37368 Federal Register / Vol. 87, No. 119 / Wednesday, June 22, 2022 / Notices 

18 15 U.S.C. 78s(b)(3)(A). 

19 17 CFR 240.19b–4(f)(2). 

20 15 U.S.C. 78s(b)(2)(B). 21 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

can impose any burden on intermarket 

competition. 

The Exchange believes that the 

proposed change could promote 

competition between the Exchange and 

other execution venues, including those 

that currently offer similar order types 

and comparable transaction pricing, by 

encouraging additional orders to be sent 

to the Exchange for execution. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 18 of the Act and 

subparagraph (f)(2) of Rule 19b–4 19

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 20 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEAMER–2022–24 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEAMER–2022–24. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEAMER–2022–24, and 

should be submitted on or before July 

13, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–13273 Filed 6–21–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95107; File No. SR–C2– 

2022–012] 

Self-Regulatory Organizations; Cboe 

C2 Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change to Amend the Fees 

Schedule 

June 15, 2022. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on June 1, 

2022, Cboe C2 Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘C2’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe C2 Exchange, Inc. (‘‘C2’’ or the 

‘‘Exchange’’) is filing with the Securities 

and Exchange Commission (the 

‘‘Commission’’) a proposed rule change 

to amend the fees schedule. The text of 

the proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegal

RegulatoryHome.aspx), at the 

Exchange’s Office of the Secretary, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

fee schedule in connection with its 

discount program for Bulk BOE Logical 

Ports, effective June 1, 2022. 

The Exchange first notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. More 

specifically, the Exchange is only one of 


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Federal Register / Vol. 87, No. 119 / Wednesday, June 22, 2022 / Notices 37369 

3 See Cboe Global Markets U.S. Options Market 

Volume Summary by Month (May 24, 2022), 

available at https://markets.cboe.com/us/options/ 

market_statistics/. 

4 While BOE Bulk Ports are available to all market 

participants, they are used primarily by Market 

Makers or firms that conduct similar business 

activity. 

5 ‘‘ADAV’’ means average daily added volume 

calculated as the number of contracts added per 

day. ADAV is calculated on a monthly basis, 

excluding contracts added or removed on any day 

that the Exchange’s system experiences a disruption 

that lasts for more than 60 minutes during regular 

trading hours (‘‘Exchange System Disruption’’) and 

on any day with a scheduled early market close. 6 ‘‘OCV’’ (or ‘‘OCC Customer Volume’’ means, the 

total equity and ETF options volume that clears in 

the Customer range at the Options Clearing 

Corporation (‘‘OCC’’) for the month for which the 

fees apply, excluding volume on any day that the 

Exchange experiences an Exchange System 

Disruption and on any day with a scheduled early 

market close. 

7The ‘‘Make Rate’’ shall be derived from a 

Market-Maker’s volume the previous month in all 

symbols using the following formula: (i) the MarketMaker’s total simple add volume divided by (ii) the 

Market-Maker’s total simple volume. Trades on teh 

open and complex orders will be excluded from the 

Make Rate calculation. The Exchange will aggregate 

the trading activity of separate Market-Maker firms 

for purposes of the discount tier and make rate 

calculation if there is at least 75% common 

ownership between the firms as reflected on each 

firm’s Form BD, Schedule A. 

8 15 U.S.C. 78f. 

9 15 U.S.C. 78f(b)(4). 

10 15 U.S.C. 78f(b)(5). 

16 options venues to which market 

participants may direct their order flow. 

Based on publicly available information, 

no single options exchange has more 

than approximately 16% of the market 

share and currently the Exchange 

represents approximately 4% of the 

market share.3 Thus, in such a lowconcentrated and highly competitive 

market, no single options exchange, 

including the Exchange, possesses 

significant pricing power in the 

execution of option order flow. The 

Exchange believes that the ever-shifting 

market share among the exchanges from 

month to month demonstrates that 

market participants can shift order flow 

or discontinue to reduce use of certain 

categories of products, in response to fee 

changes. Accordingly, competitive 

forces constrain the Exchange’s 

transaction fees, and market participants 

can readily trade on competing venues 

if they deem pricing levels at those 

other venues to be more favorable. 

The Exchange currently offers BOE 

Bulk Logical Ports (‘‘BOE Bulk Ports’’), 

which provide users with the ability to 

submit single and bulk order messages 

to enter, modify, or cancel orders 

designated as Post Only Orders with a 

Time-in-Force of Day or GTD with an 

expiration time on that trading day. 

