[Federal Register Volume 88, Number 188 (Friday, September 29, 2023)]
[Proposed Rules]
[Pages 67189-67193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21354]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 4, 19, and 52

[FAR Case 2020-016; Docket No. FAR-2020-0016; Sequence No. 1]
RIN 9000-A018


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: Proposed rule.

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SUMMARY: DoD, GSA, and NASA are proposing to amend 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: Interested parties should submit written comments to the 
Regulatory Secretariat Division at the address shown below on or before 
November 28, 2023 to be considered in the formation of the final rule.

[[Page 67190]]


ADDRESSES: Submit comments in response to FAR Case 2020-016 to the 
Federal eRulemaking portal at https://www.regulations.gov by searching 
for ``FAR Case 2020-016''. Select the link ``Comment Now'' that 
corresponds with ``FAR Case 2020-016''. Follow the instructions 
provided at the ``Comment Now'' screen. Please include your name, 
company name (if any), and ``FAR Case 2020-016'' on your attached 
document. If your comment cannot be submitted using https://www.regulations.gov, call or email the points of contact in the FOR 
FURTHER INFORMATION CONTACT section of this document for alternate 
instructions.
    Instructions: Please submit comments only and cite ``FAR Case 2020-
016'' in all correspondence related to this case. Comments received 
generally will be posted without change to https://www.regulations.gov, 
including any personal and/or business confidential information 
provided. Public comments may be submitted as an individual, as an 
organization, or anonymously (see frequently asked questions at https://www.regulations.gov/faq). To confirm receipt of your comment(s), 
please check https://www.regulations.gov, approximately two to three 
days after submission to verify posting.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Ms. Dana Bowman, Procurement Analyst, at 202-803-3188 or by email at 
<a href="/cdn-cgi/l/email-protection#a5c1c4cbc48bc7cad2c8c4cbe5c2d6c48bc2cad3"><span class="__cf_email__" data-cfemail="fe9a9f909fd09c9189939f90be998d9fd0999188">[email protected]</span></a>. For information pertaining to status, publication 
schedules, or alternate instructions for submitting comments if https://www.regulations.gov cannot be used, contact the Regulatory Secretariat 
Division at 202-501-4755 or <a href="/cdn-cgi/l/email-protection#d394809281b6b480b6b093b4a0b2fdb4bca5"><span class="__cf_email__" data-cfemail="82c5d1c3d0e7e5d1e7e1c2e5f1e3ace5edf4">[email protected]</span></a>. Please cite FAR Case 
2020-016.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA are proposing to amend the FAR to implement 
regulatory changes made by the Small Business Administration (SBA) in 
its final rule published on October 16, 2020, at 85 FR 66146 to require 
small business concerns to rerepresent their size and/or socioeconomic 
status for orders placed under multiple-award contracts under certain 
circumstances. Federal Supply Schedules (FSS) are exempt from this 
mandatory requirement; however, the contracting officer continues to 
have the discretion to require a rerepresentation for an order. SBA 
amended its regulations to ensure that small businesses qualify for the 
applicable size and/or socioeconomic status associated with orders 
placed under multiple-award contracts where size and/or socioeconomic 
status were not relevant to the award of the underlying multiple-award 
contract. Specifically, SBA amended its regulations to require small 
business concerns identified at FAR 19.000(a)(3) to rerepresent their 
size and/or socioeconomic status for orders set aside exclusively for 
small businesses that are issued under an unrestricted multiple-award 
contract, except for those with reserves. In addition, small business 
concerns must rerepresent their socioeconomic status for orders issued 
under a small business set-aside multiple-award contract or the set-
aside part of a multiple-award contract where the orders are further 
set aside for a particular socioeconomic category which differs from 
the underlying multiple-award contract or the set-aside part of the 
multiple-award contract.

