Federal Register / Vol. 74, No. 52 / Thursday, March 19, 2009 / Rules and Regulations 11821 

compliance at the start of contract 

performance. 

Item IV—Least Developed Countries 

that are Designated Countries (FAR 

Case 2008–021) 

This final rule amends the Federal 

Acquisition Regulation (FAR) to revise 

the definition of designated country, 

adding Liberia and removing Cape 

Verde. Least Developed Countries form 

a subset of designated countries. The list 

of Least Developed Countries is derived 

from a United Nations list of Least 

Developed Countries. The United States 

Trade Representative has updated the 

list of Least Developed Countries that 

are treated as designated countries. In 

acquisitions that are covered by the 

World Trade Organization Government 

Procurement Agreement, contracting 

officers must acquire only U.S.-made or 

designated country end products, or 

U.S. or designated-country services, 

unless offers of such end products or 

services are not received or are 

insufficient to fulfill the requirement 

(FAR 25.403(c)). 

Item V—Federal Food Donation Act of 

2008 (Pub. L. 110–247) (FAR Case 2008– 

017) (Interim) 

This interim rule amends the Federal 

Acquisition Regulation (FAR) Parts 26, 

31, and 52 to encourage executive 

agencies and their contractors to donate 

apparently wholesome excess food to 

nonprofit organizations that provide 

assistance to food-insecure people in the 

United States. This change implements 

the Federal Food Donation Act of 2008 

(Pub. L. 110–247) which encourages 

executive agencies and their contractors, 

in contracts for the provision, service, or 

sale of food to encourage the 

contractors, to the maximum extent 

practicable and safe, to donate 

apparently wholesome excess food to 

nonprofit organizations that provide 

assistance to food-insecure people in the 

United States. The rule is effective for 

all solicitations and contracts greater 

than $25,000 for the provision, service, 

or sale of food in the United States 

issued on or after the effective date of 

the rule. 

Item VI—Technical Amendments 

Editorial changes are made at FAR 

3.503–2, 47.103–1, and 52.225–11. 

Dated: March 13, 2009 

Al Matera, 

Director, Office of Acquisition Policy. 

Federal Acquisition Circular 

Federal Acquisition Circular (FAC) 

2005-31 is issued under the authority of 

the Secretary of Defense, the 

Administrator of General Services, and 

the Administrator for the National 

Aeronautics and Space Administration. 

Unless otherwise specified, all 

Federal Acquisition Regulation (FAR) 

and other directive material contained 

in FAC 2005-31 is effective March 19, 

2009, except for Items I and III, which 

are effective April 20, 2009. 

Dated: March 12, 2009. 

Amy G. Williams, 

Acting Deputy Director, Defense Procurement 

and Acquisition Policy (Defense Acquisition 

Regulations System). 

Dated: March 11, 2009. 

Rodney P. Lantier, 

Acting Senior Procurement Executive & 

Acting Deputy Chief Acquisition Officer, 

Office of the Chief Acquisition Officer, U.S. 

General Services Administration. 

Dated: March 11, 2009. 

William P. McNally, 

Assistant Administrator for Procurement, 

National Aeronautics and Space 

Administration. 

[FR Doc. E9–5874 Filed 3–18–09; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 1, 4, 17, 19, and 52 

[FAC 2005–31; FAR Case 2006–032; Item 

I; Docket 2007–0002; Sequence 11] 

RIN 9000–AK78 

Federal Acquisition Regulation; FAR 

Case 2006–032, Small Business Size 

Rerepresentation 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to implement the 

Small Business Administration’s (SBA) 

final rule published on November 15, 

2006 (71 FR 66434) entitled, Small 

Business Size Regulations; Size for 

Purposes of Governmentwide 

Acquisition Contracts, Multiple Award 

Schedule Contracts and Other LongTerm Contracts; 8(a) Business 

Development/Small Disadvantaged 

Business; Business Status 

Determinations. The purpose of the SBA 

rule is to improve the accuracy of small 

business size status reporting over the 

life of certain contracts. 

DATES: Effective Date: April 20, 2009. 

Applicability date: This rule applies 

to solicitations issued and contracts 

awarded on or after April 20, 2009. All 

long-term contracts as defined in this 

rule, awarded to small business 

concerns prior to June 30, 2007, that 

have not yet been modified to include 

FAR 52.219–28, must be modified to 

include FAR 52.219–28 within 90 days 

after the effective date of this final rule. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Rhonda Cundiff, Procurement Analyst, 

at (202) 501–0044 for clarification of 

content. For information pertaining to 

status or publication schedules, contact 

the FAR Secretariat at (202) 501–4755. 

Please cite FAC 2005–31, FAR case 

2006–032. 

