Document Headings

                    Document headings vary by document type but may contain                    the following:                  
                -                       the agency or agencies that issued and signed a document                    
                -                       the number of the CFR title and the number of each part                      the document amends, proposes to amend, or is directly                      related to                    
                -                       the agency docket number / agency internal file number                    
                -                       the RIN which identifies each regulatory action listed in                      the Unified Agenda of Federal Regulatory and Deregulatory                      Actions                    

                    See the                                          Document Drafting Handbook                                        for more details.                  

###### Department of Defense

          - 48 CFR Parts 205, 226, and 252
          - [DFARS Case 2003-D029]

# AGENCY:

Department of Defense (DoD).

# ACTION:

Final rule.

# SUMMARY:

DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update text pertaining to socioeconomic considerations in DoD contracting. This rule is a result of a transformation initiative undertaken by DoD to dramatically change the purpose and content of the DFARS.

# EFFECTIVE DATE:

December 9, 2005.

# FOR FURTHER INFORMATION CONTACT:

Ms. Deborah Tronic, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0289; facsimile (703) 602-0350. Please cite DFARS Case 2003-D029.

# SUPPLEMENTARY INFORMATION:

## A. Background

                    DFARS Transformation is a major DoD initiative to dramatically change the purpose and content of the DFARS. The objective is to improve the efficiency and effectiveness of the acquisition process, while allowing the acquisition workforce the flexibility to innovate. The transformed DFARS will contain only requirements of law, DoD-wide policies, delegations of FAR authorities, deviations from FAR requirements, and policies/procedures that have a significant effect beyond the internal operating procedures of DoD or a significant cost or administrative impact on contractors or offerors. Additional information on the DFARS Transformation initiative is available at                     *http://www.acq.osd.mil/​dpap/​dars/​dfars/​transformation/​index.htm.*

This final rule is a result of the DFARS Transformation initiative. The DFARS changes include—
    - Deletion of text at 226.103 containing internal DoD procedures for funding of incentive payments to contractors under the clause at 252.226-7001, Utilization of Indian Organizations, Indian-Owned Economic Enterprises, and Native Hawaiian Small Business Concerns. This text has been relocated to the new DFARS companion resource, Procedures, Guidance, and Information (PGI), available at http://www.acq.osd.mil/​dpap/​dars/​pgi. 
    - Relocation of text on contracting with historically black colleges and universities and minority institutions (HBCU/MI) from Subpart 226.70 to Subpart 226.3, for consistency with the location of FAR policy on this subject. The relocated text is substantially unchanged, but excludes information on HBCU/MI percentage goals and infrastructure assistance (226.7000 and 226.7002) that is considered unnecessary for inclusion in the DFARS.
    - Deletion of Subpart 226.72, Base Closures and Realignments, as the text       ( print page 73149)                          in this subpart unnecessarily duplicates text found elsewhere in the DFARS.                

DoD published a proposed rule at 70 FR 19038 on April 12, 2005. DoD received no comments on the proposed rule. Therefore, DoD has adopted the proposed rule as a final rule without change.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

## B. Regulatory Flexibility Act

                    DoD certifies that this final rule will not 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 the rule updates and streamlines DFARS text, but makes no significant change to DoD contracting policy.                

## C. Paperwork Reduction Act

                    The Paperwork Reduction Act does not apply because the rule does not impose any 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 205, 226, and 252

      - Government procurement

Michele P. Peterson,

Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR parts 205, 226, and 252 are amended as follows:

1. The authority citation for 48 CFR parts 205, 226, and 252 continues to read as follows:

Authority:41 U.S.C. 421 and 48 CFR Chapter 1.

# PART 205—PUBLICIZING CONTRACT ACTIONS

205.207 

2. Section 205.207 is amended in paragraph (d)(i) introductory text by removing “226.7003” and adding in its place “226.370”. 

# PART 226—OTHER SOCIOECONOMIC PROGRAMS

3. Section 226.103 is revised to read as follows: 

226.103 

Follow the procedures at PGI 226.103 when submitting a request for funding of an Indian incentive.

4. Subpart 226.3 is added to read as follows: 

# Subpart 226.3—Historically Black Colleges and Universities and Minority Institutions

      - 226.370 
      - Contracting with historically black colleges and universities and minority institutions.
      - 226.370-1 
      - General.
      - 226.370-2 
      - Definitions.
      - 226.370-3 
      - Policy.
      - 226.370-4 
      - Set-aside criteria.
      - 226.370-5 
      - Set-aside procedures.
      - 226.370-6 
      - Eligibility for award.
      - 226.370-7 
      - Protesting a representation.
      - 226.370-8 
      - Goals and incentives for subcontracting with HBCU/MIs.
      - 226.370-9 
      - Solicitation provision and contract clause. 

# Subpart 226.3—Historically Black Colleges and Universities and Minority Institutions

226.370 

226.370-1 

This section implements the historically black college and university (HBCU) and minority institution (MI) provisions of 10 U.S.C. 2323.

226.370-2 

Definitions of HBCUs and MIs are in the clause at 252.226-7000, Notice of Historically Black College or University and Minority Institution Set-Aside.

226.370-3 

DoD will use outreach efforts, technical assistance programs, advance payments, HBCU/MI set-asides, and evaluation preferences to meet its contract and subcontract goals for use of HBCUs and MIs.

226.370-4 

Set aside acquisitions for exclusive HBCU and MI participation when the acquisition is for research, studies, or services of the type normally acquired from higher educational institutions and there is a reasonable expectation that—

(a) Offers will be submitted by at least two responsible HBCUs or MIs that can comply with the subcontracting limitations in the clause at FAR 52.219-14, Limitations on Subcontracting;

(b) Award will be made at not more than 10 percent above fair market price; and

(c) Scientific or technological talent consistent with the demands of the acquisition will be offered.

226.370-5 

(a) As a general rule, use competitive negotiation for HBCU/MI set-asides.

(b) When using a broad agency announcement (FAR 35.016) for basic or applied research, make partial set-asides for HBCU/MIs as explained in 235.016.

(c) Follow the special synopsis instructions in 205.207(d). Interested HBCU/MIs must provide evidence of their capability to perform the contract, and a positive statement of their eligibility, within 15 days of publication of the synopsis in order for the acquisition to proceed as an HBCU/MI set-aside.

(d) Cancel the set-aside if the low responsible offer exceeds the fair market price (defined in FAR part 19) by more than 10 percent.

226.370-6 

(a) To be eligible for award as an HBCU or MI under the preference procedures of this subpart, an offeror must—

(1) Be an HBCU or MI, as defined in the clause at 252.226-7000, Notice of Historically Black College or University and Minority Institution Set-Aside, at the time of submission of its initial offer including price; and

(2) Provide the contracting officer with evidence of its HBCU or MI status upon request.

(b) The contracting officer shall accept an offeror's HBCU or MI status under the provision at FAR 52.226-2, Historically Black College or University and Minority Institution Representation, unless—

(1) Another offeror challenges the status; or

(2) The contracting officer has reason to question the offeror's HBCU/MI status. (A list of HBCU/MIs is published periodically by the Department of Education.)

226.370-7 

Any offeror or other interested party may challenge an offeror's HBCU or MI representation by filing a protest with the contracting officer. The protest must contain specific detailed evidence supporting the basis for the challenge. Such protests are handled in accordance with FAR 33.103 and are decided by the contracting officer.

226.370-8 

(a) In reviewing subcontracting plans submitted under the clause at FAR 52.219-9, Small Business Subcontracting Plan, the contracting officer shall—

(1) Ensure that the contractor included anticipated awards to HBCU/MIs in the small disadvantaged business goal; and

                                (2) Consider whether subcontracts are contemplated that involve research or studies of the type normally performed by higher educational institutions.                                      ( print page 73150)    

(b) The contracting officer may, when contracting by negotiation, use in solicitations and contracts a clause similar to the clause at FAR 52.219-10, Incentive Subcontracting Program, when a subcontracting plan is required and inclusion of a monetary incentive is, in the judgment of the contracting officer, necessary to increase subcontracting opportunities for HBCU/MIs. The clause should include a separate goal for HBCU/MIs.

226.370-9 

(a) Use the clause at 252.226-7000, Notice of Historically Black College or University and Minority Institution Set-Aside, in solicitations and contracts set aside for HBCU/MIs.

(b) Use the provision at FAR 52.226-2, Historically Black College or University and Minority Institution Representation, in solicitations set aside for HBCU/MIs. 

# Subpart 226.70—[Removed and Reserved]

5. Subpart 226.70 is removed and reserved. 

# Subpart 226.72—[Removed] 

6. Subpart 226.72 is removed. 

# PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES  

252.226-7000 

7. Section 252.226-7000 is amended in the introductory text by removing “226.7008” and adding in its place “226.370-9”. 

[FR Doc. 05-23729 Filed 12-8-05; 8:45 am]

BILLING CODE 5001-08-P