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###### Department of Defense

###### GENERAL SERVICES ADMINISTRATION 

###### NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 

          - 48 CFR Parts 2, 4, 5, 7, 19, 52, and 53 
          - [FAC 97-20; FAR Case 2000-302; Item I] 
          - RIN 9000-AI93 

# AGENCIES:

Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). 

# ACTION:

Interim rule with request for comments. 

# SUMMARY:

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on an interim rule amending the Federal Acquisition Regulation (FAR) to implement portions of the Veterans Entrepreneurship and Small Business Development Act of 1999 (Pub. L. 106-50). The Act established new assistance programs for veterans and service-disabled veterans who own and operate small businesses. 

# DATES:

*Effective Date:*                             October 11, 2000.                         

*Comment Date:*                             Interested parties should submit comments to the FAR Secretariat at the address shown below on or before December 11, 2000 to be considered in the formulation of a final rule.                         

      ( print page 60543)    

# ADDRESSES:

Submit written comments to: General Services Administration, FAR Secretariat (MVR), 1800 F Street, NW, Room 4035, Attn: Ms. Laurie Duarte, Washington, DC 20405 

Submit electronic comments via the Internet to: farcase.2000-302@gsa.gov. Please submit comments only and cite FAC 97-20, FAR case 2000-302 in all correspondence related to this case. 

# FOR FURTHER INFORMATION CONTACT:

The FAR Secretariat, Room 4035, GS Building, Washington, DC 20405, (202) 501-4755, for information pertaining to status or publication schedules. For clarification of content, contact Ms. Victoria Moss, Procurement Analyst, at (202) 501-4764. Please cite FAC 97-20, FAR case 2000-302. 

# SUPPLEMENTARY INFORMATION:

## A. Background 

This interim rule amends the FAR to implement sections 501(c), 502(a)(2), and 604(d) of the Veterans Entrepreneurship and Small Business Development Act of 1999 (Pub. L. 106-50). This Act established new assistance programs for veterans and service-disabled veterans who own and operate small businesses. Specifically, the Act— 

1. Defined the terms ``small business concern owned and controlled by veterans'' and  ``small business concern owned and controlled by service-disabled veterans;'' 

2. Established that veteran-owned and service-disabled veteran-owned small businesses be afforded maximum practical opportunity to participate in the performance of contracts and subcontracts awarded by any Federal agency; 

3. Established a requirement to include a goal for veteran-owned small businesses in subcontracting plans under FAR 52.219-9; 

4. Established a 3 percent Governmentwide goal (based on the total value of all prime contract and subcontract awards) for participation by service-disabled veteran-owned small businesses; and 

5. Added data collection requirements for prime and subcontract awards to veteran-owned small businesses and service-disabled veteran-owned small business concerns. 

This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. 

## B. Regulatory Flexibility Act 

                        The changes may 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 now expands the small business program by identifying new subgroups of small entities (i.e., veteran-owned small businesses and service-disabled veteran-owned small businesses) for prime contracting and subcontracting opportunities. An Initial Regulatory Flexibility Analysis (IRFA) has been prepared and is summarized as follows:                    

This interim rule amends the Federal Acquisition Regulation in order to comply with recently enacted legislation concerning small business concerns owned and controlled by veterans and service-disabled veterans. It implements section 501(c), section 502(a)(2), and section 604(d) of the Veterans Entrepreneurship and Small Business Development Act of 1999 (Pub. L. 106-50). It is estimated that there are 4 to 5.5 million small businesses owned and controlled by veterans and 100,000 to 300,000 small businesses owned and controlled by service-disabled veterans. Section 604(d) of Title VI of the Act adds data collection requirements to the Federal Procurement Data System for prime contracts and subcontracts awarded to small business concerns owned and controlled by veterans and small business concerns owned and controlled by service-disabled veterans. This rule does not duplicate, overlap, or conflict with other relevant Federal rules. There are no significant alternatives to the interim rule that would accomplish the stated beneficial objectives. 