SUPPLEMENTARY INFORMATION: 

A. Background 

DoD, GSA, and NASA published an 

interim rule in the Federal Register at 

72 FR 36852 on July 5, 2007, to 

implement the Small Business 

Administration’s (SBA) final rule 

published on November 15, 2006 (71 FR 

66434) entitled, Small Business Size 

Regulations; Size for Purposes of 

Governmentwide Acquisition Contracts, 

Multiple Award Schedule Contracts and 

Other Long-Term Contracts; 8(a) 

Business Development/Small 

Disadvantaged Business; Business 

Status Determinations. 

Four commenters submitted 

comments on the interim rule. The 

comments recommend substantive 

changes to the rule, request clarification, 

and recommend editorial changes to the 

language for clarity and consistency. A 

discussion of these comments and the 

changes made to the rule as a result of 

them is provided below: 

Comment: One commenter states that 

the interim rule is ineffective at 

preventing ongoing misrepresentation 

and miscoding on individual contracts 

because it does not impose a time limit 

on when existing contracts have to be 

modified in order to incorporate the 

small business rerepresentation 

requirements. This time period could 

easily be several years, until the time 

that the base period runs out and the 

agency must face the choice to exercise 

options. The commenter recommends 

that the rule be modified to impose a 

reasonable period of 30–90 days 

requiring all contracts to be modified for 

inclusion of the rerepresentation 

requirements, and further provide that 

these requirements will be included by 


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11822 Federal Register / Vol. 74, No. 52 / Thursday, March 19, 2009 / Rules and Regulations 

operation of law regardless of whether 

the contracts were modified. 

Response: The interim rule was 

effective on June 30, 2007. The 

Councils’ expectation was that the 

process of modifying long-term 

contracts awarded to small businesses 

prior to June 30, 2007, to include the 

FAR clause at 52.219–28, Post-Award 

Small Business Program 

Rerepresentation, would begin 

immediately and would be completed 

within a reasonable period of time. It 

was also expected that other contracts 

awarded prior to June 30, 2007, to small 

businesses, would be modified to 

include the clause at the time an option 

is exercised. To make the Councils’ 

expectation more clear, the preamble to 

this Federal Register notice states that 

all long-term contracts awarded to small 

businesses prior to June 30, 2007, that 

have not yet been modified to include 

FAR 52.219–28, must be modified 

within 90 days after the effective date of 

this final rule. 

The Councils do not concur with the 

recommendation to add language to the 

final rule stating that the 

rerepresentation requirements will be 

included by operation of law regardless 

of whether the contracts were modified. 

This is a matter to be determined by the 

courts and not addressed by the 

Councils. 

Comment: One commenter states that 

the interim rule does not make it clear 

that companies that have been acquired 

by large businesses must recertify their 

small business status (or lack thereof) 

within 30 days as well as in connection 

with individual task orders. 

Response: The Councils believe the 

interim rule is clear and changes are not 

necessary. Contractors are required to 

complete rerepresentation of their size 

status at the prime contract level in 

accordance with FAR 19.301–2 and 

52.219–28 within 30 days after 

execution of a novation agreement, or 

within 30 days after a merger or 

acquisition that does not require a 

novation agreement. Further, as set forth 

at FAR 19.301–2(d) of the final rule, 

after a contractor rerepresents it is other 

than small, and the contracting officer 

modifies the contract to reflect the 

rerepresentation, the agency no longer 

includes the value of options exercised, 

modifications issued, orders issued, or 

purchases made under blanket purchase 

agreements on that contract in its small 

business prime contracting goal 

achievements. 

Comment: One commenter 

recommends that the interim rule be 

modified to clearly require certification 

by merged or acquired firms for 

purposes of bidding on task orders. 

Response: The Councils do not 

concur. The purpose of the rule is to 

improve the accuracy of size status 

reporting over the life of certain 

contracts. Under this FAR rule, a 

rerepresentation at the contract level 

that the contractor is no longer small, 

results in the task orders being reported 

as awarded to a concern that is not 

small. FAR clause 52.219–28 requires 

that contractors rerepresent size status 

by updating their representations and 

certifications at the prime contract level 

in the Online Representations and 

Certifications Application (ORCA). The 

contractor must notify the contracting 

office that it has made the required 

rerepresentation. In accordance with 

FAR 19.301–2(d) of the final rule, after 

a contractor rerepresents it is other than 

small, and the contracting officer 

modifies the contract to reflect the 

rerepresentation, the agency no longer 

includes the value of options exercised, 

modifications issued, orders issued, or 

purchases made under blanket purchase 

agreements on that contract in its small 

business prime contracting goal 

achievements. 

The Councils do not agree that 

rerepresentation for purposes of 

competing for task orders should be 

required. This FAR rule at paragraph 

19.301–2(e), and the SBA regulation that 

it implements, state that a change in size 

status does not change the terms and 

conditions of the contract. 