Bulk BOE Ports are assessed $1,500 per 

port, per month for the first five Bulk 

BOE Ports and thereafter assessed 

$2,500 per port, per month for each 

additional Bulk BOE Port. Each Bulk 

BOE Port also incurs the logical port fee 

indicated in the table above when used 

to enter up to 30,000,000 orders per 

trading day per logical port as measured 

on average in a single month. Each 

incremental usage of up to 30,000,000 

orders per day per Bulk BOE Port will 

incur an additional logical port fee of 

$2,500 per month (‘‘incremental usage 

fees’’). The Exchange also offers a 

discount program for Bulk BOE Ports 

which provides an opportunity for 

Market-Makers to obtain credits on their 

monthly Bulk BOE Port fees (excluding 

incremental usage fees).4 Currently, 

under the Bulk BOE Ports discount 

program, Market-Makers will receive a 

30% discount on its monthly Bulk BOE 

Port fees (excluding incremental usage 

fees) where a Market-Maker has (1) a 

Step-Up ADAV 5 equal to or greater than 

0.025% of average OCV 6 from February 

2021 and (2) a ‘‘Make Rate’’ equal to or 

greater than 85%.7

The Exchange proposes to amend the 

current criteria under the Bulk BOE Port 

discount program and add another tier 

of criteria the discount program. The 

proposed rule change amends the 

current criteria in prong one by slightly 

increasing the Step-Up ADAV over the 

average OCV from 0.025% to 0.03%, 

changing the base ‘‘step-up’’ month 

from February 2021 to June 2021, and 

increasing the percentage of ‘‘Make 

Rate’’ from 85% to 97%. The 30% 

discount remains the same. The 

proposed rule change also adopts a new 

tier of criteria under the Bulk BOE Port 

discount program, which provides that 

a Market-Maker will receive a 40% 

discount on its monthly Bulk BOE 

Logical Port fees, excluding incremental 

usage fees, where the Market-Maker (1) 

has a Step-Up ADAV equal to or greater 

than 0.05% of OCV from June 2021 and 

(2) has a ‘‘Make Rate’’ equal to or greater 

than 97%. 

The proposed Bulk BOE Port discount 

program, currently and as amended, is 

designed to attract liquidity from 

traditional Market-Makers and 

encourage Market-Makers to grow their 

volume. The discount program mitigates 

costs incurred by traditional MarketMakers that focus on adding liquidity to 

the Exchange (as opposed to those that 

provide and take, or just take). The 

proposed increase in percentage of 

ADAV over OCV (0.03%) to receive the 

current 30% discount on monthly Bulk 

BOE Port fees in the existing tier and 

proposed new tier offering a 40% 

discount for reaching an even higher 

percentage of ADAV over OCV (0.05%) 

will encourage Market Makers to strive 

to provide increased levels of liquidity. 

The proposed increase in the percentage 

of ‘‘Make Rate’’ to 97%, and addition of 

the same ‘‘Make Rate’’ prong of criteria 

in the proposed new tier, is intended to 

encourage Market Makers with 

significant Make Rates to continue to 

participate on the Exchange and add 

liquidity, or otherwise increase their 

Make Rates by streaming more quotes. 

Increased liquidity and enhanced quote 

streaming from Market Makers generally 

provide greater trading opportunities 

and tighter spreads, which tends to 

signal additional corresponding increase 

in order flow from other market 

participants. This, in turn, benefits all 

investors by deepening the Exchange’s 

liquidity pool, potentially providing 

even greater execution incentives and 

opportunities, offering additional 

flexibility for all investors to enjoy cost 

savings, supporting the quality of price 

discovery, promoting market 

transparency and improving investor 

protection. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,8

in general, and furthers the objectives of 

Section 6(b)(4),9 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its Trading Permit 

Holders and issuers and other persons 

using its facilities. The Exchange also 

believes that the proposed rule change 

is consistent with the objectives of 

Section 6(b)(5) 10 requirements that the 

rules of an exchange be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest, and, 

particularly, is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes the proposed 

rule change to amend the Bulk BOE 

Ports discount program is reasonable, 

equitable and not unfairly 

discriminatory. The proposed rule 

changes to increase the percentage of 

ADAV over OCV (0.03%) to receive the 

current 30% discount on monthly Bulk 

BOE Port fees in the existing tier and to 

adopt a new tier offering a 40% 


khammond on DSKJM1Z7X2PROD with NOTICES
37370 Federal Register / Vol. 87, No. 119 / Wednesday, June 22, 2022 / Notices 