                        The FAR Secretariat has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. Interested parties may obtain a copy from the FAR Secretariat. The Councils will consider comments from small entities concerning the affected FAR Parts in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C 601,                         *et seq.*                         (FAC 97-20, FAR case 2000-302), in correspondence.                     

## C. Paperwork Reduction Act 

The Paperwork Reduction Act (Pub. L. 104-13) applies because the interim rule contains information collection requirements. Two existing OMB clearances are affected by this rule as follows: 

### Annual Reporting Burden for OMB Clearance 9000-0006 

We estimate the public reporting burden for this collection of information to average 50.54 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. 

We estimate the annual reporting burden is as follows: 

*Respondents:*                         4,253.                     

*Responses per respondent:*                         3.44.                     

*Total annual responses:*                         14,631.                     

*Preparation hours per response:*                         50.54.                     

*Total response burden hours:*                         739,389.                     

### Annual Reporting Burden for OMB Clearance 9000-0007

We estimate the public reporting burden for this collection of information to average 15.9 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. 

We estimate the annual reporting burden is as follows: 

*Respondents:*                         4,253.                     

*Responses per respondent:*                         1.67.                     

*Total annual responses:*                         7,098.                     

*Preparation hours per response:*                         15.9.                     

*Total response burden hours:*                         112,864.                     

## D. Request for Comments Regarding Paperwork Burden 

Submit comments, including suggestions for reducing this burden, not later than December 11, 2000 to: FAR Desk Officer, OMB, Room 10102, NEOB, Washington, DC 20503, and a copy to the General Services Administration, FAR Secretariat (MVR), 1800 F Street, NW, Room 4035, Washington, DC 20405. 

We particularly invite public comments on: whether this collection of information is necessary for the proper performance of functions of the FAR, and will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology. 

Requester may obtain a copy of the justifications from the General Services Administration, FAR Secretariat (MVR), Room 4035, Washington, DC 20405, telephone (202) 208-7312. Please cite OMB Control Numbers 9000-0006 or 9000-0007 in all correspondence. 

## E. Determination To Issue an Interim Rule 

                        A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator                               ( print page 60544)                            of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary in order to implement portions of the Veterans Entrepreneurship and Small Business Development Act of 1999 (Pub. L. 106-50). However, pursuant to Public Law 98-577 and FAR 1.501, the Councils will consider public comments received in response to this interim rule in the formation of the final rule.                     

# List of Subjects in 48 CFR Parts 2, 4, 5, 7, 19, 52, and 53

      - Government procurement

Dated: October 3, 2000. 

Al Matera, 

Acting Director, Federal Acquisition Policy Division. 

Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 5, 7, 19, 52, and 53 as set forth below: 

1. The authority citation for 48 CFR parts 2, 4, 5, 7, 19, 52, and 53 continues to read as follows: 

Authority:40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). 

# PART 2—DEFINITIONS OF WORDS AND TERMS 

2. Amend section 2.101 by adding, in alphabetical order, the definitions ``Service-disabled veteran-owned small business concern'' and ``Veteran-owned small business concern'' to read as follows: 

2.101 

* * * * *

*Service-disabled veteran-owned small business concern—*

(1) Means a small business concern— 

(i) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and 

(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran. 

(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined in 38 U.S.C. 101(16). 

* * * * *

*Veteran-owned small business concern*                                 means a small business concern—                             

(1) Not less than 51 percent of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and 

(2) The management and daily business operations of which are controlled by one or more veterans. 

* * * * *

# PART 4—ADMINISTRATIVE MATTERS 

3. Amend section 4.602 by revising paragraph (a)(2); and in paragraph (d) by removing ``shall'' each time it is used (three times) and adding ``must'' in its place. The revised text reads as follows: 

4.602

(a) * * * 

(2) A means of measuring and assessing the impact of Federal contracting on the Nation's economy and the extent to which small, veteran-owned small, service-disabled veteran-owned small, HUBZone small, small disadvantaged, and women-owned small business concerns are sharing in Federal contracts; and

* * * * *

# PART 5—PUBLICIZING CONTRACT ACTIONS 

4. Amend section 5.002 in the introductory paragraph by removing “shall” and adding “must” in its place; and by revising paragraph (c) to read as follows: 

5.002 

* * * * *

(c) Assist small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns in obtaining contracts and subcontracts. 

