        DEPARTMENT OF DEFENSE
        GENERAL SERVICES ADMINISTRATION
        NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
        48 CFR Parts 19, 42, and 52
        [FAR Case 2014-004; Docket No. 2014-0004; Sequence No. 1]
        RIN 9000-AM98
        Federal Acquisition Regulations: FAR Case 2014-004, Payment of Subcontractors

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

          ACTION:
          Proposed rule.

          SUMMARY:
          DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to implement a section of the Small Business Jobs Act of 2010. This statute requires contractors to notify the contracting officer in writing if the contractor pays a reduced price to a small business subcontractor, or if the contractor's payment to a small business contractor is more than 90 days past due.

          DATES:
          Interested parties should submit written comments to the Regulatory Secretariat at one of the addresses shown below on or before March 21, 2016 to be considered in the formulation of a final rule.

          ADDRESSES:
          Submit comments identified by FAR Case 2014-004 by any of the following methods:
          • Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching for “FAR Case 2014-004”. Select the link “Comment Now” that corresponds with FAR Case 2014-004. Follow the instructions provided on the screen. Please include your name, company name (if any), and “FAR Case 2014-004” in all attached documents.
          • Mail: General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW., Second floor, ATTN: Ms. Flowers, Washington, DC 20405.

            Instructions: Please submit comments only and cite FAR Case 2014-004, Payment of Subcontractors in all correspondence related to this case. Comments received generally will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail).

          FOR FURTHER INFORMATION CONTACT:
          Mr. Curtis E. Glover, Sr., Procurement Analyst, at 202-501-1448 for clarification of content. Please cite FAR case 2014-004. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.

        SUPPLEMENTARY INFORMATION:
        I. Background

        DoD, GSA, and NASA are proposing to implement section 1334 of the Small Business Jobs Act of 2010 (Pub. L. 111-240) and the Small Business Administration's (SBA's) implementation of section 1334 with its final rule, Small Business Subcontracting, published in the Federal Register at 78 FR 42391, on July 16, 2013, and effective August 15, 2013. This statute requires the prime contractor to self-report to the contracting officer when the prime contractor makes late or reduced payments to small business subcontractors. In addition, the contracting officer is required to record the identity of contractors with a history of late or reduced payments to small business subcontractors in the Federal Awardee Performance and Integrity Information System (FAPIIS).
        The FAR is proposed to be amended as follows to implement the requirements of section 1334:
        FAR 19.701 is revised to add definitions for “reduced payment” and “untimely payment.”
        FAR 19.704(a)(12) and 52.219-9(d)(12) are added to require that the offeror will pay its small business subcontractors on time and in accordance with the terms and conditions of the subcontract, and notify the contracting officer when the prime contractor pays a reduced or an untimely payment to a small business subcontractor.
        FAR 42.1502(g) is revised to include in the past performance evaluation reduced or untimely payments reported to the contracting officer by the prime contractor in accordance with the clause at 52.242-XX, Payments to Small Business Subcontractors, that are determined by the contracting officer to be unjustified.
        FAR 42.1503(b)(2)(v) is revised by including “reduced or untimely payments to small business subcontractors when a subcontracting plan is required in accordance with 19.702(a)” to the list of “Small business subcontracting” past performance evaluation factors.
        FAR 42.1503(h)(1)(vi) is added to the list of “other contractor performance information” that will be reported to FAPIIS and considered by contracting officers in evaluating contractor past performance to include a contracting officer's determination that a contractor has a history of unjustified reduced or untimely payments to small business subcontractors.
        FAR table 42-2, “Evaluation Ratings Definitions (for the Small Business Subcontracting Evaluation Factor, When 52.219-9 is Used)” is revised to include the contracting officer's evaluation of a prime contractor's self-reported unjustified reduced or untimely payments (history of three or more) to small business subcontractors.
        FAR 42.1504 is added to require contracting officers to insert the clause at 52.242-XX, Payment to Small Business Subcontractors, in all solicitations and contracts containing the clause at 52.219-9, Small Business Subcontracting Plan.
        FAR clause 52.219-9, Small Business Subcontracting Plan, is revised to add definitions for “reduced payment” and “untimely payment.”

