[Federal Register Volume 89, Number 197 (Thursday, October 10, 2024)]
[Proposed Rules]
[Pages 82196-82198]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23230]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 252

[Docket DARS-2024-0032]
RIN 0750-AM22


Defense Federal Acquisition Regulation Supplement: 8(a) Program 
(DFARS Case 2024-D025)

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

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to revise joint venture eligibility 
requirements and nonmanufacturer rule applicability to 8(a) contracts 
awarded pursuant to the 8(a) Partnership Agreement between DoD and the 
Small Business Administration. These changes are necessary to align the 
DFARS with the Federal Acquisition Regulation (FAR).

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before December 9, 2024, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2024-D025, using 
either of the following methods:
    [cir] Federal eRulemaking Portal: https://www.regulations.gov. 
Search for DFARS Case 2024-D025. Select ``Comment'' and follow the 
instructions to submit a comment. Please include ``DFARS Case 2024-
D025'' on any attached documents.
    [cir] Email: <a href="/cdn-cgi/l/email-protection#8ee1fdeaa0eae8effcfdcee3efe7e2a0e3e7e2"><span class="__cf_email__" data-cfemail="a3ccd0c78dc7c5c2d1d0e3cec2cacf8dcecacf">[email protected]</span></a>. Include DFARS Case 2024-D025 in 
the subject line of the message.
    Comments received generally will be posted without change to 
https://www.regulations.gov, including any personal information 
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission 
to verify posting.

[[Page 82197]]


FOR FURTHER INFORMATION CONTACT: Jeanette Snyder, telephone 703-508-
7524.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD is proposing to revise the DFARS to align with changes made to 
the FAR via the final rules published in the Federal Register on August 
11, 2021 (86 FR 44233) and on September 23, 2022 (87 FR 58219). The 
final rule for FAR Case 2016-011, Revision of Limitations on 
Subcontracting, published on August 11, 2021, standardized the 
application of the nonmanufacturer rule requirements for the 
socioeconomic programs identified at FAR 19.000(a)(3). The final rule 
for FAR Case 2017-019, Policy on Joint Ventures, published on September 
23, 2022, clarified the eligibility of joint ventures under the 8(a) 
Program.
    This rule is also proposing to revise the DFARS to align with the 
proposed rule for FAR Case 2021-020, Limitations on Subcontracting 
Revisions, published on January 17, 2024 (89 FR 2910). This FAR rule 
proposed to remove the nonmanufacturer rule requirements for 8(a) 
participants from FAR 19.809-2 as was intended to be accomplished via 
the final rule published on August 11, 2021, and to remove the kit 
assembler rule set from the nonmanufacturer rule. This DFARS rule 
proposes to make similar changes.

II. Discussion and Analysis

    This rule proposes to modify the contract clause at DFARS 225.219-
7010, Notification of Competition Limited to Eligible 8(a) 
Participants--Partnership Agreement, to add joint ventures to the list 
of concerns from whom offers are solicited for 8(a) Program 
acquisitions that are processed in accordance with the 8(a) Partnership 
Agreement between DoD and the Small Business Administration (SBA) (the 
Agreement). This proposed rule also includes the removal of the kit 
assembler rule set and the nonmanufacturer rule requirements addressed 
in paragraphs (d)(1), (d)(2), and (d)(3) of the clause at DFARS 
252.219-7010 to align with the clause at FAR 52.219-33, Nonmanufacturer 
Rule, which specifies the nonmanufacturer rule requirements for all 
socioeconomic categories.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT), for Commercial Products (Including Commercially 
Available Off-the-Shelf (COTS) Items), and for Commercial Services

    This proposed rule amends the clause at DFARS 225.219-7010, 
Notification of Competition Limited to Eligible 8(a) Participants--
Partnership Agreement; however, this proposed rule does not impose any 
new requirements on contracts at or below the SAT, for commercial 
products including COTS items, or for commercial services. The clause 
will continue to not apply to acquisitions at or below the SAT and will 
continue to apply to acquisitions of commercial products including COTS 
items, and to acquisitions of commercial services.

IV. Expected Impact of the Rule

    This proposed rule, when finalized, is expected to impact 8(a) 
participants, including 8(a) joint ventures, who enter into contracts 
with DoD that are processed in accordance with the Agreement. These 
participants will be required to comply with the nonmanufacturer rule 
requirements in the clause at FAR 52.219-33. As a result, DoD may see 
an increase in the number of 8(a) participants that submit proposals 
for contracts processed in accordance with the Agreement, which may 
expand the defense industrial base.

V. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, as amended.

