[Federal Register Volume 79, Number 198 (Tuesday, October 14, 2014)]
[Rules and Regulations]
[Pages 61746-61758]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-24236]



[[Page 61746]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 2, 4, 12, 14, 15, 19, 22, 26, 36, 52, and 53

[FAC 2005-77; FAR Case 2009-016; Item I; Docket 2011-0090, Sequence 1]
RIN 9000-AM05


Federal Acquisition Regulation; Federal Contracting Programs for 
Minority-Owned and Other Small Businesses

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to remove certain coverage 
involving procurements with small disadvantaged business (SDB) concerns 
and certain institutions of higher education that is based on authority 
which has expired and been found to be unconstitutional by the Court of 
Appeals for the Federal Circuit. These changes harmonize the FAR with 
current statutory authorities.

DATES: Effective: October 14, 2014.

FOR FURTHER INFORMATION CONTACT: Ms. Mahruba Uddowla, Procurement 
Analyst, at 703-605-2868, for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at 202-501-4755. Please cite FAC 2005-77, FAR Case 2009-
016.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 76 FR 55849 on September 9, 2011, to remove certain 
procurement mechanisms authorized by section 1207 of the National 
Defense Authorization Act for Fiscal Year (FY) 1987, Public Law 99-661, 
(10 U.S.C. 2323) from the FAR. The basis for this action is the U.S. 
Court of Appeals for the Federal Circuit's ruling on November 4, 2008, 
which found the current 10 U.S.C. 2323 to be unconstitutional. Rothe 
Development Corp. v. U.S. Department of Defense, et al, 545 F.3d 1023 
(Fed. Cir. 2008) (Rothe). On February 27, 2009, the United States 
District Court, Western District of Texas, San Antonio (the Court), 
pursuant to instructions from the U.S. Court of Appeals for the Federal 
Circuit, declared the current 10 U.S.C. 2323 unconstitutional and 
enjoined its further application in DoD, U.S. Coast Guard, and NASA 
procurements. Rothe Development Corp. v. U.S. Department of Defense, 
SA-98-CV-1011-XR (W.D. TX), 606 F.Supp.2d 648 (W.D.Tex., 2009).
    The Court's injunction, coupled with the expiration of the law on 
September 30, 2009, necessitates the removal of all language in the FAR 
deriving its authority solely from 10 U.S.C. 2323. This includes FAR 
subpart 19.11, Price Evaluation Adjustment for Small Disadvantaged 
Business Concerns, and FAR subpart 19.12, Small Disadvantaged Business 
Participation Program. However, the other policies, practices, and 
programs that agencies have been relying on to encourage SDB 
participation in the Federal marketplace since the Court of Appeals 
decision in Rothe remain in full effect, including the Government-wide 
goal of awarding not less than five percent of Federal contracting 
dollars to SDBs for both prime and subcontract awards, as required by 
section 15(g) of the Small Business Act, Public Law 85-536, as amended, 
(15 U.S.C. 644(g)).
    In addition, section 8(d)(4)(E) of the Small Business Act (15 
U.S.C. 637(d)(4)(E)) authorizes Federal agencies to provide incentives 
for encouraging prime contractors to subcontract with any type of small 
business, which includes SDBs, qualified Historically Underutilized 
Business Zone (HUBZone) small businesses, veteran-owned small 
businesses, service-disabled veteran-owned small businesses (SDVOSBs), 
and women-owned small businesses (WOSBs). To mirror the statutory 
authority's coverage of all small businesses, the FAR's coverage 
allowing monetary incentives for businesses subcontracting with SDBs 
(currently in FAR 19.1203) has been incorporated into the overall 
incentive subcontracting program at FAR subpart 19.7. This provision, 
along with the accompanying FAR clause 52.219-10, Incentive 
Subcontracting Program (authorized to be included in Federal 
solicitations and contracts that require subcontracting plans), provide 
guidance for the use of incentives to encourage prime contractors to 
expand their subcontracting opportunities with all small businesses, 
including SDBs.
    The procurement mechanism found in FAR 19.1202, which allows an SDB 
to receive credit as an evaluation factor or subfactor during source 
selection for its status as an SDB when competing for a prime contract, 
is deleted in its entirety as its authority derived solely from 10 
U.S.C. 2323. However, there is nothing in this final rule that 
precludes an agency from using evaluation factors and subfactors for 
subcontracting. Small Business Administration's (SBA) regulations (13 
CFR 125.3(g)) allow the use of small business as an evaluation factor 
or subfactor for an offeror's proposed approach to subcontracting with 
any small businesses, including SDBs, WOSBs, HUBZone small businesses, 
and SDVOSBs. As part of a recently opened FAR case 2014-003, Small 
Business Subcontracting Improvements, to implement sections 1321 and 
1322 of the Small Business Jobs Act, including SBA's regulations 
relating to these sections, the Civilian Agency Acquisition Council and 
the Defense Acquisition Regulations Council (the Councils) are 
conferring with SBA to consider if it would be helpful to develop 
guidance in the FAR regarding the use of such source selection factors 
and subfactors.
    To clarify the purpose and intent of this FAR change, Office of 
Federal Procurement Policy (OFPP) held outreach sessions with internal 
and external stakeholders of the small disadvantaged business community 
to discuss concerns, dispel misconceptions about the rule, clarify the 
basis of the change, and restate available programs and existing 
obligations under the Small Business Act.

II. Discussion and Analysis

    The Councils reviewed the comments in the development of the final 
rule. A discussion of the comments and the changes made to the rule as 
a result of those comments are provided as follows:

A. Summary of Significant Changes

    The changes made to the proposed rule reflected in the final rule 
are summarized as follows:
    <bullet> The definition of a ``small disadvantaged business 
concern'' at FAR 2.101(b)(2), 52.219-1(a), and 52.219-8(a), has been 
clarified, and added to 52.212-3(a);
    <bullet> The definition of ``historically black college or 
university'' at FAR 2.101 and 52.226-2 has been amended to delete the 
inclusion of nonprofit research institutions that were an integral part 
of such a college or university before November 14, 1986, from the 
definition.
    <bullet> FAR 19.000(a)(8), which was inadvertently omitted in the 
proposed rule, has been partially reinstated;
    <bullet> FAR 19.304 and 19.305 have been revised to ensure the 
guidance is aligned with the subject matter of these sections;

[[Page 61747]]

    <bullet> FAR 19.1307(d) and FAR 52.219-4(b)(3) have been removed;
    <bullet> The definitions included at FAR 52.219-1(c), and 52.219-
8(c) were moved to 52.219-1(a) and 52.219-8(a), respectively;
    <bullet> FAR 52.219-9(l)(2)(iii) and its Alternate III (l)(2)(iii) 
Requirement for the Year-End Supplementary Report for Small 
Disadvantaged Businesses, have been removed; and
    <bullet> The Standard Form 294, Subcontracting Report for 
Individual Contracts, has been revised. Prime contractors under DoD and 
the U.S. Coast Guard contracts will no longer count subcontract awards 
to Historically Black Colleges and Universities and Minority 
Institutions towards their small disadvantaged business goal. Only 
NASA, pursuant to its unique statutory authority at 51 U.S.C. 30304, 
will continue to credit Historically Black Colleges and Universities 
and Minority Institutions subcontracting data as part of its small 
disadvantaged business goal.
    <bullet> FAR 53.302-312, Optional Form 312, Small Disadvantaged 
Business (SDB) Participation Report, has been removed.