        FAR clause 52.242-XX, Payment to Small Business Subcontractors, is added to FAR part 52 to require the contractor to provide a written notice to the contracting officer if it makes a payment to a small business subcontractor that is for less than the amount agreed upon in a subcontract in accordance with its terms and conditions for supplies and services for which the Government has paid the prime contractor, or if payment to a subcontractor that is more than 90 days past due under the terms and conditions of a subcontract for supplies and services for which the Government has paid the prime contractor. In accordance with the SBA final rule, this proposed rule would apply to prime contracts that require small business subcontracting plans. For the reasons explained in section II, below, the proposed rule would cover acquisitions for commercial items, including acquisitions for commercial-off-the-shelf (COTS) items.
        II. Determinations
        The FAR Council has made the following preliminary determinations with respect to the rule's application of section 1334 of the Small Business Jobs Act of 2010, entitled “Payment of Subcontractors,” to contracts for the acquisition of commercial items:
        A. Applicability to Contracts for the Acquisition of Commercial Items
        41 U.S.C. 1906 governs the applicability of laws to the acquisition of commercial items (other than COTS items). This statute limits the applicability of laws to the acquisition of commercial items. However, section 1906 provides that the acquisition of commercial items will not be exempt from a provision of law if—
        • The law contains criminal or civil penalties;
        • The law specifically refers to 41 U.S.C. 1906 and states that the law applies to the acquisition of commercial items; or
        • The FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt the acquisition of commercial items from the provision of law.
        Section 1334 of the Small Business Jobs Act of 2010 is silent on the applicability of the requirements set forth above to contracts for commercial items and does not provide for criminal or civil penalties. Therefore, under 41 U.S.C. 1906, section 1334 does not apply to acquisitions for commercial items unless the FAR Council makes a written determination that such application is in the best interest of the Federal Government.
        In making its initial determination of whether application of section 1334 to commercial items is in the best interest of the Federal Government, the FAR Council considered the following factors: (i) The benefits of the policy in furthering Administration goals, (ii) the extent to which the benefits of the policy would be reduced if an exemption is provided for commercial items, and (iii) the burden on contractors if the policy is applied to acquisitions for commercial items.
        With respect to the first factor, this Administration has taken a number of steps to ensure that the government promptly and efficiently pays small businesses when they contract to provide goods and services to the government. These steps are part of the Administration's strong commitment to supporting small business growth and prosperity, as an engine to drive economic activity and job creation throughout the country. On September 14, 2011, the Office of Management and Budget (OMB) issued Memorandum M 11-32, titled: “Accelerating Payments to Small Businesses for Goods and Services.” That memorandum established “the Executive Branch policy that, to the full extent permitted by law, agencies shall make their payments to small business contractors as soon as practicable, with the goal of making payments within 15 days” of receipt of relevant documents. OMB explained that such acceleration helps to improve cash flow for small businesses, increases liquidity, unlocks capital for the purposes of investment and growth, and increases small business participation in Federal contracting. To further preserve and increase small business participation in all levels of federal contracting through improved cash flow, OMB broadened the policy to reach small business subcontractors. Memorandum M-12-16, “Providing Prompt Payment to Small Business Subcontractors,” established the Executive Branch policy that, to the full extent permitted by law, agencies shall take certain steps to accelerate payments to all prime contractors, in order to allow them to provide prompt payments to small business subcontractors. The policy was extended by OMB Memoranda M-13-15 and M-14-10. In 2014, the FAR Council finalized FAR changes to implement this policy and provide a clause (see FAR clause 52.232-40) to support the acceleration of payments to subcontractors.
        By instilling accountability for untimely payment to subcontractors, section 1334, SBA's implementing regulation, and this rule further the benefits and policies goals described above. Specifically, the proposed rule helps to create greater cash flow certainty, which is critical for small business subcontractors and reduces a potential barrier to their participation in federal contracting.

        With respect to the second factor (the impact of excluding commercial item acquisitions on the overall benefits of the underlying policy), the FAR Council believes based on an analysis of Fiscal Year 2014 Federal Procurement Data System (FPDS) data that less than one-third of spending on new contracts over $650,000 (i.e., the threshold for the applicability of this rule) are for commercial item acquisitions, so exclusion could have a material impact on these benefits.
        With respect to the third factor, burden on contractors selling commercial items, the initial analysis under the Paperwork Reduction Act (PRA) suggests that the total number of unique entities in Fiscal Year (FY) 2014 that are covered under this requirement (selling either commercial or non-commercial items) is 2,279 and the estimated reporting time per respondent is 2 hours. See the discussion on the PRA at Section VI, below. The FAR Council further estimates that the number of covered entities selling commercial items is not more than 40 percent of this stated total, and some of these entities may only sell COTs items, which as explained below are covered by the rule pursuant to the requirements of 41 U.S.C. 1907.
        Based on the above benefit and burden considerations, the FAR Council has made a preliminary determination that it is in the best interest of the government to apply section 1334 to commercial item acquisitions: covering commercial items helps to further an important ongoing Administration initiative to help ensure effective cash flow to small business subcontractors, which in turn helps to strengthen their participation in federal contracting, whereas exclusion of commercial item acquisitions would remove a significant amount of contracting activity from the accountability that this rule imposes on prime contractors to meet their payment commitments to their small business subcontractors. The limited information currently available to the FAR Council on reporting in accordance with the requirements of this rule suggests the burdens are not expected to be significant. Moreover, the relief provided by an exemption would be limited, since COTS are covered for the reason explained below.

        The Council welcomes public feedback on its initial analysis and preliminary determination to cover commercial items, including additional insight on the need for and cost of retrofitting payment systems to meet the requirements in the rule. This feedback will be considered before the FAR Council finalizes its analysis of benefits and burdens and makes a final determination on the scope of the final rule.
        B. Applicability to Contracts for the Acquisition of COTS Items
        41 U.S.C. 1907 governs the applicability of laws to the acquisition of COTS items. This statute limits the applicability of laws when agencies are acquiring COTS items. However, section 1907 provides similar requirements for a law to be applied to COTS items where the law contains criminal or civil penalties, refers to section 1907 and states the law applies to COTS, or where the Administrator for Federal Procurement Policy determines it would not be in the best interest of the Federal Government to exempt the acquisition of COTS items from the provision of law. Of particular relevance to the instant rulemaking, section 1907 further provides that the acquisition of COTS items will not be exempt from a provision of law if the law concerns—
        • Authorities or responsibilities under section 15 of the Small Business Act (15 U.S.C. 644); or