Comment: One commenter states the 

purpose of the interim rule is to 

improve the accuracy of size status 

representations in the Central 

Contractor Registration (CCR) and the 

Online Representations and 

Certifications Applications (ORCA) 

databases. The rule does not do this 

because it does not require contractors 

to recertify their status in these 

databases unless and until directed to 

by individual contracting officers. The 

integrity of these databases and future 

competitions is then at the mercy of 

individual contracting officers and their 

agencies who may have a vested interest 

in doing business with a large business 

under a contract vehicle with a small 

business. 

Response: As stated in the interim 

rule, the primary purpose of this rule is 

to improve the accuracy of size status 

reporting over the life of certain 

contracts. This is done by revising the 

size status in the reporting database, 

Federal Procurement Data System 

(FPDS). Size status is revised in FPDS 

for actions under a particular contract 

from the point when the contracting 

officer modifies the contract to reflect 

the rerepresentation, forward. Although 

the rule does improve the accuracy of 

CCR and ORCA by keeping the 

information more current for future 

competitions, that is not its primary 

purpose. Further, the accuracy of the 

data in these Government-wide 

databases is not dependent on the 

actions of an individual contracting 

officer. 

The FAR already requires contractors 

to update the information in CCR at 

least annually to ensure that it is 

current, accurate and complete. This 

rule adds a requirement for contractors 

to additionally update the information 

in CCR and ORCA when any of the 

events requiring rerepresentation occur. 

This means that the contractor may now 

be updating the information more often 

than annually. Neither the annual nor 

the rerepresentation update is 

dependent on an individual contracting 

officer directing it. 

When a contractor is submitting a bid 

or proposal in response to a solicitation, 

the contractor is required by a FAR 

provision in the solicitation to verify 

that the representations and 

certifications in ORCA, including those 

related to the size standard applicable to 

the solicitation, have been updated 

within the last 12 months, are current, 

accurate, and complete. Therefore, there 

is already a requirement in the FAR for 

representations to be accurate, complete 

and current for future competitions. 

This rule adds a requirement for ORCA 

also to be updated when any of the 

events requiring rerepresentation occur. 

These requirements are in standard FAR 

provisions and clauses and are not 

dependent on individual contracting 

officer direction. 

Comment: One commenter states that 

the interim rule does not utilize the 

authorities in SBA regulations, 13 CFR 

121.1001, which give SBA Government 

Contracting Area Directors and the Head 

of the SBA Office of Government 

Contracting in Washington, DC the 

authority to initiate size determinations 

for the purpose of cleaning up 

government-wide databases. The 

commenter recommends that the 

interim rule be modified to provide for 

notice and dual reporting to the SBA 

Area Directors and/or the Office of 

Government Contracting on any 

recertification requests. 

Response: The Councils have not 

adopted this recommendation since the 

SBA final rule published on November 

15, 2006 did not amend 13 CFR 

121.1001(b)(9). The rerepresentation 

rule does not affect SBA’s authority to 

initiate a formal size determination for 

purposes of validating firms listed in the 

Central Contractor Registration. 

Comment: One commenter states that 

the interim rule is ineffective at 


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applying the anti-misrepresentation 

provisions of the Small Business Act. 

The Small Business Act contains 

procedures for debarring companies that 

misrepresent their size status. 

Recommend contracting officers refer 

companies representing themselves as 

small businesses to the SBA to 

determine size status and possible 

misrepresentation. Additionally, the 

interim rule should permit referral to 

agency suspension and debarment 

officials. 

Response: The Councils do not 

concur. The FAR already addresses the 

remedies for misrepresentation of size 

status. FAR 19.301–1(b) states, ‘‘The 

contracting officer shall accept an 

offeror’s representation in a specific bid 

or proposal that it is a small business 

unless (1) another offeror or interested 

party challenges the concern’s small 

business representation, or (2) the 

contracting officer has a reason to 

question the representation.’’ The 

interim rule provided at FAR 

19.302(c)(1) that a protest concerning a 

specific rerepresentation shall be 

referred to the SBA. Nothing in this FAR 

rule precludes agencies from taking 

actions that are otherwise justified and 

permitted under the FAR. 

Comment: One commenter states that 

the purpose of the interim rule is to 

promote consistency with the SBA 

Recertification Regulations. However, 

these regulations are in conflict. Federal 

agencies will follow the FAR only 

without any additional guidance. The 

commenter recommends that the 

interim rule be modified to specifically 

direct Contracting Officers to follow the 

SBA Recertification Regulations. 

Response: The Councils do not agree. 

The stated purpose of the interim rule 

is to improve the accuracy of small 

business size status reporting, at the 

prime contract level, over the life of 

certain contracts. Contracting officers 

under the Executive Branch are required 

to follow the FAR. In cases where there 

are inconsistencies between Title 13 

(SBA regulations) and Title 48 (FAR) of 

the Code of Federal Regulations, 

contracting officers follow the FAR. 

Comment: One commenter states that 

the interim rule fails to utilize existing 

authorities concerning nonresponsibility, fraud and 

misrepresentation in Government 

contracting. The interim rule does not 

address penalties when there is a small 

business size and status 

misrepresentation. As a result, the 

interim rule sends a message that 

misconduct in small business programs 

is acceptable. 

Response: The Councils do not agree 

that the interim rule sends a message 

that misconduct in small business 

programs is acceptable. The same 

penalties that are currently available 

when a misrepresentation has occurred 

for initial award of a contract apply 

when a firm rerepresents its size status. 

The contractor is required to provide its 

rerepresentation in the Online 

Representations and Certifications 

Application (ORCA). ORCA alerts the 

contractor that it may be subject to 

penalties if information submitted in 

ORCA is not ‘‘current, accurate and 

complete.’’ As part of the signatory 

process in ORCA, the contractor is 

notified that, ‘‘By submitting the 

representations and certifications in 

ORCA, you are attesting to the accuracy 

of the information and may be subject 

to penalties for misrepresentations.’’ 

Comment: One commenter 

recommends amending the last sentence 

of FAR 19.301–2, paragraph (a), to read: 

‘‘or as authorized under another 

appropriate authority.’’ 

Response: The Councils do not 

concur. The Councils believe that the 

language, as written, is sufficient and 

the recommended change could be read 

as changing the meaning. The intent is 

that whatever authority is used the 

period of performance will not be 

extended by more than six months. 

Comment: One commenter stated that 

FPDS-NG needs to allow an effective 

date for a change to be entered, 

regardless of the modification date. 

Response: FAR 19.301–2(d) has been 

revised to state that agencies should 

issue a modification to the contract 

capturing the rerepresentation and 

report it to FPDS within 30 days after 

notification of the rerepresentation. The 

modification date is the effective date 

for changing status in FPDS. 

Comment: One commenter stated that 

the requirements are unclear for existing 

contracts. This commenter asked, under 

the rule, is a contracting officer required 

to modify a contract awarded to a small 

business that is other than long-term if 

the contract does not include an option 

to exercise? 

Response: No. There are two instances 

when the contracting officer is required 

to modify contracts awarded to small 

business concerns prior to June 30, 

2007, to include the FAR clause at 

52.219–28: 1) when the contract is a 

long-term contract; and 2) when the 

contract is not a long-term contract but 

the contract is being modified to 

exercise any option as defined in FAR 

2.101. If a contract that is not a longterm contract does not include any 

options that have not yet been 

exercised, then the contract would not 

be modified. 

Comment: One commenter asked with 

regard to FAR 19.301–2(b)(1) and (2): Do 

the words ‘‘within 30 days after 

execution of a novation agreement’’ and 

‘‘within 30 days of a merger or 

acquisition’’ assume that FAR clause 

52.219–28 is already in the contract? 

The language here can be interpreted 

two different ways. One scenario is that 

the small business must rerepresent 

upon three different sets of 

circumstances, (1) after execution of a 

novation agreement, (2) after merger or 

acquisition, or (3) after the FAR clause 

52.219–28 is added to the contract. In 

this scenario, if the clause is not already 

in the contract, how would a small 

business rerepresent after execution of a 

novation agreement or a merger/ 

acquisition? The second scenario 

assumes that the clause is already in the 

contract and upon execution of a 

novation agreement or after a merger/ 

acquisition, the small business 

rerepresents itself. 

Response: This rule addresses two 

circumstances with the same end result: 

1) contracts awarded on or after June 30, 

2007, where the clause is in the contract 

at time of award; and 2) contracts 

awarded prior to June 30, 2007, where 

the clause is incorporated into the 

contract through a contract 

modification. In the first circumstance, 

the contractor must rerepresent its size 

status within 30 days after an 

acquisition or merger, or within 30 days 

after execution of a novation agreement. 

In the second circumstance, the 

contractor must rerepresent its size 

status within 30 days of the contract 

being modified to incorporate FAR 

clause 52.219–28, if a novation 

agreement was executed, or a merger or 

acquisition occurred, prior to inclusion 

of the clause in the contract. In either 

case, the clause would be in the contract 

before the contractor is required to 

rerepresent its size status. 

Comment: One commenter states that 

the rule appears to be focused on (1) 

size classification issues; (2) statistical 

reporting; and (3) unrestricted singleaward contract scenarios. The 

commenter asked, how does a 

contracting officer treat a former small 

business acquired by a large business on 

a small business set-aside multipleaward indefinite-delivery indefinitequantity contract? 

Response: The purpose of the rule is 

to improve the accuracy of small 

business size status reporting, at the 

prime contract level, over the life of 

certain contracts. As set forth at FAR 

19.301–2(e), a change in size status does 

not change the terms and conditions of 

the contract. How a contracting officer 

treats a concern that has rerepresented 


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11824 Federal Register / Vol. 74, No. 52 / Thursday, March 19, 2009 / Rules and Regulations 

that it is no longer a small business will 

depend on the terms and conditions of 

the contract and will be case specific. 

Comment: One commenter 

recommends changing ‘‘the conditions’’ 

to ‘‘any of the conditions’’ at FAR 

4.1201(b)(2), 19.202–5(c), and 19.301– 

3(a). 

Response: The Councils concur that 

revising FAR 4.1201(b)(2) to read ‘‘any 

of the conditions’’ would be more clear 

and have made this change to the rule. 

However, the Councils do not agree that 

a change at FAR 19.202–5(c) or 19.301– 

3(a) is necessary because clause 52.219– 

28, which is referenced at 19.202–5(c) 

and 19.301(b), already states ‘‘upon the 

occurrence of any [emphasis added] of 

the following.’’ FAR 19.301–3(a) refers 

to 19.301(b). 

Comment: One commenter 

recommends changing ‘‘consider’’ to 

‘‘take into account’’ in FAR 17.207(e)(2). 

Response: Non-Concur. The term 

‘‘consider’’ is used and understood 

throughout the FAR. Making the 

recommended change would not add 

clarity or improve understanding. 

Comment: One commenter 

recommends changing ‘‘small business’’ 

to ‘‘small business concern’’ at FAR 

19.202–5(c)(2), 19.301–2(b), and 19.301– 

3(b). 

Response: Concur, for consistency 

within the FAR. The rule has been 

revised accordingly. 

Comment: One commenter 

recommends amending FAR 19.202–5 to 

include the following to be consistent 

with 52.219–28(b), (f), and (g): ‘‘Require 

a contractor that does not have 

representations and certifications in 

ORCA, or that does not have a 

representation in ORCA for the North 

American Industry Classification 

System code applicable to the contract, 

to complete and submit the 

representation required by paragraph (g) 

of clause 52.219–28, or. . .’’ 

Response: The Councils do not 

concur. FAR 19.202–5(c) contains the 

requirement to rerepresent. The various 

methods for rerepresenting are 

contained in FAR clause 52.219–28. It is 

not necessary nor would it add clarity 

to restate the methods for rerepresenting 

since they are contained in FAR clause 

52.219–28 to which 19.202–5(c) refers. 

Comment: One commenter 

recommends amending FAR clause 

52.219–28, paragraph (a) ‘‘Definitions’’, 

‘‘Small Business Concern,’’ to be 

consistent with the definition in section 

19.001. The commenter recommends 

the following language, which appears 

to have been omitted from FAR clause 

52.219–28, be appended to paragraph 

(a): ‘‘Such a concern is ‘not dominant in 

its field of operation’ when it does not 

exercise a controlling or major influence 

on a national basis in a kind of business 

activity in which a number of business 

concerns are primarily engaged. In 

determining whether dominance exists, 

consideration shall be given to all 

appropriate factors, including volume of 

business, number of employees, 

financial resources, competitive status 

or position, ownership or control of 

materials, processes, patents, license 

agreements, facilities, sales territory, 

and nature of business activity.’’ 

Response: The Councils have 

included the recommended language in 

FAR 52.219–28(a) for consistency. The 

definition which was in FAR 19.001 is 

now in 2.101. 

Comment: One commenter 

recommends amending FAR 52.219– 

28(2)(ii)(sic) to change the language 

from, ‘‘Within 60 to 120 days prior to 

the exercise date specified in the 

contract for any option thereafter,’’ to 

‘‘Within 60 to 120 days prior to the date 

specified in the contract for exercising 

any option thereafter.’’ 

Response: The Councils have revised 

the language at FAR 52.219–28(b)(3)(ii) 

as recommended for overall ease of 

understanding. 

Comment: One commenter 

recommends amending FAR 52.219– 

28(e) to read as follows: ‘‘to ensure that 

they reflect the Contractor’s current 

status.’’ 

Response: The Councils have adopted 

the recommended change to FAR 

52.219–28(e) for overall ease of 

understanding. 

In addition to the changes made in the 

final rule in response to public 

comments, the Councils made 

additional changes to make the rule 

more clear. 

In FAR paragraph 19.202–5(c), ‘‘and 

the conditions in paragraph (b) of the 

clause are met’’ was changed to ‘‘and 

the conditions in the clause for 

rerepresenting are met.’’ The reason for 

the change is that paragraph 19.202– 

5(c)(2) refers to paragraph (f) of the 

clause which was not specifically 

covered in the introductory language in 

FAR 19.202–5(c), which only referred to 

paragraph (b) of the clause. By stating 

the conditions in the clause for 

rerepresenting are met, both paragraphs 

(b) and (f) are clearly covered. 

