Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Rules and Regulations 20761 

(End of clause) 

[FR Doc. E7–7905 Filed 4–25–07; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 219 and 252 

RIN 0750–AE93 

Defense Federal Acquisition 

Regulation Supplement; Small 

Business Programs (DFARS Case 

2003–D047) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD has issued a final rule 

amending Defense Federal Acquisition 

Regulation Supplement (DFARS) text 

pertaining to small business programs. 

The rule updates and clarifies policy for 

contracting with small business and 

small disadvantaged business concerns 

and relocates text to the DFARS 

companion resource, Procedures, 

Guidance, and Information. 

EFFECTIVE DATE: April 26, 2007. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Deborah Tronic, Defense Acquisition 

Regulations System, 

OUSD(AT&L)DPAP(DARS), IMD 3C132, 

3062 Defense Pentagon, Washington, DC 

20301–3062. Telephone (703) 602–0289; 

facsimile (703) 602–0350. Please cite 

DFARS Case 2003–D047. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This final rule amends DFARS Part 

219 and corresponding contract clauses. 

The DFARS changes—

• Update and clarify requirements for 

contracting with small business and 

small disadvantaged business concerns; 

and 

• Delete text containing procedures 

for referring matters to the Small 

Business Administration; procedures for 

processing contract awards under the 

8(a) Program; and information on the 

DoD test program for negotiation of 

comprehensive small business 

subcontracting plans. Text on these 

subjects has been relocated to the 

DFARS companion resource, 

Procedures, Guidance, and Information 

(PGI), available at http:// 

www.acq.osd.mil/dpap/dars/pgi. 

DoD published a proposed rule at 71 

FR 9303 on February 23, 2006. Three 

respondents submitted comments on the 

proposed rule. A discussion of the 

comments is provided below. 

1. Comment: One respondent stated 

that the proposed changes to 

subcontracting plan requirements at 

DFARS 219.704(2) and 252.219–7003(g) 

would create an ambiguity. These 

changes proposed to amend text 

requiring contractors to notify the 

administrative contracting officer (ACO) 

of any substitutions of ‘‘firms that are 

not small, small disadvantaged, or 

women-owned small businesses for the 

firms listed in the subcontracting plan,’’

to instead indicate that the contractor 

must notify the ACO of any 

substitutions of small businesses 

specifically identified in the 

subcontracting plan. The respondent 

stated that ACOs and contractors could 

interpret this change to mean that 

contractors would be required to 

provide notification when substituting 

any firm, even one that is a small 

business concern, for one that is listed 

in the subcontracting plan. The 

respondent recommended that the rule 

instead require contractors to notify the 

ACO of any substitutions of ‘‘firms that 

are not small business concerns’’ for the 

firms listed in the subcontracting plan. 

DoD Response: DoD agrees that the 

language in the proposed rule could be 

ambiguous. Therefore, the final rule has 

been written to clarify the existing 

policy, i.e., that the contractor must 

notify the ACO of any substitutions of 

firms that are not small business firms, 

for the small business firms specifically 

identified in the subcontracting plan. 

2. Comment: One respondent 

recommended deleting the proposed 

text at 219.704(3), which contains a 

reference to the procedures in DFARS 

215.304 regarding evaluation of offers 

that require a subcontracting plan. The 

respondent recommended that the 

proposed 219.704(3) be replaced with 

text stating that offerors with approved 

commercial or comprehensive 

subcontracting plans are not required to 

submit contract-specific goals, and that 

those offerors will be evaluated based 

on Standard Form 295 information and 

Defense Contract Management Agency 

evaluations of company-wide 

performance under their small business 

programs. In addition, the respondent 

recommended that 219.704 state that 

contracting officers may accept 

commercial subcontracting plans for 

both commercial item and 

noncommercial item contracts, provided 

the plan covers the entire production of 

both commercial and noncommercial 

items as set forth at FAR 52.219–9(g). 

DoD Response: The issues addressed 

in this comment go beyond the scope of 

the changes being made under this 

DFARS case. DoD recognizes the 

importance of the issues raised by the 

respondent and is currently working 

independently of this case to resolve 

those issues. Any proposed changes to 

the DFARS that might result would be 

published under a separate case for 

public comment. 

3. Comment: One respondent stated 

that deleting DFARS text and putting it 

in PGI requires contracting officers to 

research multiple locations to ensure 

they are complying with all the 

necessary requirements. The respondent 

stated that deleting requirements would 

be streamlining, not moving them to 

another area which may cause 

uncertainty and ambiguity. 