B. Analysis of Public Comments

1. General Support for the Proposed Rule
a. Fully Supports the Rule
    Comment: One respondent expressed support for the rule, noting that 
the proposed amendments reflect policy changes Federal agencies have 
already put into effect pursuant to the Court's decision in Rothe. The 
respondent also pointed out that the proposed rule does not affect the 
Government-wide five percent SDB goal for prime contracts and 
subcontracts mandated by section 15(g) of the Small Business Act.
    Response: The Councils acknowledge receipt of this comment.
b. Support for All SDBs
    Comment: One respondent specifically acknowledged the impact the 
Federal Government has in promoting SDBs. Though it is understood that 
removing the SDB price adjustment has little practical effect on SDBs, 
the respondent urged the Government to support all SDBs as they grow 
their businesses. Further, the respondent reminded the Councils of the 
unique relationship between the United States and its indigenous people 
and asked that the trust responsibility for Native Americans and the 
government-to-government relationship continue to be honored.
    Response: The Councils acknowledge receipt of this comment.
2. Removal of Barriers to SDB Participation in Federal Procurement
    Comment: While recognizing that the Court's decision in Rothe may 
necessitate some changes to the FAR, many respondents stated that 
minority contracting programs that assist SDBs and women-owned 
businesses are entirely constitutional and should be maintained. They 
stated that minority contracting programs serve to remedy historical 
patterns of discrimination in Federal procurement and are narrowly 
tailored to serve this purpose. The respondents noted that despite 
concerted efforts to address procurement disparities for SDBs, 
minority, and women-owned businesses by the Federal Government, 
discrimination persists in Federal procurement and, therefore, they 
asked the Councils to take into consideration the compelling interest 
of contracting preferences.
    Response: This rule is limited only to contracting programs that 
were authorized solely by 10 U.S.C. 2323. Programs created to assist 
businesses owned by socially and economically disadvantaged individuals 
that were not based solely on this legal authority are unaffected by 
this rule. For instance, section 8(a) of the Small Business Act (Pub. 
L. 85-536, as amended, (15 U.S.C. 637(a)), otherwise known as the 
``8(a) Program'' is a tool used to assist socially and economically 
disadvantaged businesses to develop their company's ability to compete 
for Federal contracting opportunities. The 8(a) Program is, and 
continues to be, successful in assisting small businesses as well as a 
means for Federal agencies to achieve the statutory goal for prime 
contract awards to SDBs.
3. Concerns Related to Rule
a. Ability To Achieve the Five Percent Goal
    Comment: Several respondents, who thought that the rule removes the 
five percent statutory goal for contracting with SDBs, expressed 
concern that the rule will likely end programs that are beneficial to 
disadvantaged businesses, and potentially place all small business 
programs in jeopardy by removing agency accountability.
    Response: The final rule does not, in any way, alter the 
Governmentwide goal of participation by SDBs of not less than five 
percent of the total value of all prime contract and subcontract awards 
each fiscal year. In addition, the policies, practices, and programs 
that agencies have been relying on since the Court of Appeals decision 
in Rothe and the expiration of the statute to achieve SDB 
participation, including contracting officers' authority to continue 
making set-aside awards to SDBs who are participants in SBA's 8(a) 
business development program, remain in full effect. Agencies have 
successfully used these authorities to provide meaningful opportunities 
for SDBs.
b. Retention of Price Evaluation Adjustment Authority
    Comment: A number of respondents expressed concern regarding the 
removal of FAR subpart 19.11, which gave DoD, the United States Coast 
Guard (USCG), and NASA the authority to apply the Price Evaluation 
Adjustment (PEA). The respondents stated that doing so will deny SDBs 
the maximum, practicable opportunity to be considered for Federal 
contract awards. Further, the respondents pointed out that because the 
PEA had not been used in a decade was no justification to delete it.
    Response: Section 801 of the National Defense Authorization Act for 
FY 1999, (Pub. L. 105-261) amended 10 U.S.C. 2323 by mandating that the 
Secretary of Defense suspend the PEA if DoD achieved the five percent 
SDB goal in the previous fiscal year. DoD has met or exceeded the five 
percent SDB goal since FY 2001; therefore, in accordance with the 
mandate, DoD suspended the use of the PEA.
    In addition, the Court's decision in Rothe, coupled with the 
subsequent expiration of 10 U.S.C. 2323 on September 30, 2009, requires 
the permanent removal of the statutory basis for the PEA for DoD, USCG, 
and NASA.
c. Retention of SDB Subcontracting Incentive
    Comment: Some respondents expressed concern regarding the removal 
of the incentive subcontracting program for SDB concerns. One 
respondent remarked that the preamble of the Federal Register notice 
indicates that FAR 19.1203, ``Incentive subcontracting with small 
disadvantaged business concerns'' has been retained but moved to FAR 
subpart 19.7; however, the list of proposed amendments indicates that 
FAR subpart 19.12 has been deleted with no corresponding amendments to 
FAR subpart 19.7. Since Rothe did not nullify the basis for FAR subpart 
19.12, FAR subpart 19.12 should not be removed unless, and until, an 
amendment to FAR subpart 19.7 implementing the suggested realignment 
has been executed.
    Response: The authority to use monetary incentives to increase 
subcontracting opportunities for SDBs

[[Page 61748]]

