[Federal Register: November 7, 2007 (Volume 72, Number 215)]
[Rules and Regulations]
[Page 63084-63088]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07no07-17]
[[Page 63084]]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 5, 6, 12, 18, 26, and 52
[FAC 2005-21; FAR Case 2006-014; Item VI; Docket 2007-0001, Sequence 7]
RIN 9000-AK54
Federal Acquisition Regulation; FAR Case 2006-014, Local
Community Recovery Act of 2006
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a second
interim rule amending the Federal Acquisition Regulation (FAR) to
implement amendments to the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (Stafford Act). The Local Community Recovery
Act of 2006 amended the Stafford Act to authorize set-asides for major
disaster or emergency assistance acquisitions to businesses that reside
or primarily do business in the geographic area affected by the
disaster or emergency. Section 694 of the Department of Homeland
Security (DHS) Appropriations Act of 2007, Pub. L 109-295, enacted
requirements for transitioning work under existing contracts.
DATES: Effective Date: November 7, 2007.
Comment Date: Interested parties should submit written comments to
the FAR Secretariat on or before January 7, 2008 to be considered in
the formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-21, FAR case 2006-
014, by any of the following methods:
Federal eRulemaking Portal: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov. To
search for any document, first select under ``Step 1,'' ``Documents
with an Open Comment Period'' and select under ``Optional Step 2,''
``Federal Acquisition Regulation'' as the agency of choice. Under
``Optional Step 3,'' select ``Rules''. Under ``Optional Step 4,'' from
the drop down list, select ``Document Title'' and type the FAR case
number ``2006-014''. Click the ``Submit'' button. Please include your
name and company name (if any) inside the document. You may also search
for any document by clicking on the ``Search for Documents'' tab at the
top of the screen. Select from the agency field ``Federal Acquisition
Regulation'', and type ``2006-014'' in the ``Document Title'' field.
Select the ``Submit'' button.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann
Duarte, Washington, DC 20405.
Instructions: Please submit comments only and cite FAC 2005-21, FAR
case 2006-014, in all correspondence related to this case. All comments
received will be posted without change to http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov.
Please include your name and company name (if any) inside the document.
FOR FURTHER INFORMATION CONTACT Mr. William Clark, Procurement Analyst,
at (202) 219-1813, for clarification of content. For information
pertaining to status or publication schedules, contact the FAR
Secretariat at (202) 501-4755. Please cite FAC 2005-21, FAR case 2006-
014.
SUPPLEMENTARY INFORMATION:
A. Background
An interim rule was published August 4, 2006 (71 FR 44546),
implementing an amendment to the Stafford Act at 42 U.S.C. 5150. This
second interim rule is necessary because of a later statutory amendment
to this section. This second rule also addresses the public comments
received on the first rule. The Councils request comments on the new
language added for this second interim rule, and on whether branch
offices should qualify for the set-aside.
Local area set-aside. The first interim rule implemented the 42
U.S.C. 5150 authorization of set-asides for debris clearance,
distribution of supplies, reconstruction, and other major disaster or
emergency assistance acquisitions to businesses that reside or
primarily do business in the geographic area affected by the disaster
or emergency. The set-aside may be used together with other authorized
set-asides, for example, those in FAR Part 19 for small businesses. The
contracting officer determines the geographic area for a specific local
area set-aside. The local area set-aside may be the whole of, or some
subpart of, the affected area (e.g., one or more counties, including
across state lines). However, it may not be outside of the declared
major disaster or emergency area.
Residing or doing business primarily in the area. Congress directed
that preference be given to ``organizations, firms, and individuals
residing or doing business primarily in the area affected by such major
disaster or emergency,'' without defining the terms. The Councils
consider that an offeror who in the last twelve months had its main
operating office in the area, which generated at least half of the
offeror's gross revenues and employed at least half of the offeror's
permanent employees is, therefore, residing or primarily doing business
in the set-aside area.
Branch offices. A public comment questioned the exclusion of branch
offices. The Councils believe the intent of Congress was to favor firms
in the local area who hire local people. A local branch office is local
and hires local people, but the contract would not be restricted to the
branch office, because the branch office is not the contracting entity.
The Councils invite further comment on this issue.
Transition of work; justification. The recent amendment to 42
U.S.C. 5150 provided: (1) that any expenditure of funds on contracts
not awarded to local area organizations, firms or individuals must be
justified in writing in the contract file; and (2) that work performed
under contracts already in effect be transitioned to local area
organizations, firms or individuals, unless the head of the agency
determines it is not feasible or practicable.