DoD Response: DoD has moved nonregulatory requirements and guidance 

that do not significantly impact the 

public, from DFARS to PGI to facilitate 

rapid dissemination of any future 

changes, thus streamlining the process. 

Where there is related text in PGI, a link 

to this text is imbedded in DFARS. 

Through these links, the user is able to 

view the related PGI text side-by-side 

with the DFARS text. PGI also contains 

information on training, deviations, 

policy memoranda, and other 

information (e.g., guidebooks) that is not 

available in the DFARS. 

This rule was not subject to Office of 

Management and Budget review under 

Executive Order 12866, dated 

September 30, 1993. 

B. Regulatory Flexibility Act 

DoD certifies that this final rule will 

not 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 the rule makes no significant 

change to DoD policy for contracting 

with small business and small 

disadvantaged business concerns. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply, because the rule does not 

impose any 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 219 and 

252 

Government procurement. 

Michele P. Peterson, 

Editor, Defense Acquisition Regulations 

System. 

■ Therefore, 48 CFR parts 219 and 252 

are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 219 and 252 continues to read as 

follows: 


pwalker on PROD1PC71 with RULES
20762 Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Rules and Regulations 

Authority: 41 U.S.C. 421 and 48 CFR 

Chapter 1. 

PART 219—SMALL BUSINESS 

PROGRAMS 

■ 2. Section 219.000 is revised to read 

as follows: 

219.000 Scope of part. 

This part also implements 10 U.S.C. 

2323, which—

(1) Is applicable to DoD through fiscal 

year 2009; and 

(2) Establishes goals for awards to 

small disadvantaged business (SDB) 

concerns, historically black colleges and 

universities (HBCUs), and minority 

institutions (MIs). See 226.370 for 

policy on contracting with HBCU/MIs. 

219.202–1 [Removed] 

■ 3. Section 219.202–1 is removed. 

■ 4. The heading of Subpart 219.6 is 

revised to read as follows: 

Subpart 219.6—Certificates of 

Competency and Determinations of 

Responsibility 

■ 5. Section 219.602 is revised to read 

as follows: 

219.602 Procedures. 

When making a nonresponsibility 

determination for a small business 

concern, follow the procedures at PGI 

219.602. 

219.602–1 and 219.602–3 [Removed] 

■ 6. Sections 219.602–1 and 219.602–3 

are removed. 

■ 7. Section 219.702 is revised to read 

as follows: 

219.702 Statutory requirements. 

(1) Section 834 of Public Law 101–

189, as amended (15 U.S.C. 637 note), 

requires DoD to establish a test program 

to determine whether comprehensive 

subcontracting plans on a corporate, 

division, or plant-wide basis will reduce 

administrative burdens while enhancing 

subcontracting opportunities for small 

and small disadvantaged business 

concerns. See PGI 219.702 for the 

requirements of the test program. 

(2) Comprehensive subcontracting 

plans shall not be subject to application 

of liquidated damages during the period 

of the test program (Section 402, Pub. L. 

101–574). 

219.703 [Amended] 

■ 8. Section 219.703 is amended in 

paragraph (a)(2)(B) by removing ‘‘Small, 

Small Disadvantaged and WomenOwned’’. 

■ 9. Section 219.704 is revised to read 

as follows: 

219.704 Subcontracting plan 

requirements. 

(1) The goal for use of small 

disadvantaged business concerns shall 

include subcontracts with historically 

black colleges and universities and 

minority institutions (see Subpart 

226.70), in addition to subcontracts with 

small disadvantaged business concerns. 

Subcontracts with historically black 

colleges and universities and minority 

institutions do not have to be included 

in the small disadvantaged business 

goal in commercial items subcontracting 

plans. 

(2) In those subcontracting plans 

which specifically identify small 

businesses, prime contractors shall 

notify the administrative contracting 

officer of any substitutions of firms that 

are not small business firms, for the 

small business firms specifically 

identified in the subcontracting plan. 

Notifications shall be in writing and 

shall occur within a reasonable period 

of time after award of the subcontract. 

Contractor-specified formats shall be 

acceptable. 

(3) See 215.304 for evaluation of offers 

in acquisitions that require a 

subcontracting plan. 

219.705–2 [Removed] 

■ 10. Section 219.705–2 is removed. 