II. Discussion and Analysis

    This rule proposes to modify FAR 19.301-2, Rerepresentation by a 
contractor that represented itself as a small business concern, and FAR 
clause 52.219-28, Postaward Small Business Program Rerepresentation, to 
implement regulatory changes made in SBA's final rule issued on October 
16, 2020, at 85 FR 66146 as follows:

--Amend FAR 19.301-2(b) to require a contractor that represented its 
status as any of the small business concerns at FAR 19.000(a)(3) before 
contract award, and whose socioeconomic status is not certified by the 
SBA, to rerepresent its size and socioeconomic status in accordance 
with the clause at 52.219-28, Postaward Small Business Program 
Rerepresentation.
--Amend FAR 19.301-2(b) to add a new paragraph (2)(i) to require a 
contractor that represented itself as any of the small business 
concerns at FAR 19.000(a)(3) at the multiple-award contract level to 
rerepresent its size and socioeconomic status upon submitting an offer 
for orders set aside exclusively for small business concerns that are 
issued under an unrestricted multiple-award contract, except for orders 
issued under an unrestricted multiple-award contract with reserves;
--Amend FAR 19.301-2(b) to add a new paragraph (2)(ii) to require a 
contractor that represented itself as any of the small business 
concerns at FAR 19.000(a)(3) at the multiple-award contract level to 
rerepresent its size and socioeconomic status upon submitting an offer 
for orders issued under a set-aside multiple-award contract that are 
further set aside for a specific socioeconomic category that differs 
from the underlying multiple-award contract (i.e., orders set aside for 
HUBZone small business concerns under a small business set-aside 
multiple-award contract);
--Amend FAR 19.301-2(b) to add a new paragraph (2)(iii) to require a 
contractor that represented itself as any of the small business 
concerns at FAR 19.000(a)(3) at the multiple-award contract level to 
rerepresent its size and socioeconomic status upon submitting an offer 
for orders issued under the set-aside part of a multiple-award contract 
that are further set-aside for a specific socioeconomic category that 
differs from the underlying set-aside part of the multiple-award 
contract (i.e., orders set aside for women-owned small business 
concerns under the small business set-aside part of a multiple-award 
contract);
--As a result of adding the new paragraph (b)(2), the existing FAR 
19.301-2(b)(2) is renumbered as 19.301-2(b)(3); and
--Amend FAR clause 52.219-28, Post-Award Small Business Program 
Rerepresentation, to change the clause title from ``Post-Award'' to 
``Postaward'' and to notify offerors of the rerepresentation 
requirements at FAR 19.301-2(b)(2). ``Post-Award'' is also changed to 
``Postaward'' at FAR 4.604, 19.202-5(c), 19.301-2(b), 19.302(j), and 
19.309(c).

    Orders issued under FSS are exempt from the requirement to 
rerepresent size and/or socioeconomic status. However, a contracting 
officer has the discretion to request rerepresentation of size and/or 
socioeconomic status for a specific order.

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 proposed 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. However, this proposed 
rule does not change the application to contracts at or below the SAT, 
or for commercial products and commercial services, including COTS 
items. The clauses continue to apply to acquisitions at or below the 
SAT and to acquisitions for commercial products and commercial 
services, including COTS items.

[[Page 67191]]

IV. Expected Impact of the Rule

    As a result of this proposed rule a contractor that represented its 
status before contract award, and whose socioeconomic status is not 
certified by SBA, will be required to rerepresent their size and/or 
socioeconomic status for orders placed under multiple-award contracts, 
under certain circumstances, where rerepresentation was not previously 
required. The proposed changes ensure that the award of small business 
set-aside orders under certain multiple-award contracts are made to 
small businesses that qualify for the size and/or socioeconomic status 
associated with the orders. Therefore, the expected impact of this rule 
is that entities that no longer qualify under the applicable North 
American Industry Classification System (NAICS) code will not be 
awarded orders under the multiple-award contracts subject to this rule 
when those orders are set aside.
    Also, contracting officers will be required to verify the size and/
or socioecomonic status of a small business concern prior to issuing an 
order under the multiple-award contracts subject to this rule.
    Orders placed under the FSS program are exempt from the mandatory 
rerepresentation requirement; however, contracting officers continue to 
have the discretion to require a rerepresentation for an order.
    This proposed rule is also expected to prevent agencies from 
receiving credit towards their small business goals for awards made to 
firms that no longer qualify as small under the applicable NAICS code.
    Existing e-business systems are also expected to be impacted by 
this proposed rule as the Federal Procurement Data System (FPDS) 
currently does not 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.