remains in the FAR; however, it was relocated to FAR subpart 19.7. The 
clause at 52.219-10 has also been amended accordingly. By doing so, the 
SDB incentive provisions are now aligned with other subcontracting 
incentives authorized under section 8(d)(4)(E) of the Small Business 
Act, as amended, (15 U.S.C. 637(d)(4)(E)).
d. Removal of SDB Evaluation Factors and Subfactors
    Comment: Some respondents expressed concern regarding the removal 
of FAR 19.1202, which established a requirement for contracting 
officers to use an evaluation factor or subfactor to assess the 
participation of SDB concerns during contract performance when 
formulating the contract award decision. The respondents stated that 
the proposed FAR changes would have a negative impact on SDBs seeking 
prime contract awards, foster an environment that discourages business 
relationships between large prime contractors and SDBs, and further 
weaken SDBs' ability to compete for Federal contracts.
    Response: It is necessary to remove FAR subpart 19.12 to 
accommodate the Court's decision in Rothe and the fact that the 
underlying statutory authority for the specific procurement mechanisms 
in FAR subpart 19.12 has expired. However, there is nothing in this 
rulemaking that precludes an agency from using evaluation factors and 
subfactors during source selection to ascertain the commitment of the 
offeror to the small business community, to include SDBs.
4. Focus of the Rule
a. Other Socioeconomic Programs
    Comment: A few respondents noted that the proposed revisions to the 
FAR were written to address only section 1207. Some of these 
respondents argued that the issues addressed in Rothe also make the SBA 
8(a) and 8(d) programs indefensible. In addition, they argued that 
Rothe challenges the constitutionality of setting aside contracts under 
the AbilityOne and Randolph Sheppard programs and to concerns owned by 
Alaska Native Corporations. These respondents concluded that the FAR 
rule needs to address these issues.
    Response: The Court's decision in Rothe was specifically limited to 
the constitutionality of section 1207 of the National Defense 
Authorization Act for FY 1987. The Court's decision did not address the 
merits of other statutorily-mandated programs. Sections 8(a) and 8(d) 
of the Small Business Act, as well as the AbilityOne and Randolph 
Sheppard programs, are not within the purview of 10 U.S.C. 2323 and, 
therefore, are not the subject matter of this rule.
b. Disparity Studies
    Comment: One respondent suggested that the Administration should 
address historical and present discrimination in Federal contracting 
practices by conducting the disparate impact studies referenced in the 
court decision Adarand Constructors, Inc. v. Pena, Secretary of 
Transportation, et al. The respondent recommended that any remedies the 
Administration implements should be based on the result of those 
studies.
    Response: The comment is addressed to constitutionality standards; 
however, the scope of this rule is limited to harmonizing the FAR with 
current statutory authority.
5. Impact of the Rule on Historically Black Colleges and Universities 
(HBCUs) and Minority Institutions (MIs)
    Comment: A few respondents expressed concern regarding the impact 
of a Defense Federal Acquisition Regulations Supplement (DFARS) 
deviation regarding HBCUs and MIs. The respondents stated the changes 
will eliminate small disadvantaged business credits for prime 
contractors who subcontract with HBCUs and MIs. This in turn could 
reduce the incentives for prime contractors to award subcontracts to 
HBCUs and MIs. The respondents cautioned that DoD must ensure that the 
proposed rule does not inadvertently impede its current efforts to 
implement 10 U.S.C. 2362 objectives (e.g., engage prime contractors and 
small businesses in partnership with HBCUs and MIs as a way of 
increasing the schools' research, development, test, and engineering 
involvement).
    Response: This rule implements changes needed to conform the FAR to 
the Court's decision in Rothe and the expiration of 10 U.S.C. 2323. The 
issues raised by these respondents involve statutes that are external 
to the Rothe decision and address DFARS regulations rather than the FAR 
and, therefore, are outside the scope of this rule.
6. Technical Clarifications
    Comment: One respondent noticed a number of technical errors in the 
rule: (1) The respondent questioned the requirement at FAR 
12.303(b)(1), which requires the contracting officer to use a 
continuation sheet to provide the incentive subcontracting percentage 
in Block 10 of the Standard Form (SF) 1449, ``Solicitation/Contract/
Order For Commercial Items.'' The respondent stated this requirement 
was unnecessary since the contracting officer is already required to 
provide the same information when using FAR 52.219-10; (2) The 
respondent noticed that paragraph (a)(8) was inadvertently omitted when 
the paragraphs in the Scope section of part 19 were renumbered; and (3) 
The respondent commented that the clarification at 19.1307(d) and 
52.219-4(b)(3) was unnecessary and potentially confusing. The 
respondent recommended either deleting the paragraphs entirely, or 
including a clearer explanation of the mechanics of the historically 
underutilized business zone (HUBZone) price evaluation preference.
    Response: (1) The guidance at FAR 12.303(b)(1) must remain. FAR 
52.219-10 can be incorporated into solicitations and contracts by 
reference, in which case the contracting officer must use the SF 1449 
in order to provide the subcontracting incentive percentage.
    (2) FAR 19.000 Scope, paragraph (a)(8) has not been removed but 
instead modified to remove the reference to the PEA for small 
disadvantaged businesses.
    (3) FAR 19.1307(d) and FAR 52.219-4(b)(3) have been deleted. FAR 
19.1307(d) and the clause at 52.219-4(b)(3) were originally used to 
clarify that an offeror could receive both the HUBZone price evaluation 
preference and the SDB PEA, if eligible, under the same solicitation. 
However, the removal of the SDB PEA renders this guidance unnecessary.
    (4) FAR 53.302-312, Optional Form 312, Small Disadvantaged Business 
(SDB) Participation Report, has been removed.
    (5) Standard Form 294, Subcontracting Report for Individual 
Contracts, has been revised to remove the HBCU/MI subcontracting data 
collection requirement for DoD and USCG since the collection of this 
data resided in 10 U.S.C. 2323. However, under a separate law, 51 
U.S.C. 30304, NASA is still required to collect HBCU/MI subcontracting 
data. The revised form reflects this distinction.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs

[[Page 61749]]

and benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This is a significant regulatory action and, therefore, 
was subject to review under section 6(b) of E.O. 12866, Regulatory 
Planning and Review, dated September 30, 1993. This rule is not a major 
rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    DoD, GSA, and NASA have prepared a Final Regulatory Flexibility 
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 
U.S.C. 601, et seq. The FRFA is summarized as follows:

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 76 FR 55849 on September 9, 2011, to remove certain 
procurement mechanisms authorized by section 1207 of the National 
Defense Authorization Act for Fiscal Year (FY) 1987, Pub. L. 99-661, 
(10 U.S.C. 2323) from the Federal Acquisition Regulation (FAR). The 
basis for this action is the U.S. Court of Appeals for the Federal 
Circuit's ruling on November 4, 2008, which found the current 10 
U.S.C. 2323 to be unconstitutional. On February 27, 2009, the United 
States District Court, Western District of Texas, San Antonio (the 
Court), pursuant to instructions from the U.S. Court of Appeals for 
the Federal Circuit, declared the current 10 U.S.C. 2323 
unconstitutional and enjoined its further application in DoD, U.S. 
Coast Guard, and NASA procurements.
    As a result of the District Court's injunction of 10 U.S.C. 
2323, and the subsequent expiration of the law on September 30, 
2009, there no longer is a statutory basis for a unique DoD, USCG, 
and NASA Small Disadvantaged Business Participation Program.
    The final rule amends the FAR to remove language based on the 
expired statutory authority at 10 U.S.C. 2323.
    This rule will apply to SDBs seeking to obtain prime contracts 
with the Federal Government and subcontracts with the Federal prime 
contractors. There are approximately 24,490 SDBs currently listed in 
the Central Contractor Registration that could potentially be 
affected.
    Although there were no significant issues raised by the public 
regarding the Initial Regulatory Flexibility Analysis, several 
respondents commented that the removal of FAR subparts 19.11 and 
19.12 would deny small disadvantaged businesses the maximum, 
practicable opportunity to be considered for Federal contract 
awards. The final rule reiterates that contracting programs 
authorized by 10 U.S.C. 2323 were found unconstitutional, and the 
statute expired September 30, 2009. Therefore, the FAR must be 
amended to reflect the current statutory environment. These 
amendments are expected to have negligible effect on SDBs as the 
price evaluation adjustment at issue has not been used for 
approximately a decade.
    The rule imposes no new reporting or recordkeeping requirements 
for any small business or small entity. Pursuant with this final 
rule, Federal agencies will no longer be authorized to apply certain 
procurement mechanisms (FAR subparts 19.11 and 19.12) that had 
offered a benefit for SDB prime awards.