        • Bid protest procedures developed under the authority of 31 U.S.C. 3551 et seq.; 10 U.S.C. 2305(e) and (f); or 41 U.S.C. 3706 and 3707.
        Section 1334 amends section 8(d) of the Small Business Act (15 U.S.C. 637(d)) to establish the requirement for a prime contractor for a covered contract to provide written notification to the contracting officer if the contractor pays a reduced price to a subcontractor for goods and services upon completion of the responsibilities of the subcontractor or the payment to a subcontractor is more than 90 days past due for goods or services provided for the covered contract for which the Federal agency has paid the prime contractor.
        Section 1334 requires a contracting officer of a covered contract to consider unjustified untimely or reduced payments to a small business subcontractor of the covered contract in the prime contractor's past performance evaluation. The statute defines a “covered contract” as a contract under which a prime contractor is required to develop a subcontracting plan. Pursuant to section 8(d) of the Small Business Act (15 U.S.C. 637(d)), as implemented at FAR 19.702(a), a small business subcontracting plan is required in acquisitions expected to exceed $700,000 that have subcontracting opportunities. Contracts for COTS items in amounts greater than $700,000 that have subcontracting opportunities meet the definition of a “covered contract” provided in the statute.
        The law furthers the Administration's goal of supporting small business and advances the interests of small business subcontractors by encouraging prime contractors to comply with their stated subcontracting objectives. Increased compliance with subcontracting objectives will expand opportunities for small business subcontractors. Exclusion of a large segment of Federal contracting, such as acquisitions for COTS items, will limit the full implementation of these subcontracting-related objectives.
        Further, one of the primary FAR clauses implementing Federal procurement policies governing subcontracting with small business, 52.219-9, Small Business Subcontracting Plan, are currently prescribed for use in solicitations for COTS items. This rule merely revises FAR clause 52.219-9 to implement the new requirements for a prime contractor for a covered contract to provide written notification to the contracting officer if the contractor pays a reduced price to a subcontractor for goods and services upon completion of the responsibilities of the subcontractor or the payment to a subcontractor is more than 90 days past due for goods or services provided for the covered contract for which the Federal agency has paid the prime contractor. A further example that the rule should apply to COTS items is FAR clause 52.232-40, Providing Accelerated Payments to Small Business Subcontractors, which is required in all solicitations and contracts. Exclusion of acquisitions for COTS items from these requirements would create confusion among contractors and the Federal contracting workforce.
        The burden on contractors is not expected to increase significantly if the new requirements of section 1334 were applied to acquisitions for COTS items. Under the FAR clause 52.219-9, which is noted above, contractors are already required to commit to objectives for subcontracting with small business concerns under contracts for COTS items above the subcontracting plan threshold. The effort required for contractors to comply with the new requirements should be relatively small.
        The Council welcomes public feedback on its initial analysis and preliminary determination to cover COTS items, including additional insight on the need for and cost of retrofitting payment systems to meet the requirements in the rule. This feedback will be considered before the FAR Council finalizes its analysis of benefits and burdens and makes a final determination on the scope of the final rule.
        III. Executive Orders 12866 and 13563
        Executive Orders 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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This proposed rule is not a major rule under 5 U.S.C. 804.
        IV. Regulatory Flexibility Act

        DoD, GSA, and NASA expect that this proposed rule may have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.. Therefore, an Initial Regulatory Flexibility Analysis (IRFA) has been prepared consistent with 5 U.S.C. 603 and is summarized as follows:

          Section 1334 of the Small Business Jobs Act of 2010 (Public Law 111-240) and the Small Business Administration's final rule, Small Business Subcontracting, published in the Federal Register at 78 FR 42391, on July 16, 2013, require that the prime contractor self-report when the prime contractor makes reduced or untimely payments to small business subcontractors. Section 1334 also requires the contracting officer to record the identity of contractors with a history of unjustified reduced or untimely payments in FAPIIS.
          This proposed rule implements the self-reporting requirements of section 1334 by amending FAR 42.1504 to require contracting officers to include FAR clause 52.242-XX, Payments to Small Business Subcontractors, in all solicitations and contracts containing the clause at 52.219-9, Small Business Subcontracting Plan. The new FAR clause requires prime contractors to notify the contracting officer of reduced or untimely payments to small business subcontractors.

          The proposed rule also amends FAR 42.1503(h) to require contracting officers to report to FAPIIS a contractor that has a history of three or more reduced or untimely payments to small business subcontractors within a 12-month period under a single contract that are unjustified. Table 42-2 is also amended to include unjustified reduced or untimely payments to small business subcontractors as part of the definition of ratings for the “small business subcontracting” past performance evaluation factors.
          The proposed rule would apply to payments made to small businesses that are first-tier subcontractors to prime government contractors. There will be no burden on small businesses, as small businesses do not have subcontracting plans. This regulation will benefit small business subcontractors by encouraging large business prime contractors to pay small business subcontractors in a timely manner and the agreed upon contractual price.
          The rule does not duplicate, overlap, or conflict with any other Federal rules.
          The specifics of the statutory requirement and the SBA final rule do not allow for alternative implementation strategies.

