This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

70339 

Vol. 88, No. 195 

Wednesday, October 11, 2023 

DEPARTMENT OF AGRICULTURE 

Federal Crop Insurance Corporation 

7 CFR Part 457 

[Docket ID FCIC–23–0004] 

RIN 0563–AC83 

Actual Production History (APH) and 

Other Crop Insurance Transparency; 

Corrections 

AGENCY: Federal Crop Insurance 

Corporation, U.S. Department of 

Agriculture (USDA). 

ACTION: Correcting amendment. 

SUMMARY: On August 30, 2023, the 

Federal Crop Insurance Corporation 

corrected the Common Crop Insurance 

Policy (CCIP) Basic Provisions, ArizonaCalifornia Citrus Crop Insurance 

Provisions, California Avocado Crop 

Insurance Provisions, Macadamia Nut 

Crop Insurance Provisions, and the 

Texas Citrus Fruit Crop Insurance 

Provisions. In reviewing the changes 

made, FCIC found incorrect crop years 

in the Crop Provisions. This document 

makes the corrections. 

DATES: Effective October 11, 2023. 

FOR FURTHER INFORMATION CONTACT: 

Francie Tolle; telephone (816) 926– 

7730; email francie.tolle@usda.gov. 

Persons with disabilities who require 

alternative means of communication 

should contact the USDA Target Center 

at (202) 720–2600 or (844) 433–2774. 

SUPPLEMENTARY INFORMATION: 

Background 

On August 30, 2023, a correction to 

the ‘‘Actual Production History (APH) 

and Other Crop Insurance 

Transparency’’ was published at 88 FR 

59789 revising several references to 

subpart G and production reporting 

requirements for producers to report 

‘‘current’’ year production rather than 

‘‘previous’’ year production in various 

Crop Provisions. That correction 

inadvertently failed to revise the 

applicable crop year in the introductory 

text of the Arizona-California Citrus, 

California Avocado, Macadamia Nut 

and Texas Citrus Fruit Crop Provisions. 

This document makes those corrections. 

List of Subjects in 7 CFR Part 457 

Acreage allotments, Crop insurance, 

Reporting and recordkeeping 

requirements. 

Accordingly, 7 CFR part 457 is 

corrected by making the following 

amendments: 

PART 457—COMMON CROP 

INSURANCE REGULATIONS 

■ 1. The authority citation for part 457 

continues to read as follows: 

Authority: 7 U.S.C. 1506(l), 1506(o). 

§ 457.119 [Amended] 

■ 2. Amend § 457.119 in the 

introductory text by removing the year 

‘‘2024’’ and adding ‘‘2025’’ in its place. 

§ 457.121 [Amended] 

■ 3. Amend § 457.121 in the 

introductory text by removing the year 

‘‘2024’’ and adding ‘‘2025’’ in its place. 

§ 457.131 [Amended] 

■ 4. Amend § 457.131 in the 

introductory text by removing the year 

‘‘2024’’ and adding ‘‘2025’’ in its place. 

§ 457.175 [Amended] 

■ 5. Amend § 457.175 in the 

introductory text by removing the year 

‘‘2024’’ and adding ‘‘2025’’ in its place. 

Delores Dean, 

Acting Manager, Federal Crop Insurance 

Corporation. 

[FR Doc. 2023–22469 Filed 10–10–23; 8:45 am] 

BILLING CODE 3410–08–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 125 

RIN 3245–AH28 

National Defense Authorization Act of 

2020, Credit for Lower Tier 

Subcontracting and Other 

Amendments 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Final rule. 

SUMMARY: The U.S. Small Business 

Administration (SBA) is amending its 

regulations to implement provisions of 

the National Defense Authorization Act 

(NDAA) for Fiscal Year (FY) 2020. The 

final rule will permit a prime contractor 

with an individual subcontracting plan 

to apply credit for subcontracts to small 

businesses at lower tiers toward its 

subcontracting goals. To do so, the 

prime contractor would incorporate the 

lower-tier subcontracting performance 

into its subcontracting-plan goals. 

