[Federal Register: March 10, 2008 (Volume 73, Number 47)]
[Proposed Rules]
[Page 12699-12701]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10mr08-20]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 13 and 19
[FAR Case 2006-034; Docket 2007-0001; Sequence 15]
RIN 9000-AK92
Federal Acquisition Regulation: FAR Case 2006-034, Socioeconomic
Program Parity
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are proposing to amend the
Federal Acquisition Regulation (FAR) to ensure that the FAR reflects
the Small Business Administration's (SBA) interpretation of the Small
Business Act and SBA regulations with regard to the relationship among
various small business programs.
DATES: Comment date: Interested parties should submit written comments
to the Regulatory Secretariat at the address shown below on or before
May 9, 2008, to be considered in the formation of the final rule.
ADDRESSES: Submit comments, identified by FAR Case 2006-034, by any of
the following methods:
Regulations.gov: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov.
Submit comments via the Federal eRulemaking portal by inputting
``FAR Case 2006-034'' under the heading ``Comment or Submission''.
Select the link ``Send a Comment or Submission'' that corresponds with
FAR Case 2006-034. Follow the instructions provided to complete the
``Public Comment and Submission Form''. Please include your name,
company name (if any), and ``FAR Case 2006-034'' on your attached
document.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VPR), 1800 F Street, NW., Room 4035, ATTN: Diedra Wingate,
Washington, DC 20405.
Instructions: Please submit comments only and cite FAR case 2006-
034 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, including
any personal and/or business confidential information provided.
FOR FURTHER INFORMATION CONTACT: Ms. Rhonda Cundiff, Procurement
Analyst, at (202) 501-0044 for clarification of content. The FAR
Secretariat at (202) 501-4755 for information pertaining to status or
publication schedules. Please cite FAR case 2006-034.
SUPPLEMENTARY INFORMATION:
A. Background
The purpose of this rule is to ensure that the FAR clearly reflects
SBA's interpretation of the Small Business Act and SBA's interpretation
of its regulations with regard to the order of precedence that applies
when deciding whether to satisfy a requirement through an award to a
small business, a HUBZone small business concern, a service-disabled
veteran-owned small business (SDVOSB) concern or a small business
participating in the 8(a) Business Development Program (8(a) Program).
This FAR rule is intended to make the following clear:
(1) There is no order of precedence among the 8(a), HUBZone, or
SDVOSB Programs. However, if a requirement has been accepted by SBA
under the 8(a) Program, it must remain in the 8(a) Program unless SBA
agrees to its release in accordance with 13 CFR 124, 125 and 126.
(2) For acquisitions exceeding $100,000, the contracting officer
must consider making award under the 8(a), HUBZone or SDVOSB Programs
(either set-aside or sole source) before the contracting officer
proceeds with a small business set-aside. See 19.203(b) and 19.502-
2(b).
After having considered making award under the 8(a), HUBZone or
SDVOSB Programs, the contracting officer may set aside an acquisition
for small business, with one exception. By statute (15 U.S.C.
657a(b)(2)(B)), the contracting officer cannot set the acquisition
aside for small business if the criteria for setting it aside for
HUBZone small business are met.
(3) FAR 19.502-2(a) sets forth the requirement to exclusively
reserve acquisitions for small business between $3,000 and $100,000
unless the contracting officer determines there is not a reasonable
expectation of obtaining offers from two or more small businesses that
are competitive in terms of market prices, quality, and delivery. This
proposed rule clarifies that these small business set-asides do not
preclude award of a contract to a qualified HUBZone small business
concern pursuant to the HUBZone Program, an 8(a) Program participant
pursuant to the 8(a) Program, or to a SDVOSB concern pursuant to the
SDVOSB Program because the SBA's regulations give the contracting
officer discretionary authority to use the HUBZone, 8(a), or SDVOSB
Programs at these dollar levels. In addition, the rule shows that,
unlike procurements that are expected to exceed $100,000, it is not
mandatory that the contracting officer set aside an acquisition for
HUBZone small business concerns before setting aside the requirement
for small businesses.
(4) SBA believes that progress in fulfilling the various small
business goals, as well as other factors such as the results of market
research and the acquisition history, should be considered in making a
decision as to which program to use for the acquisition.