# PART 7—ACQUISITION PLANNING 

5. Amend section 7.105 in the introductory paragraph by removing “shall” each time it is used (four times) and adding “must” in its place; and by revising the third sentence of paragraph (b)(1) to read as follows: 

7.105 

* * * * *

                                (b)                                 *Plan of action*                                —(1)                                 *Sources*. * * * Include consideration of small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns (see part 19), and the impact of any bundling that might affect their participation in the acquisition (see 7.107) (15 U.S.C. 644(e)). * * *                             

* * * * *

# PART 19—SMALL BUSINESS PROGRAMS 

6. Amend section 19.000 in paragraph (a)(9) by removing “and”; in paragraph (a)(10) by removing the period and adding “; and” in its place; and by adding paragraph (a)(11) to read as follows: 

19.000 

(a) * * * 

(11) The use of veteran-owned small business concerns and service-disabled veteran-owned small business concerns. 

* * * * *

19.001

7. Amend section 19.001 in the definition “Small disadvantaged business concern” by removing “52.212-3(c)(2)” and adding “52.212-3(c)(4)” in its place; and by removing “52.212-3(c)(7)(ii)” and adding “52.212-3(c)(9)(ii)” in its place. 

19.201

8. Amend section 19.201 in the first sentence of paragraph (a) by adding “veteran-owned small business, service-disabled veteran-owned small business,” before the word “HUBZone”; and in the second sentence by removing “shall” and adding “must” in its place. 

19.202-2

9. Amend section 19.202-2 in the introductory paragraph by removing “shall” and adding “must” in its place; and by adding “veteran-owned small business, service-disabled veteran-owned small business,” before the word “HUBZone”. 

19.202-4

10. Amend section 19.202-4 in the introductory paragraph by removing “shall” and adding “must” in its place; and by adding “veteran-owned small business, service-disabled veteran-owned small business,” before the word “HUBZone”. 

19.202-5

11. Amend section 19.202-5 in the introductory paragraph by removing “shall” and adding “must” in its place; and in paragraphs (a) and (b) by adding “veteran-owned small business, service-disabled veteran-owned small business,” before the word “HUBZone”. 

      ( print page 60545)    

# Subpart 19.3—Determination of Small Business Status for Small Business Programs 

12. The heading of subpart 19.3 is revised to read as set forth above. 

19.301

13. Amend section 19.301 in the first sentence of paragraph (d) by adding “veteran-owned small business,” before the word “HUBZone”. 

19.304

14. Amend section 19.304 in paragraph (b) by removing “52.212-3(c)(2)” and adding “52.212-3(c)(4)” in its place; and in paragraph (c) by removing “52.212-3(c)(7)” and adding “52.212-3(c)(9)” in its place. 

19.402 

15. Amend section 19.402 in paragraph (c)(1)(ii) by adding “veteran-owned small, service-disabled veteran-owned small,” before the word “HUBZone”. 

16. Amend section 19.702 by revising the introductory paragraph to read as follows: 

19.702 

Any contractor receiving a contract for more than the simplified acquisition threshold must agree in the contract that small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns will have the maximum practicable opportunity to participate in contract performance consistent with its efficient performance. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. 

* * * * *

17. Amend section 19.703 by revising the introductory text of paragraph (a), paragraph (a)(1) and the first sentence of paragraph (b); in the fifth sentence of paragraph (b) by removing “shall” and adding “must” in its place; and adding a sixth sentence to paragraph (b). The revised and added text reads as follows: 

19.703 

(a) To be eligible as a subcontractor under the program, a concern must represent itself as a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, or woman-owned small business concern. 