        The Regulatory Secretariat has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this proposed rule on small entities.
        DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this proposed rule consistent with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2014-004) in correspondence.
        V. Paperwork Reduction Act
        The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies. The proposed rule contains information collection requirements. OMB has cleared this information collection requirement under OMB Control Number 9000-XXXX, titled: Payments to Small Business Subcontractors. FPDS for Fiscal Year (FY) 2014 lists 794 new commercial item contracts over $650,000 where the size determination was other than small and a subcontracting plan was required. FPDS for FY 2014 also lists 1,485 new non-commercial item contracts over $650,000 where the size determination was other than small and a subcontracting plan was required. It is estimated that no more than twenty percent of contractors with new commercial and non-commercial contracts where the size determination was other than small and where a subcontracting plan was required would have to notify the contracting officer that the prime contractor paid a reduced or an untimely payment to a small business subcontractor. It is also estimated that the average time required for a contractor to prepare the information for this collection is two hours. It is estimated also that the responses per respondent would be one.
        The annual reporting burden is estimated as follows:
        Respondents: 456.

        Responses per respondent: 1.

        Total annual responses: 456.

        Preparation hours per response: 2.

        Total response burden hours: 912.

          List of Subject in 48 CFR Parts 19, 42 and 52
          Government procurement.

          Dated: January 11, 2016.
          William F. Clark,
          Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

        Therefore, the DoD, GSA, and NASA propose amending 48 CFR parts 19, 42, and 52 as set forth below:
        1. The authority citation for 48 CFR parts 19, 42, and 52 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 19—SMALL BUSINESS PROGRAMS

        2. Amend section 19.701 by adding, in alphabetical order, the definitions “Reduced payment” and “Untimely payment” to read as follows:

          19.701
           Definitions.

            Reduced payment means a payment that is for less than the amount agreed upon in a subcontract in accordance with its terms and conditions, for supplies and services for which the Government has paid the prime contractor.

            Untimely payment means a payment to a subcontractor that is more than 90 days past due under the terms and conditions of a subcontract, for supplies and services for which the Government has paid the prime contractor.

        3. Amend section 19.704 by removing the period from the end of paragraph (a)(11)and adding ”; and” in its place; and adding paragraph (a)(12) to read as follows:

          19.704
          Subcontracting plan requirements.
          (a) * * *
          (12) Assurances that the offeror will pay its small business subcontractors on time and in accordance with the terms and conditions of the subcontract, and notify the contracting officer when the prime contractor pays a reduced or an untimely payment to a small business subcontractor.

          PART 42—CONTRACT ADMINISTRATION AND AUDIT SERVICES

        4. Amend section 42.1502 by revising paragraph (g) to read as follows:

          42.1502
          Policy.

          (g) Past performance evaluations shall include an assessment of the contractor's—
          (1) Performance against, and efforts to achieve, the goals identified in the small business subcontracting plan when the contract includes the clause at 52.219-9, Small Business Subcontracting Plan; and
          (2) Reduced or untimely payments (see 19.701) determined by the Contracting Officer to be unjustified to small business subcontractors.
          (i) The contracting officer shall consider and evaluate a contractor's written explanation for a reduced or an untimely payment when determining whether the reduced or untimely payment is justified.
          (ii) The contracting officer determines that a history of unjustified reduced or untimely payments has occurred when the contractor has reported three or more occasions of unjustified reduced or untimely payments under a single contract within a 12 month period (see 42.1503(h)(1)(vi) and the evaluation factors in Table 42-2).

        5. Amend section 42.1503 by—
        a. Revising paragraph (b)(2)(v);
        b. Removing from paragraph (b)(2)(vi) the phrase “late or nonpayment to subcontractors,”;
        c. Revising the introductory text of paragraph (h)(1);
        d. Removing from paragraph (h)(1)(iv) “; or” and adding a semicolon in its place;
        e. Removing the period from the end of paragraph (h)(1)(v) and adding “; or” in its place;
        f. Adding paragraph (h)(1)(vi); and
        g. Revising table 42-2.
        The revisions and additions reads as follows:

          42.1503
          Procedures.

          (b) * * *
          (2) * * *

          (v) Small business subcontracting, including reduced or untimely payments to small business subcontractors when 19.702(a) requires a subcontracting plan (as applicable, see Table 42-2).

          (h) * * *
          (1) Agencies shall ensure information is accurately reported in the FAPIIS or any successor thereto module of CPARS within 3 calendar days after a contracting officer—

          (vi) Determines that a contractor has a history of three or more unjustified reduced or untimely payments to small business subcontractors within a 12 month period (see 42.1502(g)(2)).

            Table 42-2—Evaluation Ratings Definitions
            [For the Small Business Subcontracting Evaluation Factor, when 52.219-9 is used]

              Rating
              Definition
              Note

              (a) Exceptional
              Exceeded all statutory goals or goals as negotiated. Had exceptional success with initiatives to assist, promote, and utilize small business (SB), small disadvantaged business (SDB), women-owned small business (WOSB), HUBZone small business, veteran-owned small business (VOSB), and service disabled veteran owned small business (SDVOSB). Complied with FAR 52.219-8, Utilization of Small Business Concerns. Exceeded any other small business participation requirements incorporated in the contract/order, including the use of small businesses in mission critical aspects of the program. Went above and beyond the required elements of the subcontracting plan and other small business requirements of the contract/order. Completed and submitted Individual Subcontract Reports and/or Summary Subcontract Reports in an accurate and timely manner. Did not have a history of three or more unjustified reduced or untimely payments to small business subcontractors within a 12 month period

              To justify an Exceptional rating, identify multiple significant events and state how they were a benefit to small business utilization. A singular benefit, however, could be of such magnitude that it constitutes an Exceptional rating. Small businesses should be given meaningful and innovative work directly related to the contract, and opportunities should not be limited to indirect work such as cleaning offices, supplies, landscaping, etc. Also, there should have been no significant weaknesses identified.