FAR paragraph 19.301–2(d) was 

replaced with, ‘‘After a contractor 

rerepresents it is other than small in 

accordance with 52.219–28, the agency 

may no longer include the value of 

options exercised, modifications issued, 

orders issued, or purchases made under 

blanket purchase agreements on that 

contract in its small business prime 

contracting goal achievements. Agencies 

must issue a modification to the 

contract capturing the rerepresentation 

and report it to FPDS within 30 days 

after notification of the 

rerepresentation.’’ 

This change was made to make it 

clear that the rerepresentation impacts 

all funding obligations under the 

contract, not just options exercised and 

orders issued. The Councils believe that 

this was implicit since the purpose of 

the rule is to improve the accuracy of 

size status reporting, which would cover 

all funds that are reported. However, the 

Councils have now made the language 

more clear by making it more explicit. 

A thirty-day timeframe has been added 

for making the change in FPDS. The 

Councils believe that it was understood 

that the change to FPDS would be done 

expeditiously, this thirty-day timeframe 

makes that more clear. 

FAR paragraph 52.219–28(e) has been 

revised to read in part, ‘‘The contractor 

shall notify the contracting office in 

writing within the time frames specified 

in paragraph (b) of this clause.’’ 

The Councils believe that it was 

implicit in the former language that the 

contractor must notify the Government 

within the time frames established for 

rerepresentation. However, this change 

ensures that it is clear. The phrase ‘‘by 

e-mail or otherwise’’ was deleted as 

unnecessary since ‘‘in writing’’ covers 

all forms of written submissions 

including e-mails. 

This is a significant regulatory action 

and, therefore, was subject to review 

under Executive Order 12866, 

Regulatory Planning and Review, dated 

September 30, 1993. The rule is not a 

major rule under 5 U.S.C. 804. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act, 5 

U.S.C. 601, et seq., applies to this final 

rule. The Councils prepared a Final 

Regulatory Flexibility Analysis (FRFA), 

and it is summarized as follows: 

These 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. The purpose of the SBA’s final rule, 

which this FAR rule implements, is to enable 

the Government to report more accurate 

small business prime contracting statistics. 

The rule provides for more accurate statistics 

through rerepresentations on contracts and 

using the size status in effect at the time of 

the rerepresentation. 

Improving the accuracy of the statistics 

may benefit small businesses. The premise of 

the SBA rule is that if agencies can no longer 

take credit toward their small business goals 

for funds obligated to contracts where, over 

the course of the contract, the contractor has 

become other than small, agencies will need 

to make up the shortfall in meeting their 


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Federal Register / Vol. 74, No. 52 / Thursday, March 19, 2009 / Rules and Regulations 11825 

goals by seeking new procurement 

opportunities with the present universe of 

small businesses. 

In the preamble to its rule, SBA estimated 

that potentially 2,300 concerns could be 

initially impacted by the requirement to 

rerepresent on long-term contracts, and 250 

concerns may be impacted annually, 

thereafter. In addition, it is estimated that 

300 concerns may be affected annually by the 

requirement to rerepresent size status as a 

result of novations, acquisitions, or mergers. 

This rule will not impose any additional 

recordkeeping requirements on small 

businesses because they are already required 

to review and update their size status data, 

at a minimum, on an annual basis. 

Interested parties may obtain a copy 

of the FRFA from the FAR Secretariat. 

The FAR Secretariat has submitted a 

copy of the FRFA to the Chief Counsel 

for Advocacy of the Small Business 

Administration. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act (Pub. 

L. 104–13) applies because the final rule 

contains information collection 

requirements. The FAR clause at 

52.219–28, Post-Award Small Business 

Program Rerepresentation requires the 

contractor to rerepresent size status and 

then notify the contracting office in 

writing that the data have been 

validated or updated, and provide the 

date of the validation or update. Public 

comments were solicited for the 

information collection at the interim 

rule stage (72 FR 36852). No comments 

were received. Accordingly, the FAR 

Secretariat will forward a request for 

approval of a new information 

collection requirement concerning 

9000–0163 to the Office of Management 

and Budget under 44 U.S.C. Chapter 35. 

Public comments concerning this 

request will be invited through a 

subsequent Federal Register notice. 

List of Subjects in 48 CFR Parts 1, 4, 19, 

and 52 

Government procurement. 

Dated: March 13, 2009. 

Al Matera, 

Director, Office of Acquisition Policy. 

■ Accordingly, the interim rule 

published in the Federal Register at 72 

FR 36852, July 5, 2007, is adopted as a 

final rule with the following changes: 

■ 1. The authority citation for 48 CFR 

parts 1, 4, 19, and 52 continues to read 

as follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 42 U.S.C. 2473(c). 