11 See Cboe Options Fees Schedule, MarketMaker Access Credit. 

discount for reaching an even higher 

percentage of ADAV over OCV (0.05%) 

are reasonably designed to encourage 

Market Makers to strive to provide 

increased levels of liquidity. Similarly, 

the proposed rule changes to increase 

the percentage of ‘‘Make Rate’’ to 97% 

and to add the same ‘‘Make Rate’’ prong 

of criteria in the proposed new tier are 

reasonably designed to encourage 

Market Makers with significant Make 

Rates to continue to participate on the 

Exchange and add liquidity, or 

otherwise increase their Make Rates by 

streaming more quotes. As described 

above, increased liquidity and enhanced 

quote streaming from Market Makers 

generally provide greater trading 

opportunities and tighter spreads, 

signaling an additional corresponding 

increase in order flow from other market 

participants. This potentially deepens 

the Exchange’s liquidity pool, provides 

increased execution incentives and 

opportunities, offers additional 

flexibility for all investors to enjoy cost 

savings, supports the quality of price 

discovery, promotes market 

transparency and improves investor 

protection. The Exchange believes the 

proposed discount of 40% included in 

the proposed new tier is reasonable in 

that it is an incremental increase over 

the discount rate of 30% offered in the 

existing tier, which is reasonably 

commensurate with the incremental 

increase in percentage of ADAV over 

OCV that a Market Maker must achieve 

to receive the proposed 40% discount as 

compared to the percentage of ADAV 

over OCV that a Market Maker must 

achieve to receive the existing 30% 

discount. The Exchange notes that the 

proposed discount under the proposed 

new tier is in line with the discount 

offered to Market Makers on its affiliate 

exchange, Cboe Exchange, Inc. (‘‘Cboe 

Options’’).11 Additionally, the Exchange 

believes it is reasonable to update the 

baseline month to a month that is closer 

in time, therefore a more relevant 

measure for ‘‘step-up’’ volume. 

The proposed rule change to amend 

the Bulk BOE Port discount program, 

which is offered only to Market Makers, 

is equitable and not unfairly 

discriminatory because Market Makers 

are valuable market participants that 

provide liquidity in the marketplace and 

incur costs that other market 

participants do not incur. For example, 

Market Makers have a number of 

obligations, including quoting 

obligations and fees associated with 

appointments that other market 

participants do not have. The Exchange 

also believes that the discount program, 

currently and as amended, provides an 

incentive for Market Makers to provide 

more liquidity to the Exchange. 

Generally, greater liquidity benefits all 

market participants by providing more 

trading opportunities and tighter 

spreads. The Exchange also believes it is 

reasonable, equitable and not unfairly 

discriminatory to provide credits to 

those Market Makers that primarily 

provide and post liquidity to the 

Exchange, as the Exchange wants to 

continue to encourage Market Makers 

with significant Make Rates to continue 

to participate on the Exchange and add 

liquidity. Moreover, the Exchange notes 

that Market Makers with high Make Rate 

percentages generally require higher 

amounts of capacity than other Market 

Makers. Particularly, Market Makers 

with high Make Rates are generally 

streaming significantly more quotes 

than those with lower Make Rates. As 

such, Market Makers with high Make 

Rates may incur more costs than other 

Market Makers as they may need to 

purchase multiple Bulk BOE Ports in 

order to accommodate their capacity 

needs. The Exchange believes the 

proposed credits for Bulk BOE Ports 

encourages Market Makers to continue 

to provide liquidity for the Exchange, 

notwithstanding the costs incurred by 

purchasing multiple ports. Particularly, 

the discount program, currently and as 

proposed, is intended to mitigate the 

costs incurred by traditional Market 

Makers that focus on adding liquidity to 

the Exchange (as opposed to those that 

provide and take, or just take). 

Additionally, while the Exchange has 

no way of predicting with certainty how 

many and which Market Makers will 

satisfy the proposed criteria to receive 

the discount, the Exchange anticipates 

at least two Market Makers will satisfy 

the criteria across the two tiers to 

receive the applicable discounts. The 

Exchange does not believe the proposed 

discount will adversely impact any 

Market Maker’s pricing. Rather, should 

a Market Maker not meet the proposed 

criteria, the Market Maker will merely 

not receive the proposed discount. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intramarket or 

intermarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange does not believe the proposed 

rule change to amend the Bulk BOE Port 

discount program offered to Market 

Makers will impose any burden on 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act because 

Market Makers are valuable market 

participants that provide liquidity in the 

marketplace and incur costs that other 

market participants do not incur. As 

described above, Market Makers have a 

number of obligations, including 

quoting obligations and fees associated 

with appointments that other market 

participants do not have. The Exchange 

does not believe the proposed rule 

change does will impose any burden on 

intermarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. As 

previously discussed, the Exchange 

operates in a highly competitive market. 

Trading Permit Holders have numerous 

alternative venues that they may 

participate on and director their order 

flow, including 15 other options 

exchanges and off-exchange venues. 