              (b) Very Good
              Met all of the statutory goals or goals as negotiated. Had significant success with initiatives to assist, promote and utilize SB, SDB, WOSB, HUBZone, VOSB, and SDVOSB. Complied with FAR 52.219-8, Utilization of Small Business Concerns. Met or exceeded any other small business participation requirements incorporated in the contract/order, including the use of small businesses in mission critical aspects of the program. Endeavored to go above and beyond the required elements of the subcontracting plan. Completed and submitted Individual Subcontract Reports and/or Summary Subcontract Reports in an accurate and timely manner. Did not have a history of three or more unjustified reduced or untimely payments to small business subcontractors within a 12 month period

              To justify a Very Good rating, identify a significant event and state how it was a benefit to small business utilization. Small businesses should be given meaningful and innovative opportunities to participate as subcontractors for work directly related to the contract, and opportunities should not be limited to indirect work such as cleaning offices, supplies, landscaping, etc. There should be no significant weaknesses identified.

              (c) Satisfactory
              Demonstrated a good faith effort to meet all of the negotiated subcontracting goals in the various socio-economic categories for the current period. Complied with FAR 52.219-8, Utilization of Small Business Concerns. Met any other small business participation requirements included in the contract/order. Fulfilled the requirements of the subcontracting plan included in the contract/order. Completed and submitted Individual Subcontract Reports and/or Summary Subcontract Reports in an accurate and timely manner. Did not have a history of three or more unjustified reduced or untimely payments to small business subcontractors within a 12 month period
              To justify a Satisfactory rating, there should have been only minor problems, or major problems the contractor has addressed or taken corrective action. There should have been no significant weaknesses identified. A fundamental principle of assigning ratings is that contractors will not be assessed a rating lower than Satisfactory solely for not performing beyond the requirements of the contract/order.

              (d) Marginal
              Deficient in meeting key subcontracting plan elements. Deficient in complying with FAR 52.219-8, Utilization of Small Business Concerns, and any other small business participation requirements in the contract/order. Did not submit Individual Subcontract Reports and/or Summary Subcontract Reports in an accurate or timely manner. Failed to satisfy one or more requirements of a corrective action plan currently in place; however, does show an interest in bringing performance to a satisfactory level and has demonstrated a commitment to apply the necessary resources to do so. Required a corrective action plan. Did not have a history of three or more unjustified reduced or untimely payments to small business subcontractors within a 12 month period
              To justify Marginal performance, identify a significant event that the contractor had trouble overcoming and how it impacted small business utilization. A Marginal rating should be supported by referencing the actions taken by the Government that notified the contractor of the contractual deficiency.

              (e) Unsatisfactory
              Noncompliant with FAR 52.219-8 and 52.219-9, and any other small business participation requirements in the contract/order. Did not submit Individual Subcontract Reports and/or Summary Subcontract Reports in an accurate or timely manner. Showed little interest in bringing performance to a satisfactory level or is generally uncooperative. Required a corrective action plan. Had a history of three or more unjustified reduced or untimely payments to small business subcontractors within a 12 month period
              To justify an Unsatisfactory rating, identify multiple significant events that the contractor had trouble overcoming and state how it impacted small business utilization. A singular problem, however, could be of such serious magnitude that it alone constitutes an Unsatisfactory rating. An Unsatisfactory rating should be supported by referencing the actions taken by the Government to notify the contractor of the deficiencies. When an Unsatisfactory rating is justified, the contracting officer must consider whether the contractor made a good faith effort to comply with the requirements of the subcontracting plan required by FAR 52.219-9 and follow the procedures outlined in FAR 52.219-16, Liquidated Damages-Subcontracting Plan.

            Note 1: Plus or minus signs may be used to indicate an improving (+) or worsening (−) trend insufficient to change the evaluation status.
            Note 2: N/A (not applicable) should be used if the ratings are not going to be applied to a particular area for evaluation.

        6. Add section 42.1504 to Subpart 42.15—CONTRACTOR PERFORMANCE INFORMATION to read as follows:

          42.1504
          Contract clause.
          Insert the clause at 52.242-XX, Payments to Small Business Subcontractors, in all solicitations and contracts containing the clause at 52.219-9, Small Business Subcontracting Plan.

          PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

        7. Amend section 52.212-5 by revising the date of the clause and paragraph (b)(17)(i) to 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 (Date)

          (b) * * *
          __(17)(i) 52.219-9, Small Business Subcontracting Plan (DATE) (15 U.S.C. 637(d)(4)).

        8. Amend section 52.219-9 by—
        a. Revising the date of the clause;
        b. Adding to paragraph (b), in alphabetical order, the definitions “Reduced payment” and “Untimely payment”; and
        c. Adding paragraph (d)(12).
        The revisions and additions read as follows:

          52.219-9
          Small Business Subcontracting Plan.

          Small Business Subcontracting Plan (Date)

          (b) * * *

            Reduced payment means a payment that is for less than the amount agreed upon in a subcontract in accordance with its terms and conditions, for supplies and services for which the Government has paid the prime contractor.

            Untimely payment means a payment to a subcontractor that is more than 90 days past due under the terms and conditions of a subcontract, for supplies and services for which the Government has paid the prime contractor.