DATES: This rule is effective on 

November 13, 2023. 

FOR FURTHER INFORMATION CONTACT: 

Roman Ivey, Program Analyst, Office of 

Policy Planning and Liaison, Small 

Business Administration, at 

roman.ivey@sba.gov, (202) 401–1420. 

SUPPLEMENTARY INFORMATION: 

I. Background Information 

The SBA is revising its Small 

Business Subcontracting Plan 

regulations in 13 CFR 125.3 in response 

to changes made in section 870 of the 

National Defense Authorization Act 

(NDAA) of 2020, Public Law 116–92. 

Specifically, section 870 made changes 

to section 8(d) of the Small Business 

Act, 15 U.S.C. 637(d), regarding the 

requirements that apply to a Federal 

contractor seeking to obtain 

subcontracting credit on certain types of 

Federal contracts. SBA published a 

proposed rule on December 19, 2022, 87 

FR 77529, to implement section 870. 

After receiving comments from the 

public, SBA finalizes the rule with the 

changes described below. 

Most Federal contracts require the 

awardee to enter into a subcontracting 

plan that includes percentage goals for 

using small businesses and 

subcategories of small businesses. 

Subcontracting plans apply to Federal 

contracts exceeding $750,000 ($1.5 

million for construction), unless the 

awardee is a small business, the contract 

does not offer subcontracting 

opportunities, or the contract will be 

performed entirely outside the United 

States and its outlying areas. Prior to 

SBA’s final rule published on December 

23, 2016, 81 FR 94246, SBA’s 

regulations permitted a prime contractor 

to count only its first-tier subcontracts 

toward the goals in its subcontracting 

plan. The December 2016 Final Rule, 

however, mandated that prime 

contractors receive credit for lower-tier 


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subcontracts under certain criteria. 

Section 870 changed the criteria for 

receiving such credit, and this final rule 

implements those statutory changes. 

Section 870 made three changes to 

subcontracting plan requirements. First, 

a prime contractor may elect, in some 

instances, to receive credit toward its 

subcontracting plan for lower-tier 

subcontracts to small businesses. 

Second, agencies are prohibited from 

setting tier-specific goals for prime 

contractors that use lower-tier credit. 

Third, subcontracting plans are required 

to recite the records that contractors will 

maintain to substantiate lower-tier 

credit. 

These changes require SBA to change 

some of the provisions set forth in the 

December 2016 Final Rule. Most 

importantly, relying on prior statutory 

language, the December 2016 Final Rule 

made it mandatory for contractors with 

individual subcontracting plans to take 

credit for lower-tier subcontracts. 

Section 870, by contrast, removes the 

mandate and states that prime 

contractors ‘‘may elect to receive credit’’ 

either for first-tier subcontracts on their 

own, or for subcontracts at any tier. 

Accordingly, SBA is changing the prior 

mandate to an election. 

Additionally, the December 2016 

Final Rule only allowed for contractors 

to receive lower-tier subcontracting 

credit if the contractor had two sets of 

subcontracting goals. A contractor 

would have a goal for small-business 

subcontracting at the first tier, and an 

additional goal for small business 

subcontracting at lower tiers. Section 

870 prohibits agencies from setting tierspecific goals for prime contractors that 

use lower-tier credit. To address section 

870, SBA is revising the regulations so 

that all prime contractors will have only 

one set of subcontracting goals. This 

rule also implements the requirement 

from section 870 that contractors 

include in their subcontracting plans a 

statement of the types of records they 

will maintain to substantiate 

subcontracting credit. 

Section 870 further created a new 

subparagraph 8(d)(16)(B) in the Small 

Business Act, 15 U.S.C. 637(d)(16)(B), 

that requires agencies to collect, report, 

and review data on compliance with 

subcontracting plans. The new 

subparagraph duplicates existing 

statutory language in section 8(d)(7) of 

the Small Business Act, 15 U.S.C. 

637(d)(7), and has already been 

implemented in SBA’s regulations at 13 

CFR 125.6(f)(8). Therefore, no regulatory 

changes are necessary to implement 

new subparagraph 8(d)(16)(B). 

