Federal Register / Vol. 89, No. 244 / Thursday, December 19, 2024 / Proposed Rules 103709 

(c) All statements made in a request 

are subject to the statutes governing 

perjury and to 18 U.S.C. 1001. 

§ 400.5 Procedure for submitting a 

request. 

A request must be submitted in 

writing, either by U.S. mail or the email 

address designated on the Commission’s 

website, addressed to the Office of the 

General Counsel. An authorized agent or 

parent or guardian of a contributor may 

submit a modification or redaction 

request, but the agent or parent or 

guardian must disclose the identity of 

their principal. 

§ 400.6 Initial request processing. 

(a) Upon receipt of a request, the 

Office of the General Counsel will, 

within five (5) business days, review the 

request for substantial compliance with 

the technical requirements of § 400.4(a). 

(b) If the request does not comply 

with the technical requirements of 

§ 400.4(a), the Office of the General 

Counsel will, within five (5) business 

days, notify the requestor that no action 

will be taken on the basis of the request 

and specify the deficiencies of the 

request. 

§ 400.7 Reasonable probability finding; 

notification. 

(a) If the Commission, after reviewing 

the request and any supporting 

documentation, determines by an 

affirmative vote of four (4) or more of its 

members that there is a reasonable 

probability that the relevant disclosure 

would subject the contributor to threats, 

harassments, or reprisals, the 

Commission may approve, in whole or 

in part, the modification or redaction of 

the requested information. 

(b) The Commission will, within five 

(5) business days of voting, notify the 

requestor of the Commission’s decision. 

(c) If the request is approved, the 

Commission will expeditiously effect 

any approved changes to the reports 

published by the Commission. 

(d) If changes are made to a disclosure 

report filed with the Commission, 

within five (5) business days after the 

changes are made, the Commission will 

notify the committee or person who 

filed the disclosure report that the 

report was modified pursuant to this 

part. 

§ 400.8 Modifications or redactions in 

future disclosure reports. 

If the Commission makes 

modifications or redactions to a 

disclosure report pursuant to a request 

from a contributor under this part, any 

individuals or entities who are required 

to identify the same contributor in 

reports or statements filed with the 

Commission may incorporate those 

modifications or redactions into any 

report or statement filed within the next 

two calendar years, or within any other 

period specified by the Commission in 

its decision approving the contributor’s 

request. 

§ 400.9 Confidentiality. 

(a) Except as provided in § 400.7(d), 

no request submitted to the 

Commission, nor any notification sent 

by the Commission, nor any findings 

made by the Commission, will be made 

public by the Commission without the 

written consent of the requestor. 

(b) Nothing in this part shall be 

construed to prevent the introduction of 

evidence in the courts of the United 

States which could properly be 

introduced pursuant to the Federal 

Rules of Evidence or Federal Rules of 

Civil Procedure. 

Dated: December 12, 2024. 

On behalf of the Commission. 

Sean J. Cooksey, 

Chairman, Federal Election Commission. 

[FR Doc. 2024–29989 Filed 12–18–24; 8:45 am] 

BILLING CODE P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 125 

RIN 3245–AI09 

Government Contracting: 

Subcontracting Program 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Proposed rule. 

SUMMARY: The U.S. Small Business 

Administration (SBA) proposes to revise 

its Small Business Subcontracting 

Program regulations to encourage faster 

payments to small business 

subcontractors and streamline the 

reporting process for prime contracts. 

This proposed rule will require prime 

contractors notify contracting officers in 

writing when it fails to make full or 

timely payments to the subcontractor 

within 30 days past due; require prime 

contractors cooperate with contracting 

officers to correct/mitigate this failure 

until payment is made in full to the 

subcontractor; and allow contracting 

officers to modify a prime contractor’s 

past performance for failure to make full 

or timely payments. 

DATES: Comments must be received on 

or before February 18, 2025. 

ADDRESSES: You may submit comments, 

identified by RIN 3245–AI09, by any of 

the following methods: 

• Federal eRulemaking Portal: 

https://www.regulations.gov and follow 

the instructions for submitting 

comments. 

• Email: Kunmi Ageh, Procurement 

Policy Analyst (Attorney), Office of 

Policy Planning and Liaison, Small 

Business Administration, at 

Kunmi.Ageh@sba.gov. 

SBA will post all comments on 

https://www.regulations.gov. 

Instructions: All submissions received 

must include the agency name and 

docket number or Regulatory 

Information Number (RIN) for this 

rulemaking. All comments received will 

be posted on https://

www.regulations.gov. If you wish to 

submit confidential business 

information (CBI) as defined in the User 

Notice at https://www.regulations.gov, 

please submit the comments to Kunmi 

Ageh and highlight the information that 

you consider to be CBI and explain why 

you believe this information should be 

held confidential. 

FOR FURTHER INFORMATION CONTACT: 

Kunmi Ageh, Procurement Policy 

Analyst (Attorney), Office of Policy 

Planning and Liaison, Small Business 

Administration, at Kunmi.Ageh@

sba.gov, 202–374–8454. 

Electronic copies of this Federal 

Register are available at https://

www.regulations.gov. The docket is 

available at https://

www.regulations.gov, the Federal 

eRulemaking Portal. A ‘‘100-word 

summary’’ is also available on https://

www.regulations.gov. For additional 

information on submitting items to, or 

accessing items in, the docket, please 

refer to the ADDRESSES section of this 

NPRM. 

SUPPLEMENTARY INFORMATION: 

Background Information 

The SBA proposes to revise its Small 

Business Subcontracting Program 

regulations in 13 CFR 125.3 in response 

to changes made in section 862 of the 

National Defense Authorization Act 

(NDAA) for Fiscal Year 2024, Public 

Law 118–31. Section 862 made changes 

to section 8(d)(13) of the Small Business 

Act, 15 U.S.C. 637(d)(13)(B)(i), by 

amending the time in which a prime 

contractor must notify the contracting 

officer in writing if, upon completion of 

the responsibilities of the small business 

subcontractor, payment to the 

subcontractor is past due under the 

terms of the subcontract by 30 days. 

This means a prime contractor must 

notify a contracting officer in writing 

when it failed to make fully or timely 

payments to a subcontractor within 30 

days past the payment due date. Section 


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862 also requires that the prime 

contractor cooperate (act or work 

together) with the contracting officer to 

correct and mitigate the failure to make 

a full or timely payment to a 

subcontractor. The prime contractor has 

the duty to cooperate with the 

contracting officer until the 

subcontractor receives full payment, is 

made whole or the contracting officer’s 

determination is no longer effective, 

regardless of performance or status of 

the contract in question. Lastly, a 

contracting officer has the option to 

include the failure to make full and 

timely payments in the prime 

contractor’s past performance rating 

before or after close-out of the covered 

contract. 

SBA intends to simplify the 

subcontracting reporting process by 

proposing additional changes to the 

Subcontracting Program. This proposed 

rule will allow contractors the option to 

base their commercial subcontracting 

plans on the Federal Government’s 

fiscal year (FY), as well as allow prime 

contractors the option to base a 

subcontractor’s size status on its 

primary NAICS code for subcontracts, 

but only limited to subcontracts under 

commercial subcontracting plans, 

subcontracts under the Micro-Purchase 

Threshold (MPT), and for indirect costs 

subcontracts in instances where the 

subcontract does not result from a 

solicitation with a NAICS code. This 

proposed rule also intends to explain 

how to calculate an agency’s allocation 

on the Commercial Summary 

Subcontract Reports (SSRs) and provide 

a clear due date for when to submit 

Commercial SSRs. SBA proposes to 

clarify which agencies should receive 

Individual Subcontract Reports (ISRs) or 

SSRs, provide the deadline for 

submissions of ISRs or SSRs, and list 

the individuals with the authority to 

sign SSRs. 