          (d) * * *
          (12) The offeror shall provide assurances that the offeror will pay its small business subcontractors on time, make payments in accordance with the terms and conditions of the underlying subcontract, and notify the contracting officer when the prime contractor makes either a reduced or an untimely payment to a small business subcontractor (see 52.242-XX).

        9. Add section 52.242-XX to read as follows:

          52.242-XX
          Payments to Small Business Subcontractors
          As prescribed in 42.1504, insert the following clause:
          Payments to Small Business Subcontractors (Date)
          (a) Definitions.

            Reduced payment means a payment that is for less than the amount agreed upon in a subcontract in accordance with its terms and conditions, for supplies and services for which the Government has paid the prime contractor.

            Untimely payment means a payment to a subcontractor that is more than 90 days past due under the terms and conditions of a subcontract, for supplies and services for which the Government has paid the prime contractor.
          (b) Notice. The Contractor shall notify the Contracting Officer in writing if—
          (1) A small business subcontractor is entitled to payment under the terms and conditions of the subcontract; and
          (2) The Prime contractor makes a payment that is either reduced or untimely to the small business subcontractor, or if the Contractor failed to make a payment which is now untimely.
          (c) Content of Notice. The Contractor shall include the reason(s) for making the reduced or untimely payment in any notice required under paragraph (b).
          (End of clause)

      [FR Doc. 2016-00950 Filed 1-19-16; 8:45 am]
      BILLING CODE 6820-EP-P


        ENVIRONMENTAL PROTECTION AGENCY
        40 CFR Part 52
        [EPA-R03-OAR-2019-0483; FRL-10001-97-Region 3]
        Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania; Allegheny County Administrative Revisions to Definitions, Remedies, and Enforcement Orders Sections and Incorporation by Reference of National Ambient Air Quality Standards

          AGENCY:
          Environmental Protection Agency (EPA).

          ACTION:
          Proposed rule.

          SUMMARY:
          The Environmental Protection Agency (EPA) is proposing to approve a state implementation plan (SIP) revision formally submitted by the Commonwealth of Pennsylvania on behalf of Allegheny County. These revisions include administrative amendments made to the Allegheny County Health Department (ACHD) Rules and Regulations, Article XXI, Air Pollution Control. Specifically, the revisions added a definition for “County Council;” deleted its current listing of ambient air quality standards and added, through incorporation by reference, all national ambient air quality standards (NAAQS) promulgated by EPA; revised references to the “Board of County Commissioners” to “County Executive” or “County Council;” added the “Manager of the Air Quality Program or their respective designee” as a signatory for enforcement orders; and revised a reference from the “Bureau of Environmental Quality Division of Air Quality” to “Air Quality Program of the Department.” This action is being taken under the Clean Air Act (CAA).

          DATES:
          Written comments must be received on or before December 13, 2019.

          ADDRESSES:

          Submit your comments, identified by Docket ID No. EPA-R03-OAR-2019-0483 at https://www.regulations.gov, or via email to Spielberger.Susan@epa.gov. For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. For either manner of submission, EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be confidential business information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the For Further Information Contact section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.

          FOR FURTHER INFORMATION CONTACT:

          Erin Malone, Planning & Implementation Branch (3AD30), Air & Radiation Division, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. The telephone number is (215) 814-2190. Ms. Malone can also be reached via electronic mail at malone.erin@epa.gov.

        SUPPLEMENTARY INFORMATION:

        I. Background
        On February 15, 2019, the Commonwealth of Pennsylvania formally submitted, on behalf of Allegheny County, a revision to the Pennsylvania SIP (Revision 73).1
           The revision consists of administrative and definition amendments, as well as incorporation by reference of the NAAQS to ACHD Rules and Regulations, Article XXI, Air Pollution Control. The revision was adopted by ACHD and became effective September 25, 2013.

            1 On April 28, 2017, ACHD submitted Revision 73 to the Pennsylvania Department of Environmental Protection (PADEP). PADEP, on behalf of Allegheny County, also submitted a clarification letter dated June 24, 2019 to EPA to further clarify the revisions to sections 2101.10 and 2101.20 of Article XXI of ACHD's Rules and Regulations.

        II. Summary of SIP Revision and EPA Analysis
        The February 15, 2019 submittal includes amended versions of ACHD Rules and Regulations, Article XXI, Air Pollution Control, sections 2101.10 Ambient Air Quality Standards, 2101.20 Definitions, 2109.02 Remedies, and 2109.03 Enforcement Orders. The amendment to section 2101.10 deleted ACHD's existing list of NAAQS and added, through incorporation by reference, all NAAQS promulgated by the EPA under the CAA at 40 CFR part 50. The amendment to section 2101.20 added the following definition for County Council, “`County Council' means the Council of Allegheny County, Pennsylvania.” The amendments to section 2109.02 revised the reference to “Board of County Commissioners” to “County Executive” in paragraphs (a)(5) and (a)(6).
        In section 2109.03, the amendments include revising references from “Board of County Commissioners” to “County Council,” as well as an additional signatory option for enforcement orders in paragraph (b)(1). The language in paragraph (b)(1) was revised from “Be in written form and be signed by the Director or the Deputy Director, Bureau of Environmental Quality” to “Be in written form and be signed by the Director, the Deputy Director of the Bureau of Environmental Quality, or the Manager of the Air Quality Program, or their respective designee.” Lastly, in the provisions of paragraph (d)(1), Hearings, the “Bureau of Environmental Quality Division of Air Quality” was revised to the “Air Quality Program of the Department” to specify that such hearings cannot be held before employees of the Department who are assigned to the Air Quality Program.
        EPA's review of this material indicates the February 15, 2019 submittal is approvable as it meets requirements of the CAA under section 110(a) and contains the deletion/addition of language incorporating by reference all of the NAAQS promulgated by EPA and other administrative revisions to regulations that were previously included in the Pennsylvania SIP. None of these deletions, additions, or revisions affect emissions of air pollutants, and none of the deletions, additions, or revisions will interfere with any applicable requirement concerning attainment of reasonable further progress or any other applicable requirements in the CAA. Thus, EPA finds the revision approvable specifically for section 110(l) of the CAA.