(1) To represent itself as a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, or woman-owned small business concern, a concern must meet the appropriate definition in 2.101 or 19.001. 

* * * * *

(b) A contractor acting in good faith may rely on the written representation of its subcontractor regarding the subcontractor's status as a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, or a woman-owned small business concern. * * * Protests challenging HUBZone small business concerns status must be filed in accordance with 13 CFR 126.800.

18. Amend section 19.704 by revising paragraph (a)(1); and in paragraphs (a)(2), (a)(3), (a)(6), (a)(8), and (a)(11) by adding “veteran-owned small business,” before the word “HUBZone”. The revised text reads as follows: 

19.704 

(a) * * * 

(1) Separate percentage goals for using small business, veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns as subcontractors. Service-disabled veteran-owned small business concerns meet the definition of veteran-owned small business concerns, and offerors may include them within the subcontracting plan goal for veteran-owned small business concerns. A separate goal for service-disabled veteran-owned small business concerns is not required;. 

* * * * *

19.705-2

19. Amend section 19.705-2 in the introductory paragraph by removing “shall” and adding “must” in its place; and in the last sentence of paragraph (d) by removing “shall” and adding “must” in its place, and adding “veteran-owned small business (including service-disabled veteran-owned small business),” before the word “HUBZone”. 

20. Amend section 19.705-4 by— 

a. Removing from the introductory paragraph “shall” and adding “must” in its place; 

b. Adding in the second and last sentences of paragraph (c), and paragraphs (d)(1) and (d)(5) “veteran-owned small business,” before the word “HUBZone”; and 

c. Revising paragraph (d)(6) to read as follows: 

19.705-4 

* * * * *

(d) * * * 

(6) Advise the offeror of available sources of information on potential small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business subcontractors, as well as any specific concerns known to be potential subcontractors. If the offerors proposed goals are questionable, the contracting officer must emphasize that the information should be used to develop realistic and acceptable goals. The contracting officer should ensure that the contractor has considered the use of service-disabled veteran-owned small businesses in developing its veteran-owned small business goal (see 19.704(a)(1) and 52.219-9(d)(1)). 

* * * * *

19.705-7 

21. Amend section 19.705-7 in paragraph (a) by adding in the first sentence “veteran-owned small business (including service-disabled veteran-owned small business),” before the word “HUBZone”; and in the third and fourth sentences of paragraph (d) by adding “veteran-owned small business (including service-disabled veteran-owned small business),” before the word “HUBZone”. 

19.706 

22. Amend section 19.706 in paragraphs (b) and (c) by adding “veteran-owned small business (including service-disabled veteran-owned small business),” before the word “HUBZone”. 

19.708 

23. Amend section 19.708 in paragraphs (c)(1), (c)(2), and (c)(3) by adding “veteran-owned small business (including service-disabled veteran-owned small business),” before the word “HUBZone”. 

# PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 

24. Amend section 52.212-3 by— 

a. Revising the date of the provision; 

b. Adding in paragraph (a), in alphabetical order, the definitions “Service-disabled veteran-owned small       ( print page 60546)                                business concern” and “Veteran-owned small business concern”;                         

c. Redesignating paragraphs (c)(2) through (c)(7) as (c)(4) through (c)(9), respectively, and adding new paragraphs (c)(2) and (c)(3); 

d. Removing from the “Note” paragraph in newly designated paragraph (c)(5), “(c)(4) and (c)(5)” and adding “(c)(6) and (c)(7)” in its place; 

e. Removing from Alternate I “( *Oct 1998*)” and adding “(                            *Oct 2000*)” in its place, and removing “(c)(8)” and adding “(c)(10)” in its place; redesignating paragraph “(8)” as “(10)” and removing “(c)(7)” and adding “(c)(9)” in its place;                         

f. Removing from Alternate II “( *Oct 1998*)” and adding “(                            *Oct 2000*)” in its place, and removing “(c)(7)(iii)” and adding “(c)(9)(iii)” in its place; and                         

g. Removing from Alternate III “( *Jan 1999*)” and adding “(                            *Oct 2000*)” in its place, and removing “(c)(9)” and adding “(c)(11)” in its place; designating the second paragraph of Alternate III as paragraph (c)(11); and removing from newly designated paragraph (c)(11)(ii) “(c)(9)(i)” and adding “(c)(11)(i)” in its place.                         