This second interim rule implements these requirements. The rule
emphasizes the wisdom of awarding contracts in advance of an emergency,
but not awarding orders so lengthy that they make transition to a local
firm awkward.
The rule also gives factors for the agencies to consider prior to
determining that a transition is not feasible or practicable. The
determination not to transition may be done within a reasonable time.
Class determinations and class justifications are allowed.
Competition justification. The first interim rule established a new
FAR Subpart 6.6 to clarify the competition justification requirements
for Stafford Act acquisitions, but that was to be revisited in the
final (now second interim) rule. This second interim rule moves to
section 6.207 the section declaring that no competition justification
is needed for the local area set-aside. The rest of the subpart has
been deleted as unnecessary. No justification for other than full and
open competition is needed for the use of an evaluation factor if
preference is afforded local firms through such a mechanism. The
revised statute
[[Page 63085]]
establishes a new justification, but this is not a full and open
competition justification, so it is being placed in Part 26, not Part
6.
Definitions. The Councils established a new definition for ``Major
disaster or emergency area'' to clarify the role of the Presidential
declaration and DHS. DHS has a website where the public and contracting
officers can easily find information on recently declared major
disasters and recently declared emergencies. This website is added to
the definition.
New definitions are also added for ``emergency response contract''
and ``local firm'' to clarify how these concepts are used in the rule.
The term ``designated area'' was not defined in the first interim
rule. To avoid confusion, the second interim rule changes it everywhere
to more precisely read ``set-aside area.''
A reference to the Small Business Administration (SBA) regulatory
definitions of terms used in the ``Restrictions on Subcontracting
Outside Disaster or Emergency Area'' clause is added to that clause.
Public comments. No public comments were received in response to
the Councils' request in the first rule for views on whether the
``Restrictions on Subcontracting Outside Disaster or Emergency Area''
and the ``Disaster or Emergency Area Representation'' should apply to
preferences other than local area set asides; or whether the
percentages for general or specialty construction should be raised.
The Councils received nine public comments from four respondents
regarding the first interim rule. A summary of the comments and the
Councils' responses follows.
1. Comment: One respondent recommended that it would be more
appropriate to create a new section within FAR Subpart 6.2 (i.e.,
section 6.207) for consistency with the content of sections 6.205 and
6.206 which describes set-asides as a type of full and open competition
after the exclusion of sources rather than to maintain the interim rule
FAR Subpart 6.6, Stafford Act Preference for Local Area Contractor. The
recommendation also suggested removal of FAR section 6.603 entirely
since it implies that implementing the local area preference by using
an evaluation factor would qualify as other than full and open
competition.
Response: The recommendation was accepted and this second interim
rule moves to FAR 6.207 the section declaring that no competition
justification is needed for the local area set-aside. The rest of the
previous FAR Subpart 6.6 has been removed.
2. Comment: One respondent expressed an opinion that the
instructions in FAR 12.301(e)(4) for FAR 52.226-4 and 52.226-5 were
unnecessary because they are already included in the list of clauses
contained in FAR 52.212-5, which is a mandatory clause in commercial
item contracts. The respondent also suggested replacing the phrase,
``when setting aside under the Stafford Act'' due to its inconsistency
with the language used in the FAR 26.203 prescription. A new FAR
subparagraph 12.301(e)(4) was suggested as follows: ``The contracting
officer shall insert the provision at 52.226-3, Disaster or Emergency
Area Representation, in solicitations for acquisitions that are set-
aside for a Disaster or Emergency Area under 26.203(a). This
representation is not in the Online Representations and Certifications
Application (ORCA) Database.''
Response: The recommendation was partially accepted in that only
the provision, not the clauses, is mentioned at FAR subparagraph
12.301(e)(4). Regarding the suggested rewording of FAR subparagraph
12.301(e)(4), the Councils believe the reference to the Stafford Act
should be kept, rather than adding a second reference to the ``Disaster
or Emergency Area'' in the same sentence.
3. Comment: The rule should revise the text at FAR 26.202(a)(2) to
state, ``A major disaster or emergency may result in numerous
Presidential declarations spanning counties in several contiguous
States'' for consistency with 6.602(a) and (b), which refer to both
``disasters'' and ``emergencies.''
Response: The respondent's comment was accepted. The second interim
rule contains the correction as recommended.