■ 11. Section 219.708 is amended by 

revising the section heading and 

paragraph (b)(1) to read as follows: 

219.708 Contract clauses. 

(b)(1)(A) Use the clause at 252.219–

7003, Small Business Subcontracting 

Plan (DoD Contracts), in solicitations 

and contracts that contain the clause at 

FAR 52.219–9, Small Business 

Subcontracting Plan. 

(B) In contracts with contractors that 

have comprehensive subcontracting 

plans approved under the test program 

described in 219.702, use the clause at 

252.219–7004, Small Business 

Subcontracting Plan (Test Program), 

instead of the clauses at 252.219–7003, 

Small Business Subcontracting Plan 

(DoD Contracts), and FAR 52.219–9, 

Small Business Subcontracting Plan. 

* * * * * 

■ 12. Section 219.800 is amended by 

revising paragraph (a) to read as follows: 

219.800 General. 

(a) By Partnership Agreement (PA) 

between the Small Business 

Administration (SBA) and the 

Department of Defense (DoD), the SBA 

has delegated to the Under Secretary of 

Defense (Acquisition, Technology, and 

Logistics) its authority under paragraph 

8(a)(1)(A) of the Small Business Act (15 

U.S.C. 637(a)) to enter into 8(a) prime 

contracts, and its authority under 

8(a)(1)(B) of the Small Business Act to 

award the performance of those 

contracts to eligible 8(a) Program 

participants. However, the SBA remains 

the prime contractor on all 8(a) 

contracts, continues to determine 

eligibility of concerns for contract 

award, and retains appeal rights under 

FAR 19.810. The SBA delegates only the 

authority to sign contracts on its behalf. 

Consistent with the provisions of the 

PA, this authority is hereby redelegated 

to DoD contracting officers. A copy of 

the PA, which includes the PA’s 

expiration date, is available at PGI 

219.800. 

* * * * * 

■ 13. Section 219.803 is revised to read 

as follows: 

219.803 Selecting acquisitions for the 8(a) 

Program. 

When selecting acquisitions for the 

8(a) Program, follow the procedures at 

PGI 219.803. 

■ 14. Section 219.804 is revised to read 

as follows: 

219.804 Evaluation, offering, and 

acceptance. 

When processing requirements under 

the PA, follow the procedures at PGI 

219.804. 

219.804–2 and 219.804–3 [Removed] 

■ 15. Sections 219.804–2 and 219.804–

3 are removed. 

■ 16. Section 219.805–2 is revised to 

read as follows: 

219.805–2 Procedures. 

When processing requirements under 

the PA, follow the procedures at PGI 

219.805–2 for requesting eligibility 

determinations. 

■ 17. Sections 219.808–1 and 219.811 

are revised to read as follows: 

219.808–1 Sole source. 

For sole source requirements 

processed under the PA, follow the 

procedures at PGI 219.808–1. 

219.811 Preparing the contracts. 

When preparing awards under the PA, 

follow the procedures at PGI 219.811. 

219.811–1 and 219.811–2 [Removed] 

■ 18. Sections 219.811–1 and 219.811–

2 are removed. 

■ 19. Section 219.811–3 is amended by 

revising paragraph (3) to read as follows: 

219.811–3 Contract clauses. 

* * * * * 

(3) Use the clause at 252.219–7011, 

Notification to Delay Performance, in 


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Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Rules and Regulations 20763 

solicitations and purchase orders issued 

under the PA cited in 219.800. 

219.812 [Removed] 

■ 20. Section 219.812 is removed. 

■ 21. Section 219.1101 is added to read 

as follows: 

219.1101 General. 

The determination to use or suspend 

the price evaluation adjustment for DoD 

acquisitions can be found at http:// 

www.acq.osd.mil/dpap/dars/classdev/ 

index.htm. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 22. Section 252.212–7001 is amended 

by revising the clause date and 

paragraphs (b)(2) and (3) to read as 

follows: 

252.212–7001 Contract terms and 

conditions required to implement Statutes 

or Executive orders applicable to Defense 

acquisitions of commercial items. 

* * * * * 

CONTRACT TERMS AND CONDITIONS 

REQUIRED TO IMPLEMENT STATUTES OR 

EXECUTIVE ORDERS APPLICABLE TO 

DEFENSE ACQUISITIONS OF 

COMMERCIAL ITEMS (APR 2007) 

* * * * * 

(b) * * * 

(2) ll 252.219–7003, Small Business 

Subcontracting Plan (DoD Contracts) (APR 

2007) (15 U.S.C. 637). 

(3) ll 252.219–7004, Small Business 

Subcontracting Plan (Test Program) (APR 

2007) (15 U.S.C. 637 note). 