With these revisions, SBA plans to 

simplify the subcontract reporting 

process and address common concerns 

with subcontract reporting. 

Severability 

SBA anticipates for the provisions of 

this proposed rule, if finalized, to be 

severable from each other such that if a 

court were to hold that any provision is 

invalid or unenforceable as to a 

particular person or circumstance, the 

rule would remain in effect as to any 

other person or circumstance. 

Section-by-Section Analysis 

Section 125.3(a)(1)(i)(B) 

SBA proposes to add language to 

§ 125.3(a)(1)(i)(B) that the 

subcontracting plan must be submitted 

by the entity awarded the contract, 

which must reflect all subcontracting to 

be performed by itself and its affiliates. 

With this amendment, SBA proposes to 

clarify that this section also applies to 

prime contractors that are considered a 

joint venture. SBA will eliminate the 

issue where two other than small 

business concerns submit an offer as a 

joint venture and use individual 

subcontracting plans to fulfill the 

subcontracting plan requirement, 

whereas instead, the subcontracting 

plan should name the joint venture 

offeror. 

Section 125.3(a)(1)(iii) 

SBA proposes to add text to 

§ 125.3(a)(1)(iii) to clarify that utilities 

purchased from a municipality or solely 

authorized by that municipality to 

provide services in a particular 

geographic region should not be 

included in a subcontracting base. 

Section 125.3(b)(3)(ii) 

SBA proposes to add language to 

§ 125.3(b)(3)(ii) to include the Dynamic 

Small Business Search (DSBS) to the list 

of tools for conducting market research. 

DSBS is a research tool meant to help 

contractors identify small business 

concerns capable of performing all or 

part of the contract as a subcontractor. 

The addition of DSBS will promote 

practicable subcontracting 

opportunities. Therefore, in addition to 

System for Award Management 

(SAM.gov) and SBA’s SUBNet, SBA 

proposes to add DSBS to the list of tools 

for conducting market research to assist 

contractors in locating small business 

concerns. 

Section 125.3(c)(1)(v) 

Currently, § 125.3(c)(1)(v) requires the 

contractor to assign a NAICS code that 

best describes the nature of the 

subcontract, and its corresponding size 

standard, to each subcontract and to 

each solicitation if a solicitation is 

utilized. Further, a contractor may rely 

on a subcontractor’s electronic 

representations and certifications, if the 

solicitation for the subcontract contains 

a clause that requires the subcontractor 

verify, by the submission of its offer, 

that the size or socioeconomic 

representations and certifications are 

current, accurate, and complete as of the 

date of the offer for the subcontract. 

SBA proposes to add language to 

§ 125.3(c)(1)(v) that a subcontractor’s 

primary NAICS code may be used as its 

size classification for all subcontracts 

under commercial subcontracting plans, 

for subcontracts under the MicroPurchase Threshold (MPT), and for the 

indirect costs of subcontracts. The 

prime can only use the primary NAICS 

code for classifying the subcontractor 

where the subcontract does not result 

from a solicitation with a NAICS code. 

If the prime contractor issues a 

solicitation for a subcontract that has a 

NAICS code, then that prime contractor 

must use the size representation for the 

NAICS code in that solicitation, rather 

than the primary NAICS code for the 

subcontractor. This will ensure all 

responses to the solicitation for the 

subcontract are assessed against the 

same NAICS code and corresponding 

size standard. SBA has noticed 

contractor challenges to determine the 

size of subcontractors for indirect costs 

and accurately counting all indirect 

costs in the ‘‘other than small’’ category. 

Thus, SBA intends to increase the 

correct size classification for 

subcontractors by providing an alternate 

method to classify their suppliers. This 

change simplifies prime contractor’s 

ability to identify the size status of a 

subcontractor for indirect costs (for 

companies with all plan types), for 

subcontracts issued under commercial 

subcontracting plans, and for 

subcontracts under the MPT. 

A contractor cannot require a 

subcontractor to register in SAM.gov to 

identify a potential subcontractor’s size 

and socio-economic status; however, 

Contractors can determine a 

subcontractor’s size and socioeconomic 

status for their primary NAICS code 

through written size representations or 

electronic representations. For 

HUBZone small businesses and servicedisabled veteran-owned small 

businesses (SDVOSBs), SBA requires 

the contractor or subcontractor be 

registered in DSBS, SAM.gov, or 

successor system, prior to submitting a 

certification application to SBA. For a 

contractor to verify the status of a 

HUBZone or SDVOSB subcontractor, it 

must verify the status of the concern in 

DSBS. Any contractor or subcontractor 

that does not submit a certification 

application for SDVOSBs status to SBA 

by December 22, 2024, cannot selfcertify for a Federal prime or 

subcontract that counts towards 

SDVOSB goaling purposes or SDVOSB 

subcontracting goals under 13 CFR 

128.200(c)(2). If the contractor chooses 

to register in SAM.gov, the contractor’s 

primary NAICS is indicated in the 

Assertions, Service Classifications, 

portion of a contractor’s SAM profile. 

Subcontracts are still required to 

include a clause in the solicitation or 

subcontract that require subcontractors 

verify by submission of the offer or 

acceptance that the subcontractor’s size 


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and socioeconomic representations and 

certifications in SAM (or in the 

contractor’s electronic database) are 

current, accurate and complete as of the 

date of the offer for the subcontract (or, 

if an offer is not a part of the 

procurement process, as of the date of 

award). 

Finally, SBA proposes to clarify that 

the size certification and recertification 

requirements of 13 CFR 121.404(g) do 

not apply to subcontracts. However, if 

there is a merger or acquisition that 

causes the reissuance of the subcontract, 

this is considered a new subcontract. 

Section 125.3(c)(1)(vi) 

SBA proposes four revisions to 

§ 125.3(c)(1)(vi). First, SBA plans to 

amend this section to clarify what 

reports must be submitted for orders 

against multi-agency indefinite delivery, 

indefinite quantity (IDIQ) contracts. 

Unlike Commercial Plans under FAR 

52–219–9(l)(2)(i)(e), contractors cannot 

allocate a percentage of work in the SSR 

to more than one executive agency 

when submitting reports. An individual 

SSR is directed to a single agency. Thus, 

SBA proposes a separate SSR should be 

submitted to the ordering agency when 

orders are placed under multi-agency 

multiple award contracts. This will 

ensure a separate SSR is submitted for 

each ordering agency to capture 

subcontracts awarded during the fiscal 

year for that agency’s order, so the 

ordering agency receives credit in 

accordance with 13 CFR 125.3(h)(3). 