The revised text reads as follows: 

52.212-3 

* * * * *

## Offeror Representations and Certifications—Commercial Items (Oct. 2000) 

(a) * * * 

* * * * *

*Service-disabled veteran-owned small business concern*                                    —                                 

(1) Means a small business concern— 

(i) Not less than 51 percent of which is owned by one or more service—disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and 

(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran. 

(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined in 38 U.S.C. 101(16). 

* * * * *

*Veteran-owned small business concern*                                     means a small business concern—                                 

(1) Not less than 51 percent of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and

(2) The management and daily business operations of which are controlled by one or more veterans. 

* * * * *

(c) * * *

                                    (2)                                     *Veteran-owned small business concern.*                                     [                                    *Complete only if the offeror represented itself as a small business concern in paragraph (c)(1) of this provision.*] The offeror represents as part of its offer that it [ ] is, [ ] is not a veteran-owned small business concern.                                 

                                    (3)                                     *Service-disabled veteran-owned small business concern.*                                     [                                    *Complete only if the offeror represented itself as a veteran-owned small business concern in paragraph (c)(2) of this provision.*] The offeror represents as part of its offer that it [ ] is, [ ] is not a service-disabled veteran-owned small business concern.                                 

* * * * *

25. Amend section 52.219-1 by— 

a. Revising the date of the provision; 

b. Adding paragraphs (b)(4) and (b)(5); 

c. Revising the heading of paragraph (c) and adding, in alphabetical order, the definitions “Service-disabled veteran-owned small business concern” and “Veteran-owned small business concern”; 

d. Removing “, as used in this provision,” from the definitions “Small business concern” and “Women-owned small business concern”; 

e. Adding in the introductory text of paragraph (d)(2) “HUBZone small,” after the word “small,” the first time it appears; 

f. Removing from Alternate I “( *Nov 1999*)” and adding “(                            *Oct 2000*)” in its place, removing “(b)(4)” and adding “(b)(6)” in its place; redesignating paragraph (4) as paragraph (b)(6); removing from newly designated paragraph (b)(6)(ii) “(b)(4)(i)” and adding “(b)(6)(i)” in its place; and                        

g. Removing from Alternate II “( *Nov 1999*)” and adding “(                            *Oct 2000*)” in its place, and removing “(b)(5)” and adding “(b)(7)” in its place; and redesignating paragraph (5) of Alternate II as paragraph (b)(7). The revised text reads as follows:                         

52.219-1 

* * * * *

## Small Business Program Representations (Oct. 2000) 

* * * * *

(b) * * *

                                    (4) [                                    *Complete only if the offeror represented itself as a small business concern in paragraph (b)(1) of this provision.*] The offeror represents as part of its offer that it [ ] is, [ ] is not a veteran-owned small business concern.                                 

                                    (5) [                                    *Complete only if the offeror represented itself as a veteran-owned small business concern in paragraph (b)(4) of this provision.*] The offeror represents as part of its offer that it [ ] is, [ ] is not a service-disabled veteran-owned small business concern.                                 

                                    (c)                                     *Definitions.*                                     As used in this provision—                                 

*Service-disabled veteran-owned small business concern—*

(1) Means a small business concern— 

(i) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and

(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran. 

(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined in 38 U.S.C. 101(16). 

* * * * *

*Veteran-owned small business concern*                                     means a small business concern—                                 

(1) Not less than 51 percent of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and

(2) The management and daily business operations of which are controlled by one or more veterans. 

