASA are issuing a final rule to amend the FAR to 
update the rerepresentation of size and socioeconomic status 
requirements for set-aside orders issued under unrestricted 
multiple-award contracts to align with the regulatory changes made 
by the Small Business Administration (SBA) in its final rule dated 
October 16, 2020, at 85 FR 66146. This final rule requires a 
business concern to rerepresent its size and/or socioeconomic status 
for all set-aside orders under unrestricted multiple-award 
contracts, unless the contract authorized reserves of specific types 
of small business concerns for which size and/or socioeconomic 
status was required, and the order is issued against the reserved 
portion. Additionally, this rule requires a business concern to 
rerepresent its socioeconomic status for all set-aside orders for 
which the required socioeconomic status for the order differs from 
that of the underlying set-aside multiple-award contract. The 
updated requirements are made to clarify SBA's regulatory provisions 
and eliminate confusion among small businesses and contracting 
activities.
    2. Statement of the significant issues raised by the public 
comments in response to the initial regulatory flexibility analysis, 
a statement of the assessment of the agency of such issues, and a 
statement of any changes made to the rules as a result of such 
comments.
    There were no significant issues raised by the public comments 
in response to the initial regulatory flexibility analysis.
    Currently, contractors are required to rerepresent their size 
and socioeconomic status for orders under multiple-award contracts 
if the contracting officer requires rerepresentation for that order 
or as required by the clause at FAR 52.219-28. This rule requires 
contractors to rerepresent their size and/or socioeconomic status 
for all orders issued under unrestricted multiple-award contracts 
(except for orders issued under Federal Supply Schedule (FSS) 
contracts), and for set-aside orders for which the required 
socioeconomic status for the order differs from that of the 
underlying set-aside multiple-award contract.
    3. Description of and an estimate of the number of small 
entities to which the rule will apply.
    According to data from the Federal Procurement Data System 
(FPDS) for fiscal year (FY) 2021, FY 2022, and FY 2023, small 
businesses were required to rerepresent their socioeconomic status 
for modifications as follows: 2,006, 3,379, in and 2,842, 
respectively. This averages out to approximately 2,742 
rerepresentation modifications per year. Additional data from FPDS 
indicates that agencies set aside orders under unrestricted 
multiple-award contracts, excluding reserve orders and orders under 
FSS contracts, as follows: 7,341 in FY 2021, 7,463 in FY 2022, and 
8,336 in FY 2023, which averages out to 7,713 per year. Data from 
FPDS also indicates that agencies set aside orders under set-aside 
multiple-award contracts (other than FSS contracts) in the 
categories covered by this rule as follows: 2,060 in FY 2021, 1,977 
in FY 2022, and 2,213 in FY 2023, which averages out to 2,083 per 
year. Therefore, the estimated number of small entities to which the 
rule will apply is 4,179.
    4. Description of projected reporting, recordkeeping, and other 
compliance requirements of the rule.
    This rule includes new reporting, recordkeeping, or other 
compliance requirements for small entities. The Regulatory 
Secretariat Division has submitted to OMB a request to review and 
approve revisions to previously approved information collection 
requirements in the clause at FAR 52.219-28, Post-Award Small 
Business Program Rerepresentation.
    5. Description of the steps the agency has taken to minimize the 
significant economic impact on small entities consistent with the 
stated objectives of applicable statutes.
    There are no known significant alternative approaches that would 
accomplish the stated objectives.

    Interested parties may obtain a copy of the FRFA from the 
Regulatory Secretariat Division. The Regulatory Secretariat Division 
has submitted a copy of the FRFA to the Chief Counsel for Advocacy of 
the Small Business Administration.

VIII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. 3501-3521) applies. The rule 
contains information collection requirements. The Regulatory 
Secretariat Division has submitted to OMB a request to review and 
approve revisions to previously approved information collection 
requirements in the FAR clause at 52.219-28.

A. OMB Control Number, Title, and Any Associated Form(s)

    OMB control number and title: 9000-0163, Rerepresentation of Size 
and Socioeconomic Status.

