[Federal Register Volume 75, Number 238 (Monday, December 13, 2010)]
[Rules and Regulations]
[Pages 77737-77739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-30563]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 19, and 52

[FAC 2005-47; FAR Case 2009-019; Item IV; Docket 2010-0108, Sequence 1]
RIN 9000-AL77


Federal Acquisition Regulation; Small Disadvantaged Business 
Self-Certification

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) are issuing an interim rule 
amending the Federal Acquisition Regulation (FAR) to incorporate 
changes made by the Small Business Administration (SBA) to its Small 
Disadvantaged Business (SDB) Program.

DATES: Effective Date: December 13, 2010.
    Comment Date: Interested parties should submit written comments to 
the Regulatory Secretariat on or before February 11, 2011 to be 
considered in the formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-47, FAR Case 2009-
019, by any of the following methods:
    <bullet> Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by inputting ``FAR Case 
2009-019'' under the heading ``Enter Keyword or ID'' and selecting 
``Search.'' Select the link ``Submit a Comment'' that corresponds with 
``FAR Case 2009-019.'' Follow the instructions provided at the ``Submit 
a Comment'' screen. Please include your name, company name (if any), 
and ``FAR Case 2009-019'' on your attached document.
    <bullet> Mail: General Services Administration, Regulatory 
Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE., 
Washington, DC 20417.
    Instructions: Please submit comments only and cite FAC 2005-47, FAR 
Case 2009-019, in all correspondence related to this case. All comments 
received will be posted without change to http://www.regulations.gov, 
including any personal and/or business confidential information 
provided.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Mr. Karlos Morgan, Procurement Analyst, at (202) 501-2364. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-47, FAR 
Case 2009-019.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule amends the FAR to allow subcontractors on Federal 
contracts to self-represent their status as SDBs to prime contractors. 
SBA published an interim final rule in the Federal Register at 73 FR 
57490, October 3, 2008, to allow SDB subcontractors to provide written 
statements to prime contractors representing in good faith their status 
as an SDB concern for the purposes of subcontract awards under Federal 
prime contracts. Under SBA's previous regulation, only those firms that 
were certified by SBA as SDBs could participate as SDBs for Federal 
prime contract and subcontract opportunities. SBA stated that, 
effective October 3, 2008, it would no longer serve as a source for SDB 
certification for firms seeking to establish themselves as SDBs. The 
revision to SBA's regulation removed any uncertainty regarding SDB 
subcontractors' ability to self-represent themselves in good faith to 
prime contractors.
    In order to maintain consistency between the SBA regulations and 
the FAR, the Councils are amending the FAR as outlined below:
    <bullet> FAR 2.101, Definitions: The term ``small disadvantaged 
business concern'' is revised to be consistent with 13 CFR part 124, 
which continues to recognize small business concerns that have been 
certified by SBA, and to add language that allows small business 
concerns to self-represent their status as SDBs for subcontracts.
    <bullet> FAR 19.301-1, Representations by the offeror: Amended to 
update citations.
    <bullet> FAR 19.703, Eligibility requirements for participating in 
the

[[Page 77738]]

program: Amended to add language that allows the contractor to rely on 
small business concerns to self-represent their status as SDBs for 
subcontracts.
    <bullet> FAR 52.219-8, Utilization of Small Business Concerns: 
Amended to include language that the small business concern can self-
represent its SDB status in writing.
    <bullet> FAR 52.219-25, Small Disadvantaged Business Participation 
Program--Disadvantaged Status and Reporting: Amended to allow the 
contractor to accept written self-representations of small 
disadvantaged status from subcontractors.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of the 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 Councils do not expect this interim rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
because this revision removes a requirement for SDBs to obtain SBA SDB 
certification prior to award of a subcontract. This change will be 
beneficial to SDBs because they will no longer have to incur the cost 
associated with a formal certification process. Therefore, an Initial 
Regulatory Flexibility Analysis has not been performed. The Councils 
invite comments from small business concerns and other interested 
parties on the expected impact of this rule on small entities.
    The Councils will also consider comments from small entities 
concerning the existing regulations in parts affected by this rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAC 2005-47, FAR Case 
2009-019) in all 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. 
chapter 35, et seq.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense, the Administrator of General Services, and the 
Administrator of the National Aeronautics and Space Administration that 
urgent and compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
because the FAR currently prohibits small business concerns that are 
not certified by the SBA from participating as SDB concerns for 
subcontracting. This interim rule implements changes promulgated by the 
SBA and is necessary for the FAR to be consistent with SBA's 
regulations pertaining to SDB certifications. However, pursuant to 41 
U.S.C. 418b and FAR 1.501-3(b), 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 2, 19, and 52

    Government procurement.

    Dated: November 24, 2010.
Millisa Gary,
Acting Director, Acquisition Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 19, and 52 as set 
forth below:
0
1. The authority citation for 48 CFR parts 2, 19, 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 2--DEFINITIONS OF WORDS AND TERMS

0
2. Amend section 2.101 in paragraph (b)(2), in the definition ``Small 
disadvantaged business concern'', by--
0
a. Revising the introductory text and paragraph (1)(iii);
0
b. Amending paragraph (2) by removing the period at the end of the 
paragraph and adding a semicolon in its place; and
0
c. Adding paragraph (3).
    The revised and added text reads as follows:


2.101  Definitions.

* * * * *
    (b) * * *
    (2) * * *
    Small disadvantaged business concern (except for 52.212-3(c)(4) and 
52.219-1(b)(2) for general statistical purposes and 52.212-3(c)(9)(ii), 
52.219-22(b)(2), 52.219-22(b)(1)(C), and 52.219-23(a)(3) for joint 
ventures under the price evaluation adjustment for small disadvantaged 
business concerns), consistent with 13 CFR 124.1002, means an offeror, 
that is a small business under the size standard applicable to the 
acquisition; and either--
    (1) * * *
    (iii) It is identified, on the date of its representation, as a 
certified small disadvantaged business concern in the CCR Dynamic Small 
Business Search data base maintained by the Small Business 
Administration;
* * * * *
    (3) It represents in writing that it qualifies as a small 
disadvantaged business (SDB) for any Federal subcontracting program if 
it believes in good faith that it is owned and controlled by one or 
more socially and economically disadvantaged individuals and meets the 
SDB eligibility criteria of 13 CFR 124.1002.
* * * * *

PART 19--SMALL BUSINESS PROGRAMS


19.301-1  [Amended]

0
3. Amend section 19.301-1 in paragraph (d), in the last sentence, by 
removing ``13 CFR 124.1011'' and adding ``13 CFR 124.1004'' in its 
place.

0
4. Amend section 19.703 by removing from paragraph (a)(1) ``HUBZone 
small business,'' and adding ``HUBZone small business, small 
disadvantaged business,'' in its place; removing from paragraph (a)(2), 
in the second sentence, ``13 CFR 124.1015 through 124.1022'' and adding 
``13 CFR 124.1007 through 124.1014'' in its place; and revising 
paragraph (b) to read as follows:


19.703  Eligibility requirements for participating in the program.

* * * * *
    (b) A contractor acting in good faith may rely on the written 
representation of its subcontractor regarding the subcontractor's 
status as a small business, small disadvantaged business, veteran-owned 
small business, service-disabled veteran-owned small business, or a 
woman-owned small business concern. The contractor, the contracting 
officer, or any other interested party can challenge a subcontractor's 
size status representation by filing a protest, in accordance with 13 
CFR 121.1001 through 121.1008. Protests challenging a subcontractor's 
small disadvantaged business representation must be filed in accordance 
with 13 CFR 124.1007 through 124.1014.
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
5. Amend section 52.212-5 by revising the date of the clause; removing 
from paragraph (b)(11) ``(MAY 2004)'', and adding ``(DEC 2010)'' in its 
place; removing from paragraph (e)(1)(ii) ``(October 2000)'', and 
adding ``(DEC

[[Page 77739]]

2010)'' in its place; revising the date of Alternate II; and removing 
from Alternate II, paragraph (e)(1)(ii)(C) ``(MAY 2004)'' and adding 
``(DEC 2010)'' in its place.
    The revised text reads 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 (DEC 2010)

* * * * *
    Alternate II (DEC 2010). * * *
* * * * *

0
6. Amend section 52.213-4 by revising the date of the clause, and 
paragraph (a)(2)(vii) to read as follows:


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

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Items) (DEC 2010)

    (a) * * *
    (2) * * *
    (vii) 52.244-6, Subcontracts for Commercial Items (DEC 2010).
* * * * *

0
7. Amend section 52.219-8 by--
0
a. Revising the date of the clause; and
0
b. In paragraph (c), in the definition ``Small disadvantaged business 
concern'', by redesignating paragraphs (1) through (4) as paragraphs 
(1)(i) through (iv), respectively, and revising the newly redesignated 
paragraph (1)(iv); and adding paragraph (2).
    The revised and added text reads as follows:


52.219-8  Utilization of Small Business Concerns.

* * * * *

Utilization of Small Business Concerns (DEC 2010)

* * * * *
    (c) * * *
* * * * *
    Small disadvantaged business concern * * *
    (1)(i) * * *
    (iv) It is identified, on the date of its representation, as a 
certified small disadvantaged business in the CCR Dynamic Small 
Business Search database maintained by the Small Business 
Administration, or
    (2) It represents in writing that it qualifies as a small 
disadvantaged business (SDB) for any Federal subcontracting program, 
and believes in good faith that it is owned and controlled by one or 
more socially and economically disadvantaged individuals and meets 
the SDB eligibility criteria of 13 CFR 124.1002.
* * * * *

0
8. Amend section 52.219-25 by revising the date of the clause; revising 
the second sentence of paragraph (a); redesignating paragraph (b) as 
paragraph (c); and adding a new paragraph (b) to read as follows:


52.219-25  Small Disadvantaged Business Participation Program--
Disadvantaged Status and Reporting.

* * * * *

Small Disadvantaged Business Participation Program--Disadvantaged 
Status and Reporting (DEC 2010)

    (a) * * * The Contractor shall obtain representations of small 
disadvantaged status from joint venture partners, teaming 
arrangement members, and subcontractors (see exception in paragraph 
(b) of this section) through use of a provision substantially the 
same as paragraph (b)(1)(i) of the provision at FAR 52.219-22, Small 
Disadvantaged Business Status. * * *
    (b) For subcontractors that are not certified as a small 
disadvantaged business by the Small Business Administration, the 
Contractor shall accept the subcontractor's written self-
representation as a small disadvantaged business, unless the 
Contractor has reason to question the self-representation.
* * * * *

0
9. Amend section 52.244-6 by revising the date of the clause; and 
removing from paragraph (c)(1)(iii) ``(MAY 2004)'' and adding ``(DEC 
2010)'' in its place.
    The revised text reads as follows:


52.244-6  Subcontracts for Commercial Items.

* * * * *

Subcontracts for Commercial Items (DEC 2010)

* * * * *
[FR Doc. 2010-30563 Filed 12-10-10; 8:45 am]
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