V. 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 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. Regulatory Flexibility Act

    DoD, GSA, and NASA do not expect this proposed 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. 601-612, 
because contractors are currently required by regulation to update 
their size and socioeconomic status representation at least annually; 
within 30 days after a novation or merger; for long-term contracts, 
within 60 to 120 days prior to the end of the fifth year of the 
contract and within 60 to 120 days prior to the date specified in the 
contract for the exercise of any option thereafter, and when a 
contracting officer requires rerepresentation for an order. This 
proposed rule adds a requirement for small business concerns to 
rerepresent their size and socioeconomic representations for orders 
issued under a multiple-award contract under certain circumstances. 
However, an Initial Regulatory Flexibility Analysis (IRFA) has been 
performed and is summarized as follows:

    DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to update the requirement for 
rerepresentation of size and socioeconomic status for set-aside 
orders issued under multiple-award contracts. These changes are 
required to implement the regulatory changes made by the Small 
Business Administration (SBA) in its final rule published October 
16, 2020, at 85 FR 66146. Specifically, this proposed rule requires 
a small business concern that represented its status before contract 
award, and whose socioeconomic status is not certified by the SBA, 
to rerepresent its size and/or socioeconomic status for all set-
aside orders under an unrestricted multiple-award contract where the 
orders are set aside for a particular socioeconomic category, unless 
the contract authorized reserves. Additionally, small business 
concerns must rerepresent their socioeconomic status for orders 
issued under a set-aside multiple-award contract where the orders 
are further set aside exclusively for a particular socioeconomic 
category which differs from the underlying multiple-award contract 
or the set-aside part of the multiple-award contract (e.g., the 
multiple-award contract is a small business set-aside award and 
competition is restricted to certified HUBZone small businesses). 
This proposed rule also requires a small business concern to 
rerepresent its socioeconomic status for all set-aside orders where 
the required socioeconomic status for the order differs from that of 
the underlying set-aside part of the multiple-award contract. The 
updated requirements are made to clarify SBA's regulatory provisions 
and ensure that small businesses qualify under the NAICS code for 
orders issued under multiple-award contracts.
    The objective of this proposed rule is to implement regulatory 
changes made in SBA's final rule at 85 FR 66146 published on October 
16, 2020, to update the requirements for size and socioeconomic 
status rerepresentation for set-aside orders issued under multiple-
award contracts where the socioeconomic status of the order differs 
from the underlying multiple-award contract or set-aside part of the 
multiple-award contract, except for multiple-award contracts with 
reserves and Federal Supply Schedule (FSS) contracts. These changes 
will ensure that orders set-aside for small businesses are awarded 
to concerns that qualify for the size and/or socioeconomic status of 
the NAICS code associated with the order. Promulgation of the FAR is 
authorized by 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. The legal basis for this rule is SBA's regulations at 13 CFR 
part 121.404(a)(1) as amended by SBA's final rule.
    This rule will impact approximately 4,395 small entities per 
year. Currently, contractors are required to rerepresent their size 
and socioeconomic status for orders under multiple-award contracts 
if the contracting officer explicitly requires rerepresentation for 
that order or as required by FAR clause 52.219-28, Postaward Small 
Business Program Rerepresentation.
    According to FPDS, in the last three fiscal years (FYs), 
agencies set aside orders for small entities under unrestricted 
multiple-award contracts as follows: 6,509 in FY 2019; 7,392 in FY 
2020; and 7,251 in FY 2021; for an average of 7,051 per fiscal year. 
According to FPDS, in the last three fiscal years, agencies further 
set aside orders for small entities under set-aside multiple-award 
contracts as follows: 8,403 in FY 2019; 9,470 in FY 2020; and 10,034 
in FY 2021; for an average of 9,302 per fiscal year. According to 
FPDS, in the last three fiscal years, agencies further set aside 
orders for a socioeconomic category under the set-aside portion of a 
multiple-award contract, where the socioeconomic category differs 
from the underlying multiple-award contract, as follows: 43 in FY 
2019; 41 in FY 2020; and 37 in FY 2021; for an average of 40 per 
fiscal year. This provides an average 5,464 total set-aside orders 
for small entities per fiscal year.
    This proposed rule will impose new reporting, recordkeeping, or 
other compliance requirements for all small entities. In accordance 
with FAR 4.1201(b)(1), small entities are required to update their 
size and socioeconomic status representations in the System for 
Award Management as necessary, but at least annually, to ensure they 
are kept current, accurate, and complete. Small entities are also 
required to rerepresent their size and socioeconomic status in 
accordance with FAR clause 52.219-28, Postaward Small Business 
Program Rerepresentation. Currently, in accordance with FAR 19.301-
1(e), the size and/or socioeconomic status representation of small 
entities flows from