    Interested parties may obtain a copy of the FRFA from the 
Regulatory Secretariat. The Regulatory Secretariat has submitted a copy 
of the FRFA to the Chief Counsel for Advocacy of the Small Business 
Administration.

V. Paperwork Reduction Act

    The final rule does not contain any information collection 
requirements that require the approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). The 
rule removes FAR coverage at FAR subparts 19.11 and 19.12, and the 
corresponding clauses at FAR 52.219-22, Small Disadvantaged Business 
Status, FAR 52.219-23, Notice of Price Evaluation Adjustment for Small 
Disadvantaged Business Concerns, FAR 52.219-24, Small Disadvantaged 
Business Participation Program-Targets, FAR 52.219-25, Small 
Disadvantaged Business Participation Program-Disadvantaged Status and 
Reporting, and FAR 52.219-26, Small Disadvantaged Business 
Participation Program-Incentive Subcontracting. This rule also removes 
the Optional Form 312, Small Disadvantaged Business (SDB) Participation 
Report. With these changes, the information collection associated with 
this rule under OMB Control number 9000-0150 will be removed, reducing 
the information collection burden imposed by the Federal Government on 
the public by 15,000 burden hours.
    This rule will also change the information collection methodology 
for subcontracting. As a result, the information collection burden 
imposed by the Federal Government on the public by the Federal 
Government associated with OMB Control numbers 9000-0006 and 9000-0007 
will be reduced by approximately 741,903 and 178,402 hours 
respectively.
    No action is required to remove any hours related to the data 
collection requirement for the Year End Supplementary Report for Small 
Disadvantaged Businesses identified at FAR 52.219-9(l)(2)(iii) and 
Alternate III of the same clause, since these reporting requirements 
are not associated with any current OMB information collection 
clearances.

List of Subjects in 48 CFR Parts 1, 2, 4, 12, 14, 15, 19, 22, 26, 
36, 52, and 53

    Government procurement.

    Dated: September 30, 2014.
William Clark,
Acting Director, Office of Government-Wide Acquisition Policy, Office 
of Acquisition Policy, Office of Government-Wide Policy.

    Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 2, 4, 12, 14, 
15, 19, 22, 26, 36, 52, and 53 as set forth below:

0
1. The authority citation for 48 CFR parts 1, 2, 4, 12, 14, 15, 19, 22, 
26, 36, 52, and 53 continues to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM


1.106  [Amended]

0
2. Amend section 1.106 in the table following the introductory text, by 
removing FAR segments ``19.12'', ``52.219-22'', ``52.219-23'', and 
``52.219-25'' and their corresponding OMB Control Number ``9000-0150''.

PART 2--DEFINITIONS OF WORDS AND TERMS

0
3. Amend section 2.101 in paragraph (b)(2), in the definition 
``Historically black college or university'' by removing the last 
sentence; and revising the definition ``Small disadvantaged business 
concern'' to read as follows:


2.101  Definitions.

* * * * *
    (b) * * *
    (2) * * *
    Small disadvantaged business concern, consistent with 13 CFR 
124.1002, means a small business concern under the size standard 
applicable to the acquisition, that
    (1) Is at least 51 percent unconditionally and directly owned (as 
defined at 13 CFR 124.105) by--
    (i) One or more socially disadvantaged (as defined at 13 CFR 
124.103) and economically disadvantaged (as defined at 13 CFR 124.104) 
individuals who are citizens of the United States; and
    (ii) Each individual claiming economic disadvantage has a net worth 
not exceeding $750,000 after taking into account the applicable 
exclusions set forth at 13 CFR 124.104(c)(2); and
    (2) The management and daily business operations of which are 
controlled (as defined at 13 CFR 124.106) by individuals who meet the 
criteria in paragraphs (1)(i) and (ii) of this definition.
* * * * *

[[Page 61750]]

PART 4--ADMINISTRATIVE MATTERS


4.1202  [Amended]

0
4. Amend section 4.1202 by removing and reserving paragraph (k).

PART 12--ACQUISITION OF COMMERCIAL ITEMS


12.301  [Amended]

0
5. Amend section 12.301 by removing the last sentence from paragraph 
(b)(2).
0
6. Amend section 12.303 by revising paragraph (b)(1) to read as 
follows:


12.303  Contract format.

* * * * *
    (b) * * *
    (1) Block 10 if an incentive subcontracting clause is used (the 
contracting officer shall indicate the applicable percentage);
* * * * *

PART 14--SEALED BIDDING


14.502  [Amended]

0
7. Amend section 14.502 by removing paragraph (b)(4); redesignating 
paragraphs (b)(5) through (8) as paragraphs (b)(4) through (7), 
respectively; and removing from the newly designated paragraph (b)(5) 
``Subpart'' and adding ``subpart'' in its place.

PART 15--CONTRACTING BY NEGOTIATION


15.304  [Amended]

0
8. Amend section 15.304 by removing paragraph (c)(4); and redesignating 
paragraphs (c)(5) and (6) as paragraphs (c)(4) and (5), respectively.
0
9. Amend section 15.305 by revising paragraph (a)(2)(v) and removing 
from paragraph (a)(5) ``(c)(5)'' and adding ``(c)(4)'' in its place.
    The revision reads as follows:


15.305  Proposal evaluation.

    (a) * * *
    (2) * * *
    (v) The evaluation should include the past performance of offerors 
in complying with subcontracting plan goals for small disadvantaged 
business (SDB) concerns (see subpart 19.7).
* * * * *
0
10. Amend section 15.503 by--
0
a. Revising the introductory text of paragraph (a)(2)(i);
0
b. Removing paragraph (a)(2)(i)(B); and
0
c. Redesignating paragraphs (a)(2)(i)(C) through (E) as paragraphs 
(a)(2)(i)(B) through (D), respectively.
    The revision reads as follows:


15.503  Notifications to unsuccessful offerors.

    (a) * * *
    (2) * * *
    (i) In addition to the notice in paragraph (a)(1) of this section, 
the contracting officer shall notify each offeror in writing prior to 
award and upon completion of negotiations and determinations of 
responsibility--
* * * * *

PART 19--SMALL BUSINESS PROGRAMS

0
11. Amend section 19.000 by--
0
a. Revising paragraphs (a) introductory text and (a)(8);
0
b. Removing paragraphs (a)(9) and (10); and
0
c. Redesignating paragraphs (a)(11) and (12) as paragraphs (a)(9) and 
(10), respectively.
    The revisions read as follows:


19.000  Scope of part.

    (a) This part implements the acquisition-related sections of the 
Small Business Act (15 U.S.C. 631, et seq.), applicable sections of the 
Armed Services Procurement Act (10 U.S.C. 2302, et seq.), 41 U.S.C. 
3104, and Executive Order 12138, May 18, 1979. It covers--
* * * * *
    (8) The use of a price evaluation preference for HUBZone small 
business concerns;
* * * * *


19.201  [Amended]

0
12. Amend section 19.201 by--
0
a. Removing paragraph (b);
0
b. Redesignating paragraphs (c) through (f) as paragraphs (b) through 
(e), respectively;
0
c. Removing from the newly designated paragraph (c)(12) ``(d)(11)'' and 
adding ``(c)(11)'' in its place; and
0
d. Removing newly designated paragraph (e).