* * * * * 

■ 23. Section 252.219–7003 is amended 

by revising the section heading, the 

clause title and date, the introductory 

text preceding paragraph (a), and 

paragraph (g) to read as follows: 

252.219–7003 Small business 

subcontracting plan (DoD contracts). 

* * * * * 

SMALL BUSINESS SUBCONTRACTING 

PLAN (DOD CONTRACTS) (APR 2007) 

This clause supplements the Federal 

Acquisition Regulation 52.219–9, Small 

Business Subcontracting Plan, clause of this 

contract. 

* * * * * 

(g) In those subcontracting plans which 

specifically identify small businesses, the 

Contractor shall notify the Administrative 

Contracting Officer of any substitutions of 

firms that are not small business firms, for 

the small business firms specifically 

identified in the subcontracting plan. 

Notifications shall be in writing and shall 

occur within a reasonable period of time after 

award of the subcontract. Contractorspecified formats shall be acceptable. 

■ 24. Section 252.219–7004 is amended 

by revising the section heading, the 

clause title and date, and paragraph (d) 

to read as follows: 

252.219–7004 Small business 

subcontracting plan (test program). 

* * * * * 

SMALL BUSINESS SUBCONTRACTING 

PLAN (TEST PROGRAM) (APR 2007) 

* * * * * 

(d) The failure of the Contractor or 

subcontractor to comply in good faith with 

(1) the clause of this contract entitled 

‘‘Utilization of Small Business Concerns,’’ or 

(2) an approved plan required by this clause, 

shall be a material breach of the contract. 

[FR Doc. E7–7906 Filed 4–25–07; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 222 

RIN 0750–AF59 

Defense Federal Acquisition 

Regulation Supplement; Wage 

Determinations (DFARS Case 2006–

D043) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD has issued a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to update procedures for 

obtaining Department of Labor wage 

determinations for construction and 

service contracts. The DFARS 

amendments are consistent with 

changes made to the Federal 

Acquisition Regulation. 

EFFECTIVE DATE: April 26, 2007. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy Williams, Defense Acquisition 

Regulations System, OUSD (AT&L) 

DPAP (DARS), IMD 3C132, 3062 

Defense Pentagon, Washington, DC 

20301–3062. Telephone (703) 602–0328; 

facsimile (703) 602–0350. Please cite 

DFARS Case 2006–D043. 

SUPPLEMENTARY INFORMATION: 

A. Background 

Item IV of Federal Acquisition 

Circular 2005–10, published at 71 FR 

36930 on June 28, 2006, amended the 

Federal Acquisition Regulation to 

implement the Wage Determinations 

OnLine internet Website as the source 

for obtaining Department of Labor wage 

determinations for construction and 

service contracts. 

This final rule makes the following 

corresponding DFARS changes: 

Æ Revises the heading of sections 

222.001 and 222.1008. 

Æ Relocates text addressing use of the 

Service Contract Act Directory of 

Occupations, from 222.1008–2 to 

222.1008–1, and updates the text to 

reflect the replacement of Standard 

Form 98a with the electronic e98 

process. 

Æ Removes obsolete text at 222.1008–

7 and 222.1014. 

In addition, this final rule adds 

DFARS section 222.404–2, which 

contains a reference to internal DoD 

procedures for obtaining clarification of 

proper application of construction wage 

rate schedules. 

This rule was not subject to Office of 

Management and Budget review under 

Executive Order 12866, dated 

September 30, 1993. 

B. Regulatory Flexibility Act 

This rule will not have a significant 

cost or administrative impact on 

contractors or offerors, or a significant 

effect beyond the internal operating 

procedures of DoD. Therefore, 

publication for public comment under 

41 U.S.C. 418b is not required. 

However, DoD will consider comments 

from small entities concerning the 

affected DFARS subparts in accordance 

with 5 U.S.C. 610. Such comments 

should cite DFARS Case 2006–D043. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply, because the rule does not 

impose any 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 Part 222 

Government procurement. 

Michele P. Peterson, 

Editor, Defense Acquisition Regulations 

System. 

■ Therefore, 48 CFR part 222 is 

amended as follows: 

PART 222—APPLICATION OF LABOR 

LAWS TO GOVERNMENT 

ACQUISITIONS 

■ 1. The authority citation for 48 CFR 

part 222 continues to read as follows: 

Authority: 41 U.S.C. 421 and 48 CFR 

Chapter 1. 

■ 2. Section 222.001 is amended by 

revising the section heading to read as 

follows: 


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