VI. Regulatory Flexibility Act

    DoD does not expect this proposed rule, when finalized, to have a 
significant economic impact on a substantial number of small entities 
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et 
seq., because this rule merely updates the DFARS to align with the FAR. 
However, an initial regulatory flexibility analysis has been performed 
and is summarized as follows:
    This proposed rule is necessary to revise the contract clause at 
DFARS 252.219-7010, Notification of Competition Limited to Eligible 
8(a) Participants--Partnership Agreement, to align with changes made to 
the FAR regarding joint venture eligibility for 8(a) Program 
acquisitions processed in accordance with the 8(a) Partnership 
Agreement between DoD and the Small Business Administration (SBA). This 
proposed rule also removes the nonmanufacturer rule requirements from 
the clause to align with changes made to the FAR.
    The objective of the rule is to revise the DFARS to align with 
amendments made to the FAR. The legal basis for the rule is 41 U.S.C. 
1303.
    According to data from the Procurement Business Intelligence 
Service, in the last three fiscal years DoD awarded contracts that 
included the clause at DFARS 252.219-7010 to unique small entities as 
follows: 848 in fiscal year 2021; 553 in fiscal year 2022; 600 in 
fiscal year 2023. This averages out to 667 per fiscal year. Therefore, 
DoD estimates that the number of small entities to which this rule will 
apply is approximately 667.
    This proposed rule does not impose any new reporting, 
recordkeeping, or other compliance requirements for small entities.
    This proposed rule does not duplicate, overlap, or conflict with 
any other Federal rules.
    DoD did not identify any significant alternatives to the proposed 
rule. Any impact is expected to be beneficial.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this proposed rule on 
small entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this proposed rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (DFARS Case 2024-
D025), in correspondence.

VII. Paperwork Reduction Act

    This proposed rule does not contain any information collection 
requirements that require the approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Part 252

    Government procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

    Therefore, the Defense Acquisition Regulations System proposes to 
amend 48 CFR part 252 as follows:

[[Page 82198]]

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
1. The authority citation for 48 CFR part 252 continues to read as 
follows:

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

0
2. Revise and republish section 252.219-7010 to read as follows:


252.219-7010   Notification of Competition Limited to Eligible 8(a) 
Participants--Partnership Agreement.

    As prescribed in 219.811-3(2), use the following clause:

Notification of Competition Limited to Eligible 8(a) Participants--
Partnership Agreement (DATE)

    (a) Offers are solicited only from--
    (1) Small business concerns expressly certified by the Small 
Business Administration (SBA) for participation in SBA's 8(a) 
Program and which meet the following criteria at the time of 
submission of offer:
    (i) The Offeror is in conformance with the 8(a) support 
limitation set forth in its approved business plan.
    (ii) The Offeror is in conformance with the Business Activity 
Targets set forth in its approved business plan or any remedial 
action directed by SBA.
    (iii) If the competition is to be limited to 8(a) concerns 
within one or more specific SBA regions or districts, then the 
Offeror's approved business plan is on file and serviced by ___. 
[Contracting Officer completes by inserting the appropriate SBA 
District and/or Regional Office(s) as identified by SBA.]
    (2) A joint venture, in which at least one of the 8(a) program 
participants that is a party to the joint venture complies with the 
criteria set forth in paragraph (a)(1) of this clause, and that has 
a joint venture agreement that complies with 13 CFR 124.513(c); or
    (3) A joint venture--
    (i) That is comprised of a mentor and an 8(a) 
prot[eacute]g[eacute] with an approved mentor-prot[eacute]g[eacute] 
agreement under an SBA mentor-prot[eacute]g[eacute] program;
    (ii) In which at least one of the 8(a) program participants that 
is a party to the joint venture complies with the criteria set forth 
in paragraph (a)(1) of this clause; and
    (iii) With a joint venture agreement that complies with 13 CFR 
124.513(c).
    (b) By submission of its offer, the Offeror represents that it 
meets the applicable criteria set forth in paragraph (a) of this 
clause.
    (c) Any award resulting from this solicitation will be made 
directly by the Contracting Officer to the successful 8(a) offeror 
selected through the evaluation criteria set forth in this 
solicitation.
    (d) The ___ [insert name of SBA's contractor] will notify the 
___ [insert name of contracting agency] Contracting Officer in 
writing immediately upon entering an agreement (either oral or 
written) to transfer all or part of its stock or other ownership 
interest to any other party.
(End of clause)
[FR Doc. 2024-23230 Filed 10-9-24; 8:45 am]
BILLING CODE 6001-FR-P


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