        A detailed summary of EPA's review and rationale for approving the February 15, 2019 submittal may be found in the technical support document (TSD) for this proposed rulemaking action, available online at www.regulations.gov, docket number EPA-R03-OAR-2019-0483.
        III. Proposed Action

        EPA's review of this material indicates the February 15, 2019 submittal is approvable as it meets the requirements of the CAA under section 110(a) and includes the deletion/addition of language incorporating by reference all of the NAAQS promulgated by EPA and other administrative revisions to regulations that were previously included in the Pennsylvania SIP. EPA is proposing to approve the February 15, 2019 submittal, which includes administrative deletions, additions, and revisions to ACHD Rules and Regulations, Article XXI, Air Pollution Control, sections 2101.10 Ambient Air Quality Standards, 2101.20 Definitions, 2109.02 Remedies, and 2109.03 Enforcement Orders, as a revision to the Pennsylvania SIP. EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final rulemaking action.
        IV. Incorporation by Reference
        In this document, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference the revisions to ACHD Rules and Regulations, Article XXI, Air Pollution Control, sections 2101.10 Ambient Air Quality Standards, 2101.20 Definitions, 2109.02 Remedies, and 2109.03 Enforcement Orders discussed in Section II of this preamble. Also, in this document, as described in the proposed amendments to 40 CFR part 52, EPA is proposing to remove provisions of the EPA-Approved Pennsylvania Regulations and Statutes from the Pennsylvania State Implementation Plan, which is incorporated by reference in accordance with the requirements of 1 CFR part 51.

        EPA has made, and will continue to make, these materials generally available through https://www.regulations.gov and at the EPA Region III Office (please contact the person identified in the For Further Information Contact section of this preamble for more information).
        V. Statutory and Executive Order Reviews
        Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
        • Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
        • Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866.

        • Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

        • Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);
        • Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
        • Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
        • Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
        • Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
        • Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
        • Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
        In addition, this proposed rule, proposing approval of administrative revisions to ACHD Rules and Regulations, Article XXI, Air Pollution Control, sections 2101.10 Ambient Air Quality Standards, 2101.20 Definitions, 2109.02 Remedies, and 2109.03 Enforcement Orders, does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

          List of Subjects in 40 CFR Part 52
          Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Sulfur oxides.

          Authority:
          42 U.S.C. 7401 et seq.

          Dated: October 30, 2019.
          Cosmo Servidio,
          Regional Administrator, Region III.

      [FR Doc. 2019-24575 Filed 11-12-19; 8:45 am]
       BILLING CODE 6560-50-P


        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 635
        [I.D. 110206A]
        RIN 0648-AU86
        Atlantic Highly Migratory Species (HMS); U.S. Atlantic Swordfish Fishery Management Measures

          AGENCY:
          National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

          ACTION:
          Notification of public hearings.

          SUMMARY:

          NMFS published a proposed rule on November 28, 2006, to amend regulations governing the U.S. Atlantic swordfish fishery that would provide a reasonable opportunity for U.S. vessels to more fully harvest the domestic U.S. North Atlantic swordfish quota. This notice announces the dates, locations, and times of seven public hearings to obtain public comment on the proposed rule. Comments received at these hearings will assist NMFS in selecting management measures to more fully utilize the International Commission on the Conservation of Atlantic Tunas (ICCAT)-recommended U.S. North Atlantic swordfish quota in recognition of the improved stock status of North Atlantic swordfish. These public hearings will be combined with scoping meetings on potential shark management measures that require an amendment to the Consolidated Atlantic Highly Migratory Species Fishery Management Plan (HMS FMP). Notice of the shark scoping meetings is published today in a separate Federal Register document.

          DATES:

          Public hearings will be held in January 2007. For specific dates and times, see SUPPLEMENTARY INFORMATION.

          As published on November 28, 2006 (71 FR 68784), written comments on the proposed rule must be received no later than 5 p.m. January 31, 2007.

          ADDRESSES:

          Public hearings will be held in Madeira Beach, FL; Fort Pierce, FL; Destin, FL; Manteo, NC; Houma, LA; Gloucester, MA; and Manahawkin, NJ. See SUPPLEMENTARY INFORMATION for details.
          As published on November 28, 2006 (71 FR 68784), written comments on the proposed rule should be mailed to Sari Kiraly, Highly Migratory Species Management Division by any of the following methods:
          • E-mail: SF1.110206A@noaa.gov. Include in the subject line the following identifier: “I.D. 110206A.”
          • Written: 1315 East-West Highway, Silver Spring, MD 20910. Please mark the outside of the envelope “Comments on Swordfish Revitalization Proposed Rule.”
          • Fax: (301) 713-1917.
          • Federal e-Rulemaking Portal: http://www.regulations.gov.