4. Comment: A comment was submitted indicating that 26.203(a)
content is inconsistent with FAR 26.203(b). The respondent suggested
replacing paragraph (a) with the following, ``The contracting officer
shall insert the provision at 52.226-3, Disaster or Emergency Area
Representation, in solicitations for acquisitions that are set-aside
for a Disaster or Emergency Area under 26.203(a). For commercial items
see 12.301(e)(4).''
Response: Partially accepted. The prescription content was revised
for consistency with the FAR conventions on prescription format.
5. Comment: FAR 52.212-5(b)(27) and (28) did not contain clause
dates and ``Aug 2006'' should be inserted into parentheses after the
title of each clause.
Response: Accepted, however the dates for both clauses have been
revised due to amendment of the clauses.
6. Comment: The rule does not discuss whether the phrase,
``offerors residing or doing business primarily in the area affected *
* *,'' excludes branch offices of corporations headquartered elsewhere.
The comment described a scenario where a branch office could meet all
of the tests imposed at FAR 52.226-3(c) and still not have the
corporate business meet the adjective test of ``primarily'' doing
business within the affected region. The respondent suggested adding
the term ``* * * to include branches, divisions, or other sub units of
corporation headquartered outside of the affected area * * *'' after
``* * * offerors residing or doing business primarily in the area
affected'' in FAR 26.202, 52.226-3, 52.226-4, and 52.226-5.
Response: The recommendation was not adopted for the second interim
rule. However, the Councils are seeking further public views on this
comment as indicated in the Preamble to this rule.
7. Comment: Several respondents commented on the designation of FAR
52.226-4, Notice of Disaster or Emergency, as a ``provision'' vice a
``clause''. Another comment on the prescription for FAR 52.226-4
suggested clarifying the prescription by replacing the phrase, ``* * *
that are set-aside for a Disaster or Emergency Area under 26.203(a)''
with ``* * * that contain the provision at 52.226-3.''
Response: The second interim rule changes FAR 52.226-4 to a
``clause.'' The prescription for FAR 52.226-4 and 52.226-5 are revised
for consistency with the FAR conventions on prescription format.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The interim rule is not expected 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, et seq. This second
interim rule continues the set-aside for local businesses in an area
affected by a major disaster or emergency to promote economic recovery.
The set-aside does not replace the small business set-aside. Both set-
asides can apply to an acquisition. The local set-aside will encourage
use of
[[Page 63086]]
local small businesses. The rule also implements a new requirement that
work performed under contracts already in effect be transitioned to
local area organizations, firms, or individuals, unless the agency head
determines it is not feasible or practicable. The Councils expect that
more work will be transitioned to small businesses than away from them.
The Government Accountability Office (GAO) report on Hurricane Katrina
Small Business Contracts (GAO-07-205) found that businesses in the
three states primarily affected by the hurricane received $1.9 billion,
which was 18% of the $11.6 billion spent by DHS, GSA, DoD and the Army
Corps of Engineers between August 1, 2005, and June 30, 2006. Small
businesses received 66% of the $1.9 billion awarded to those local
businesses. The Councils believe this shows that small businesses would
not be hurt by a local area set-aside.
Therefore, an Initial Regulatory Flexibility Analysis has not been
performed. The Councils will consider comments from small entities
concerning the affected FAR Parts 5, 6, 12, 18, 26, and 52 in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C 601, et seq. (FAC 2005-21,
FAR case 2006-014), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose information collection requirements that require
the approval of the Office of Management and Budget under 44 U.S.C.
3501, et seq.
D. Determination to Issue an Interim Rule
A determination has been made under the authority of DoD, GSA, and
NASA that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary because this interim rule implements the Local Community
Recovery Act of 2006 (Pub. L. 109-218), and section 694 of the DHS
Appropriations Act of 2007 (DHS Appropriations Act) (Pub. L. 109-295).
These statutes amended the Stafford Act at 42 U.S.C. 5150, to authorize
set-asides for major disaster or emergency assistance acquisitions to
businesses that reside or primarily do business in the geographic area
affected by the disaster or emergency. Section 694 of the DHS
Appropriations Act enacted requirements for transitioning work under
existing contracts to local area organizations, firms, or individuals.
This action is necessary to improve the Government's ability to target
local businesses and promote local economic recovery in an affected
area. The statutes went into effect April 20, 2006, and October 4,
2006, respectively. However, pursuant to Pub. L. 98-577 and FAR 1.501,
the Councils will consider public comments received in response to this
interim rule in the formation of the final rule.