SBA received 10 comments in 

response to the proposed rule. The 

following section discusses and 

responds to the comments. 

II. Summary of and Response to 

Comments 

Support for the Rule 

Comment: SBA received numerous 

comments expressing support for the 

proposed changes that are implemented 

by this final rule. One commenter 

specifically highlighted that this rule 

will increase small business utilization 

in Federal contracting. 

Response: SBA acknowledges the 

commenters’ support. SBA will 

implement the rule with the changes as 

noted below. 

Outside the Scope of the Rule 

Comments: SBA received four 

comments that were unrelated in any 

way to the proposed rule or the issue of 

credit for lower-tier subcontracting. 

Response: As these comments do not 

relate to the rulemaking, SBA will not 

provide a response to these comments. 

Comment: SBA received one 

comment regarding the applicability of 

lower-tier subcontracting credit for 

Small Business Participation Plans. 

Response: Small Business 

Participation Plans are not within the 

purview of SBA regulations and thus are 

not impacted by this final rule. 

Opposition to the Rule 

Comments: SBA received two 

comments that opposed the proposed 

changes that are implemented by this 

final rule. One commenter opposed the 

rule on the basis that it grants credit to 

a prime contractor for the 

subcontracting work done by a first-tier 

or lower-tier subcontractor. This 

commenter emphasized that prime 

contractors would be able to get credit 

for something that they do not take full 

responsibility for. Another commenter 

opposed the rule on the basis that it 

would increase costs to the government. 

Response: SBA is implementing these 

regulatory changes in line with the 

statutory mandate from section 870. In 

addition, SBA does not agree with the 

concerns of these commenters. Prime 

contractors will have to take some level 

of responsibility for lower-tier 

subcontracting in their subcontracting 

plan and compliance review. In 

addition, there is no basis for 

concluding that this rule will result in 

an increased cost to the government. 

Therefore, these comments do not 

justify SBA failing to implement the 

NDAA for FY 2020. 

Concerns With Implementation in eSRS 

Comments: Two commenters 

expressed concern with how the 

Electronic Subcontracting Reporting 

System (eSRS) would be able to handle 

the new reporting and elections of 

lower-tier subcontracting under this 

rule. Specifically, they highlight issues 

with certifying subcontractor data 

entries and limitations in Individual 

Subcontractor Reports (ISRs) as points 

of concern. 

Response: SBA does not believe that 

this final rule needs to determine 

exactly how the new lower-tier 

subcontracting election and reporting 

will work within eSRS. Prime 

contractors are not responsible for 

certifying the data entries input by 

subcontractors into eSRS. Any potential 

issues can be resolved by the technical 

teams that run eSRS. 

Applicability of ‘‘Good Faith Effort’’ and 

Liquidated Damages to Lower-Tier 

Subcontracting 

Comments: One commenter sought 

clarification on the applicability of 

‘‘good faith effort’’ and liquidated 

damages to lower-tier subcontracting. 

Presumably, this commenter was 

referring to those terms as they are used 

in the context of subcontracting goals 

and performance under 13 CFR 125.3. 

This commenter also sought 

clarification on the standard of review 

that a prime contractor is subject to with 

respect to first-tier and lower-tier 

subcontractor performance. SBA also 

presumes this comment refers to 

Compliance Reviews which are 

described in 13 CFR 125.3(f). 

Response: SBA is not altering any 

regulatory language other than what is 

noted below in this final rule. Thus, 

prime contractors are still subject to the 

requirement to make good faith efforts 

to meet subcontracting goals even when 

a prime contractor elects to receive 

credit for lower-tier subcontracting. In 

addition, an agency may impose 

liquidated damages if a contractor fails 

to demonstrate good faith effort or fails 

to provide a corrective action plan after 

receiving a marginal or unsatisfactory 

rating following a Compliance Review. 