[[Page 67192]]

the multiple-award contract to orders placed under it. This proposed 
rule will make it mandatory for small entities to rerepresent their 
size and/or socioeconomic status at the order level under certain 
circumstances (e.g., when submitting an offer for a set-aside order 
under an unrestricted multiple-award contract). Therefore, this rule 
will apply to all small entities seeking award of an order under the 
types of multiple-award contracts addressed by this rule.
    The proposed rule does not duplicate, overlap, or conflict with 
any other Federal rules.
    There are no known significant alternative approaches to the 
proposed rule.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA, and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by the rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAR Case 2020-016), 
in correspondence.

VII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. 3501-3521) applies because 
the proposed rule contains information collection requirements. This 
rule affects the information collection requirements in the provisions 
at 52.219-28 currently approved under OMB Control Number 9000-0163 in 
accordance with the Paperwork Reduction Act. Accordingly, the 
Regulatory Secretariat Division has submitted a request for approval of 
a revised information collection requirement concerning 9000-0163, 
Rerepresentation of Size and Socioeconomic Status to the Office of 
Management and Budget.
    A. 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 and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    The annual reporting burden is estimated as follows:
    Respondents: 4,395.
    Responses per respondent: 3.
    Total annual responses: 13,185.
    Preparation hours per response: 0.5.
    Total response burden hours: 6,592.50.
    B. Request for Comments Regarding Paperwork Burden.
    Submit comments, including suggestions for reducing this burden, 
not later than November 28, 2023 through https://www.regulations.gov 
and follow the instructions on the site. All items submitted must cite 
OMB Control No. 9000-0163, Small Business Size Rerepresentation. 
Comments received generally will be posted without change to https://www.regulations.gov, including any personal and/or business 
confidential information provided. To confirm receipt of your 
comment(s), please check https://www.regulations.gov, approximately two 
to three days after submission to verify posting. If there are 
difficulties submitting comments, contact the GSA Regulatory 
Secretariat Division at 202-501-4755 or <a href="/cdn-cgi/l/email-protection#a4e3f7e5f6c1c3f7c1c7e4c3d7c58ac3cbd2"><span class="__cf_email__" data-cfemail="f4b3a7b5a69193a79197b4938795da939b82">[email protected]</span></a>.
    Public comments are particularly invited on:
    <bullet> Whether the proposed collection of information is 
necessary for the proper performance of the functions of Federal 
Government acquisitions, including whether the information will have 
practical utility;
    <bullet> The accuracy of the estimate of the burden of the proposed 
information collection;
    <bullet> Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    <bullet> Ways to minimize the burden of the information collection 
on respondents, including the use of automated collection techniques or 
other forms of information technology.
    Requesters may obtain a copy of the supporting statement from the 
GSA Regulatory Secretariat Division by calling 202-501-4755 or emailing 
<a href="/cdn-cgi/l/email-protection#793e2a382b1c1e2a1c1a391e0a18571e160f"><span class="__cf_email__" data-cfemail="90d7c3d1c2f5f7c3f5f3d0f7e3f1bef7ffe6">[email protected]</span></a>. Please cite OMB Control No. 9000-0163, Small 
Business Size Rerepresentation, in all correspondence.