List of Subjects in 48 CFR Parts 5, 6, 12, 18, 26, and 52
Government procurement.
Dated: October 31, 2007.
Al Matera,
Director, Office of Acquisition Policy.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 5, 6, 12, 18, 26, and
52 as set forth below:
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1. The authority citation for 48 CFR parts 5, 6, 12, 18, 26, and 52
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 5-PUBLICIZING CONTRACT ACTIONS
0
2. Amend section 5.207 by revising paragraph (d) to read as follows:
5.207 Preparation and transmittal of synopses.
* * * * *
(d) Set-asides. When the proposed acquisition provides for a total
or partial small business set-aside, HUBZone small business set-aside,
or a service-disabled veteran-owned small business set-aside, the
appropriate Numbered Note will be cited. When the proposed acquisition
provides for a local area set-aside (see Subpart 26.2) the contracting
officer shall identify his set-aside in the synopsis.
* * * * *
PART 6--COMPETITION REQUIREMENTS
0
3. Add section 6.207 to read as follows:
6.207 Set-asides for local firms during a major disaster or
emergency.
(a) To fulfill the statutory requirements relating to 42 U.S.C.
5150, contracting officers may set aside solicitations to allow only
offerors residing or doing business primarily in the area affected by
such major disaster or emergency to compete (see Subpart 26.2).
(b) No separate justification or determination and findings is
required under this part to set aside a contract action. The set-aside
area specified by the contracting officer shall be a geographic area
within the area identified in a Presidential declaration(s) of major
disaster or emergency and any additional geographic areas identified by
the Department of Homeland Security.
Subpart 6.6 [Removed]
0
4. Remove subpart 6.6.
PART 12--ACQUISITION OF COMMERCIAL ITEMS
0
5. Amend section 12.301 by revising paragraphs (b)(4) and (e)(4) to
read as follows:
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(b) * * *
(4) The clause at 52.212-5, Contract Terms and Conditions Required
to Implement Statutes or Executive Orders--Commercial Items. This
clause incorporates by reference only those clauses required to
implement provisions of law or executive orders applicable to the
acquisition of commercial items. The contracting officer shall attach
this clause to the solicitation and contract and, using the appropriate
clause prescriptions, indicate which, if any, of the additional clauses
cited in 52.212-5(b) or (c) are applicable to the specific acquisition.
Some of the clauses require fill-in; the fill-in language should be
inserted as directed by 52.104(d). When cost information is obtained
pursuant to Part 15 to establish the reasonableness of prices for
commercial items, the contracting officer shall insert the clauses
prescribed for this purpose in an addendum to the solicitation and
contract. This clause may not be tailored. Use the clause with its
Alternate I when the head of the agency has waived the examination of
records by the Comptroller General in accordance with 25.1001.
* * * * *
(e) * * *
(4) When setting aside under the Stafford Act (Subpart 26.2),
include the provision at 52.226-3, Disaster or Emergency Area
Representation, in the solicitation. The representation in this
provision is not in the Online Representations and Certifications
Application (ORCA) Database.
* * * * *
PART 18--EMERGENCY ACQUISITIONS
0
6. Amend section 18.203 by:
[[Page 63087]]
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a. Removing paragraph (a);
0
b. Redesignating paragraphs (b) and (c) as (a) and (b) respectively;
and
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c. Revising redesignated paragraph (a) to read as follows:
18.203 Incidents of national significance, emergency declaration, or
major disaster declaration.
(a) Disaster or emergency assistance activities. Preference will be
given to local organizations, firms, and individuals when contracting
for major disaster or emergency assistance activities when the
President has made a declaration under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act. Preference may take the form of
local area set-asides or an evaluation preference. (See 6.207 and
Subpart 26.2.)
* * * * *
PART 26--OTHER SOCIOECONOMIC PROGRAMS
0
7. Revise subpart 26.2 to read as follows:
Subpart 26.2--Disaster or Emergency Assistance Activities
Sec.
26.200 Scope of subpart.
26.201 Definitions.
26.202 Local area preference.
26.202-1 Local area set-aside.
26.202-2 Evaluation preference.
26.203 Transition of work.
26.204 Justification for expenditures to other than local firms.
26.205 Solicitation provision and contract clauses.
26.200 Scope of subpart.
This subpart implements the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5150), which provides a preference
for local organizations, firms, and individuals when contracting for
major disaster or emergency assistance activities.