* * * * *

26. Amend section 52.219-8 by revising the date of the clause and paragraphs (a), (c), and (d) to read as follows: 

52.219-8 

* * * * *

## Utilization of Small Business Concerns (Oct. 2000) 

(a) It is the policy of the United States that small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns shall have the maximum practicable opportunity to participate in performing contracts let by any Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns. 

* * * * *

                                    (c)                                     *Definitions.*                                     As used in this contract—                                 

*HUBZone small business concern*                                     means a small business concern that appears on the List of Qualified HUBZone Small Business Concerns maintained by the Small Business Administration.                                 

*Service-disabled veteran-owned small business concern—*

                                    (1) Means a small business concern—                                           ( print page 60547)    

(i) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and

(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran. 

(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined in 38 U.S.C. 101(16). 

*Small business concern*                                     means a small business as defined pursuant to Section 3 of the Small Business Act and relevant regulations promulgated pursuant thereto.                                 

*Small disadvantaged business concern*                                     means a small business concern that represents, as part of its offer that—                                 

(1) It has received certification as a small disadvantaged business concern consistent with 13 CFR part 124, subpart B; 

(2) No material change in disadvantaged ownership and control has occurred since its certification; 

(3) Where the concern is owned by one or more individuals, the net worth of each individual upon whom the certification is based does not exceed $750,000 after taking into account the applicable exclusions set forth at 13 CFR 124.104(c)(2); and 

(4) It is identified, on the date of its representation, as a certified small disadvantaged business in the database maintained by the Small Business Administration (PRO-Net). 

*Veteran-owned small business concern*                                     means a small business concern—                                 

(1) Not less than 51 percent of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and

(2) The management and daily business operations of which are controlled by one or more veterans. 

*Women-owned small business concern*                                     means a small business concern—                                 

(1) That is at least 51 percent owned by one or more women, or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and

(2) Whose management and daily business operations are controlled by one or more women. 

(d) Contractors acting in good faith may rely on written representations by their subcontractors regarding their status as a small business concern, a veteran-owned small business concern, a service-disabled veteran-owned small business concern, a HUBZone small business concern, a small disadvantaged business concern, or a women-owned small business concern. 

(End of clause)

27. Amend section 52.219-9 by— 

a. Revising the date of the clause; 

b. Adding to the first and second sentences of paragraph (c) “veteran-owned small business,” before the word “HUBZone”; 

c. Revising paragraph (d)(1); 

d. Redesignating paragraphs (d)(2)(iii) through (d)(2)(v) as (d)(2)(iv) through (d)(2)(vi), and adding a new (d)(2)(iii); 

e. Redesignating paragraphs (d)(3)(ii) through (d)(3)(iv) as (d)(3)(iii) through (d)(3)(v), and adding a new paragraph (d)(3)(ii); 

f. Revising paragraph (d)(5); 

g. Redesignating paragraphs (d)(6)(ii) through (d)(6)(iv) as (d)(6)(iii) through (d)(6)(v), and adding a new paragraph (d)(6)(ii); 

h. Adding to paragraph (d)(8) “veteran-owned small business,” before the word “HUBZone”; 

i. Revising paragraph (d)(10)(iii); 

j. Adding to the introductory text of paragraph (d)(11), (d)(11)(i), and (d)(11)(ii) “veteran-owned small business,” before the word “HUBZone”; 

k. Redesignating paragraphs (d)(11)(iii)(B) through (d)(11)(iii)(E) as (d)(11)(iii)(C) through (d)(11)(iii)(F), and adding a new paragraph (d)(11)(iii)(B); 

l. Removing from paragraph (d)(11)(iv)(B) the word “and”; removing the period at the end of (d)(11)(iv)(C) and adding “; and” in its place; and adding new paragraph (d)(11)(iv)(D); 

m. Adding in paragraphs (e)(1) (twice), (e)(2), (e)(3), and (e)(4) “veteran-owned small business,” before the word “HUBZone”; 

n. Removing from Alternate I “( *Jan 1999*)” and adding “(                            *Oct 2000*)” in its place; and by adding “veteran-owned small business,” before the word “HUBZone” (twice) in paragraph (c) of the Alternate; and                        

o. Removing from Alternate II “( *Jan 1999*)” and adding “(                            *Oct 2000*)” in its place; and by adding “veteran-owned small business,” before the word “HUBZone” (twice) in paragraph (c) of the Alternate. The revised text reads as follows:                         