B. Need and Uses

    This rule amends FAR clause 52.219-28 to require concerns to also 
rerepresent their size and/or socioeconomic status for orders placed 
under multiple-award contracts under certain circumstances as described 
in paragraph (c) of the clause and this preamble.
    The collected information is used by SBA, Congress, Federal 
agencies, and the public for various reasons such as market research, 
set-aside determinations, and determining if agencies are meeting 
statutory goals.

C. Annual Burden

    Public reporting burden for this collection of information is 
estimated to average 0.5 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering the 
data needed, and completing and reviewing the collection of 
information.
    The increase in the annual reporting burden, because of the final 
rule, is estimated as follows:
    Respondents: 835.
    Total annual responses: 1,069.
    Total response burden hours: 534.

D. Public Comment to OMB on Information Collection

    A 60-day notice was published in the Federal Register at 88 FR 
67189, on September 29, 2023. A comment was received and addressed in 
section II. of this preamble; however, it did not change the estimate 
of the burden. Written comments and recommendations for this 
information collection revision should be sent within 30 days of 
publication of this rule to www.reginfo.gov/public/do/PRAMain. Find 
this information collection by selecting ``Currently under Review--Open 
for Public Comments'' or by using the search function.

E. Obtaining Copies

    Requesters may obtain a copy of the information collection 
documents from the GSA Regulatory Secretariat Division, by calling 202-
501-4755 or emailing [email protected]. Please cite OMB Control Number 
9000-0163, Small Business Rerepresentation.

List of Subjects in 48 CFR Parts 4, 8, 16, 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 are amending 48 CFR parts 4, 8, 16, 
19, and 52 as set forth below:

0
1. The authority citation for 48 CFR parts 4, 8, 16, 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 4--ADMINISTRATIVE AND INFORMATION MATTERS


4.604  [Amended]

0
2. Amend section 4.604 in paragraph (b)(4) by removing the text 
``contracting office'' and ``Post-Award'' and adding

[[Page 522]]

``contracting officer'' and ``Postaward'' in their places, 
respectively.

PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES


8.405-5   [Amended]

0
3. Amend section 8.405-5 in paragraph (b) by removing the text 
``section 19.301-2(b)(2)'' and adding ``19.301-2(b)(3)'' in its place.

PART 16--TYPES OF CONTRACTS


16.505   [Amended]

0
4. Amend section 16.505 in paragraph (b)(9) by removing the text 
``section 19.301-2(b)(2)'' and adding ``19.301-2(b)(3)'' in its place.

PART 19--SMALL BUSINESS PROGRAMS


19.202-5   [Amended]

0
5. Amend section 19.202-5 in paragraph (c) introductory text by 
removing ``Post Award'' and adding ``Postaward'' in its place.

0
6. Amend section 19.301-2 by--
0
a. Revising the section heading and paragraph (b) introductory text;
0
b. Removing from paragraphs (b)(1)(i) and (ii) ``Post-Award'' and 
adding ``Postaward'' in its place;
0
c. Redesignating paragraph (b)(2) as paragraph (b)(3);
0
d. Adding a new paragraph (b)(2);
0
e. Adding headings to paragraphs (c) and (d);
0
f. Revising paragraphs (d)(2)(i) and (ii); and
0
g. Adding a heading to paragraph (e).
    The revisions and additions read as follows:


19.301-2   Rerepresentation by a contractor that represented its status 
as a small business concern.