26.201 Definitions.
Emergency response contract means a contract with private entities
that supports assistance activities in a major disaster or emergency
area, such as debris clearance, distribution of supplies, or
reconstruction.
Local firm means a private organization, firm, or individual
residing or doing business primarily in a major disaster or emergency
area.
Major disaster or emergency area means the area included in the
official Presidential declaration(s) and any additional areas
identified by the Department of Homeland Security. Major disaster
declarations and emergency declarations are published in the Federal
Register and are available at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.fema.gov/news/disasters.fema.
26.202 Local area preference.
When awarding emergency response contracts during the term of a
major disaster or emergency declaration by the President of the United
States under the authority of the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C.5121, et seq.), preference shall
be given, to the extent feasible and practicable, to local firms.
Preference may be given through a local area set-aside or an evaluation
preference.
26.202-1 Local area set-aside.
The contracting officer may set aside solicitations to allow only
local firms within a specific geographic area to compete (see 6.207).
(a) The contracting officer, in consultation with the requirements
office, shall define the specific geographic area for the local set-
aside.
(b) A major disaster or emergency area may span counties in several
contiguous States. The set-aside area need not include all the counties
in the declared disaster/emergency area(s), but cannot go outside it.
(c) The contracting officer shall also determine whether a local
area set-aside should be further restricted to small business concerns
in the set-aside area (see Part 19).
26.202-2 Evaluation preference.
The contracting officer may use an evaluation preference, when
authorized in agency regulations.
26.203 Transition of work.
(a) In anticipation of potential emergency response requirements,
agencies involved in response planning should consider awarding
emergency response contracts before a major disaster or emergency
occurs to ensure immediate response and relief. These contracts should
be structured to respond to immediate emergency response needs, and
should not be structured in any way that may inhibit the transition of
emergency response work to local firms (e.g., unnecessarily broad
scopes of work or long periods of performance).
(b) 42 U.S.C. 5150(b)(2) requires that agencies performing
response, relief, and reconstruction activities transition to local
firms any work performed under contracts in effect on the date on which
the President declares a major disaster or emergency, unless the head
of such agency determines in writing that it is not feasible or
practicable. This determination may be made on an individual contract
or class basis. The written determination shall be prepared within a
reasonable time given the circumstances of the emergency.
(c) In effecting the transition, agencies are not required to
terminate or renegotiate existing contracts. Agencies should transition
the work at the earliest practical opportunity after consideration of
the following:
(1) The potential duration of the disaster or emergency.
(2) The severity of the disaster or emergency.
(3) The scope and structure of the existing contract, including its
period of performance and the milestone(s) at which a transition is
reasonable (e.g., before exercising an option).
(4) The potential impact of a transition, including safety,
national defense, and mobilization.
(5) The expected availability of qualified local offerors who can
provide the products or services at a reasonable price.
(d) The agency shall transition the work to local firms using the
local area set-aside identified in 26.202-1.
26.204 Justification for expenditures to other than local firms.
(a) 42 U.S.C. 5150(b)(1) requires that, subsequent to any
Presidential declaration of a major disaster or emergency, any
expenditure of Federal funds, under an emergency response contract not
awarded to a local firm, must be justified in writing in the contract
file. The justification should include consideration for the scope of
the major disaster or emergency and the immediate requirements or needs
of supplies and services to ensure life is protected, victims are cared
for, and property is protected.
(b) The justification may be made on an individual or class basis.
The contracting officer approves the justification.
26.205 Solicitation provision and contract clauses.
(a) The contracting officer shall insert the provision at 52.226-3,
Disaster or Emergency Area Representation, in solicitations involving
the local area set-aside. For commercial items, see 12.301(e)(4).
(b) The contracting officer shall insert the clause at 52.226-4,
Notice of Disaster or Emergency Area Set-aside in solicitations and
contracts involving local area set-asides.
(c) The contracting officer shall insert the clause at 52.226-5,
Restrictions on Subcontracting Outside Disaster or
[[Page 63088]]
Emergency Area, in all solicitations and contracts that involve local
area set-asides.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
8. Revise section 52.212-5 in clause heading and paragraphs (b)(30) and
(b)(31) to read as follows:
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR
EXECUTIVE ORDERS--COMMERCIAL ITEMS (Nov 2007)
* * * * *
(b) * * *
---- (30) 52.226-4, Notice of Disaster or Emergency Area Set-Aside
(Nov 2007) (42 U.S.C. 5150).
