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[Federal Register Volume 80, Number 58 (Thursday, March 26, 2015)]
[Rules and Regulations]
[Pages 15912-15913]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06757]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 205, 206, 215, 219, 226, 232, 235, 252, and Appendix I 
to Chapter 2

RIN 0750-AH45

Defense Federal Acquisition Regulation Supplement: Deletion of 
Text Implementing 10 U.S.C. 2323 (DFARS Case 2011-D038)

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

ACTION: Final rule.

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SUMMARY: DoD has adopted as final, without change, an interim rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to remove language based on a statute that provided the underlying 
authority for DoD's Small Disadvantaged Business (SDB) program. This 
action is necessary because the statute has expired.

DATES: Effective March 26, 2015.

FOR FURTHER INFORMATION CONTACT: Ms. Judith S. Rubinstein, telephone 
571-372-6093.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published an interim rule in the Federal Register at 79 FR 
61579 on October 14, 2014, to delete those DFARS sections that were 
based on 10 U.S.C. 2323, which has expired. 10 U.S.C. 2323 provided the 
underlying statutory authority for DoD's Small Disadvantaged Business 
(SDB) program, including the establishment of a specific goal within 
the overall 5 percent SDB goal for the award of prime contracts and 
subcontracts to historically black colleges and universities (HBCUs) 
and minority institutions (MIs). Because of the expiration of this 
authority, all DFARS sections based on this authority were deleted by 
the interim rule.

II. Discussion and Analysis

    There were no public comments submitted in response to the interim 
rule. The interim rule has been converted to a final rule, without 
change.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    A final regulatory flexibility analysis has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
and is summarized as follows:
    The objective of this rule is to amend the DFARS to remove or 
revise clauses, provisions, and guidance conditioned on section 1207 of 
the National Defense Authorization Act of 1987, Public Law

[[Page 15913]]

99-661, as codified at 10 U.S.C. 2323. Section 2323 of title 10 expired 
on September 30, 2009. However, prior to the implementation of the 
interim rule, the implementing regulations for this law still appeared 
in the DFARS. Implementation of this rule was needed to preclude the 
risk that DoD contracting officers would inadvertently issue a 
solicitation or execute a contract based on an acquisition strategy 
that is no longer authorized.
    No public comments were submitted in response to the initial 
regulatory flexibility analysis, or in response to the interim rule, 
which was published in the Federal Register on October 14, 2014. 
Therefore, there were no issues to assess, and no changes to the rule 
were necessary.
    DoD does not expect this rule to have a significant economic impact 
on a substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601, et seq. This expectation is 
based on the following information and analysis:
    The DoD Small Disadvantaged Business (SDB) program has not been in 
effect since fiscal year (FY) 2008. This rule does not change the 
fundamental procurement policies that DoD has used to achieve strong 
SDB participation or to encourage the involvement of historically Black 
colleges and universities and minority institutions in defense-related 
research, development, testing, and evaluation efforts. The following 
rationale is provided:
    10 U.S.C. 2323 was the underlying statutory authority for DoD's 
small disadvantaged business (SDB) program. DoD's SDB program was 
intended to supplement and complement the Federal-wide SDB program 
authorized under the Small Business Act. It provided for the 
institution of a specific goal within the mandatory 5 percent SDB goal 
for the award of prime contracts and subcontracts to historically Black 
colleges and universities, minority institutions, and Hispanic-serving 
institutions. Section 2323 of Title 10 served as the basis for a number 
of unique acquisition techniques used by DoD to help it achieve these 
goals, such as the price evaluation adjustment for SDBs in competitive 
procurements and the set-aside for historically Black colleges and 
universities and minority institutions. It was also the basis for the 
special 95 percent customary progress payment rate for SDBs.
    Now that the law has expired, these special techniques can no 
longer be used. However, the impact of this change is mitigated by a 
number of factors. Preeminent among those factors is DoD's obligation 
to meet or exceed the expectations of the Small Business Act regarding 
SDBs, and to provide assistance for defense-related research, 
development, testing, and evaluation activities to historically Black 
colleges and universities and minority institutions.
    Section 15(g) of the Small Business Act, Public Law 85-536, as 
amended, (15 U.S.C. 644(g)), requires all Federal agencies to make 
every attempt to achieve the annual Government-wide goal for 
participation by SDBs. The statutory SDB goal is not less than 5 
percent of the total value of all prime contract and subcontract awards 
for each fiscal year. DoD must comply with this law, and it has. The 
Department has met or exceeded the 5 percent SDB goal since FY 2001.
    DoD contracting officers can employ monetary incentives in 
solicitations and contracts, when inclusion of such incentives is, in 
the judgment of the contracting officer, necessary to increase 
subcontracting opportunities for small businesses, service-disabled 
veteran-owned small businesses, HUBZone small businesses, women-owned 
small businesses, as well as small disadvantaged businesses. In 
addition, while the 95 percent progress payment rate is no longer 
allowable, SDBs, because they are small businesses, are still eligible 
to receive the 90 percent progress payment rate. Finally, the extent of 
participation of all small businesses, including small disadvantaged 
businesses, in performance of the contract is addressed during source 
selection for negotiated DoD acquisitions that are required to have 
subcontracting plans. The past performance of offerors in complying 
with subcontracting goals with all small businesses, including SDBs, is 
also evaluated in DoD acquisitions.
    The capability and expertise that HBCUs and MIs bring to numerous 
DoD-funded research and development programs are valued commodities. 
DoD must explore new areas of science, mathematics, and engineering in 
order to develop the alternative technologies needed to fulfill its 
national security mission. HBCUs and MIs will continue to support DoD 
in these endeavors through their involvement in various research and 
development programs. This rule does not impose new reporting, 
recordkeeping or other compliance requirements.

V. Paperwork Reduction Act

    The 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 Parts 205, 206, 215, 219, 226, 232, 235, 
252, and Appendix I to Chapter 2

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

0
Accordingly, the interim rule amending 48 CFR parts 205, 206, 215, 219, 
226, 232, 235, 252, and Appendix I to Chapter 2, which was published at 
79 FR 61579 on October 14, 2014, is adopted as a final rule without 
change.

[FR Doc. 2015-06757 Filed 3-25-15; 8:45 am]
 BILLING CODE 5001-06-P
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