PART 1—FEDERAL ACQUISITION 

REGULATIONS SYSTEM 

1.106 [Amended] 

■ 2. Amend section 1.106 by adding, in 

numerical sequence, FAR segment 

‘‘52.219–28’’ and its corresponding 

OMB Control Number ‘‘9000–0163’’. 

PART 4—ADMINISTRATIVE MATTERS 

4.1201 [Amended] 

■ 3. Amend section 4.1201 by removing 

from paragraph (b)(2) ‘‘When the’’ and 

adding ‘‘When any of the’’ in its place. 

PART 19—SMALL BUSINESS 

PROGRAMS 

■ 4. Amend section 19.202–5 by 

revising the introductory text of 

paragraph (c); and removing from 

paragraphs (c)(1) and (c)(2) ‘‘business’’ 

and adding ‘‘business concern’’ in its 

place. 

19.202–5 Data collection and reporting 

requirements. 

* * * * * 

(c) When the contract includes the 

clause at 52.219–28, Post Award Small 

Business Program Rerepresentation, and 

the conditions in the clause for 

rerepresenting are met— 

* * * * * 

■ 5. Amend section 19.301–2 by 

revising the section heading as set forth 

below; by removing from the 

introductory text of paragraph (b) 

‘‘business’’ and adding ‘‘business 

concern’’ in its place; and by revising 

paragraph (d) to read as follows: 

19.301–2 Rerepresentation by a contractor 

that represented itself as a small business 

concern. 

* * * * * 

(d) After a contractor rerepresents it is 

other than small in accordance with 

52.219–28, the agency may no longer 

include the value of options exercised, 

modifications issued, orders issued, or 

purchases made under blanket purchase 

agreements on that contract in its small 

business prime contracting goal 

achievements. Agencies should issue a 

modification to the contract capturing 

the rerepresentation and report it to 

FPDS within 30 days after notification 

of the rerepresentation. 

* * * * * 

■ 6. Amend section 19.301–3 by 

revising the section heading as set forth 

below; and by removing from paragraph 

(b) ‘‘business’’ and adding ‘‘business 

concern’’ in its place. The revised text 

reads as follows: 

19.301–3 Rerepresentation by a contractor 

that represented itself as other than a small 

business concern. 

* * * * * 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 7. Amend section 52.212–5 by 

revising the date of the clause and 

paragraph (b)(16) to read as follows: 

52.212–5 Contract Terms and Conditions 

Required to Implement Statutes or 

Executive Orders—Commercial Items. 

* * * * * 

CONTRACT TERMS AND CONDITIONS 

REQUIRED TO IMPLEMENT STATUTES OR 

EXECUTIVE ORDERS—COMMERCIAL 

ITEMS (MAR 2009) 

* * * * * 

(b) * * * 

(16) 52.219–28, Post Award Small Business 

Program Rerepresentation (MAR 2009) (15 

U.S.C. 632(a)(2)). 

* * * * * 

(End of Clause) 

■ 8. Amend section 52.219–28 by 

revising the date of the clause; by 

adding in paragraph (a), in the 

definition ‘‘Small business concern’’ 

two new sentences to the end of the 

paragraph; and by revising paragraphs 

(b)(3)(ii) and (e) to read as follows: 

52.219–28 Post-Award Small Business 

Program Rerepresentation. 

* * * * * 

POST-AWARD SMALL BUSINESS 

PROGRAM REREPRESENTATION (MAR 

2009) 

(a) Definitions. * * * 

Small business concern * * * Such a 

concern is ‘‘not dominant in its field of 

operation’’ when it does not exercise a 

controlling or major influence on a national 

basis in a kind of business activity in which 

a number of business concerns are primarily 

engaged. In determining whether dominance 

exists, consideration shall be given to all 

appropriate factors, including volume of 

business, number of employees, financial 

resources, competitive status or position, 

ownership or control of materials, processes, 

patents, license agreements, facilities, sales 

territory, and nature of business activity. 

(b) * * * 

(3) * * * 

(ii) Within 60 to 120 days prior to the date 

specified in the contract for exercising any 

option thereafter. 

* * * * * 

(e) Except as provided in paragraph (g) of 

this clause, the Contractor shall make the 

rerepresentation required by paragraph (b) of 

this clause by validating or updating all its 

representations in the Online 

Representations and Certifications 

Application and its data in the Central 

Contractor Registration, as necessary, to 

ensure that they reflect the Contractor’s 

current status. The Contractor shall notify the 

contracting office in writing within the 

timeframes specified in paragraph (b) of this 


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11826 Federal Register / Vol. 74, No. 52 / Thursday, March 19, 2009 / Rules and Regulations 

clause that the data have been validated or 

updated, and provide the date of the 

validation or update. 