19.202-6  [Amended]

0
13. Amend section 19.202-6 by removing paragraph (a)(3) and 
redesignating paragraphs (a)(4) through (6) as paragraphs (a)(3) 
through (5), respectively.
0
14. Revise section 19.304 to read as follows:


19.304  Small disadvantaged business status.

    (a) The contracting officer may accept an offeror's representation 
that it is a small disadvantaged business concern (SDB) concern.
    (b) The provision at 52.219-1, Small Business Program 
Representations, or 52.212-3(c)(4), Offeror Representations and 
Certifications--Commercial Items, is used to collect SDB data.
    (c) A representation of SDB status on a Federal prime contract will 
be deemed a misrepresentation of SDB status if the firm does not meet 
the requirements of 13 CFR 124.1001(b).
    (d) Any person or entity that misrepresents a firm's status as an 
SDB concern in order to obtain a contracting opportunity in accordance 
with section 8(d) of the Small Business Act, (15 U.S.C. 637(d)) will be 
subject to the penalties imposed by section 16(d) of the Small Business 
Act, (15 U.S.C. 645(d)), as well as any other penalty authorized by 
law.

0
15. Revise section 19.305 to read as follows:


19.305  Reviews and protests of SDB status.

    This section applies to reviews and protests of a small business 
concern's SDB status as a prime contractor or subcontractor.
    (a) SBA may initiate the review of SDB status on any firm that has 
represented itself to be an SDB on a prime contract or subcontract to a 
Federal prime contract whenever it receives credible information 
calling into question the SDB status of the firm.
    (b) Requests for an SBA review of SDB status may be forwarded to 
the Small Business Administration, Assistant Administrator for SDBCE, 
409 Third Street SW., Washington, DC 20416.
    (c) An SBA review of a subcontractor's SDB status differs from a 
formal protest. Protests of a small business concern's SDB status as a 
subcontractor are processed under 19.703(a)(2). Protests of a concern's 
size as a prime contractor are processed under 19.302. Protests of a 
concern's size as a subcontractor are processed under 19.703(b).


19.309  [Amended]

0
16. Amend section 19.309 by removing paragraph (b) and redesignating 
paragraphs (c) and (d) as paragraphs (b) and (c), respectively.
0
17. Amend section 19.703 by revising the first sentence of paragraph 
(a)(2) to read as follows:


19.703  Eligibility requirements for participating in the program.

    (a) * * *
    (2) In connection with a subcontract, the contracting officer or 
the SBA may protest the disadvantaged status of a proposed 
subcontractor. * * *
* * * * *

[[Page 61751]]

19.705-1  [Amended]

0
18. Amend section 19.705-1 by removing the second sentence.
0
19. Amend section 19.705-4 by revising the last sentence of paragraph 
(c) to read as follows:


19.705-4  Reviewing the subcontracting plan.

* * * * *
    (c) * * * An incentive subcontracting clause (see 52.219-10, 
Incentive Subcontracting Program), may be used when additional and 
unique contract effort, such as providing technical assistance, could 
significantly increase subcontract awards to small business, small 
disadvantaged business, veteran-owned small business, service-disabled 
veteran-owned small business, HUBZone small business, or women-owned 
small business concerns.
* * * * *


19.708  [Amended]

0
20. Amend section 19.708 in paragraphs (c)(1), (2), and (3) by removing 
``business, HUBZone small business, and'' and adding ``business, 
HUBZone small business, small disadvantaged business, and'' in its 
place.

Subpart 19.11 [Removed and Reserved]

0
21. Remove and reserve subpart 19.11, consisting of sections 19.1101 
through 19.1104.

Subpart 19.12 [Removed and Reserved]

0
22. Remove and reserve subpart 19.12, consisting of sections 19.1201 
through 19.1204.


19.1307  [Amended]

0
23. Amend section 19.1307 by removing paragraph (d) and redesignating 
paragraph (e) as paragraph (d).

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS


22.1006  [Amended]

0
24. Amend section 22.1006 by--
0
a. Removing from paragraph (a)(2)(i)(C) ``52.204-8(c)(2)(iii) or (iv)'' 
and adding ``52.204-8(c)(2)(ii) or (iii)'' in its place;
0
b. Removing from paragraph (e)(2)(i) ``52.204-8(c)(2)(iii)'' and adding 
``52.204-8(c)(2)(ii)'' in its place; and
0
c. Removing from paragaraph (e)(4)(i) ``52.204-8(c)(2)(iv)'' and adding 
``52.204-8(c)(2)(iii)'' in its place.

PART 26--OTHER SOCIOECONOMIC PROGRAMS


26.304   [Amended]

0
25. Amend section 26.304 by removing the last sentence.

PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS


36.501   [Amended]

0
26. Amend section 36.501 by removing from paragraph (b) ``19.11,''.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
27. Amend section 52.204-5 by revising the date of the provision and by 
removing from paragraph (b) ``(b)(1) of FAR 52.219-1,'' and adding 
``(c)(1) of FAR 52.219-1,'' in its place.
    The revision reads as follows:


52.204-5   Women-Owned Business (Other Than Small Business).

* * * * *

Women-Owned Business (Other Than Small Business) (Oct 2014)

* * * * *

0
28. Amend section 52.204-8 by--
0
a. Revising the date of the provision;
0
b. Revising paragraph (c)(1)(xxi);
0
c. Removing paragraph (c)(2)(i); and
0
d. Redesignating paragraphs (c)(2)(ii) through (vii) as (c)(2)(i) 
through (vi), respectively.
    The revisions read as follows:


52.204-8   Annual Representations and Certifications.

* * * * *

Annual Representations and Certifications (Oct 2014)

* * * * *

    (c) * * *
    (1) * * *
    (xxi) 52.226-2, Historically Black College or University and 
Minority Institution Representation. This provision applies to 
solicitations for research, studies, supplies, or services of the 
type normally acquired from higher educational institutions.
* * * * *


0
29. Amend section 52.212-2 by--
0
a. Revising the date of the provision; and
0
b. Removing from paragraph (a) ``(iv) small disadvantaged business 
participation;''
    The revision reads as follows:


52.212-2   Evaluation--Commercial Items.