Further, this SSR need only reflect 

subcontract awards that result from that 

agency’s orders. Any dollar value 

subcontract should be included in the 

ISR (or SF 294, if applicable) and SSR 

reports. Contractors with individual 

subcontracting plans must submit ISRs 

during contract performance as required 

under this provision. Although 

uncommon, if the agency that issued the 

underlying contract does not award any 

orders, then the contractor must still 

submit an SSR with zero dollars. For 

example, XYZ Company has a contract 

with U.S. General Services 

Administration (GSA), under the 

Federal Supply Schedule (FSS), that 

contains an individual subcontracting 

plan. The FSS allows other agencies to 

place an order under this contract. The 

U.S. Department of Veterans Affairs 

(VA) places an order against the FSS 

with XYZ Company. XYZ Company 

must submit two SSRs. One to VA, 

reflecting a subcontracting that occurred 

during the reporting period pertaining 

to its order; and the other to GSA, 

reflecting no subcontracting because 

GSA did not place any orders itself. If 

the contractor has another prime or 

subcontract with the VA, that contractor 

would combine all its subcontracting 

under VA into one SSR. 

Second, this rule proposes the 

contractor submit its SSR within 45 

days after the end of the Government’s 

fiscal year (e.g., by November 14th for 

the September 30th reporting period). 

This mirrors the recently proposed 

change in 13 CFR 125.3(d)(2), which 

would extend the due dates for 

subcontracting reports by 15 days, from 

30 days to 45 days. 

Third, SBA proposes to amend this 

section to clarify that SSRs should be 

submitted to the executive agency level 

unless otherwise directed by the agency. 

SBA proposes to define Executive 

agency as an executive department, a 

military department, or any 

independent establishment within the 

meaning of 5 U.S.C. 101, 102, and 

104(1), respectively, and any wholly 

owned Government corporation within 

the meaning of 31 U.S.C. 9101 (as 

defined in FAR 2.101). For example, 

XYZ Company submits SSRs to Centers 

for Disease Control and Prevention, 

Centers for Medicare and Medicaid 

Services, and Food and Drug 

Administration—all lower-level 

agencies that fall under the U.S. 

Department of Health and Human 

Services (HHS). Here, XYZ Company 

should have submitted only one SSR to 

HHS, the executive agency. Contractors 

may continue to file commercial SSRs at 

the awarding level. 

Lastly, SBA proposes to amend this 

section to increase individuals who may 

sign the SSR. Specifically, the 

contractor’s President (or equivalent at 

education institutions), CEO, Vice 

President, General Manager, or most 

Senior Executive for Government 

Procurement may sign the SSR. 

Currently, the contractor’s President is 

the only individual that may sign the 

SSR. This is an issue because the 

contractor’s President may not be 

available for signature or may not have 

subject matter knowledge. Thus, SBA 

intends to ease the SSRs process by 

allowing signatures from individuals 

who have knowledge of the content and 

are readily available to sign the reports 

in lieu of the CEO. 

Section 125.3(c)(1)(xiii)(C) 

SBA proposes to add a definition of 

contract completion in accordance with 

physically completed contracts under 

FAR 4.804–4. More specifically, under 

FAR 4.804–4, a contract is considered 

physically complete when the 

contractor has performed all services 

and/or provided all required deliveries, 

and the Government has accepted the 

services and/or accepted the supplies. 

In the instance of rental, use, or storage 

agreements, contract completion occurs 

when the Government has provided the 

contractor a notice of complete contract 

termination or the contract period has 

expired. 

Under the past performance ratings 

program, the prime contractor must rate 

the first-tier small business 

subcontractor using the five-scale 

ratings system found in FAR 42.1503 

(48 CFR 42.1503). The prime contractor 

must provide an exceptional, very good, 

satisfactory, marginal, or unsatisfactory 

rating to the first-tier small business 

subcontractor. In turn, subcontractors 

who intend to provide this rating when 

making an offer for a prime contract 

must include the following evaluation 

factors: (1) technical; (2) cost control; (3) 

schedule/timeliness; (4) management or 

business relations; and (5) other (as 

applicable). 

Thus, § 125.3(c)(1)(xiii)(C) allows a 

first-tier subcontractor to request a 

subcontractor’s past performance rating 

from the prime contractor within 30 

calendar days of completion of the 

prime contractor’s contract with the 

Government. This clarifies the time a 

contract is considered complete, which 

thereby starts the ‘‘30 calendar day’’ 

window for a first-tier subcontractor to 

request a performance rating from the 

prime contractor. 

Section 125.3(c)(2) 

SBA proposes to amend § 125.3(c)(2) 

to set forth the rules for commercial 

subcontracting plans. First, SBA 

proposes to provide contractors the 

option to base their commercial 

subcontracting plans on the Federal 

Government’s fiscal year. Currently, 

§ 125.3(c)(2) only permits 

subcontractors to base their commercial 

subcontracting plans on their individual 

fiscal year. This revision permits 

contractors to base their commercial 

subcontracting plans on the Federal 

Government’s fiscal year, if desired, so 

the subcontracting plan can match the 

SSR reporting period. 

Second, SBA proposes to amend 

§ 125.3(c)(2) to clarify how to calculate 

an agency’s allocation on the 

Commercial SSR and provide a clear 

due date for submission of the 

Commercial SSR. The agency allocation 

percentage on the SSR is the percentage 

of revenue during the Government’s 

fiscal year attributable to each Federal 

agency, when compared to the 

contractor’s total revenue earned during 

the Government fiscal year. It should be 

noted that the contractor’s total revenue, 

including its Federal and non-Federal 

revenue, is used in the denominator. All 

subcontracting with any Federal agency 


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should be included even if the 

contractor does not have a 

subcontracting plan with the agency; 

and the executive level of the agency 

should be selected unless otherwise 

directed by the agency. 

Third, SBA proposes to amend 

§ 125.3(c)(2) to permit the use of a 

subcontractor’s primary NAICS as the 

size of the subcontractor under a 

commercial subcontracting plan. This 

change also applies to indirect costs 

subcontracts, and subcontracts below 

the Micro-Purchase Threshold (MPT). 

Section 125.3(c)(5) 

Per the requirements of section 862 of 

the NDAA for FY2024, SBA proposes to 

revise the timeframe in § 125.3(c)(5) in 

which a prime contractor must notify 

the contracting officer in writing, if 

upon completion of the responsibilities 

of the small business subcontractor, that 

payment to the subcontractor will be 

untimely under the terms of the 

subcontract. Previously, a prime 

contractor was required to notify the 

contracting officer in writing if payment 

was more than ‘‘90’’ days past due. 

Under this revision, a prime contractor 

must notify the contracting officer in 

writing when the payment to a small 

business subcontractor is more than 

‘‘30’’ days past due under the terms of 

the subcontract. 

Section 125.3(c)(6) 

SBA proposes to add text to 

§ 125.3(c)(6) that states a contractor has 

met its subcontracting goal when it has 

met or exceeded its percentage goal in 

its subcontracting plan—whether the 

goals are based on total contract value 

or total subcontracting. This change 

clarifies how contracting officers look to 

a contractor’s percentage goal to 

determine whether that contractor has 

met its subcontracting goal. Specifically, 

a prime contractor’s subcontracting plan 

must include a statement of total dollars 

planned to be subcontracted to small 

and disadvantaged businesses under 

FAR 19.704(a)(2). This allocated 

percentage of the total subcontract 

dollars is considered the percentage goal 

for the subcontracting plan. Thus, if the 

contractor fails to meet its percentage 

goal, the contractor is required to 

provide the contracting officer a written 

explanation why it failed to meet its 

planned small business subcontracting 

goals. 

Section 125.3(d)(3)(i) 

SBA proposes to revise the language 

in § 125.3(d)(3)(i) by replacing ‘‘large’’ 

with ‘‘other than small’’ with the intent 

to clarify that application of this section 

includes, but is not limited to, 

businesses, organizations, public 

utilities, and State and local 

governments. The current language 

includes the term ‘‘large’’ business, 

which could be interpreted to exclude 

municipalities; for example, State and 

local governments, non-profit 

organizations, and public utilities. 