* * * * * 

(End of clause) 

[FR Doc. E9–5871 Filed 3–18–09; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Part 15 

[FAC 2005–31; FAR Case 2008–012; Item 

II; Docket 2008–0001, Sequence 10] 

RIN 9000–AL12 

Federal Acquisition Regulation; FAR 

Case 2008–012, Clarification of 

Submission of Cost or Pricing Data on 

Non-Commercial Modifications of 

Commercial Items 

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 Section 

814 of the National Defense 

Authorization Act for Fiscal Year 2008. 

Section 814 required the harmonization 

of the thresholds for cost or pricing data. 

Specifically, Section 814 required 

alignment of the threshold for cost or 

pricing data on non-commercial 

modifications of commercial items with 

the Truth In Negotiation Act (TINA) 

threshold for cost and pricing data. 

DATES: Effective Date: March 19, 2009. 

Comment Date: Interested parties 

should submit written comments to the 

FAR Secretariat on or before May 18, 

2009 to be considered in the 

formulation of a final rule. 

ADDRESSES: Submit comments 

identified by FAC 2005–31, FAR case 

2008–012, by any of the following 

methods: 

• Regulations.gov: http:// 

www.regulations.gov. 

Submit comments via the Federal 

eRulemaking portal by inputting ‘‘FAR 

Case 2008–012’’ under the heading 

‘‘Comment or Submission’’. Select the 

link ‘‘Send a Comment or Submission’’ 

that corresponds with FAR Case 2008– 

012. Follow the instructions provided to 

complete the ‘‘Public Comment and 

Submission Form’’. Please include your 

name, company name (if any), and 

‘‘FAR Case 2008–012’’ on your attached 

document. 

• Fax: 202–501–4067. 

• Mail: General Services 

Administration, Regulatory Secretariat 

(VPR), 1800 F Street, NW, Room 4041, 

ATTN: Hada Flowers, Washington, DC 

20405. 

Instructions: Please submit comments 

only and cite FAC 2005–31, FAR case 

2008–012, in all correspondence related 

to this case. All comments received will 

be posted without change to http:// 

www.regulations.gov, including any 

personal and/or business confidential 

information provided. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Edward N. Chambers, Procurement 

Analyst, at (202) 501–3221 for 

clarification of content. Please cite FAC 

2005–31, FAR case 2008–012. For 

information pertaining to status or 

publication schedules, contact the FAR 

Secretariat at (202) 501–4755. 

SUPPLEMENTARY INFORMATION: 

A. Background 

The National Defense Authorization 

Act (NDAA) for Fiscal Year 2008, 

Section 814, implemented two areas of 

clarification with regards to the 

submission of cost or pricing data on 

non-commercial modifications of 

commercial items. The first area dealt 

with clarifying at what point during the 

life of the contract that the cost or 

pricing data threshold should be 

applied. Section 814 of the NDAA for 

FY 2008 clarified this point by inserting 

‘‘(at the time of contract award’’) after 

‘‘total price of the contract’’ language 

already contained in this FAR section. 

The second area dealt with the 

harmonization of the thresholds for cost 

or pricing data. Section 814 of the 

NDAA for FY 2008 deleted the current 

threshold amount ($500,000) for cost or 

pricing data relative to non-commercial 

modifications of commercial items and 

aligned this threshold with the current 

Truth In Negotiation Act (TINA) 

threshold for cost or pricing data of 

$650,000. Thus, as the TINA threshold 

for cost or pricing data is adjusted in the 

future so will the threshold for 

obtaining cost or pricing data on noncommercial modifications of 

commercial items. This case will make 

the necessary changes within the FAR. 

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 interim rule is not expected 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., 

since it is harmonizing this FAR section 

with other parts of the FAR and should 

actually reduce the administrative 

burden on contractors by not requiring 

them to track two separate dollar 

thresholds for submitting cost or pricing 

data. It is also increasing this dollar 

threshold relative to the submittal of 

cost or pricing data in this situation and 

thus contractors will experience a 

reduced administrative burden since 

they no longer will be required to 

submit cost or pricing data on this lower 

threshold amount. Therefore, an Initial 

Regulatory Flexibility Analysis has not 

been performed. The Councils will 

consider comments from small entities 

concerning the affected FAR Part 15 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 2005–31, FAR case 2008– 

012), in correspondence. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the changes to the 

FAR do not impose information 

collection requirements that require the 

approval of the Office of Management 

and Budget under 44 U.S.C. Chapter 35, 

et seq. 

D. 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 

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 because this 

provision of the National Defense 

Authorization Act for Fiscal Year 2008, 

Section 814 went into effect upon 

enactment, on January 28, 2008. 

However, pursuant to Pub. L. 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 Part 15 

Government procurement. 


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