* * * * *

Evaluation--Commercial Items (Oct 2014)

0
30. Amend section 52.212-3 by--
0
a. Revising the date of the provision;
0
b. Adding in paragraph (a), in alphabetical order, the definition 
``Small disadvantaged business concern'';
0
c. Removing from paragraph (c)(4) ``, for general statistical 
purposes,'';
0
d. Removing paragraph (c)(10);
0
e. Redesignating paragraph (c)(11) as paragraph (c)(10);
0
f. Removing from the newly designated paragraph (c)(10)(ii) 
``representation in paragraph (c)(11)(i)'' and adding ``representation 
in paragraph (c)(10)(i)'' in its place;
0
g. Revising Alternate I; and
0
h. Removing Alternate II.
    The revisions and additions read as follows:


52.212-3   Offeror Representations and Certifications--Commercial 
Items.

* * * * *

Offeror Representations and Certifications--Commercial ITEMS (Oct 2014)

* * * * *
    (a) * * *
    Small disadvantaged business concern, consistent with 13 CFR 
124.1002, means a small business concern under the size standard 
applicable to the acquisition, that--
    (1) Is at least 51 percent unconditionally and directly owned 
(as defined at 13 CFR 124.105) by--
    (i) One or more socially disadvantaged (as defined at 13 CFR 
124.103) and economically disadvantaged (as defined at 13 CFR 
124.104) individuals who are citizens of the United States; and
    (ii) Each individual claiming economic disadvantage has a net 
worth not exceeding $750,000 after taking into account the 
applicable exclusions set forth at 13 CFR 124.104(c)(2); and
    (2) The management and daily business operations of which are 
controlled (as defined at 13.CFR 124.106) by individuals, who meet 
the criteria in paragraphs (1)(i) and (ii) of this definition.
* * * * *

    Alternate I (OCT 2014)_. As prescribed in 12.301(b)(2), add the 
following paragraph (c)(11) to the basic provision:

    (11) (Complete if the offeror has represented itself as 
disadvantaged in paragraph (c)(4) of this provision.)
    _Black American.
    _Hispanic American.
    _Native American (American Indians, Eskimos, Aleuts, or Native 
Hawaiians).
    _Asian-Pacific American (persons with origins from Burma, 
Thailand, Malaysia, Indonesia, Singapore, Brunei, Japan, China, 
Taiwan, Laos, Cambodia (Kampuchea), Vietnam, Korea, The Philippines, 
Republic of Palau, Republic of the Marshall Islands,

[[Page 61752]]

Federated States of Micronesia, the Commonwealth of the Northern 
Mariana Islands, Guam, Samoa, Macao, Hong Kong, Fiji, Tonga, 
Kiribati, Tuvalu, or Nauru).
    _Subcontinent Asian (Asian-Indian) American (persons with 
origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the 
Maldives Islands, or Nepal).
    _Individual/concern, other than one of the preceding.

0
31. Amend 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Revising paragraphs (b)(11), (b)(12), (b)(16), (b)(17)(i), and 
(b)(17)(iv);
0
c. Removing paragraphs (b)(21) through (23);
0
d. Redesignating paragraphs (b)(24) through (56) as paragraphs (b)(21) 
through (53), respectively;
0
e. Revising paragraph (e)(1)(ii); and
0
f. Revising the date and paragraph (e)(1)(ii)(C) of Alternate II.
    The revisions read as follows:


52.212-5   Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required to Implement Statutes or 
Executive Orders--Commercial Items (Oct 2014)

* * * * *
    (b) * * *
    _(11)(i) 52.219-3, Notice of HUBZone Set-Aside or Sole-Source 
Award (NOV 2011) (15 U.S.C. 657a).
    _(ii) Alternate I (NOV 2011) of 52.219-3.
    _(12)(i) 52.219-4, Notice of Price Evaluation Preference for 
HUBZone Small Business Concerns (OCT 2014) (if the offeror elects to 
waive the preference, it shall so indicate in its offer) (15 U.S.C. 
657a).
    _(ii) Alternate I (JAN 2011) of 52.219-4.
* * * * *
    _(16) 52.219-8, Utilization of Small Business Concerns (OCT 
2014) (15 U.S.C. 637(d)(2) and (3)).
    _(17)(i) 52.219-9, Small Business Subcontracting Plan (OCT 2014) 
(15 U.S.C. 637(d)(4)).
* * * * *
    _(iv) Alternate III (OCT 2014) of 52.219-9.
* * * * *
    (e)(1) * * *
    (ii) 52.219-8, Utilization of Small Business Concerns (OCT 2014) 
(15 U.S.C. 637(d)(2) and (3)), in all subcontracts that offer 
further subcontracting opportunities. If the subcontract (except 
subcontracts to small business concerns) exceeds $650,000 ($1.5 
million for construction of any public facility), the subcontractor 
must include 52.219-8 in lower tier subcontracts that offer 
subcontracting opportunities.
* * * * *

    Alternate II (OCT 2014) * * *

    (e)(1)(ii) * * *
    (C) 52.219-8, Utilization of Small Business Concerns (OCT 2014) 
(15 U.S.C. 637(d)(2) and (3)), in all subcontracts that offer 
further subcontracting opportunities. If the subcontract (except 
subcontracts to small business concerns) exceeds $650,000 ($1.5 
million for construction of any public facility), the subcontractor 
must include 52.219-8 in lower tier subcontracts that offer 
subcontracting opportunities.
* * * * *



0
32. Amend section 52.213-4 by revising the date of the clause and 
paragraph (a)(2)(viii) to read as follows:


52.213-4   Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Items) (Oct 2014)

    (a) * * *
    (2) * * *
    (viii) 52.244-6, Subcontracts for Commercial Items (OCT 2014)_
* * * * *


0
33. Amend section 52.219-1 by revising the date of the provision and 
paragraphs (a) through (c) to read as follows:


52.219-1   Small Business Program Representations.

* * * * *

Small Business Program Representations (Oct 2014)

    (a) Definitions. As used in this provision--
    Economically disadvantaged women-owned small business (EDWOSB) 
concern means a small business concern that is at least 51 percent 
directly and unconditionally owned by, and the management and daily 
business operations of which are controlled by, one or more women 
who are citizens of the United States and who are economically 
disadvantaged in accordance with 13 CFR part 127. It automatically 
qualifies as a women-owned small business concern eligible under the 
WOSB Program.
    Service-disabled veteran-owned small business concern--
    (1) Means a small business concern--
    (i) Not less than 51 percent of which is owned by one or more 
service-disabled veterans or, in the case of any publicly owned 
business, not less than 51 percent of the stock of which is owned by 
one or more service-disabled veterans; and
    (ii) The management and daily business operations of which are 
controlled by one or more service-disabled veterans or, in the case 
of a service-disabled veteran with permanent and severe disability, 
the spouse or permanent caregiver of such veteran.
    (2) Service-disabled veteran means a veteran, as defined in 38 
U.S.C. 101(2), with a disability that is service-connected, as 
defined in 38 U.S.C. 101(16).
    Small business concern means a concern, including its 
affiliates, that is independently owned and operated, not dominant 
in the field of operation in which it is bidding on Government 
contracts, and qualified as a small business under the criteria in 
13 CFR Part 121 and the size standard in paragraph (b) of this 
provision.
    Small disadvantaged business concern, consistent with 13 CFR 
124.1002, means a small business concern under the size standard 
applicable to the acquisition, that--
    (1) Is at least 51 percent unconditionally and directly owned 
(as defined at 13 CFR 124.105) by--
    (i) One or more socially disadvantaged (as defined at 13 CFR 
124.103) and economically disadvantaged (as defined at 13 CFR 
124.104) individuals who are citizens of the United States, and
    (ii) Each individual claiming economic disadvantage has a net 
worth not exceeding $750,000 after taking into account the 
applicable exclusions set forth at 13 CFR 124.104(c)(2); and
    (2) The management and daily business operations of which are 
controlled (as defined at 13 CFR 124.106) by individuals who meet 
the criteria in paragraphs (1)(i) and (ii) of this definition.
    Veteran-owned small business concern means a small business 
concern--
    (1) Not less than 51 percent of which is owned by one or more 
veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any 
publicly owned business, not less than 51 percent of the stock of 
which is owned by one or more veterans; and
    (2) The management and daily business operations of which are 
controlled by one or more veterans.
    Women-owned small business concern means a small business 
concern--
    (1) That is at least 51 percent owned by one or more women; or, 
in the case of any publicly owned business, at least 51 percent of 
the stock of which is owned by one or more women; and
    (2) Whose management and daily business operations are 
controlled by one or more women.
    Women-owned small business (WOSB) concern eligible under the 
WOSB Program (in accordance with 13 CFR part 127), means a small 
business concern that is at least 51 percent directly and 
unconditionally owned by, and the management and daily business 
operations of which are controlled by, one or more women who are 
citizens of the United States.
    (b)(1) The North American Industry Classification System (NAICS) 
code for this acquisition is______--[insert NAICS code].
    (2) The small business size standard is __--[insert size 
standard].
    (3) The small business size standard for a concern which submits 
an offer in its own name, other than on a construction or service 
contract, but which proposes to furnish a product which it did not 
itself manufacture, is 500 employees.
    (c) Representations. (1) The offeror represents as part of its 
offer that it [square] is, [square] is not a small business concern.
    (2) [Complete only if the offeror represented itself as a small 
business concern in paragraph (c)(1) of this provision.] The

[[Page 61753]]

offeror represents that it [square] is, [square] is not, a small 
disadvantaged business concern as defined in 13 CFR 124.1002.
    (3) [Complete only if the offeror represented itself as a small 
business concern in paragraph (c)(1) of this provision.] The offeror 
represents as part of its offer that it [square] is, [square] is not 
a women-owned small business concern.
    (4) Women-owned small business (WOSB) concern eligible under the 
WOSB Program. [Complete only if the offeror represented itself as a 
women-owned small business concern in paragraph (c)(3) of this 
provision.] The offeror represents as part of its offer that--
    (i) It [square] is, [square] is not a WOSB concern eligible 
under the WOSB Program, has provided all the required documents to 
the WOSB Repository, and no change in circumstances or adverse 
decisions have been issued that affects its eligibility; and
    (ii) It [square] is, [square] is not a joint venture that 
complies with the requirements of 13 CFR part 127, and the 
representation in paragraph (c)(4)(i) of this provision is accurate 
for each WOSB concern eligible under the WOSB Program participating 
in the joint venture. [The offeror shall enter the name or names of 
the WOSB concern eligible under the WOSB Program and other small 
businesses that are participating in the joint venture: ___--.] Each 
WOSB concern eligible under the WOSB Program participating in the 
joint venture shall submit a separate signed copy of the WOSB 
representation.
    (5) Economically disadvantaged women-owned small business 
(EDWOSB) concern. [Complete only if the offeror represented itself 
as a women-owned small business concern eligible under the WOSB 
Program in (c)(4) of this provision.] The offeror represents as part 
of its offer that--
    (i) It [square] is, [square] is not an EDWOSB concern eligible 
under the WOSB Program, has provided all the required documents to 
the WOSB Repository, and no change in circumstances or adverse 
decisions have been issued that affects its eligibility; and
    (ii) It [square] is, [square] is not a joint venture that 
complies with the requirements of 13 CFR part 127, and the 
representation in paragraph (c)(5)(i) of this provision is accurate 
for each EDWOSB concern participating in the joint venture. [The 
offeror shall enter the name or names of the EDWOSB concern and 
other small businesses that are participating in the joint venture: 
___--.] Each EDWOSB concern participating in the joint venture shall 
submit a separate signed copy of the EDWOSB representation.
    (6) [Complete only if the offeror represented itself as a small 
business concern in paragraph (c)(1) of this provision.] The offeror 
represents as part of its offer that it [square] is, [square] is not 
a veteran-owned small business concern.
    (7) [Complete only if the offeror represented itself as a 
veteran-owned small business concern in paragraph (c)(6) of this 
provision.] The offeror represents as part of its offer that it 
[square] is, [square] is not a service-disabled veteran-owned small 
business concern.
    (8) [Complete only if the offeror represented itself as a small 
business concern in paragraph (c)(1) of this provision.] The offeror 
represents, as part of its offer, that--
    (i) It [square] is, [square] is not a HUBZone small business 
concern listed, on the date of this representation, on the List of 
Qualified HUBZone Small Business Concerns maintained by the Small 
Business Administration, and no material changes in ownership and 
control, principal office, or HUBZone employee percentage have 
occurred since it was certified in accordance with 13 CFR Part 126; 
and
    (ii) It [square] is, [square] is not a HUBZone joint venture 
that complies with the requirements of 13 CFR Part 126, and the 
representation in paragraph (c)(8)(i) of this provision is accurate 
for each HUBZone small business concern participating in the HUBZone 
joint venture. [The offeror shall enter the names of each of the 
HUBZone small business concerns participating in the HUBZone joint 
venture: ___--.] Each HUBZone small business concern participating 
in the HUBZone joint venture shall submit a separate signed copy of 
the HUBZone representation.
* * * * *


0
34. Amend section 52.219-2 by revising the introductory text to read as 
follows:


52.219-2   Equal Low Bids.

    As prescribed in 19.309(b), insert the following provision:
* * * * *

0
35. Amend section 52.219-4 by--
0
a. Revising the date of the clause;
0
b. Removing paragraph (b)(3); and
0
c. Redesignating paragraph (b)(4) as (b)(3).
    The revision reads as follows:


52.219-4  Notice of Price Evaluation Preference for HUBZone Small 
Business Concerns.

* * * * *

Notice of Price Evaluation Preference for HUBZone Small Business 
Concerns (Oct 2014)

* * * * *


0
36. Amend section 52.219-8 by revising the date of the clause and 
paragraphs (a) through (c) to read as follows:


52.219-8  Utilization of Small Business Concerns.