Revising this rule will clarify the 

inclusion of all types of concerns, such 

as State and local governments, and 

other organizations that are not small 

business concerns. 

Section 125.3(d)(5) 

Consistent with the requirements of 

section 862 of the NDAA for FY2024, 

SBA proposes to revise the timeframe of 

§ 125.3(d)(5) from ‘‘90’’ days to ‘‘30’’ 

days. Under this revision, a contracting 

officer must evaluate a prime 

contractor’s written explanation for an 

untimely payment to a subcontractor 

that is more than ‘‘30’’ days past due 

under the terms of the subcontract. The 

contracting officer may also consider 

that information when rating the 

contractor for past performance 

purposes. SBA proposes to mirror the 

mandatory statutory changes in 

§ 125.3(c)(5) by amending the timeframe 

for the contracting officer’s evaluation 

from ‘‘90’’ to ‘‘30’’ days for consistency. 

Section 125.3(d)(7) Through (8) 

SBA proposes to add new paragraph 

§ 125.3(d)(7) to implement the 

requirements of section 862 of the 

NDAA for FY 2024. Specifically, this 

section allows the contracting officer to 

enter and modify the prime contractor’s 

past performance information when 

there is an unjustified failure to make a 

full or timely payment to a 

subcontractor subject to this section 

before or after close-out of the contract. 

This section further stipulates that 

once the contracting officer makes the 

determination that there was an 

unjustified failure by the prime 

contractor to make a full or timely 

payment to a subcontractor under this 

section, then the prime contractor must 

cooperate with the contracting officer to 

correct and mitigate the unjustified 

failure. During this process, the 

contracting officer consults with the 

Director of Small Business Programs or 

the Director of Small and Disadvantaged 

Business Utilization acting or other 

representatives of the Federal 

Government to ensure compliance with 

small business goals. The prime 

contractor has a duty to cooperate until 

the subcontractor is made whole or the 

contracting officer’s determination is no 

longer effective, regardless of 

performance or close-out status of the 

subject contract. 

SBA intends to remove § 125.3(d)(8) 

entirely because when the contract is 

awarded, the original subcontracting 

plan will include all options; therefore, 

this provision is unnecessary. 

As a result of removing § 125.3(d)(8) 

and adding new paragraph § 125.3(d)(7), 

SBA proposes to redesignate the current 

§ 125.3(d)(7) as § 125.3(d)(8). 

Sections 125.3(e)(1) Through (e)(5) 

Similar to amendments made in 

§ 125.3(d)(3)(i), SBA proposes to revise 

the language in § 125.3(e)(1) through (5) 

by revising ‘‘large’’ to ‘‘other than 

small’’ with the intent to clarify that 

application of this section includes, but 

is not limited to, businesses, 

organizations, public utilities, and State 

and local governments. 

Section 125.3(e)(3) 

In addition to revising ‘‘large’’ to 

‘‘other than small’’ in § 125.3(e)(3), SBA 

proposes to add DSBS as an alternative 

market research tool for prime 

contractors to assist in identifying small 

business concerns that can perform all 

or part of the work as a subcontractor. 

This section currently omits DSBS as a 

market research tool, thus SBA intends 

to ensure this database is listed as one 

of the key market research alternatives 

available to contractors in addition to 

the currently listed tools, SAM, SUBnet 

and Business Matchmaking events. 

Section 125.3(f)(1) 

First, SBA proposes to revise 

§ 125.3(f)(1) by removing the language 

‘‘on site’’ because virtual meetings and 

calls are more common and widely 

accessible. Next, SBA proposes to 

remove the ‘‘six to eight months’’ for a 

follow-up review and replace that 

language with ‘‘within a year’’. This 

revision will clarify that SBA or the 

agency conducting the review has at 

least a year to conduct a follow-up 

compliance review to ensure the 

contractor has implemented all 

corrective actions. Lastly, SBA proposes 

to include the language ‘‘the corrective 

actions’’ after ‘‘implemented’’. This 

revision clarifies that contractors are 

required to complete any corrective 

actions by the time of its follow-up 

review. Overall, this provides additional 

time to complete this segment of 

contract performance. 

Section 125.3(f)(4) 

SBA proposes to amend the timeframe 

from ‘‘30’’ days to within ‘‘45’’ days of 

receipt of the official compliance report. 

This provides a contractor that receives 

a marginal or unsatisfactory rating 

additional time to provide a written 

corrective action plan to SBA, or to both 


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SBA and the agency that conducted the 

compliance review (if the agency 

conducting the review has an agreement 

with SBA). 

Section 125.3(h)(2) 

SBA proposes to revise the language 

in § 125.3(h)(2) to include the text 

‘‘when order-level goals were required’’ 

and the text ‘‘on the underlying 

contract’s ISR report.’’ Specifically, this 

revision clarifies the time a contractor is 

required to submit small business 

subcontracting accomplishments, which 

is when order-level goals are required; 

and the correct agency to submit this 

information, which is the contracting 

agency on the underlying contract’s ISR 

report. Summarily, SBA intends to 

update the requirements so contractors 

are aware that the order-level 

achievements must be reported on the 

underlying contract’s ISR report when 

order-level goals are required. 

Second, SBA proposes to add the 

language ‘‘[t]he order’s subcontracting 

only needs to be included on the ISR’s 

order-level report from the inception of 

the order until the order is completed, 

and on the ISR designated as ‘final’.’’ 

This specifies the length of time an 

order level subcontracting must be 

included on the ISR’s order-level report. 

Compliance with Executive Orders 

12866, 12988, 13132, 13175, 13563, the 

Congressional Review Act (5 U.S.C. 

801–808), the Paperwork Reduction Act 

(44 U.S.C., Ch. 35), and the Regulatory 

Flexibility Act, (5 U.S.C. 601–612). 

Executive Order 12866 

The Office of Management and Budget 

(OMB) has determined that this 

rulemaking is significant regulatory 

action for the purposes of Executive 

Order 12866. 

SBA’s Regulatory Impact Analysis 

1. Regulatory Impact Analysis: Is 

there a need for the regulatory action? 

This action proposes to implement a 

statutory requirement—the NDAA 

FY24—as well as simplify the 

subcontracting reporting process by 

proposing additional changes to the 

Subcontracting Program. The proposed 

rule provides an offeror with the option 

to base its commercial subcontracting 

plans on its fiscal year or the Federal 

Government’s fiscal year; and allows for 

the size status of the subcontractor to be 

based on its primary NAICS code for 

commercial subcontracting plans, 

indirect costs subcontracts, and 

contracts under the MPT. The proposed 

rule defines executive agency and 

contract completion. It clarifies how to 

calculate the agency allocation on the 

Commercial SSR; when the higher tier 

contractors must review the lower tier 

ISR; and submission of SSRs for orders 

under multi-agency IDIQ contracts. 

2. What is the baseline, and the 

incremental benefits and costs of this 

regulatory action? 

There are three provisions associated 

with incremental benefits or 

incremental costs. SBA has determined 

that the remaining changes clarify or 

improve existing policies. 