Additionally, the Exchange represents a 

small percentage of the overall market. 

Based on publicly available information, 

no single options exchange has more 

than 16% of the market share. 

Therefore, no exchange possesses 

significant pricing power in the 

execution of option order flow. Indeed, 

participants can readily choose to send 

their orders to other exchange and offexchange venues if they deem fee levels 

at those other venues to be more 

favorable. Moreover, the Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and, also, recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ The 

fact that this market is competitive has 

also long been recognized by the courts. 

In NetCoalition v. Securities and 

Exchange Commission, the D.C. Circuit 

stated as follows: ‘‘[n]o one disputes 

that competition for order flow is 

‘fierce.’ . . . As the SEC explained, ‘[i]n 

the U.S. national market system, buyers 

and sellers of securities, and the brokerdealers that act as their order-routing 

agents, have a wide range of choices of 

where to route orders for execution’; 

[and] ‘no exchange can afford to take its 

market share percentages for granted’ 

because ‘no exchange possesses a 

monopoly, regulatory or otherwise, in 

the execution of order flow from broker 

dealers’. . . .’’. Accordingly, the 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 119 / Wednesday, June 22, 2022 / Notices 37371 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f). 14 17 CFR 200.30–3(a)(12). 

Exchange does not believe its proposed 

fee change imposes any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 12 and paragraph (f) of Rule 

19b–4 13 thereunder. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

C2–2022–012 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–C2–2022–012. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–C2–2022–012 and should 

be submitted on or before July 13, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–13274 Filed 6–21–22; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Procurement Scorecard Program; 

Treatment of Deobligations 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: The U.S. Small Business 

Administration (SBA) publishes an 

annual procurement scorecard 

(Scorecard) that scores agencies on their 

performance in contracting with small 

businesses. This notice sets forth SBA’s 

method for reflecting negative-dollar 

transactions (or ‘‘deobligations’’) in the 

SBA scorecard starting with the Fiscal 

Year 2022 (FY22) scorecard. For 

purposes of calculating prime 

contracting achievements, SBA will 

exclude deobligations associated with 

certain older awards. 

FOR FURTHER INFORMATION CONTACT: 

Mihaela Ciorneiu, Goaling Manager, 

Office of Government Contracting and 

Business Development, 

Mihaela.Ciorneiu@sba.gov, (202) 205– 

7716. The phone number above may 

also be reached by individuals who are 

deaf or hard of hearing, or who have 

speech disabilities, through the Federal 

Communications Commission’s TTYBased Telecommunications Relay 

Service teletype service at 711. 

SUPPLEMENTARY INFORMATION: 

I. Background 

SBA issues an annual Scorecard to 

score Federal agencies on creating the 

maximum practicable opportunities for 

the award of prime contracts and 

subcontracts to small business concerns, 

small disadvantaged businesses (SDBs), 

women-owned small businesses 

(WOSBs), HUBZone small business 

concerns, and service-disabled veteranowned small business concerns (SDVO 

SBCs). Sec. 868, Public Law 114–92, 129 

Stat. 933 (November 25, 2015). SBA 

bases an agency’s score on several 

weighted factors, the most significant of 

which is the percentage of prime 

contracting dollars awarded to small 

businesses. 

SBA receives the prime contracting 

data for the annual Scorecard from the 

Federal Procurement Data System 

(FPDS), through a special data extract 

prepared by the Integrated Acquisition 

Environment (IAE), part of the U.S. 

General Services Administration (GSA). 

In recent years, it has become apparent 

to SBA that FPDS’s method for 

recording deobligations skews certain 

agencies’ prime contracting figures, and, 

by extension, the annual Scorecard 

inaccurately reports those agencies’ 

small businesses dollars awarded in that 

fiscal year. 

A deobligation is an accounting 

transaction to reconcile an agency’s 

obligations with its disbursements. 

When an agency awards a contract, the 

agency records an obligation in FPDS at 

the date of the award. FPDS does not 

reflect disbursements, however, so, in 

cases where the obligation exceeds the 

agency’s disbursements, agencies will 

record a deobligation so that the total of 

obligations matches the total of 

disbursements. Deobligations appear in 

FPDS as a negative-dollar transaction in 

the fiscal year that the agency records its 

deobligation. 

Even though the deobligation appears 

as a negative-dollar transaction, the 

agency did not award a negative-dollar 

contract. The deobligation is for 

accounting purposes and is used to 

show that the agency disbursed less on 

the contract than had been originally 

obligated. However, as noted above, the 

deobligation is recorded in the year that 

deobligation occurred, which can be in 


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