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. The rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
This change may have a significant economic impact on a significant
number of small entities within the meaning of the Regulatory
Flexibility Act 5 U.S.C. 601, et seq., because it will clarify the
relationship among various small business programs with regard to
whether one has priority over another for acquisition purposes. It has
been unclear to the acquisition community if there is an order of
precedence that applies when deciding whether to satisfy a requirement
through an award to small business, HUBZone small business, service
disabled veteran-owned small business or a small business participating
in the 8(a) Business Development Program. This proposed rule will have
both a negative and positive impact on the 8(a) Business Development
Program, the HUBZone Program, the Service-Disabled Veteran-Owned Small
Business Program and the Small Business Program.
[[Page 12700]]
Viewed as a whole, there is no impact on the small business
community, as this rule does not increase or decrease the number of
contracts awarded to small businesses. However, there will be a
negative impact on contractors with a particular preference who lose a
contract set-aside to another socioeconomic category of contractors
with a different preference who gain the contract set-aside, who
thereby will receive a positive impact. The FAR Secretariat has
submitted a copy of the Initial Regulatory Flexibility Analysis (IRFA)
to the Chief Counsel for Advocacy of the Small Business Administration.
A copy of the IRFA may be obtained from the Regulatory Secretariat. The
Councils will consider comments from small entities concerning the
affected FAR parts in accordance with 5 U.S.C. 610. Comments must be
submitted separately and should cite 5 U.S.C. 601, et seq., FAR Case
2006-034, in correspondence. The analysis is summarized as follows:
The purpose of this proposed rule is to revise the FAR to ensure
that it complies with SBA's interpretation of the Small Business Act
and the SBA regulations that implement that Act. The entities that
will be affected are small businesses that do business with the
Federal Government. Generally, all current and potential Government
contractors must register in the Central Contractor Registration
(CCR) to be eligible for contract award and payment. There are
approximately 313,512 small business firms; 13,000 HUBZone firms;
9,947 8(a) firms and 9,614 SDVO SBC currently registered in CCR that
may be affected by this proposed rule.
There are no significant alternatives that would reduce any
impact on small businesses. The FAR rule is implementing SBA's
interpretation of the Small Business Act and SBA's implementing
regulations.
C. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. Chapter 35) does not apply
because the proposed rule does not contain information collection
requirements that require the approval of the Office of Management and
Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Parts 13 and 19
Government procurement.
Al Matera,
Director, Office of Acquisition Policy.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 13 and
19 as set forth below:
1. The authority citation for 48 CFR parts 13 and 19 continue 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 13--SIMPLIFIED ACQUISITION PROCEDURES
2. Amend section 13.003 by revising the first sentence in paragraph
(b)(2) to read as follows:
13.003 Policy.
* * * * *
(b) * * *
(2) The contracting officer may make an award under the 8(a)
Program (see Subpart 19.8) or set aside for HUBZone small business
concerns (see 19.1305) or service-disabled veteran-owned small business
concerns (see 19.1405) an acquisition of supplies or services that has
an anticipated dollar value exceeding the micro-purchase threshold and
not exceeding the simplified acquisition threshold. * * *
* * * * *
PART 19--SMALL BUSINESS PROGRAMS
3. Amend section 19.202 by revising the first sentence to read as
follows:
19.202 Specific policies.
In order to further the policy in 19.201(a), contracting officers
shall comply with the specific policies listed in this section and
shall consider recommendations of the agency Director of Small and
Disadvantaged Business Utilization, or the Director's designee, as to
whether a particular acquisition should be awarded under Subparts 19.5,
19.8, 19.13, or 19.14. * * *
4. Amend subpart 19.2 by adding section 19.203 to read as follows:
19.203 Relationship among small business programs.
(a) Acquisitions subject to the small business set-aside at 19.502-
2(a).
The requirement to exclusively reserve acquisitions for small
business at 19.502-2(a) does not preclude the contracting officer from
awarding a contract under the--
(1) 8(a) Program (Subpart 19.8);
(2) HUBZone Program (Subpart 19.13); or
(3) Service-Disabled Veteran-Owned Small Business Procurement
Program (SDVOSB)(Subpart 19.14).
(b) Acquisitions subject to the small business set-aside at 19.502-
2(b). (1) The contracting officer must consider the 8(a), HUBZone, and
SDVOSB programs before using a small business set-aside. There is no
order of precedence among the 8(a), HUBZone, and SDVOSB programs.
However, if a requirement has been accepted by SBA under the 8(a)
Program, it must remain in the 8(a) Program unless SBA agrees to its
release in accordance with 13 CFR 124, 125 and 126; and
(2) The contracting officer must set aside an acquisition for
HUBZone small business concerns if the conditions at 19.1305 are met,
before considering a small business set-aside.
5. Amend section 19.501 by--
a. Removing paragraphs (c) and (d);
b. Redesignating paragraphs (e), (f), (g), (h), and (i) as (c),
(d), (e), (f), and (g), respectively; and
c. Revising the second sentence of new paragraph (c) to read as
follows:
19.501 General.
* * * * *
(c) * * *. The contracting officer shall perform market research
and document why a small business set-aside is inappropriate when an
acquisition is not set aside for small business, unless an award is
anticipated under the 8(a), HUBZone or service-disabled veteran-owned
small business programs. * * *
* * * * *
6. Amend section 19.502-2 by adding a new first sentence and
revising the last sentence in paragraph (a) and adding a new first
sentence in paragraph (b) to read as follows:
19.502-2 Total small business set-asides.
(a) Before setting aside an acquisition under this paragraph, refer
to 19.203(a). * * *. The small business reservation does not preclude
the award of a contract as described in 19.203 or 19.1007(c).
(b) Before setting aside an acquisition under this paragraph,
follow 19.203(b). * * *
* * * * *
7. Amend section 19.800 by revising paragraph (e) to read as
follows:
19.800 General.
* * * * *
(e) Before deciding to set aside an acquisition in accordance with
Subpart 19.5, the contracting officer must consider offering the
acquisition under the 8(a) Program (see 19.203).
* * * * *
8. Amend section 19.1305 by revising paragraphs (a) through (d) to
read as follows:
19.1305 HUBZone set-aside procedures.
(a) The contracting officer--
(1) May set aside acquisitions exceeding the simplified acquisition
threshold for competition restricted to HUBZone small business concerns
when the requirements of paragraph (b) of this section can be satisfied
(see 19.203);
(2) Must set-aside acquisitions exceeding the simplified
acquisition threshold for HUBZone small business
[[Page 12701]]
concerns before setting them aside for small business concerns or
conducting the acquisition using full and open competition if the
conditions in paragraph (b) of this section are met; and
(3) Must consider HUBZone set-asides before considering HUBZone
sole source awards (see 19.1306).
(b) To set aside an acquisition for competition restricted to
HUBZone small business concerns, the contracting officer must have a
reasonable expectation that--
(1) Offers will be received from two or more HUBZone small business
concerns; and
(2) Award will be made at a fair market price.
(c) A contracting officer may set aside acquisitions exceeding the
micro-purchase threshold but not exceeding the simplified acquisition
threshold for competition restricted to HUBZone small business concerns
at the sole discretion of the contracting officer, provided the
requirements of paragraph (b) of this section can be satisfied.
(d) If the contracting officer receives only one acceptable offer
from a qualified HUBZone small business concern in response to a set-
aside, the contracting officer should make an award to that concern. If
the contracting officer receives no acceptable offers from HUBZone
small business concerns, the HUBZone set-aside shall be withdrawn.
* * * * *
9. Amend section 19.1405 by revising paragraph (a) and the second
sentence of paragraph (c) to read as follows:
19.1405 Service-disabled veteran-owned small business set-aside
procedures.
(a) The contracting officer--
(1) May set aside acquisitions exceeding the micro-purchase
threshold for competition restricted to service-disabled veteran-owned
small business concerns when the requirements of paragraph (b) of this
section can be satisfied (see 19.203); and
(2) Must consider service-disabled veteran-owned small business
set-asides before considering service-disabled veteran-owned small
business sole source awards (see 19.1406) or small business set-asides
(see 19.5).
* * * * *
(c) * * *. If the contracting officer receives no acceptable offers
from service-disabled veteran-owned small business concerns, the
service-disabled veteran-owned set-aside shall be withdrawn.
* * * * *
19.1406 [Amended]
10. Amend introductory paragraph (a) by removing ``19.501(d)'' and
adding ``19.203'' in its place.
[FR Doc. E8-4561 Filed 3-7-08; 8:45 am]
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