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

0
1. The authority citation for 48 CFR parts 4, 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 ``Post-Award'' 
and adding ``Postaward'' in its place.

PART 19--SMALL BUSINESS PROGRAMS


19.202-5  [Amended]

0
3. Amend section 19.202-5 in paragraph (c) introductory text by 
removing ``Post Award'' and adding ``Postaward'' in its place.
0
4. Amend section 19.301-2 in paragraph (b) by--
0
a. Revising paragraph (b) introductory text;
0
b. Removing from paragraphs (b)(1)(i) and (ii) ``Post-Award'' and 
adding ``Postaward'' in its place;
0
c. Removing from paragraph (b)(1)(iii)(B) ``thereafter; or'' and adding 
``thereafter.'' in its place; and
0
d. Redesignating paragraph (b)(2) as paragraph (b)(3) and adding a new 
paragraph (b)(2).
    The revision and addition read as follows:


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

* * * * *
    (b) A contractor that represented its status as any of the small 
business concerns identified in 19.000(a)(3) before contract award, and 
whose socioeconomic status is not certified by the SBA, 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 an unrestricted multiple-
award contract with reserves;
    (ii) Issued under a set-aside multiple-award contract 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 small business set-aside 
multiple-award contract); or
    (iii) Issued under the set aside part of a multiple-award contract 
that is further set-aside for a specific socioeconomic category that 
differs from the underlying

[[Page 67193]]

set-aside part of the multiple-award contract (e.g., an order set aside 
for a women-owned small business concern under the small business set-
aside part of the multiple-award contract).
* * * * *


19.302  [Amended]

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


19.309  [Amended]

0
6. 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

0
7. Amend section 52.212-5 by revising the date of the clause and 
removing from paragraph (b)(23)(i) ``Post Award'' and ``(MAR 2023)'' 
and adding ``Postaward'' and ``(DATE)'' in its place.
    The revision reads as follows:


52.212-5  Contract Terms and Conditions Required To Implement Statutes 
or Executive Orders--Commercial Products and Commercial Services.

* * * * *

Contract Terms and Conditions Required To Implement Statutes or 
Executive Orders--Commercial Products and Commercial Services (DATE)

* * * * *
0
8. Amend section 52.219-28 by--
0
a. Revising the section heading;
0
b. Revising the clause heading and date of the clause;
0
c. Revising paragraph (c); and
0
d. Removing from paragraph (f) ``paragraph (b) and (c)'' and adding 
``paragraphs (b) and (c)'' in its place.
    The revisions read as follows:


52.219-28  Postaward Small Business Program Rerepresentation.

* * * * *

Postaward Small Business Program Rerepresentation (DATE)

* * * * *
    (c) If the Contractor represented its status as any of the small 
business concerns identified in 19.000(a)(3) prior to award of this 
contract and its socioeconomic status is not certified by the SBA, 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 an order (except that paragraphs (a)(1) through 
(3) of this section 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 an unrestricted multiple-
award contract with reserves);
    (2) Issued under a set-aside multiple-award contract 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 small business set-aside 
multiple-award contract);
    (3) Issued under the set-aside part of a multiple-award contract 
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 HUBZone small business concern 
under a 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. 2023-21354 Filed 9-28-23; 8:45 am]
BILLING CODE 6820-EP-P


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