52.219-9 

* * * * *

## Small Business Subcontracting Plan (Oct. 2000) 

(d) * * *

(1) Goals, expressed in terms of percentages of total planned subcontracting dollars, for the use of small business, veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns as subcontractors. Service-disabled veteran-owned small business concerns meet the definition of veteran-owned small business concerns, and offerors may include them within the subcontracting plan goal for veteran-owned small business concerns. A separate goal for service-disabled veteran-owned small business concerns is not required. The offeror shall include all subcontracts that contribute to contract performance, and may include a proportionate share of products and services that are normally allocated as indirect costs. 

(2) * * *

(iii) Total dollars planned to be subcontracted to veteran-owned small business concerns; 

* * * * *

(3) * * *

(ii) Veteran-owned small business concerns; 

* * * * *

                                    (5) A description of the method used to identify potential sources for solicitation purposes (                                    *e.g.,*                                     existing company source lists, the Procurement Marketing and Access Network (PRO-Net) of the Small Business Administration (SBA), veterans service organizations, the National Minority Purchasing Council Vendor Information Service, the Research and Information Division of the Minority Business Development Agency in the Department of Commerce, or small, HUBZone, small disadvantaged, and women-owned small business trade associations). A firm may rely on the information contained in PRO-Net as an accurate representation of a concern's size and ownership characteristics for the purposes of maintaining a small, veteran-owned small, HUBZone small, small disadvantaged, and women-owned small business source list. Use of PRO-Net as its source list does not relieve a firm of its responsibilities (                                    *e.g.,*                                     outreach, assistance, counseling, or publicizing subcontracting opportunities) in this clause.                                 

(6) * * * 

(ii) Veteran-owned small business concerns; 

* * * * *

(10) * * * 

(iii) Submit Standard Form (SF) 294, Subcontracting Report for Individual Contracts, and/or SF 295, Summary Subcontract Report, in accordance with paragraph (j) of this clause. The reports shall provide information on subcontract awards to small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, small disadvantaged business concerns, women-owned small business concerns, and Historically Black Colleges and Universities and Minority Institutions. Reporting shall be in accordance with the instructions on the forms or as provided in agency regulations. 

* * * * *

(11) * * * 

(iii) * * * 

(B) Whether veteran-owned small business concerns were solicited and, if not, why not; 

* * * * *

(iv) * * * 

(D) Veterans service organizations. 

* * * * *

(End of clause) 

52.219-10 

28. Amend section 52.219-10 by revising the date of the clause to read ``(Oct 2000)''; by adding in paragraph (a)       ( print page 60548)                                ``veteran-owned small business (including service-disabled veteran-owned small business),'' before the word ``HUBZone''; and by adding in paragraph (b) ``veteran-owned small business (including service-disabled veteran-owned small business),'' before the word ``HUBZone'', and adding a comma following ``goals for small business''.                         

# PART 53—FORMS 

53.219 

29. Amend section 53.219 in paragraphs (a) and (b) by removing ``( *Rev. 12/98*)'' and adding ``(Rev.                             *10/00*)'' in their place.                         

30. Revise sections 53.301-294 and 53.301-295 to read as follows: 
      ( print page 60549)          ( print page 60550)          ( print page 60551)          ( print page 60552)    

BILLING CODE 6820-EP-P

[FR Doc. 00-25874 Filed 10-10-00; 8:45 am]

BILLING CODE 6820-EP-C