---- (31) 52.226-5, Restrictions on Subcontracting Outside Disaster
or Emergency Area (Nov 2007) (42 U.S.C. 5150).
* * * * *
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9. Revise section 52.226-3 to read as follows:
52.226--3 Disaster or Emergency Area Representation.
As prescribed in 26.205(a), insert the following provision:
DISASTER OR EMERGENCY AREA REPRESENTATION (Nov 2007)
(a) Set-aside area. The area covered in this contract is: --------
-------------- [Contracting Officer to fill in with definite geographic
boundaries.]
(b) Representations. The offeror represents that it ------does ----
---- does not reside or primarily do business in the set-aside area.
(c) An offeror is considered to be residing or primarily doing
business in the set-aside area if, during the last twelve months--
(1) The offeror had its main operating office in the area; and
(2) That office generated at least half of the offeror's gross
revenues and employed at least half of the offeror's permanent
employees.
(d) If the offeror does not meet the criteria in paragraph (c) of
this provision, factors to be considered in determining whether an
offeror resides or primarily does business in the set-aside area
include--
(1) Physical location(s) of the offeror's permanent office(s) and
date any office in the set-aside area(s) was established;
(2) Current state licenses;
(3) Record of past work in the set-aside area(s) (e.g., how much
and for how long);
(4) Contractual history the offeror has had with subcontractors
and/or suppliers in the set-aside area;
(5) Percentage of the offeror's gross revenues attributable to work
performed in the set-aside area;
(6) Number of permanent employees the offeror employs in the set-
aside area;
(7) Membership in local and state organizations in the set-aside
area; and
(8) Other evidence that establishes the offeror resides or
primarily does business in the set-aside area. For example, sole
proprietorships may submit utility bills and bank statements.
(e) If the offeror represents it resides or primarily does business
in the set-aside area, the offeror shall furnish documentation to
support its representation if requested by the Contracting Officer. The
solicitation may require the offeror to submit with its offer
documentation to support the representation.
(End of provision)
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10. Revise section 52.226-4 to read as follows:
52.226--4 Notice of Disaster or Emergency Area Set-Aside.
As prescribed in 26.205(b), insert the following clause:
NOTICE OF DISASTER OR EMERGENCY AREA SET-ASIDE (Nov 2007)
(a) Set-aside area. Offers are solicited only from businesses
residing or primarily doing business in --------------------
[Contracting Officer to fill in with definite geographic boundaries.]
Offers received from other businesses shall not be considered.
(b) This set-aside is in addition to any small business set-aside
contained in this contract.
(End of clause)
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11. Revise section 52.226-5 to read as follows:
52.226--5 Restrictions on Subcontracting Outside Disaster or
Emergency Area.
As prescribed in 26.205(c), insert the following clause:
RESTRICTIONS ON SUBCONTRACTING OUTSIDE DISASTER OR EMERGENCY
AREA (Nov 2007)
(a) Definitions. The definitions of the following terms used in
this clause are found in the Small Business Administration regulations
at 13 CFR 125.6(e): cost of the contract, cost of contract performance
incurred for personnel, cost of manufacturing, cost of materials,
personnel, and subcontracting.
(b) The Contractor agrees that in performance of the contract in
the case of a contract for--
(1) Services (except construction). At least 50 percent of the cost
of contract performance incurred for personnel shall be expended for
employees of the Contractor or employees of other businesses residing
or primarily doing business in the clause at FAR 52.226--4, Notice of
Disaster or Emergency Area Set-Aside;
(2) Supplies (other than procurement from a nonmanufacturer of such
supplies). The Contractor or employees of other businesses residing or
primarily doing business in the set-aside area shall perform work for
at least 50 percent of the cost of manufacturing the supplies, not
including the cost of materials;
(3) General construction. The Contractor will perform at least 15
percent of the cost of the contract, not including the cost of
materials, with its own employees or employees of other businesses
residing or primarily doing business in the set-aside area; or
(4) Construction by special trade Contractors. The Contractor will
perform at least 25 percent of the cost of the contract, not including
the cost of materials, with its own employees or employees of other
businesses residing or primarily doing business in the set-aside area.
(End of clause)
[FR Doc. 07-5482 Filed 11-6-07; 8:45 am]
BILLING CODE 6820-EP-S