57458 Federal Register / Vol. 70, No. 189 / Friday, September 30, 2005 / Rules and Regulations 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 19 and 52 

[FAC 2005–06; FAR Case 2004–036; Item 

VI] 

RIN 9000–AK11 

Federal Acquisition Regulation; 

Addition of Landscaping and Pest 

Control Services to the Small Business 

Competitiveness Demonstration 

Program 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed to finalize, 

without change, the interim rule 

published in the Federal Register at 70 

FR 11740, March 9, 2005. This rule 

implements Section 821 of the Ronald 

W. Reagan National Defense 

Authorization Act for Fiscal Year 2005. 

Section 821 added landscaping and pest 

control services to the Small Business 

Competitiveness Demonstration 

Program. 

DATES: Effective Date: September 30, 

2005. 

FOR FURTHER INFORMATION CONTACT: The 

FAR Secretariat at (202) 501–4755 for 

information pertaining to status or 

publication schedules. For clarification 

of content, contact Ms. Kimberly 

Marshall, Procurement Analyst, at (202) 

219–0986. Please cite FAC 2005–06, 

FAR case 2004–036. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This rule finalizes, without change, 

the interim rule published in the 

Federal Register at 70 FR 11740, March 

9, 2005. The rule implements Section 

821 of the Ronald W. Reagan National 

Defense Authorization Act for Fiscal 

Year 2005 (Public Law 108–375). 

Section 821 amended Section 717 of the 

Small Business Competitiveness 

Demonstration Program Act of 1988 (15 

U.S.C. 644 note) by adding landscaping 

and pest control services to the program. 

As a result, agencies are precluded from 

considering acquisitions for landscaping 

and pest control services over the 

emerging small business reserve, 

currently $25,000, for small business 

set-asides unless the set-asides are 

needed to meet their assigned goals. 

The Councils published the interim 

rule in the Federal Register at 70 FR 

11740, March 9, 2005, with a request for 

comments by May 9, 2005. One 

respondent submitted a comment in 

response to the interim rule. The 

comment is addressed below. 

Comment: The rule should be 

changed to provide small businesses, 

including ‘‘mom and pop’’ businesses, 

the first opportunity to compete for 

awards under NAICS codes 561730 and 

561710. 

Councils’ response: The rule 

implements a statute which added 

landscaping and pest control services to 

the Small Business Competitiveness 

Demonstration Program. The Councils 

have no authority to change the statute 

or implementing regulation to make the 

suggested change. The Councils note, 

however, that the rule applies only to 

acquisitions over the emerging small 

business reserve amount which is 

currently $25,000. Agencies will 

continue to set-aside, for emerging small 

businesses, acquisitions at or below the 

emerging small business reserve amount 

consistent with the requirements in FAR 

subparts 19.1007(c). In addition, 

agencies are allowed to reinstate the 

small business set-asides if needed to 

meet their assigned goals. 

This is not a significant regulatory 

action and, therefore, was not subject to 

review under Section 6(b) of Executive 

Order 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act, 5 

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

rule and a Final Regulatory Flexibility 

Analysis (FRFA) has been performed. 

The analysis is summarized as follows: 

Final Regulatory Flexibility Analysis 

This final rule amends FAR Parts 19 and 

52 to implement Section 821 of the Ronald 

W. Reagan National Defense Authorization 

Act for Fiscal Year 2005, Public Law 108–

375, which amends Section 717 of the Small 

Business Competitiveness Demonstration 

Program Act of 1988 (15 U.S.C. 644 note). 

Section 821 provides for the addition of two 

North American Industry Classification 

System (NAICS) codes, landscaping (561730) 

and pest control services (561710) to the 

Small Business Competitiveness 

Demonstration Program under the designated 

industry groups. 

The changes inform the agencies of the 

new additions to the Small Business 

Competitiveness Demonstration Program and 

also gives the Contracting Officer the specific 

‘‘Emerging small business reserve amount’’ of 

$25,000 for the designated groups. 

The objective of the final rule is to further 

assess the ability of small business concerns 

to compete successfully in certain industry 

categories without competition being 

restricted by the use of small business setasides. The implementation of section 821 of 

the Ronald W. Reagan National Defense 

Authorization Act for Fiscal Year 2005, 

Public Law 108–375 will change the FAR as 

follows: (1) revises the designated industry 

groups to include Exterminating and Pest 

Control Services and Landscaping Services in 

FAR 19.1002(1) and 19.1005; (2) deletes the 

word ‘‘four’’ before designated industry 

groups in the FAR. 

