Source: http://farsite.hill.af.mil/reghtml/changes/fac/fac2005-77.htm
Timestamp: 2017-10-24 00:12:24
Document Index: 133914992

Matched Legal Cases: ['arts 1', 'arts 2', 'art 16', 'arts 1', 'art 19', 'art 19', 'art 19', 'art 19', 'art 19', 'art 19', 'art 19', 'art 19', 'art 19', 'art 19', 'art 19', 'art 19', 'art 19', 'art 19', 'arts 19', 'arts 19', 'arts 19', 'arts 1', 'arts 1', 'arts 1', 'art 19', 'art 19', 'art 19', 'art 19', 'art 127', 'art 127', 'art 126', 'art 126', 'art 19']

FAC2005-77
[FR Doc No: 2014-24233]
42 CFR Parts 1, 2, 4, et al.
Federal Register / Vol. 79 , No. 198 / Tuesday, October 14, 2014 / Rules and Regulations
[Docket No. FAR 2014-0051, Sequence No. 5]
SUMMARY: This document summarizes the Federal Acquisition Regulation (FAR) rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) in this Federal Acquisition Circular (FAC) 2005-77. A companion document, the Small Entity Compliance Guide (SECG), follows this FAC. The FAC, including the SECG, is available via the Internet at http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: The analyst whose name appears in the table below in relation to the FAR case. Please cite FAC 2005-77 and the specific FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.
Federal Contracting Programs for Minority-Owned and Other Small Businesses.
Uddowla
Irrevocable Letters of Credit.
Uniform Procurement Identification.
SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the actual revisions and/or amendments made by these rules, refer to the specific item numbers and subjects set forth in the documents following these item summaries. FAC 2005-77 amends the FAR as specified below:
Item I--Federal Contracting Programs for Minority-Owned and Other Small Businesses (FAR Case 2009-016)
Item II--Irrevocable Letters of Credit (FAR Case 2011-023)
Item III--Uniform Procurement Identification (FAR Case 2012-023)
[FR Doc No: 2014-24240]
48 CFR Parts 2 and 4
[FAC 2005-77; FAR Case 2012-023; Item III; Docket 2012-0023, Sequence 1]
RIN 9000-AM60
SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement a uniform Procurement Instrument Identification (PIID) numbering system, which will require the use of Activity Address Codes (AACs) as the unique identifier for contracting offices and other offices, in order to standardize procurement transactions across the Federal Government.
DATES: Effective: November 13, 2014.
FOR FURTHER INFORMATION CONTACT: Mr. Edward Loeb, Procurement Analyst, at 202-501-0650, 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 2012-023.
A. Summary of Significant Changes From the Proposed Rule 1. At FAR 4.1601 the implementation deadline for new unique procurement instrument identifiers has been rescheduled and will now be no later than October 1, 2017. In the proposed rule there was a FAR multistep transition process being proposed, but the Councils have delayed the implementation date and deleted what was identified at FAR 4.1601 as the ``transition'' requirement, so that all agencies will be responsible for completing the transition to the PIID procedures of this rule by October 1, 2017.
2. At FAR 4.1601 the ``End state'' requirement is modified to read ``No later than October 1, 2017, agencies shall comply with paragraph (a) of this section and use the requirements in 4.1602 and 4.1603 for all new solicitations and awards.'' This clarifies that the rule does not intend to modify the identifiers for existing solicitations or contracts.
Comment: One respondent recommended not applying the new requirements to historical documents due to the major system changes and cross referencing issues that would result. Another respondent considered the prospect of modifying existing awards to be infeasible due to the changes that would be necessary across other systems such as SAM, FPDS-NG, FAADS Plus/USASpending.gov, FedBizOpps, and Grants.gov. Response: The final rule only applies the new requirements to new solicitations and contracts, with an implementation deadline of October 1, 2017 (see FAR 4.1601(b)(2)).
Response: It is understood that this rule may have a significant cost for implementation; however, the GAT Board, Office of Management and Budget (OMB) and the FAR Council have determined that in order to achieve the noted accountability and transparency goals of the rule, the changes must be made. Office of Federal Procurement Policy (OFPP) will monitor agency progress in implementing this rule to ascertain if any changes are required.5. FAR 4.1602(c), Clarification Concerning ``Additional Agency Information''
Comment: One respondent requested clarification of what is meant by the language at FAR 4.1602(c) regarding ``Additional agency specific identification information.''
6. FAR 4.1603, Clarification Concerning ``Until It Has Been Determined''
Comment: One respondent requested clarification of what is meant by the language at FAR 4.1603(b)(2)(iii) regarding ``until it has been determined.''
Response: Assistance actions are outside of the scope of this rule. However, this comment has been provided to OMB for consideration.9. Address Activity Codes
2. Amend section 2.101 in paragraph (b)(2) by adding, in alphabetical order, the definition ``Activity Address Code (AAC)'' to read as follows:
3. Amend section 4.605 by--
a. Removing from paragraph (a) ``4.1601,'' and adding ``4.601 to 4.1603,'' in its place; and
(e) Office codes. Agencies shall by October 1, 2015--
(iii) Contracts of all types except indefinite-delivery contracts (see subpart 16.5)
(iv) Indefinite-delivery contracts (including Federal Supply Schedules, Governmentwide acquisition contracts(GWACs), and multi-agency contracts
(v) Reserved for future Federal Governmentwide us
(vi) Task orders, delivery orders or calls under--Indefinite-delivery contracts (including Federal Supply Schedules, Governmentwide acquisition contracts (GWACs), and multi-agency contracts); Blanket purchase agreements; or Basic ordering agreements.
(vii) Basic ordering agreements
(ix) Do not use this letter`
numbers or alpha-numeric numbers for use by its various components.
modifications to contracts, orders, and agreements using a six position alpha or numeric, or a combination thereof, added to the 13-17 character PIID. For example, a modification could be numbered P00001. This would be added to the end of the 13-17 character PIID illustrated in (a)(5) of this section.
[FR Doc No: 2014-24239]
48 CFR Parts 1, 28, and 52
[FAC 2005-77; FAR Case 2011-023; Item II; Docket 2011-0023, Sequence 1]
RIN 9000-AM53
SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to remove all references to Office of Federal Procurement Policy (OFPP) Pamphlet No. 7, Use of Irrevocable Letters of Credit, and also provide updated sources of data required to verify the credit worthiness of a financial entity issuing or confirming an irrevocable letter of credit (ILC).
FOR FURTHER INFORMATION CONTACT: Ms. Cecelia L. Davis, Procurement Analyst, at 202-219-0202, 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 2011-023.
FAR 28.204-3 currently cites OFPP Pamphlet No. 7 at paragraphs (g)(1) and (h)(1) as an available resource that may be used to obtain information on credit rating services or investment grade ratings of financial entities issuing or confirming ILCs because it provides overarching policy and specific guidance on the use of ILCs, but some of the information is outdated. Therefore, instead of referencing the OFPP Pamphlet, this rule--
(2) Provides additional sources of data required to verify the credit worthiness of a financial entity issuing or confirming an ILC, as summarized on the Web sites of the Federal Deposit Insurance Corporation (http://www2.fdic.gov/idasp/index.asp) and Securities and Exchange Commission http://www.sec.gov/answers/nrsro.htm).
Response: The intent of the proposed rule, as stated in the
published preamble is as follows: ``. . . to remove all references to the Office of Federal Procurement Policy (OFPP) Pamphlet No. 7, Use of Irrevocable Letters of Credit (ILC), and also provide updated sources of data required to verify the credit worthiness of a financial entity issuing or confirming an ILC.'' As a result, the inclusion of ISP 98 is considered to be a substantive change and thus beyond the scope of this case.
The rule does not contain any new 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). However, there is a pre-existing requirement at FAR 52.228-14 for offerors/contractors to provide the contacting officer a credit rating that indicates the financial institutions have the required credit rating as of the date of issuance of the ILC. OMB Control Number 9000-0045, titled: Bid Guarantees, Performance and Payment Bonds, and Alternative Payment Protections, covers the information collection requirements associated with alternative payment protections (including ILCs) and acceptable security for bonds (including ILCs). ILCs are seldom offered as alternative payment protection or security for a bid bond, performance bond, or payment bond. The negligible burden of providing a credit rating along with the required ILC is already sufficiently covered by the approved burden hours in 9000-0045.
2. Amend section 1.106, in the list following the introductory text, by adding in numerical sequence, FAR segment ``52.228-14'' and its corresponding OMB Control No. ``9000-0045''.
(2) To support the credit rating of the financial institution(s) issuing or confirming the ILC, the contracting officer shall verify the following information: (i) Federal insurance: Each financial institution is federally insured. Verification of federal insurance is available through the Federal Deposit Insurance Corporation (FDIC) institution directory at the Web site http://www2.fdic.gov/idasp/index.asp.
5. This Letter of Credit is subject to the Uniform Customs and Practice (UCP) for Documentary Credits, International Chamber of Commerce Publication No.__-- (Insert version in effect at the time of ILC issuance, e.g., ``Publication 600, 2006 edition'') and to the extent not inconsistent therewith, to the laws of __--[State of confirming financial institution, if any, otherwise State of issuing financial institution].
5. This confirmation is subject to the Uniform Customs and Practice (UCP) for Documentary Credits, International Chamber of Commerce Publication No.__-- (Insert version in effect at the time of ILC issuance, e.g., ``Publication 600, 2006 edition'') and to the extent not inconsistent therewith, to the laws of__--[State of confirming financial institution].
[FR Doc No: 2014-24236]
[FAC 2005-77; FAR Case 2009-016; Item I; Docket 2011-0090, Sequence 1]
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.
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.
The changes made to the proposed rule reflected in the final rule are summarized as follows:
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);
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.
FAR 19.000(a)(8), which was inadvertently omitted in the proposed rule, has been partially reinstated;
FAR 19.304 and 19.305 have been revised to ensure the guidance is aligned with the subject matter of these sections;
FAR 19.1307(d) and FAR 52.219-4(b)(3) have been removed;
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;
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
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.
FAR 53.302-312, Optional Form 312, Small Disadvantaged Business (SDB) Participation Report, has been removed.
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.
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.
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 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.
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.
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.
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
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:
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:
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''.
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:
4. Amend section 4.1202 by removing and reserving paragraph (k).
5. Amend section 12.301 by removing the last sentence from paragraph (b)(2).
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.
8. Amend section 15.304 by removing paragraph (c)(4); and redesignating paragraphs (c)(5) and (6) as paragraphs (c)(4) and (5), respectively.
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.
10. Amend section 15.503 by--
c. Redesignating paragraphs (a)(2)(i)(C) through (E) as paragraphs (a)(2)(i)(B) through (D), respectively.
(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--
11. Amend section 19.000 by--
a. Revising paragraphs (a) introductory text and (a)(8);
b. Removing paragraphs (a)(9) and (10); and
c. Redesignating paragraphs (a)(11) and (12) as paragraphs (a)(9) and
(10), respectively.
(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;
12. Amend section 19.201 by--
b. Redesignating paragraphs (c) through (f) as paragraphs (b) through
(e), respectively;
c. Removing from the newly designated paragraph (c)(12) ``(d)(11)'' and adding ``(c)(11)'' in its place; and
d. Removing newly designated paragraph (e).
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.
(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.
This section applies to reviews and protests of a small business concern's SDB status as a prime contractor or subcontractor.
(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).
16. Amend section 19.309 by removing paragraph (b) and redesignating paragraphs (c) and (d) as paragraphs (b) and (c), respectively.
17. Amend section 19.703 by revising the first sentence of paragraph (a)(2) to read as follows:
(2) In connection with a subcontract, the contracting officer or the SBA may protest the disadvantaged status of a proposed subcontractor. * * *
19. Amend section 19.705-4 by revising the last sentence of paragraph (c) to read as follows:
(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.
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]
21. Remove and reserve subpart 19.11, consisting of sections 19.1101 through 19.1104.
Subpart 19.12 [Removed and Reserved]
22. Remove and reserve subpart 19.12, consisting of sections 19.1201 through 19.1204.
23. Amend section 19.1307 by removing paragraph (d) and redesignating paragraph (e) as paragraph (d).
24. Amend section 22.1006 by--
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;
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
c. Removing from paragaraph (e)(4)(i) ``52.204-8(c)(2)(iv)'' and adding ``52.204-8(c)(2)(iii)'' in its place.
25. Amend section 26.304 by removing the last sentence.
26. Amend section 36.501 by removing from paragraph (b) ``19.11,''.
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.
28. Amend section 52.204-8 by--
d. Redesignating paragraphs (c)(2)(ii) through (vii) as (c)(2)(i) through (vi), respectively.
Annual Representations and Certifications (Oct 2014)
29. Amend section 52.212-2 by--
b. Removing from paragraph (a) ``(iv) small disadvantaged business participation;''
52.212-2 Evaluation--Commercial Items.
Evaluation--Commercial Items (Oct 2014)
30. Amend section 52.212-3 by--
b. Adding in paragraph (a), in alphabetical order, the definition ``Small disadvantaged business concern'';
c. Removing from paragraph (c)(4) ``, for general statistical purposes,'';
d. Removing paragraph (c)(10);
e. Redesignating paragraph (c)(11) as paragraph (c)(10);
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;
g. Revising Alternate I; and
h. Removing Alternate II.
Offeror Representations and Certifications--Commercial ITEMS (Oct 2014)
Alternate I (OCT 2014)_. As prescribed in 12.301(b)(2), add the following paragraph (c)(11) to the basic provision:
_Black American.
_Hispanic American.
_Native American (American Indians, Eskimos, Aleuts, or Native Hawaiians).
_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.
31. Amend 52.212-5 by--
b. Revising paragraphs (b)(11), (b)(12), (b)(16), (b)(17)(i), and (b)(17)(iv);
c. Removing paragraphs (b)(21) through (23);
d. Redesignating paragraphs (b)(24) through (56) as paragraphs (b)(21) through (53), respectively;
e. Revising paragraph (e)(1)(ii); and
f. Revising the date and paragraph (e)(1)(ii)(C) of Alternate II.
Contract Terms and Conditions Required to Implement Statutes or Executive Orders--Commercial Items (Oct 2014)
_(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.
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.
32. Amend section 52.213-4 by revising the date of the clause and paragraph (a)(2)(viii) to read as follows:
Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items) (Oct 2014)
(viii) 52.244-6, Subcontracts for Commercial Items (OCT 2014)_
33. Amend section 52.219-1 by revising the date of the provision and paragraphs (a) through (c) to read as follows:
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
(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].
(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 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.
(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.
34. Amend section 52.219-2 by revising the introductory text to read as follows:
35. Amend section 52.219-4 by--
c. Redesignating paragraph (b)(4) as (b)(3).
36. Amend section 52.219-8 by revising the date of the clause and paragraphs (a) through (c) to read as follows:
Utilization of Small Business Concerns (Oct 2014)
(a) Definitions. As used in this contract--
37. Amend section 52.219-9 by--
b. Removing from paragraph (d)(10)(iii) ``Historically'' and adding ``for NASA only, Historically'' in its place; and
c. Removing paragraph (l)(2)(iii); and
d. Amend Alternate III by--
1. Revising the date of the Alternate III;
2. Removing from paragraph (d)(10)(iii) ``Historically'' and adding ``for NASA only, Historically'' in its place; and
3. Removing paragraph (l)(2)(iii).
Small Business Subcontracting Plan (Oct 2014)
Alternate III (Oct 2014). * * *
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.
39. Remove and reserve sections 52.219-22, 52.219-23, 52.219-24, 52.219-25, and 52.219-26.
40. Amend section 52.219-28 by revising the introductory text to read as follows:
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:
42. Amend section 52.244-6 by revising the date of the clause and paragraph (c)(1)(iii) to read as follows:
Subcontracts for Commercial Items (Oct 2014)
(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.
43. Revise section 53.219 to read as follows:
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.
44. Amend section 53.301-294 by revising the form to read as follows:
[GRAPHIC] [TIFF OMITTED] TR14OC14.004
[GRAPHIC] [TIFF OMITTED] TR14OC14.005
[GRAPHIC] [TIFF OMITTED] TR14OC14.006
[GRAPHIC] [TIFF OMITTED] TR14OC14.007
53.302-312 [Removed]
45. Remove section 53.302-312.
[FR Doc. 2014-24236 Filed 10-10-14; 8:45 am]
[FR Doc No: 2014-24242]
[Docket No. FAR 2014-0052, Sequence No. 5]
SUMMARY: This document is issued under the joint authority of DOD, GSA, and NASA. This Small Entity Compliance Guide has been prepared in accordance with section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. It consists of a summary of the rules appearing in Federal Acquisition Circular (FAC) 2005-77, which amends the Federal Acquisition Regulation (FAR). An asterisk (*) next to a rule indicates that a regulatory flexibility analysis has been prepared. Interested parties may obtain further information regarding these rules by referring to FAC 2005-77, which precedes this document. These documents are also available via the Internet at http://www.regulations.gov.
DATES: October 14, 2014.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact the analyst whose name appears in the table below. Please cite FAC 2005-77 and the FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.