* * * * *

Utilization of Small Business Concerns (Oct 2014)

    (a) Definitions. As used in this contract--
    HUBZone small business concern means a small business concern 
that appears on the List of Qualified HUBZone Small Business 
Concerns maintained by the Small Business Administration.
    Service-disabled veteran-owned small business concern--
    (1) Means a small business concern--
    (i) Not less than 51 percent of which is owned by one or more 
service-disabled veterans or, in the case of any publicly owned 
business, not less than 51 percent of the stock of which is owned by 
one or more service-disabled veterans; and
    (ii) The management and daily business operations of which are 
controlled by one or more service-disabled veterans or, in the case 
of a service-disabled veteran with permanent and severe disability, 
the spouse or permanent caregiver of such veteran.
    (2) Service-disabled veteran means a veteran, as defined in 38 
U.S.C. 101(2), with a disability that is service-connected, as 
defined in 38 U.S.C. 101(16).
    Small business concern means a small business as defined 
pursuant to Section 3 of the Small Business Act and relevant 
regulations promulgated pursuant thereto.
    Small disadvantaged business concern, consistent with 13 CFR 
124.1002, means a small business concern under the size standard 
applicable to the acquisition, that--
    (1) Is at least 51 percent unconditionally and directly owned 
(as defined at 13 CFR 124.105) by--
    (i) One or more socially disadvantaged (as defined at 13 CFR 
124.103) and economically disadvantaged (as defined at 13 CFR 
124.104) individuals who are citizens of the United States; and
    (ii) Each individual claiming economic disadvantage has a net 
worth not exceeding $750,000 after taking into account the 
applicable exclusions set forth at 13 CFR 124.104(c)(2); and
    (2) The management and daily business operations of which are 
controlled (as defined at 13.CFR 124.106) by individuals, who meet 
the criteria in paragraphs (1)(i) and (ii) of this definition.
    Veteran-owned small business concern means a small business 
concern--
    (1) Not less than 51 percent of which is owned by one or more 
veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any 
publicly owned business, not less than 51 percent of the stock of 
which is owned by one or more veterans; and
    (2) The management and daily business operations of which are 
controlled by one or more veterans.
    Women-owned small business concern means a small business 
concern--
    (1) That is at least 51 percent owned by one or more women, or, 
in the case of any publicly owned business, at least 51 percent of 
the stock of which is owned by one or more women; and
    (2) Whose management and daily business operations are 
controlled by one or more women.
    (b) It is the policy of the United States that small business 
concerns, veteran-owned small business concerns, service-disabled 
veteran-owned small business concerns, HUBZone small business 
concerns, small disadvantaged business concerns, and women-owned 
small business concerns shall have the maximum practicable 
opportunity to participate in performing contracts let by any 
Federal agency, including contracts and subcontracts for subsystems, 
assemblies, components, and related services for major

[[Page 61754]]

systems. It is further the policy of the United States that its 
prime contractors establish procedures to ensure the timely payment 
of amounts due pursuant to the terms of their subcontracts with 
small business concerns, veteran-owned small business concerns, 
service-disabled veteran-owned small business concerns, HUBZone 
small business concerns, small disadvantaged business concerns, and 
women-owned small business concerns.
    (c) The Contractor hereby agrees to carry out this policy in the 
awarding of subcontracts to the fullest extent consistent with 
efficient contract performance. The Contractor further agrees to 
cooperate in any studies or surveys as may be conducted by the 
United States Small Business Administration or the awarding agency 
of the United States as may be necessary to determine the extent of 
the Contractor's compliance with this clause.
* * * * *


0
37. Amend section 52.219-9 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (d)(10)(iii) ``Historically'' and adding 
``for NASA only, Historically'' in its place; and
0
c. Removing paragraph (l)(2)(iii); and
0
d. Amend Alternate III by--
0
1. Revising the date of the Alternate III;
0
2. Removing from paragraph (d)(10)(iii) ``Historically'' and adding 
``for NASA only, Historically'' in its place; and
0
3. Removing paragraph (l)(2)(iii).
    The revisions read as follows:


52.219-9  Small Business Subcontracting Plan.

* * * * *

Small Business Subcontracting Plan (Oct 2014)

* * * * *
    Alternate III (Oct 2014). * * *
* * * * *

0
38. Amend section 52.219-10 by revising the date of the clause and 
removing from paragraph (b) ``and women-owned'' and adding ``small 
disadvantaged business, and women-owned'' in its place.
    The revision reads as follows:


52.219-10  Incentive Subcontracting Program.

* * * * *

Incentive Subcontracting Program (Oct 2014)

* * * * *


52.219-22, 52.219-23, 52.219-24, 52.219-25, and 52.219-26  [Removed and 
Reserved]

0
39. Remove and reserve sections 52.219-22, 52.219-23, 52.219-24, 
52.219-25, and 52.219-26.
0
40. Amend section 52.219-28 by revising the introductory text to read 
as follows:


52.219-28  Post-Award Small Business Program Rerepresentation.

    As prescribed in 19.309(c), insert the following clause:
* * * * *

0
41. Amend section 52.226-2 by revising the date of the provision, and 
in paragraph (a) the definition ``Historically black college or 
university'' to read as follows:


52.226-2  Historically Black College or University and Minority 
Institution Representation.

* * * * *

Historically Black College or University and Minority Institution 
Representation (Oct 2014)

    (a) * * *
    Historically black college or university means an institution 
determined by the Secretary of Education to meet the requirements of 
34 CFR 608.2.
* * * * *


0
42. Amend section 52.244-6 by revising the date of the clause and 
paragraph (c)(1)(iii) to read as follows:


52.244-6  Subcontracts for Commercial Items.

* * * * *

Subcontracts for Commercial Items (Oct 2014)

* * * * *
    (c)(1) * * *
    (iii) 52.219-8, Utilization of Small Business Concerns (OCT 
2014) (15 U.S.C. 637(d)(2) and (3)), if the subcontract offers 
further subcontracting opportunities. If the subcontract (except 
subcontracts to small business concerns) exceeds $650,000 ($1.5 
million for construction of any public facility), the subcontractor 
must include 52.219-8 in lower tier subcontracts that offer 
subcontracting opportunities.
* * * * *

PART 53--FORMS

0
43. Revise section 53.219 to read as follows:


53.219  Small business programs.

    The following standard form is prescribed for use in reporting 
small business (including Alaska Native Corporations and Indian 
tribes), veteran-owned small business, service-disabled veteran-owned 
small business, HUBZone small business, small disadvantaged business 
(including Alaska Native Corporations and Indian tribes) and women-
owned small business subcontracting data, as specified in part 19: SF 
294, (Rev. OCT 2014) Subcontracting Report for Individual Contracts. SF 
294 is authorized for local reproduction.
0
44. Amend section 53.301-294 by revising the form to read as follows:


53.301-294  Subcontracting Report for Individual Contracts.

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53.302-312  [Removed]

0
45. Remove section 53.302-312.

[FR Doc. 2014-24236 Filed 10-10-14; 8:45 am]
BILLING CODE 6820-EP-C