There was one comment that addressed the 

IRFA. The comment is addressed below: 

Comment: The rule should be changed to 

provide small businesses, including ‘‘mom 

and pop’’ businesses, the first opportunity to 

compete for awards under NAICS codes 

561730 and 561710. 

Agency’s Response: The rule implements a 

statute which added landscaping and pest 

control services to the Small Business 

Competitiveness Demonstration Program. 

The Councils have no authority to change the 

statute or implementing regulation to make 

the suggested change. The Councils note, 

however, that the rule applies only to 

acquisitions over the emerging small 

business reserve amount which is currently 

$25,000. Agencies will continue to set-aside, 

for emerging small businesses, acquisitions at 

or below the emerging small business reserve 

amount consistent with the requirements in 

FAR subparts 19.1007(c). In addition, 

agencies are allowed to reinstate the small 

business set-asides if needed to meet their 

assigned goals. 

The final rule will apply to all small 

business concerns that compete on Federal 

procurements falling under NAICS codes 

561730 and 561710. Based on 

Governmentwide data retrieved from the 

Federal Procurement Data System (FPDS) for 

the specified NAICS codes, approximately 

141 small business concerns were awarded 

contracts of $25,000 or more on an 

unrestricted basis in fiscal year 2002 for 

NAICS code 561730. This represents about 

88 percent of all contracts awarded with 

unrestricted competition for that NAICS 

code. In fiscal year 2003 there were 116 

contracts awarded to small business concerns 

on an unrestricted basis, which represents 

approximately 81 percent of all contracts 

awarded with unrestricted competition for 

that NAICS codes. FPDS data also show that 

25 small business concerns were awarded 

contracts of $25,000 or more on an 

unrestricted basis in fiscal year 2002 for 

NAICS code 561710. This represents about 

56 percent of all contracts awarded with 

unrestricted competition for that NAICS 

code. In fiscal year 2003 there were 17 

contracts awarded to small business concerns 

on an unrestricted basis, which represents 

approximately 77 percent of all contracts 

awarded with unrestricted competition for 

that NAICS codes. It is estimated that small 

business concerns will continue to be 

successful in winning at least one-half to 

three-fourths of awards on an unrestricted 

Federal Register / Vol. 70, No. 189 / Friday, September 30, 2005 / Rules and Regulations 57459 

basis when these designated industry groups 

are added to the Small Business 

Competitiveness Demonstration Programs 

given the history of their success in recent 

unrestricted competitive Government 

acquisitions falling under NAICS codes 

561730 and 561710. Additional data 

retrieved from FPDS show that the number 

of small business set-asides for NAICS code 

561730 in fiscal years 2002 and 2003 

combined was approximately 952 and the 

number of small business set-asides for 

NAICS code 561710 in fiscal years 2002 and 

2003 combined was approximately 96. The 

changes may have a significant economic 

impact on a substantial number of small 

entities within the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601, et seq., because 

previously set-aside acquisitions for services 

falling within NAICS codes 561730 and 

561710 will now be included in the 

designated industry groups of the Small 

Business Competitiveness Demonstration 

Program. FAR 19.1007(b) states that 

‘‘Solicitations for acquisitions in any of the 

designated industry groups that have an 

anticipated dollar value greater than the 

emerging small business reserve amount 

must not be considered for small business 

set-asides under FAR 19.5. However, 

agencies may reinstate the use of small 

business set-asides as necessary to meet their 

assigned goals, but only within 

organizational units that failed to meet the 

small business participation goal. 

Acquisitions in the designated industry 

groups must continue to be considered for 

placement under the 8(a) Program (see 

Subpart 19.8), the HUBZone Program (see 

Subpart 19.13), and the Service-Disabled 

Veteran-Owned Small Business Procurement 

Program (see Subpart 19.14).’’ Given the large 

number of awards made under these NAICS 

codes, it is anticipated that the addition of 

the two NAICS codes to the Small Business 

Competitiveness Demonstration Program will 

promote an increased number of 

opportunities for small business concerns to 

develop teaming arrangements and joint 

ventures. 