13 CFR 125.3(f)(5)(i).SBA is also 

declining to adopt a preferential or 

lenient review standard for Compliance 

Reviews as that process is described in 

13 CFR 125.3(f). 

Flow-Down of Federal Acquisition 

Regulation (FAR) Clauses to All 

Subcontracting Levels 

Comment: One commenter requested 

that SBA provide regulatory language to 

direct flow-down of relevant FAR 

clauses (48 CFR Chapter 1) to all 

applicable subcontracts so that prime 

contractors can more easily rely on firsttier and lower-tier subcontractors to 


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provide data necessary to comply with 

subcontracting requirements. 

Response: Subcontracting flow-down 

clauses are already mandated under the 

CFR and FAR regulations. Therefore, 

including such language in this rule 

would be duplicative and unnecessary. 

Ensuring Subcontractor Compliance 

Comment: One commenter requested 

SBA assistance with holding other-thansmall subcontractors accountable for 

their lower-tier subcontracting plans. 

This commenter specifically requested 

that SBA define its role in holding these 

subcontractors accountable when they 

fail to meet lower-tier subcontracting 

goals. 

Response: SBA has an interest in 

seeing all subcontracting plans—at all 

levels of subcontracting—followed to 

ensure maximum small business 

utilization in Federal procurement. To 

that end, there should be consequences 

for subcontractors that fail to meet 

lower-tier subcontracting requirements. 

Prime contractors can accomplish this 

by not subcontracting to firms that 

continuously fail to meet subcontracting 

requirements. In some cases, it may be 

appropriate for the government to send 

a ‘‘show cause’’ letter that proposes 

debarment for subcontractors that 

repeatedly fail to meet their lower-tier 

subcontracting goals. 

Applicability to Commercial Goods and 

Services 

Comment: One commenter requested 

that commercial goods and services be 

omitted from the reporting requirements 

on prime contractors and 

subcontractors. This commenter cited a 

FAR clause that exempts small business 

reporting requirements for commercial 

goods and services. 

Response: This comment is not 

related to lower-tier subcontracting 

credit which is the focus of this rule. 

This rule does not change any of the 

reporting requirements for commercial 

goods and services, it merely allows a 

prime contractor to elect to receive 

credit for lower tier subcontracting. The 

exception to reporting for commercial 

goods and services found at FAR 

52.219–9(j) remains in place. 

Commercial goods and services could be 

part of any subcontracting plan so 

changing the reporting requirements for 

them would require a much broader 

rulemaking than the instant one. 

Timeline for Incorporating Lower-Tier 

Subcontracting Plan 

Comment: One commenter requested 

a specific timeline for incorporating 

lower-tier subcontracting goals of within 

90 days of contract award. The 

commenter noted the difficulty in 

gathering the required information from 

first-tier and lower-tier subcontractors 

in order to prepare a full subcontracting 

plan especially when relying on input 

from first-tier and lower-tier 

subcontractors. 

Response: SBA is not adopting this 

timeline within 13 CFR 

125.3(a)(1)(i)(C)(1). All prime 

contractors are required to have a 

subcontracting plan in place by the time 

of award in those cases where a 

subcontracting plan is mandated by 13 

CFR 125.3(a). 

Remove Restriction on Governmentwide 

and Multi-Agency Contracts 

Comments: One commenter requested 

that SBA remove the language in the 

new regulations that would prohibit 

lower-tier subcontracting credit for 

governmentwide and multi-agency 

contracts. This commenter argued that 

SBA’s proposed regulatory change 

enlarges the restrictions on lower-tier 

subcontracting as written in section 870. 

They requested that SBA strike the 

language referring to governmentwide 

and multi-agency contracts in proposed 

13 CFR 125.3(a)(1)(i)(C)(5). 

Response: The restriction on 

governmentwide and multi-agency 

contracts comes directly from the 

language of section 870. The categories 

listed in the second sentence of 

proposed regulation 13 CFR 

125.3(a)(1)(i)(C)(5) are all synonymous 

with ‘‘more than one contract with one 

or more Federal agencies, or to one 

contract with more than one Federal 

agency.’’ Thus, SBA is declining to 

adopt this comment as it is counter to 

the plain language of section 870. 

Clarification on Definition of ‘‘Single 

Contract With One Federal Agency’’ 

Comment: One commenter requested 

that SBA define what is meant by a 

single contract with one Federal agency. 

Specifically, this commenter wanted to 

know whether individual branches 

(Army, Navy, etc.) within the 

Department of Defense are treated as 

separate agencies. 

Response: The term ‘‘Executive 

Agency’’ is defined in FAR 2.101. In this 

specific example, Army and Navy 

would be treated as separate agencies 

for Federal procurement. 

Whether a Firm Can Opt-In to the 

Lower-Tier Subcontracting Credit 

During Contract Performance 

Comments: One commenter asked 

whether it is possible to ‘‘opt-in’’ to 

receiving credit for lower-tier 

subcontracting during the performance 

of a contract. This commenter 

highlighted examples where the use of 

an other-than-small subcontractor may 

not be known until years into the 

performance of a contract. In such cases 

it may be appropriate for the prime 

contractor to elect to receive credit for 

lower-tier subcontracting well after 

contract award. 

Response: SBA recognizes that there 

may be instances when a prime 

contractor is unaware of subcontracting 

opportunities for other-than-small firms 

until after contract award and during 

performance. However, prime 

contractors can always request a 

modification of their subcontracting 

plan from the contracting officer to 

account for newly discovered otherthan-small subcontractors or other 

changed circumstances. 

Section-by-Section Analysis 

Section 125.3(a) 

SBA is changing the threshold for a 

required subcontracting plan to 

$750,000. This makes the threshold 

consistent with the FAR subpart 19.7 

and with other references to the 

threshold in § 125.3. 

Section 125.3(a)(1)(i)(C) 

SBA is revising the language of 13 

CFR 125.3(a)(1)(i)(C) to incorporate the 

two statutory changes from section 870 

that differ from SBA’s December 2016 

rule: creating an election for using 

lower-tier subcontracting credit and 

prohibiting more than one set of goals. 

First, the revised language makes 

lower-tier subcontracting credit 

discretionary in some circumstances. A 

prime contractor may elect to take credit 

for lower-tier subcontractors only when 

the subcontracting plan applies to a 

single contract with one Federal agency. 

In other situations—i.e., where the plan 

applies to more than one contract or to 

a single contract with more than one 

agency—section 870 prohibits the prime 

contractor from receiving credit for 

lower-tier subcontracting. Commercial 

plans and comprehensive 

subcontracting plans therefore are not 

eligible to use lower-tier subcontracting 

credit. They must instead rely solely on 

first-tier subcontracts. Additionally, 

governmentwide contracts and multiagency contracts are not permitted to 

use lower-tier subcontracting credit. 

Where a prime contractor elects to 

include lower-tier subcontracts towards 

its goal, the prime contractor will be 

credited with lower-tier subcontracts 

that are reported under lower-tier 

subcontracting plans. This rule does not 

require prime contractors to submit 

additional reports. Prime contractors 

will be required to report only their 


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first-tier awards. Lower-tier 

subcontracting awards are required to be 

reported by the prime contractor’s 

lower-tier subcontractors in accordance 

with their subcontracting plans and 

SBA’s regulations. SBA believes that 

only having each subcontract at any tier 

reported once will help prevent 

duplicative counting of the same 

awards. 

Second, the rule eliminates the prior 

provision that a prime contractor would 

have two sets of subcontracting goals— 

one for the first tier and one for lower 

tiers. Instead, the prime contractor will 

incorporate the subcontracting-plan 

goals of its lower-tier subcontractors 

into its individual-subcontracting-plan 

goals. 

Section 125.3(c) 

SBA is creating a new requirement 

codified at 13 CFR 125.3(c)(1)(xii) to 

incorporate the new recordkeeping 

requirements on contractors with 

subcontracting plans. Specifically, 

prime contractors are required to 

maintain records of the procedures used 

to substantiate the credit they elect to 

receive for lower-tier subcontracting 

under 13 CFR 125.3(a)(1)(i)(C). 

III. Compliance With Executive Orders 

12866, 12988, 13132, 13175, and 13563, 

the Congressional Review Act (5 U.S.C. 

801–808), the Paperwork Reduction Act 

(44 U.S.C., Ch. 35), and the Regulatory 

Flexibility Act (5 U.S.C. 601–612) 

Executive Order 12866 

The Office of Management and Budget 

(OMB) has determined that this rule is 

not a significant regulatory action for 

the purposes of Executive Order 12866. 

Executive Order 13563 

SBA previously solicited comments 

from the public on a proposal to provide 

credit for lower-tier subcontracting. 80 

FR 60300. Those comments were 

considered for this rulemaking. 

Additionally, as part of its ongoing 

efforts to engage stakeholders in the 

development of its regulations, SBA has 

solicited comments and suggestions 

from procuring agencies on how to best 

implement section 870. SBA has 

incorporated those comments and 

suggestions to the extent feasible. 

Executive Order 12988 

For purposes of Executive Order 

12988, SBA has drafted this rule, to the 

extent practicable, in accordance with 

the standards set forth in section 3(a) 

and 3(b)(2) of that Executive order, to 

minimize litigation, eliminate 

ambiguity, and reduce burden. This rule 

has no preemptive or retroactive effect. 

Executive Order 13175 

This rule does not have tribal 

implications under Executive Order 

13175, Consultation and Coordination 

with Indian Tribal Governments, 

because it does not have a substantial 

direct effect on one or more Indian 

tribes, on the relationship between the 

Federal Government and Indian tribes, 

or on the distribution of power and 

responsibilities between the Federal 

Government and Indian tribes. 

Executive Order 13132 

For the purpose of Executive Order 

13132, SBA has determined that this 

rule will not have substantial direct 

effects on the States, on the relationship 

between the National Government and 

the States, or on the distribution of 

power and responsibilities among the 

various layers of government. Therefore, 

SBA has determined that this rule has 

no federalism implications warranting 

preparation of a federalism assessment. 

Paperwork Reduction Act, 44 U.S.C. Ch. 

35 

This rule updates the requirements for 

small business subcontracting plans to 

add a requirement for prime contractors 

to include in their subcontracting plans 

a statement of the types of records they 

will maintain to substantiate 

subcontracting credit. The FAR rule 

implementing this requirement will 

account for this information collection, 

and clearance for the information 

collection will be obtained by the FAR 

Council. 

Regulatory Flexibility Act, 5 U.S.C. 601– 

612 

According to the Regulatory 

Flexibility Act (RFA), 5 U.S.C. 601, 

when an agency issues a rulemaking, it 

must prepare a regulatory flexibility 

analysis to address the impact of the 

rule on small entities. However, section 

605 of the RFA allows an agency to 

certify a rule, in lieu of preparing an 

analysis, if the rulemaking is not 

expected to have a significant economic 

impact on a substantial number of small 

entities. The RFA defines ‘‘small entity’’ 

to include ‘‘small businesses,’’ ‘‘small 

organizations,’’ and ‘‘small 

governmental jurisdictions.’’ 

This rule concerns various aspects of 

SBA’s contracting programs. As such, 

the rule relates to small business 

concerns, but would not affect ‘‘small 

organizations’’ or ‘‘small governmental 

jurisdictions’’ because those programs 

generally apply only to ‘‘business 

concerns’’ as defined by SBA 

regulations, in other words, to small 

businesses organized for profit. ‘‘Small 

organizations’’ or ‘‘small governmental 

jurisdictions’’ are non-profits or 

governmental entities and do not 

generally qualify as ‘‘business concerns’’ 

within the meaning of SBA’s 

regulations. 

There are approximately 350,000 

concerns registered as small business 

concerns in the System for Award 

Management (SAM) that could 

potentially be impacted by the 

implementation of section 870. 

However, SBA cannot say with any 

certainty how many will be impacted 

because we do not know how many of 

these concerns participate in 

government contracting as 

subcontractors. A firm is required to 

register in SAM in order to participate 

in Federal contracting as a prime 

contractor, but not for purposes of 

subcontracting. Therefore, there are no 

known compliance or other costs 

imposed by this rule on small business 

concerns. 

In sum, the regulatory amendments 

implemented by this rule will not have 

a disparate impact on small businesses 

and will increase their opportunities to 

participate in Federal Government 

contracting as subcontractors without 

imposing any additional costs. For the 

reasons discussed, SBA certifies that 

this rule will not have a significant 

economic impact on a substantial 

number of small business concerns. 

Congressional Review Act (5 U.S.C. 801– 

808) 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as amended by the 

Small Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a ‘‘major rule’’ may take 

effect, the agency promulgating the rule 

must submit a rule report, which 

includes a copy of the rule, to each 

House of the Congress and to the 

Comptroller General of the United 

States. SBA will submit a report 

containing this rulemaking and other 

required information to the U.S. Senate, 

the U.S. House of Representatives, and 

the Comptroller General of the United 

States. A major rule cannot take effect 

until 60 days after it is published in the 

Federal Register. This rulemaking has 

been reviewed and determined by OMB 

not to be a ‘‘major rule’’ under 5 U.S.C. 

804(2). 

List of Subjects in 13 CFR Part 125 

Government contracts, Government 

procurement, Reporting and 

recordkeeping requirements, Small 

businesses, Small business 

subcontracting. 

For the reasons stated in the 

preamble, SBA amends 13 CFR part 125 

as follows: 


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Federal Register / Vol. 88, No. 195 / Wednesday, October 11, 2023 / Rules and Regulations 70343 

PART 125—GOVERNMENT 

CONTRACTING PROGRAMS 

■ 1. The authority citation for 13 CFR 

part 125 is revised to read as follows: 

Authority: 15 U.S.C. 632(p), (q), 634(b)(6), 

637, 644, 657f, 657q, 657r, and 657s; 38 

U.S.C. 501 and 8127. 

■ 2. Amend § 125.3 by: 

■ a. Removing the number ‘‘$650,000’’ 

in paragraph (a) introductory text and 

adding in its place the number 

‘‘$750,000’’; 

■ b. Revising paragraph (a)(1)(i)(C); 

■ c. Removing the word ‘‘and’’ after the 

semicolon at the end of paragraph 

(c)(1)(xi); 

■ d. Redesignating paragraph (c)(1)(xii) 

as paragraph (c)(1)(xiii); and 

■ e. Adding a new paragraph (c)(1)(xii). 

The revision and addition read as 

follows: 

§ 125.3 What types of subcontracting 

assistance are available to small 

businesses? 

(a) * * * 

(1) * * * 

(i) * * * 

(C) Where the subcontracting goals 

pertain only to a single contract with 

one Federal agency, the contractor may 

elect to receive credit for small business 

concerns performing as first-tier 

subcontractors or subcontractors at any 

tier pursuant to the subcontracting plans 

required under paragraph (c) of this 

section in an amount equal to the dollar 

value of work awarded to such small 

business concerns. The election must be 

recorded in the subcontracting plan. If 

the contractor elects to receive credit for 

subcontractors at any tier, the following 

requirements apply: 

(1) The prime contractor must 

incorporate the subcontracting-plan 

goals of their lower-tier subcontractors 

in its individual-subcontracting-plan 

goals. 

(2) To receive credit for their 

subcontracting, lower-tier 

subcontractors must have their own 

individual subcontracting plans. 

(3) The prime contractor and any 

subcontractor with a subcontracting 

plan are responsible for reporting on 

subcontracting performance under their 

contracts or subcontracts at their first 

tier. This reporting method applies to 

both individual subcontracting reports 

and summary subcontracting reports. 

(4) The prime contractor’s 

performance under its individual 

subcontracting plan will be calculated 

by aggregating the prime contractor’s 

first-tier subcontracting achievements 

with the achievements of the prime 

contractor’s lower-tier subcontractors 

that have flow-down subcontracting 

plans. 

(5) If the subcontracting goals pertain 

to more than one contract with one or 

more Federal agencies, or to one 

contract with more than one Federal 

agency, the prime contractor shall 

receive credit only for first-tier 

subcontractors that are small business 

concerns. This restriction applies to all 

commercial plans, all comprehensive 

subcontracting plans with the 

Department of Defense, 

governmentwide contracts, and multiagency contracts. 

* * * * * 

(c) * * * 

(1) * * * 

(xii) The prime contractor must 

provide a written statement of the types 

of records it will maintain to 

demonstrate that procedures have been 

adopted to substantiate the 

subcontracting credit that the prime 

contractor elects under paragraph 

(a)(1)(i)(C) of this section; and 

* * * * * 

Isabella Casillas Guzman, 

Administrator. 

[FR Doc. 2023–22466 Filed 10–10–23; 8:45 am] 

BILLING CODE 8026–09–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 125 

RIN 3245–AH70 

Ownership and Control and 

Contractual Assistance Requirements 

for the 8(a) Business Development 

Program; Correction 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Correcting amendments. 

SUMMARY: The Small Business 

Administration (SBA) is correcting a 

final rule that was published in the 

Federal Register on April 27, 2023. The 

rule implemented several changes to the 

ownership and control requirements for 

the 8(a) Business Development program, 

implemented changes relating to 8(a) 

contracts, and implemented a statutory 

amendment in the National Defense 

Authorization Act (NDAA) for Fiscal 

Year (FY) 2022. 

DATES: Effective October 11, 2023. 

FOR FURTHER INFORMATION CONTACT: 

Donna Fudge, U.S. Small Business 

Administration, Office of Policy, 

Planning, and Liaison, 409 Third Street 

SW, Washington, DC 20416; (202) 205– 

6363; Donna.fudge@sba.gov. This phone 

number may also be reached by 

individuals who are deaf or hard of 

hearing, or who have speech 

disabilities, through the Federal 

Communications Commission’s TTYBased Telecommunications Relay 

Service teletype service at 711. 

SUPPLEMENTARY INFORMATION: On April 

27, 2023, SBA amended its regulation to 

implement changes to the ownership 

and control requirements for the 8(a) 

Business Development program, 

implement changes related to 8(a) 

contracts, and implement a statutory 

amendment from section 863 of the 

National Defense Authorization Act 

(NDAA) for Fiscal Year (FY) 2022. This 

is the second set of corrections. The first 

set of corrections was published in the 

Federal Register on May 5, 2023. (88 FR 

28985). This document augments those 

corrections. 

In the final rule at § 125.8(b)(iv), SBA 

inadvertently omitted a regulatory 

change instruction to clarify language 

stating how the funds remaining in the 

joint venture bank account at the 

conclusion of the joint venture 

contract(s) and/or termination of the 

joint venture are to be distributed. This 

paragraph is revised to state that the 

funds remaining in the joint venture 

bank account shall be distributed at the 

termination of the joint venture 

according to the percentage of 

ownership. 

This document also corrects a citation 

in 13 CFR 125.4(c)(5). 

List of Subjects in 13 CFR Part 125 

Government contracts, Government 

procurement, Reporting and 

recordkeeping requirements, Small 

businesses, Technical assistance. 

PART 125—GOVERNMENT 

CONTRACTING PROGRAMS 

■ 1. The authority citation for part 125 

continues to read as follows: 

Authority: 15 U.S.C. 632(p), (q), 634(b)(6), 

637, 644, 657r and 657s. 

■ 2. Amend § 125.4 by revising (c)(5) to 

read as follows: 

§ 125.4 What is the Government property 

sales assistance program? 

* * * * * 

(c) * * * 

(5) These provisions are contained in 

§§ 121.501 through 121.512 of this 

chapter. 

■ 3. Amend § 125.8 by revising (b)(2)(iv) 

to read as follows: 

§ 125.8 What requirements must a joint 

venture satisfy to submit an offer for a 

procurement or sale set aside or reserved 

for small business? 

* * * * * 

(b) * * * 

(2) * * * 

(iv) Stating that the small business 

participant(s) must receive profits from 


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