* * * * *
    (b) Requirements. A contractor that represented its status as any 
of the small business concerns identified at 19.000(a)(3) before 
contract award is required to rerepresent its size and socioeconomic 
status in accordance with the clause at 52.219-28, Postaward Small 
Business Program Rerepresentation--
* * * * *
    (2) For the NAICS code assigned to an order (except for an order 
issued under a Federal Supply Schedule contract)--
    (i) Set aside exclusively for a small business concern identified 
at 19.000(a)(3) that is issued under an unrestricted multiple-award 
contract, unless the order is issued under the reserved portion of an 
unrestricted multiple-award contract (e.g., an order set aside for a 
woman-owned small business concern under a multiple-award contract that 
was not set-aside, unless the order is issued under the reserved 
portion of the multiple-award contract);
    (ii) Issued under a multiple-award contract set aside for small 
businesses that is further set aside for a specific socioeconomic 
category that differs from the underlying multiple-award contract 
(e.g., an order set aside for a HUBZone small business concern under a 
multiple-award contract that is set-aside for small businesses); or
    (iii) Issued under the part of the multiple-award contract that is 
set aside for small businesses that is further set aside for a specific 
socioeconomic category that differs from the underlying set-aside part 
of the multiple-award contract (e.g., an order set aside for a part of 
the multiple-award contract that is partially set-aside for small 
businesses); or
* * * * *
    (c) NAICS code size standard. * * *
    (d) Procedures-- * * *
    (2) * * *
    (i) When an order is issued under an unrestricted multiple-award 
contract and the contractor's rerepresentations no longer qualifies it 
as a small business concern identified at 19.000(a)(3), the agency can 
no longer include the value of the order in its small business prime 
contracting goal achievements. When a contractor's rerepresentation for 
an order qualifies it as a different small business concern identified 
at 19.000(a)(3) than what it represented for contract award, the agency 
can include the value of the order in its small business prime 
contracting goal achievement, consistent with the rerepresentation.
    (ii) A rerepresentation for an order issued under an unrestricted 
multiple-award contract does not change the size or socioeconomic 
status representation for the contract.
    (e) Size status change. * * *


19.302  [Amended]

0
7. Amend section 19.302 in paragraph (j) by removing ``Post-Award'' and 
adding ``Postaward'' in its place.


19.309  [Amended]

0
8. Amend section 19.309 in paragraph (c)(1) by removing ``Post-Award'' 
and adding ``Postaward'' in its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.212-5  [Amended]

0
9. Amend section 52.212-5 in paragraph (b)(26)(i) by removing ``Post-
Award'' and ``(FEB 2024)'' and adding ``Postaward'' and ``(JAN 2025)'' 
in their places, respectively.

0
10. Amend section 52.219-28 by--
0
a. Revising the section heading, clause heading and date, and paragraph 
(c); and
0
b. Removing from paragraph (f) ``paragraph (b) and (c)'' and ``office 
in'' and adding ``paragraphs (b) and (c)'' and ``officer in'' in their 
places, respectively.
    The revisions read as follows:


52.219-28  Postaward Small Business Program Rerepresentation.

* * * * *
Postaward Small Business Program Rerepresentation (JAN 2025)

* * * * *
    (c) If the Contractor represented its status as any of the small 
business concerns identified at 19.000(a)(3) prior to award of this 
contract, the Contractor shall rerepresent its size and 
socioeconomic status according to paragraph (f) of this clause or, 
if applicable, paragraph (h) of this clause, for the NAICS code 
assigned to an order (except that paragraphs (c)(1) through (3) of 
this clause do not apply to an order issued under a Federal Supply 
Schedule contract at subpart 8.4)--
    (1) Set aside exclusively for a small business concern 
identified at 19.000(a)(3) that is issued under an unrestricted 
multiple-award contract, unless the order is issued under the 
reserved portion of an unrestricted multiple-award contract (e.g., 
an order set aside for a woman-owned small business under a 
multiple-award contract that is not set-aside, unless the order is 
issued under the reserved portion of the multiple-award contract);
    (2) Issued under a multiple-award contract set aside for small 
businesses that is further set aside for a specific socioeconomic 
category that differs from the underlying multiple-award contract 
(e.g., an order set aside for a HUBZone small business concern under 
a multiple-award contract that is set aside for small businesses);
    (3) Issued under the part of the multiple-award contract that is 
set aside for small businesses that is further set aside for a 
specific socioeconomic category that differs from the underlying 
set-aside part of the multiple-award contract (e.g., an order set 
aside for a WOSB concern under the part of the multiple-award 
contract that is partially set aside for small businesses); and
    (4) When the Contracting Officer explicitly requires it for an 
order issued under a multiple-award contract, including for an order 
issued under a Federal Supply Schedule contract (see 8.405-5(b) and 
19.301-2(b)(2)).
* * * * *
[FR Doc. 2024-31404 Filed 1-2-25; 8:45 am]
BILLING CODE 6820-EP-P


This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.