The purpose of the Competitiveness 

Demonstration Program is to assess the 

ability of small businesses to compete 

successfully in certain industry categories 

without competition being restricted by the 

use of small business set-asides. This portion 

of the program is limited to the four 

designated industry groups listed in FAR 

19.1005 and will include the addition of 

landscaping and pest control services to the 

designated industry groups. The final rule 

imposes no reporting, recordkeeping, or other 

compliance requirements. 

The final rule does not duplicate, overlap, 

or conflict with any other Federal rules. 

There are no practical alternatives that will 

accomplish the objectives of this final rule. 

Interested parties may obtain a copy 

of the FRFA from the FAR Secretariat. 

The FAR Secretariat has submitted a 

copy of the FRFA to the Chief Counsel 

for Advocacy of the Small Business 

Administration. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the changes to the 

FAR do not impose information 

collection requirements that require the 

approval of the Office of Management 

and Budget under 44 U.S.C. 3501, et 

seq. 

List of Subjects in 48 CFR Parts 19 and 

52 

Government procurement. 

Dated: September 22, 2005. 

Julia B. Wise, 

Director, Contract Policy Division. 

Interim Rule Adopted as Final Without 

Change 

■ Accordingly, the interim rule 

amending 48 CFR parts 19 and 52, 

which was published at 70 FR 11740, 

March 9, 2005, is adopted as a final rule 

without change. 

[FR Doc. 05–19473 Filed 9–29–05; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 19 and 28 

[FAC 2005–06; FAR Case 2003–029; Item 

VII] 

RIN 9000–AK01 

Federal Acquisition Regulation; 

Powers of Attorney for Bid Bonds 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to establish that a 

copy of an original power of attorney, 

including a photocopy or facsimile 

copy, when submitted in support of a 

bid bond, is sufficient evidence of the 

authority to bind the surety. The 

authenticity and enforceability of the 

power of attorney at the time of the bid 

opening will be treated as a matter of 

responsibility. 

DATES: Effective Date: September 30, 

2005. 

FOR FURTHER INFORMATION CONTACT: The 

FAR Secretariat at (202) 501–4755 for 

information pertaining to status or 

publication schedules. For clarification 

of content, contact Ms. Cecelia L. Davis, 

Procurement Analyst, at (202) 219–

0202. Please cite FAC 2005–06, FAR 

case 2003–029. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This final rule amends the Federal 

Acquisition Regulation to revise the 

policy relating to acceptance of copies 

of powers of attorney accompanying bid 

bonds. There has been a significant level 

of controversy surrounding contracting 

officers’ decisions regarding the 

evaluation of bid bonds and 

accompanying powers of attorney. 

Since 1999, a series of GAO decisions 

has rejected telefaxed as well as 

photocopied powers of attorney. The 

latest decision from GAO (All Seasons 

Construction, Inc., B–291166.2, Dec. 6, 

2002) has been interpreted by industry 

and procuring agencies to require a 

contracting officer to inspect the power 

of attorney at bid opening to ascertain 

that the signatures are original and 

applied after generation of the 

documents. This case law has created a 

costly and unworkable requirement for 

the surety industry and left contracting 

officers with an almost impossible 

standard to enforce. More recently, on 

January 9, 2004, the U.S. Court of 

Federal Claims, in Hawaiian Dredging 

Construction, Co. v. U.S., 59 Fed. Cl.205 

(2004), issued a ruling highlighting that 

the FAR does not require an original 

signature on the document serving as 

evidence of authority to bind the surety. 

The court was critical of GAO’s 

reasoning in the All Seasons case. In 

response to the split between the two 

bid protest fora and the quandary shared 

by industry and government in 

implementing a workable standard to be 

applied at bid opening, the Councils 

agreed to a revision to FAR part 28 that 

would remove the matter of authenticity 

and enforceability of powers of attorney 

from a contracting officer’s 

responsiveness determination, which is 

based solely on documents available at 

the time of bid opening. Instead, the 

rule instructs contracting officers to 

address these issues after bid opening as 

a matter of responsibility. 

DoD, GSA, and NASA published a 

proposed rule in the Federal Register at 

69 FR 51936, August 23, 2004, and 46 

public comments were received. A 

resolution of the public comments 

follows: