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[Federal Register Volume 79, Number 215 (Thursday, November 6, 2014)]
[Proposed Rules]
[Pages 65917-65918]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-26268]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 219, and 252

RIN 0750-AI42

Defense Federal Acquisition Regulation Supplement: Advancing 
Small Business Growth (DFARS Case 2014-D009)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to clarify that entering into a contract 
award may cause a small business to eventually exceed the applicable 
small business size standard.

DATES: Comment Date: Comments on the proposed rule should be submitted 
in writing to the address shown below on or before January 5, 2015, to 
be considered in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2014-D009, using 
any of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2014-D009'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2014-D009.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2014-D009'' on your attached document.
    [cir] Email: osd.dfars@mail.mil. Include DFARS Case 2014-D009 in 
the subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. Lee 
Renna, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, 
Washington, DC 20301-3060.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To 
confirm receipt of your comment(s), please check www.regulations.gov, 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Ms. Lee Renna, Defense Acquisition 
Regulations System, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense 
Pentagon, Washington, DC 20301-3060. Telephone 571-372-6095.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD is proposing to revise the DFARS to implement policy to ensure 
a small business contractor is made aware that entering into a covered 
contract conveys its acknowledgement that doing so may cause it to 
eventually exceed the small business size standard of the North 
American Industry Classification System (NAICS) code identified in the 
solicitation and contract. This clarification is required by section 
1611 of the National Defense Authorization Act for Fiscal Year 2014, 
(10 U.S.C. 2419).
    A ``covered'' contract within the context of this rule means a 
contract that was awarded to a qualified small business concern, as 
defined in section 3(a) of the Small Business Act, Public Law 85-536 as 
amended, (15 U.S.C. 632(a)), with an estimated annual dollar value 
that--
     Will exceed the small business size standard (if expressed 
in dollars) for the North American Industry System (NAICS) code 
assigned by the contracting officer; or
     Will exceed $70,000,000, if the small business standard is 
expressed in number of employees, for the NAICS code assigned by the 
contracting officer.
    Should this occur, the company will no longer qualify as a small 
business in that and other similar NAICS codes.
    Section 1611 further stipulates that new language shall be added to 
the DFARS to encourage these companies to develop the capabilities and 
characteristics typically sought by DoD from contractors that are 
competitive as other than small businesses. To this end, small business 
contractors may seek out the training and counseling services available 
from the Procurement Technical Assistance Program (PTAP). The PTAP, 
through its network of over 300 Procurement Technical Assistance 
Centers located across the United States as well as the territories of 
Puerto Rico and Guam, offers a wide range of Government contracting 
assistance. The PTAP is administered by the Defense Logistics Agency 
and funded through cooperative agreements between DoD and state and 
local non-profit entities.
    To incorporate this guidance, the rule proposes to revise 
212.301(f); add a new section 219.309 entitled Solicitation provisions 
and contract clauses; and add a new solicitation provision at 252.219.

II. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all 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 a significant regulatory action and, therefore, was subject to 
review under section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.

III. Regulatory Flexibility Act

    DoD does not expect this 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 it does not 
create or alleviate any financial burden on small entities. The purpose 
of the rule is to advise small businesses that by entering into a DoD 
contract, they may eventually cause the company to exceed the size 
standard associated with the NAICS code identified in the contract. The 
rule further encourages these contractors to develop the competencies 
typically desired of other than small businesses. Therefore, an initial 
regulatory flexibility analysis has not been performed.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this rule on small 
entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts 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 (DFARS Case 2014-D009), in 
correspondence.

IV. Paperwork Reduction Act

    The rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the

[[Page 65918]]

Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 212, 219, and 252

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 212, 219, and 252 are proposed to be 
amended as follows:

0
1. The authority citation for parts 212 and 252 continues to read as 
follows:

    Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

0
2. Amend section 212.301 by--
0
a. Redesignating paragraphs (f)(xxii) through (lxxiv) as (f)(xxiii) 
through (lxxv); and
0
b. Adding a new paragraph (f)(xxii) to read as follows:

212.301  Solicitation provisions and contract clauses for the 
acquisition of commercial items.

    (f) * * *
    (xxii) Use the provision at 252.219-XXXX, Advancing Small Business 
Growth, as prescribed in 219.309, to comply with 10 U.S.C. 2419.

PART 219--SMALL BUSINESS PROGRAMS

0
3. The authority citation for part 219 is revised to read as follows:

    Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

0
4. Add section 219.309 to subpart 219.3 to read as follows:

219.309  Solicitation provisions and contract clauses.

    (a) Use the provision at 252.219-XXXX, Advancing Small Business 
Growth, as required by 10 U.S.C. 2419, in solicitations, including 
solicitations using FAR part 12 procedures for acquisition of 
commercial items, when the estimated annual value of the contract is 
expected to exceed--
    (1) The small business size standard, if expressed in dollars, for 
the North American Industry Classification System (NAICS) code assigned 
by the contracting officer; or
    (2) $70,000,000, if the small business size standard is expressed 
as number of employees for the NAICS code assigned by the contracting 
officer.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
5. Add section 252.219-XXXX to read as follows:

252.219-XXXX  Advancing Small Business Growth.

    As prescribed in 219.309, use the following provision:

Advancing Small Business Growth (Date)

    (a) This provision implements 10 U.S.C. 2419.
    (b) The Offeror acknowledges that by acceptance of this 
contract, it may exceed the applicable small business size standard 
of the NAICS code assigned to the contract and would no longer 
qualify as a small business concern for that NAICS code. (Small 
business size standards matched to industry NAICS codes are 
published by the Small Business Administration and are available at 
http://www.sba.gov/content/table-small-business-size-standards.) The 
Offeror is therefore encouraged to develop the capabilities and 
characteristics typically desired in contractors that are 
competitive as other-than-small contractors in this industry.
    (c) For technical assistance in this regard, the Offeror may 
contact the nearest Procurement Technical Assistance Center (PTAC). 
PTAC locations are available at http://www.aptac-us.org.

(End of provision)

[FR Doc. 2014-26268 Filed 11-5-14; 8:45 am]
BILLING CODE 5001-06-P
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