First, NDAA FY 2024 amends section 

8(d)(13) of the Small Business Act to 

encourage faster payments to small 

business subcontractors. Prime 

contractors are required to notify 

contracting officers of its failure to make 

full or timely payments to the 

subcontractor within 30 days. The 

prime contractor must cooperate with 

the contracting officer until full and 

timely payments are made or the 

contracting officer’s determinations are 

no longer effective. The contracting 

officer may consider the prime 

contractor’s failure to make a full or 

timely payment to a subcontractor in 

past performance. The existing baseline 

without implementing the change 

provides prime contractors 90 days to 

notify a contracting officer of late 

payments without any effect to past 

performance or incentive to cooperate 

with the contracting officer to resolve 

the failure to make timely payments. As 

a result, subcontractors may not receive 

full payments until after performance 

and contract completion. The most 

significant benefits of this proposed rule 

will ensure subcontractors receive 

timely payments and incentivize the 

prime contractor to cooperate with 

contracting officers regarding full 

payments to subcontractors. 

Second, § 125.3(c)(1)(vi) allows a 

contractor’s CEO, president, vice 

president, general manager, or most 

senior executive for government 

procurement to sign the SSRs. The 

current baseline only allows the CEO/ 

President to sign the SSR. As a result, 

submissions of SSRs take additional 

time, subject to the availability and 

subject-matter knowledge of the CEO/ 

President. This proposed change will 

benefit the process by allowing 

additional individuals within a firm to 

sign the SSRs report. SBA believes this 

will create more efficiency in the SSR 

reporting process. 

Lastly, § 123.3(c)(1)(vi) would require 

prime contractors submit separate 

summary subcontracting reports (SSRs) 

for each ordering agency against each 

multi-agency indefinite delivery, 

indefinite quantity (IDIQ) contract. The 

existing baseline without implementing 

the change only requires prime 

contractors submit one SSR report to the 

IDIQ agency. As a result, the ordering 

agency may not receive proper credit 

towards its subcontracting goals. 

The proposed change will benefit 

program participants by ensuring each 

ordering agency receives credit as 

required under 13 CFR 125.3(h)(3). 

Contractors are already required to 

submit SSRs to the agency that awarded 

the IDIQ contract, and the data should 

already exist. Thus, the only cost 

associated with the proposed change 

would be the cost to complete 

additional SSR reports and organize 

existing ordering data by agency. It is 

difficult to calculate the cost associated 

with submitting SSRs. To determine a 

cost for this change, SBA reviewed the 

Paperwork Reduction Act Supporting 

Statement for the FAR’s Subcontracting 

Plan forms, under OMB Control No. 

9000–0007. Considering the burdens 

estimated in the Supporting Statement, 

SBA estimates a contractor currently 

spends approximately three hours to 

submit an SSR, the equivalent to an 

individual subcontracting report (ISR). 

That equates to approximately $132.46 

per hour, which is the mean hourly 

wage of $66.23 plus 100 percent for 

overhead and benefits for Management 

Occupation (see Management 

Occupations (bls.gov), retrieved 

September 4, 2024). In FY20, 4,389 

contractors submitted an ISR. SBA 

estimates a 5% increase, which is an 

approximate increase of 220 reports 

submitted annually. Thus, the aggregate 

cost of this proposed change amounts to 

$87,424 annually. This proposed rule 

also intends to concurrently provide 15 

additional days to submit SSRs under 

§ 125.3(d)(2). Thus, SBA believes the 

additional time allocated in this 

rulemaking will resolve any undue 

burden, given the data for SSRs already 

exist. 

3. What alternatives have been 

considered? 

The alternative to the proposed rule 

would be to keep SBA’s processes and 

procedures as currently stated in the 

Code of Federal Regulations. However, 

because the proposed rule intends to 

simplify the subcontracting reporting 

process, SBA does not believe this 

alternative will benefit the 

Subcontracting Program. 

Additionally, this rulemaking 

implements section 862 of NDAA FY24. 

There is no alternative to implementing 

this statutory requirement. 

Executive Order 13563 

This Executive order directs agencies 

to, among other things: (a) Afford the 

public a meaningful opportunity to 

comment through the internet on 

proposed regulations, with a comment 


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period that should generally consist of 

not less than 60 days; (b) provide for an 

‘‘open exchange’’ of information among 

Government officials, experts, 

stakeholders, and the public; and (c) 

seek the views of those who are likely 

to be affected by the rulemaking even 

before issuing a notice of proposed 

rulemaking. As far as practicable or 

relevant, SBA considers these 

requirements in developing this 

rulemaking as discussed below. 

1. Did the agency use the best 

available techniques to quantify 

anticipated present and future costs 

when responding to E.O. 12866 (e.g., 

identifying changing future compliance 

costs that might result from 

technological innovation or anticipated 

behavioral changes)? 

To the extent possible the agency 

utilized the most recent data available 

in the System for Award Management 

(SAM.gov) and the Electronic 

Subcontracting Reporting System 

(eSRS). This proposed rule does not 

attempt to quantify anticipated present 

and future costs, and so the agency 

expects minimal impact. 

2. Public participation: Did the 

agency: (a) afford the public a 

meaningful opportunity to comment 

through the internet on any proposed 

regulation, with a comment period that 

should generally consist of not less than 

60 days; (b) provide for an ‘‘open 

exchange’’ of information among 

government officials, experts, 

stakeholders, and the public; (c) provide 

timely online access to the rulemaking 

docket on Regulations.gov; and (d) seek 

the views of those who are likely to be 

affected by rulemaking? 

The notice of proposed rulemaking 

will have a 60-day comment period and 

will be posted on www.regulations.gov 

to allow the public to comment 

meaningfully on its provisions. 

3. Flexibility: Did the agency identify 

and consider regulatory approaches that 

reduce burdens and maintain flexibility 

and freedom of choice for the public. 

Yes, the notice of proposed 

rulemaking implements changes; 

provides offerors with the option to 

submit their commercial subcontracting 

plans using either the Government’s 

fiscal year or their fiscal year; allows a 

subcontractor’s size status to be based 

on its primary NAICS code for 

commercial subcontracting plans, 

indirect costs subcontracts, and 

contracts under the MPT only in 

instances where the subcontract does 

not result from a solicitation with a 

NAICS code; and provides other 

clarifications. 

Executive Order 12988 

For purposes of Executive Order 

12988, SBA has drafted this rulemaking, 

to the extent practicable, in accordance 

with the standards set forth in section 

3(a) and 3(b)(2) of that Executive order, 

to minimize litigation, eliminate 

ambiguity, and reduce burden. This 

rulemaking has no preemptive or 

retroactive effect. 

Executive Order 13175 

This rulemaking does not have Tribal 

implications under Executive Order 

13175, Consultation and Coordination 

with Indian Tribal Governments, 

because it does not have a substantial 

direct effect on one or more Indian 

tribes, on the relationship between the 

Federal Government and Indian tribes, 

or on the distribution of power and 

responsibilities between the Federal 

Government and Indian tribes. 

Executive Order 13132 

For the purpose of Executive Order 

13132, SBA has determined that this 

rulemaking will not have substantial 

direct effects on the States, on the 

relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

layers of government. Therefore, SBA 

has determined that this rulemaking has 

no federalism implications warranting 

preparation of a federalism assessment. 

Paperwork Reduction Act, 44 U.S.C. 

Ch. 35 

The notice of proposed rulemaking 

would make changes and clarifications 

to SBA’s subcontracting regulation. 

Specifically, this rulemaking will 

require contractors submit a separate 

SSR for each ordering agency to capture 

subcontracts awarded during the fiscal 

year for that agency’s order(s), so the 

ordering agency receives credit in 

accordance with 13 CFR 125.3(h)(3). 

This collection of information may 

require submission or retention of 

documents; however, SBA believes that 

this impact will be minimal. Contractors 

are already required to submit SSRs to 

the agency that awarded the IDIQ 

contract, so the data should already 

exist in the contractor’s ordinary course 

of business recordkeeping. 

Regulatory Flexibility Act, 5 U.S.C. 

601–612 

According to the Regulatory 

Flexibility Act (RFA), 5 U.S.C. 601, 

when an agency issues a rulemaking, it 

must prepare a regulatory flexibility 

analysis to address the impact of the 

rule on small entities. However, section 

605 of the RFA allows an agency to 

certify a rule, in lieu of preparing an 

analysis, if the rulemaking is not 

expected to have a significant economic 

impact on a substantial number of small 

entities. The RFA defines ‘‘small entity’’ 

to include ‘‘small businesses,’’ ‘‘small 

organizations,’’ and ‘‘small 

governmental jurisdictions.’’ This 

proposed rule concerns various aspects 

of SBA’s contracting programs. As such, 

the rule relates to small business 

concerns but would not affect ‘‘small 

organizations’’ or ‘‘small governmental 

jurisdictions’’ because those programs 

generally apply only to ‘‘business 

concerns’’ as defined by SBA 

regulations, in other words, to small 

businesses organized for profit. ‘‘Small 

organizations’’ or ‘‘small governmental 

jurisdictions’’ are non-profits or 

governmental entities and do not 

generally qualify as ‘‘business concerns’’ 

within the meaning of SBA’s 

regulations. 

There are approximately 350,000 

concerns registered as small business 

concerns in the System for Award 

Management (SAM) that could 

potentially be impacted by the 

implementation of section 862. 

However, SBA cannot say with any 

certainty how many will be impacted 

because we do not know how many of 

these concerns participate in 

Government contracting as 

subcontractors. A firm is required to 

register in SAM in order to participate 

in Federal contracting as a prime 

contractor, but not for purposes of 

subcontracting. The data does not allow 

SBA to estimate the cost of the proposed 

rule on small business concerns. 

In sum, the proposed amendments 

would not have a disparate impact on 

small businesses and would increase 

their opportunities to participate in 

Federal Government contracting as 

subcontractors without imposing any 

additional costs. For the reasons 

discussed, SBA certifies that this 

proposed rule would not have a 

significant economic impact on a 

substantial number of small business 

concerns. 

List of Subjects in 13 CFR Part 125 

Government contracts, Government 

procurement, Reporting and 

recordkeeping requirements, Small 

businesses, Small business 

subcontracting. 

For the reasons stated in the 

preamble, SBA proposes to amend 13 

CFR part 125 as follows: 


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PART 125—GOVERNMENT 

CONTRACTING PROGRAMS 

■ 1. The authority citation for part 125 

is revised to read as follows: 

Authority: 15 U.S.C. 632(p), (q), 634(b)(6), 

637, 644, 657f, 657q, 657r, and 657s; 38 

U.S.C. 501 and 8127. 

■ 2. Amend § 125.3 by: 

■ a. Revising paragraphs (a)(1)(i)(B), 

(a)(1)(iii), (b)(3)(ii), (c)(1)(v) and (vi), 

(c)(1)(xiii)(C), (c)(2), (5) and (6), (d)(3)(i), 

(d)(5); 

■ b. Removing paragraph (d)(8); 

■ c. Redesignating paragraph (d)(7) as 

paragraph (d)(8); 

■ d. Adding new paragraph (d)(7); and 

■ e. Revising paragraphs (e)(1) through 

(5), (f)(1) and (4) and (h)(2). 

The revisions and addition read as 

follows: 

§ 125.3 What types of subcontracting 

assistance are available to small 

businesses? 

(a) * * * 

(1) * * * 

(i) * * * 

(B) Purchases from a corporation, 

company, or subdivision that is an 

affiliate of the prime contractor or 

subcontractor, or a joint venture in 

which the contractor is one of the joint 

venturers, are not included in the 

subcontracting base. Subcontracts by 

first-tier affiliates, and subcontracts by a 

joint venture in which the prime 

contractor is one of the joint venturers, 

shall be treated as subcontracts of the 

prime contractor. The subcontracting 

plan must be submitted by the entity 

awarded the contract, which reflects 

subcontracting done by itself, its 

affiliates and if a joint venture, its joint 

venture partners. 

* * * * * 

(iii) The following should not be 

included in the subcontracting base: 

internally generated costs such as 

salaries and wages; employee insurance; 

other employee benefits; payments for 

petty cash; depreciation; interest; 

income taxes; property taxes; lease 

payments; fines; claims; and dues; 

Original Equipment Manufacturer 

relationships during warranty periods 

(negotiated up front with product); 

utilities and other services purchased 

from a municipality or solely authorized 

by the municipality to provide services 

in a particular geographic region such as 

electricity, water, natural gas and sewer; 

and philanthropic contributions. Utility 

companies may be eligible for 

additional exclusions unique to their 

industry, which may be approved by the 

contracting officer on a case-by-case 

basis. Exclusions from the 

subcontracting base include but are not 

limited to those listed in this section. 

* * * * * 

(b) * * * 

(3) * * * 

(ii) Conducting market research to 

identify small business subcontractors 

and suppliers through all reasonable 

means, such as performing online 

searches via the System for Award 

Management (SAM) (or any successor 

system), the Dynamic Small Business 

Search (DSBS), posting Notices of 

Sources Sought and/or Requests for 

Proposal on SBA’s SUBNet, 

participating in Business Matchmaking 

events, and attending pre-bid 

conferences; 

* * * * * 

(c) * * * 

(1) * * * 

(v) The contractor must assign to each 

subcontract, and to each solicitation, if 

a solicitation is utilized, the NAICS 

code and corresponding size standard 

that best describes the principal purpose 

of the subcontract (see § 121.401 of this 

chapter). A formal solicitation is not 

required for each subcontract, but the 

contractor must provide some form of 

written notice of the NAICS code and 

size standard assigned to potential 

offerors prior to acceptance and award 

of the subcontract. The prime contractor 

(or subcontractor) may rely on a 

subcontractor’s electronic 

representations and certifications, if the 

solicitation for the subcontract contains 

a clause which provides that the 

subcontractor verifies by submission of 

the offer that the size or socioeconomic 

representations and certifications are 

current, accurate, and complete as of the 

date of the offer for the subcontract. 

Where the subcontract does not result 

from a solicitation with a NAICS code, 

a prime contractor may use a 

subcontractor’s primary NAICS for size 

classification, only for indirect costs (in 

all plan types), for subcontracts issued 

under commercial subcontracting plans, 

and for subcontracts below the MicroPurchase Threshold (MPT) as defined in 

FAR 2.101. If relying upon an electronic 

size representation, the subcontract 

must still include a clause in the 

solicitation or subcontract which 

provides that the subcontractor verifies 

by submission of the offer, or 

acceptance of the subcontract if an offer 

is not part of the procurement process, 

that the size or socioeconomic 

representations and certifications in 

SAM (or in the contractor’s electronic 

database) are current, accurate and 

complete as of the date of the offer for 

the subcontract (or as of the date of 

award is if an offer is not a part of the 

procurement process). The size 

certification and recertification 

requirements of § 121.404(g) of this 

chapter do not apply to subcontracts. 

However, if there is a merger or 

acquisition that causes the reissuance of 

the subcontract, this is considered a 

new subcontract. Electronic submission 

may include any method acceptable to 

the prime contractor (or subcontractor) 

including, but not limited to, size or 

socioeconomic representations and 

certifications made in SAM (or any 

successor system). With the exception of 

service-disabled veteran-owned small 

business and HUBZone, prime 

contractor (or subcontractor) may not 

require the use of SAM (or any 

successor system) for purposes of 

representing size or socioeconomic 

status in connection with a subcontract. 

(vi) The contractor must submit 

timely and accurate ISRs and SSRs in 

eSRS (or any successor system), or if 

applicable, submit a timely SF 294, 

Subcontracting Report for Individual 

Contract, such as when a particular 

procurement cannot be entered into 

eSRS. A ‘‘final’’ ISR must be submitted 

within 45 days of contract completion. 

A contract should be considered 

complete in accordance with FAR 

4.804–4. For orders placed under multiagency IDIQ contracting vehicles that 

contain an individual subcontracting 

plan, a separate SSR should be 

submitted for each ordering agency 

capturing subcontracts awarded during 

the fiscal year for that agency’s orders. 

An SSR must also be submitted to the 

agency with the underlying contract 

even if no subcontracting occurred with 

this agency; this SSR reflects only 

subcontract awards as a result of orders 

from that agency, if any. SSRs should be 

submitted to the executive agency level 

unless otherwise directed by the agency. 

Commercial SSRs may be submitted to 

the lower-level awarding agency. Any 

dollar value of subcontract should be 

included in the ISR and SSR reports. 

Executive agency under this paragraph 

(c)(1)(vi) means an executive 

department, a military department, or 

any independent establishment within 

the meaning of 5 U.S.C. 101, 102, and 

104(1), respectively, and any wholly 

owned Government corporation within 

the meaning of 31 U.S.C. 9101 (FAR 

2.101). This is the highest hierarchical 

agency level such as ‘‘Department of the 

Interior.’’ For the SSRs, the contractor’s 

President, CEO, Vice President, General 

Manager, or most Senior Executive for 

Government Procurement may sign the 

report. When a report is rejected by the 

contracting officer, the contractor must 

make the necessary corrections and 


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resubmit the report within 30 days of 

receiving the notice of rejection. 

* * * * * 

(xiii) * * * 

(C) A first-tier small business 

subcontractor must make the request for 

a performance rating from the prime 

contractor within 30 calendar days after 

the completion of the period of 

performance for the prime contractor’s 

contract with the Government. A 

contract should be considered complete 

in accordance with FAR 4.804–4. The 

prime contractor and the first-tier small 

business subcontractor may negotiate a 

later deadline for the request for a 

performance rating, but in no case can 

the prime contractor impose a deadline 

earlier than 30 calendar days after the 

completion of the period of performance 

for the prime contractor’s contract with 

the Government. 

* * * * * 

(2) A commercial subcontracting plan 

covers the offeror’s fiscal year or the 

Federal Government’s fiscal year and 

applies to all of the commercial 

products and commercial services sold 

by either the entire company or a 

portion thereof (e.g., division, plant, or 

product line). Once approved, the plan 

remains in effect during the fiscal year 

for all Federal Government contracts in 

effect during that period. The 

contracting officer of the agency that 

originally approved the commercial 

subcontracting plan will exercise the 

functions of the contracting officer on 

behalf of all agencies that award 

contracts covered by the plan. The 

percentage allocation on the 

Commercial SSR should include all 

subcontracting as a prime contractor or 

a subcontractor with any Federal 

agency, even if the contractor does not 

have a contract or a subcontracting plan 

with the agency; the executive level of 

the agency should be selected unless 

otherwise directed by the agency; and 

the agency allocation should be each 

Executive Agency’s percentage of 

revenue when compared to the 

contractor’s total revenue for the 

Government’s fiscal year. Unless the 

subcontract results from a solicitation 

with a NAICS code, a subcontractor may 

use its primary NAICS code for its size 

classification for commercial 

subcontracting plans. The contractor 

shall submit an SSR annually. SSRs are 

due within 45 days after the end of the 

Government’s fiscal year. 

* * * * * 

(5) A prime contractor shall notify the 

contracting officer in writing if upon 

completion of the responsibilities of the 

small business subcontractor (i.e., the 

subcontractor is entitled to payment 

under the terms of the subcontract), the 

prime contractor pays a reduced price to 

a small business subcontractor for goods 

and services provided for the contract or 

the payment to a small business 

subcontractor is more than 30 days past 

due under the terms of the subcontract 

for goods and services provided for the 

contract and for which the Federal 

agency has paid the prime contractor. 

‘‘Reduced price’’ means a price that is 

less than the price agreed upon in a 

written, binding contractual document. 

The prime contractor shall include the 

reason for the reduction in payment to 

or failure to pay a small business 

subcontractor in any written notice. 

(6) If at the conclusion of a contract 

the prime contractor did not meet all of 

the small business subcontracting goals 

in the subcontracting plan, the prime 

contractor shall provide the contracting 

officer with a written explanation as to 

why it did not meet the goals of the plan 

so that contracting officer can evaluate 

whether the prime contractor acted in 

good faith as set forth in paragraph 

(d)(3) of this section. A contractor has 

met its goal when it has met or exceeded 

its percentage goal. 

* * * * * 

(d) * * * 

(3) * * * 

(i) Evidence that an other than small 

business prime contractor has made a 

good faith effort to comply with its 

subcontracting plan or other 

subcontracting responsibilities includes 

supporting documentation that: 

* * * * * 

(5) Evaluating the prime contractor’s 

written explanation concerning its 

payment of a reduced price to a small 

business subcontractor for goods and 

services upon completion of the 

responsibilities of the subcontractor or 

its payment to a subcontractor more 

than 30 days past due under the terms 

of the subcontract for goods and services 

provided for the contract and for which 

the Federal agency has paid the prime 

contractor, and considering that 

information when rating the contractor 

for past performance purposes. 

* * * * * 

(7) Entering or modifying the prime 

contractor’s past performance 

information when there is an unjustified 

failure to make a full or timely payment 

to a subcontractor subject to this section 

before or after close-out of the contract. 

If the contracting officer makes a 

determination that there was an 

unjustified failure by the prime contract 

to make a full or timely payment to a 

subcontractor under this section, then 

the prime contractor must cooperate 

with the contracting officer, who 

consults with the Director of Small 

Business Programs or the Director of 

Small and Disadvantaged Business 

Utilization acting, to correct and 

mitigate the unjustified failure. The 

prime contractor must cooperate with 

the contracting officer until payment is 

made in full to the subcontractor or the 

contracting officer’s determination is no 

longer effective, before or after the 

closeout of the contract. 

* * * * * 

(e) * * * 

(1) Facilitating the matching of other 

than small prime contractors with small 

business concerns; 

(2) Counseling other than small 

business contractors on their 

responsibilities to maximize 

subcontracting opportunities for small 

business concerns; 

(3) Instructing other than small prime 

contractors on identifying small 

business concerns by means of SAM (or 

any successor system), DSBS, SUBNet, 

Business Matchmaking events, and 

other resources and tools; 

(4) Counseling small business 

concerns on how to market themselves 

to other than small prime contractors; 

(5) Maintaining a portfolio of other 

than small prime contractors and 

conducting Subcontracting Orientation 

and Assistance Reviews (SOARs). 

SOARs are conducted for the purpose of 

assisting prime contractors in 

understanding and complying with their 

small business subcontracting 

responsibilities, including developing 

subcontracting goals that reflect 

maximum practicable opportunity for 

small business; maintaining acceptable 

books and records; and periodically 

submitting reports to the Federal 

Government; and 

* * * * * 

(f) * * * 

(1) A prime contractor’s performance 

under its subcontracting plan is 

evaluated by means of compliance 

reviews and follow-up reviews, as a 

supplement to evaluations performed by 

the contracting agency, either on a 

contract-by-contract basis or, in the case 

of contractors having multiple contracts, 

on an aggregate basis. A compliance 

review is a surveillance review that 

determines a contractor’s achievements 

in meeting the goals and other elements 

in its subcontracting plan for both open 

contracts and contracts completed 

during the previous 12 months. A 

follow-up review is done after a 

compliance review, generally within a 

year of SBA’s receipt of the contractor’s 

Corrective Action Plan, to determine if 


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the contractor has implemented the 

corrective actions. 

* * * * * 

(4) Any contractor that receives a 

marginal or unsatisfactory rating must 

provide a written corrective action plan 

to SBA, or to both SBA and the agency 

that conducted the compliance review if 

the agency conducting the review has an 

agreement with SBA, within 45 days of 

its receipt of the official compliance 

report. 

* * * * * 

(h) * * * 

(2) When order-level goals were 

required, contractors shall submit small 

business subcontracting 

accomplishments for individual orders 

to the contracting agency on the 

underlying contract’s ISR report. The 

order-level goals only need to be 

included on the ISR’s order-level report 

from the inception of the order until the 

order is completed, and on the ISR 

designated as final. 

* * * * * 

Isabella Casillas Guzman, 

Administrator. 

[FR Doc. 2024–29267 Filed 12–18–24; 8:45 am] 

BILLING CODE 8026–09–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 71 

[Docket No. FAA–2024–2352; Airspace 

Docket No. 24–AEA–4] 

RIN 2120–AA66 

Establishment of United States Area 

Navigation Route Q–161 and 

Amendment of United States Area 

Navigation Routes Q–97, Q–133, Q– 

437, Q–439, Q–445, and Q–481; Eastern 

United States 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Supplemental Notice of 

Proposed Rulemaking (SNPRM). 

SUMMARY: This action adds the proposed 

amendment of United States Area 

Navigation (RNAV) Route Q–409 that 

was inadvertently omitted from the 

NPRM for Docket No. FAA–2024–2352. 

Additionally, this action corrects the 

OYVAY waypoint (WP) state location to 

Delaware in RNAV Route Q–437. This 

action supports the Northeast Corridor 

Atlantic Coast Route (NEC ACR) 

Optimization Project to improve the 

efficiency of the National Airspace 

System (NAS). 

DATES: Comments must be received on 

or before January 21, 2025. 

ADDRESSES: Send comments identified 

by FAA Docket No. FAA–2024–2352 

and Airspace Docket No. 24–AEA–4 

using any of the following methods: 

* Federal eRulemaking Portal: Go to 

www.regulations.gov and follow the 

online instructions for sending your 

comments electronically. 

* Mail: Send comments to Docket 

Operations, M–30; U.S. Department of 

Transportation, 1200 New Jersey 

Avenue SE, Room W12–140, West 

Building Ground Floor, Washington, DC 

20590–0001. 

* Hand Delivery or Courier: Take 

comments to Docket Operations in 

Room W12–140 of the West Building 

Ground Floor at 1200 New Jersey 

Avenue SE, Washington, DC, between 9 

a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. 

* Fax: Fax comments to Docket 

Operations at (202) 493–2251. 

Docket: Background documents or 

comments received may be read at 

www.regulations.gov at any time. 

Follow the online instructions for 

accessing the docket or go to the Docket 

Operations in Room W12–140 of the 

West Building Ground Floor at 1200 

New Jersey Avenue SE, Washington, 

DC, between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

FAA Order JO 7400.11J, Airspace 

Designations and Reporting Points, and 

subsequent amendments can be viewed 

online at www.faa.gov/air_traffic/ 

publications/. You may also contact the 

Rules and Regulations Group, Policy 

Directorate, Federal Aviation 

Administration, 600 Independence 

Avenue SW, Washington, DC 20597; 

telephone: (202) 267–8783. 

FOR FURTHER INFORMATION CONTACT: 

Brian Vidis, Rules and Regulations 

Group, Policy Directorate, Federal 

Aviation Administration, 600 

Independence Avenue SW, Washington, 

DC 20597; telephone: (202) 267–8783. 

SUPPLEMENTARY INFORMATION: 

Authority for This Rulemaking 

The FAA’s authority to issue rules 

regarding aviation safety is found in 

Title 49 of the United States Code. 

Subtitle I, section 106 describes the 

authority of the FAA Administrator. 

Subtitle VII, Aviation Programs, 

describes in more detail the scope of the 

agency’s authority. This rulemaking is 

promulgated under the authority 

described in Subtitle VII, Part A, 

Subpart I, Section 40103. Under that 

section, the FAA is charged with 

prescribing regulations to assign the use 

of the airspace necessary to ensure the 

safety of aircraft and the efficient use of 

airspace. This regulation is within the 

scope of that authority as it amends the 

route structure to maintain the efficient 

flow of air traffic within the NAS. 

Comments Invited 

The FAA invites interested persons to 

participate in this rulemaking by 

submitting written comments, data, or 

views. Comments are specifically 

invited on the overall regulatory, 

aeronautical, economic, environmental, 

and energy-related aspects of the 

proposal. The most helpful comments 

reference a specific portion of the 

proposal, explain the reason for any 

recommended change, and include 

supporting data. To ensure the docket 

does not contain duplicate comments, 

commenters should submit only one 

time if comments are filed 

electronically, or commenters should 

send only one copy of written 

comments if comments are filed in 

writing. 

The FAA will file in the docket all 

comments it receives, as well as a report 

summarizing each substantive public 

contact with FAA personnel concerning 

this proposed rulemaking. Before acting 

on this proposal, the FAA will consider 

all comments it receives on or before the 

closing date for comments. The FAA 

will consider comments filed after the 

comment period has closed if it is 

possible to do so without incurring 

expense or delay. The FAA may change 

this proposal in light of the comments 

it receives. 

Privacy: In accordance with 5 U.S.C. 

553(c), DOT solicits comments from the 

public to better inform its rulemaking 

process. DOT posts these comments, 

without edit, including any personal 

information the commenter provides, to 

www.regulations.gov, as described in 

the system of records notice (DOT/ALL– 

14 FDMS), which can be reviewed at 

www.dot.gov/privacy. 

Availability of Rulemaking Documents 

An electronic copy of this document 

may be downloaded through the 

internet at www.regulations.gov. 

Recently published rulemaking 

documents can also be accessed through 

the FAA’s web page at www.faa.gov/air_

traffic/publications/airspace_

amendments/. 

You may review the public docket 

containing the proposal, any comments 

received and any final disposition in 

person in the Dockets Operations office 

(see ADDRESSES section for address, 

phone number, and hours of 

operations). An informal docket may 

also be examined during normal 

business hours at the office of the 

Eastern Service Center, Federal Aviation 

Administration, Room 210, 1701 


lotter on DSK11XQN23PROD with PROPOSALS1