          Copies of the Draft Environmental Assessment, proposed rule, the 2006 Consolidated HMS FMP and other relevant documents are available from the Highly Migratory Species Management Division website at http://www.nmfs.noaa.gov/sfa/hms or by contacting Sari Kiraly (see FOR FURTHER INFORMATION CONTACT).

          FOR FURTHER INFORMATION CONTACT:
          Sari Kiraly at (301) 713-2347, Michael Clark at (301) 713-2347, or Richard Pearson (727) 824-5399.

        SUPPLEMENTARY INFORMATION:
        The Atlantic swordfish fishery is managed under the authority of the Magnuson-Stevens Fishery Conservation and Management Act and the Atlantic Tunas Convention Act. The Consolidated HMS FMP is implemented by regulations at 50 CFR part 635.
        On November 28, 2006 (71 FR 68784), NMFS published a proposed rule that summarized options that may increase opportunities for U.S. vessels to fully harvest the ICCAT-recommended U.S. North Atlantic swordfish quota. That proposed rule would increase swordfish retention limits for incidental swordfish permit holders, and modify recreational swordfish retention limits for HMS Charter/Headboat and Angling category permit holders. The proposed rule would also modify HMS limited access vessel upgrading restrictions for pelagic longline (PLL) vessels. These actions would address persistent underharvests of the domestic swordfish quota, while continuing to minimize bycatch to the extent practicable, so that swordfish are harvested in a sustainable, yet economically viable manner. The comment period on the proposed rule ends on January 31, 2007.
        Request for Comments

        Seven public hearings will be held in January 2007 to provide the public an opportunity to comment on proposed swordfish management measures (November 28, 2006; 71 FR 68784) to be included in the upcoming final rule. These public hearings will be held in conjunction with scoping meetings for an amendment to the HMS FMP to gather comments on implementing future shark management measures. Information regarding the scoping meetings for potential shark management measures is published today in a separate Federal Register notice. The time allotted to swordfish and shark management measures will be distributed accordingly to provide ample opportunity for the public to comment on both topics. Time may be split equally or additional time may be allotted to either shark or swordfish measures, as necessary, depending on the attendees' primary interests.
        Hearing Dates, Times, and Locations
        Public hearings for the November 28, 2006 (71 FR 68784) proposed rule are scheduled as follows:
        1. Wednesday, January 17, 2007, 6-9 p.m. Northeast Regional Office, One Blackburn Drive, Gloucester, MA 01930.
        2. Thursday, January 18, 2007, 6-9 p.m. City of Madeira Beach, 300 Municipal Drive, Madeira Beach, FL 33708.
        3. Thursday, January 18, 2007, 6-9 p.m. Manahawkin Public Library, 129 North Main Street, Manahawkin, NJ 08050.
        4. Tuesday, January 23, 2007, 6-9 p.m. Destin Community Center, 101 Stahlman Avenue, Destin, FL 32541.
        5. Thursday, January 25, 2007, 6-9 p.m. Bayou Black Recreational Center, 3688 Southdown Mandalay Road, Houma, LA 70360.
        6. Tuesday, January 30, 2007, 6-9 p.m. Fort Pierce Library, 101 Melody Lane, Fort Pierce, FL 34950.
        7. Wednesday, January 31, 2007, 6-9 p.m. Manteo Town Hall, 407 Budleigh Street, Manteo, NC 27954.
        Public Hearings Code of Conduct
        The public is reminded that NMFS expects participants at the public hearings to conduct themselves appropriately. At the beginning of each hearing, a representative of NMFS will explain the ground rules (e.g., alcohol is prohibited from the hearing room; attendees will be called to give their comments in the order in which they registered to speak; each attendee will have an equal amount of time to speak; and attendees should not interrupt one another). The NMFS representative will attempt to structure the hearing so that all attending members of the public will be able to comment, if they so choose, regardless of the controversial nature of the subject(s). Attendees are expected to respect the ground rules, and, if they do not, they will be asked to leave the hearing.
        Special Accommodations

        The hearings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Michael Clark (see FOR FURTHER INFORMATION CONTACT) at least 7 days prior to the hearing.

          Authority:
          16 U.S.C et seq.; 16 U.S.C. 1801 et seq.

          Dated: December 26, 2006.
          Karyl K. Brewster-Geisz,
          Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.

      [FR Doc. E6-22512 Filed 12-29-06; 8:45 am]
      BILLING CODE 3510-22-S


        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 622
        [Docket No. 200622-0165]
        RIN 0648-BJ20
        Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Reef Fish Fishery of the Gulf of Mexico; Gray Snapper Management Measures

          AGENCY:
          National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

          ACTION:
          Proposed rule; request for comments.

          SUMMARY:
          NMFS proposes to implement management measures described in Amendment 51 to the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico (Gulf)(FMP), as prepared by the Gulf of Mexico Fishery Management Council (Council) (Amendment 51). This proposed rule would establish and modify status determination criteria and harvest levels for the gray snapper stock. The purposes of this proposed rule are to end overfishing of gray snapper and achieve optimum yield (OY).

          DATES:
          Written comments must be received by August 5, 2020.

          ADDRESSES:
          You may submit comments on the proposed rule identified by “NOAA-NMFS-2019-0116” by either of the following methods:
          • Electronic Submission: Submit all electronic public comments via the Federal e-Rulemaking Portal. Go to www.regulations.gov/#!docketDetail;D= NOAA-NMFS-2019-0116, click the “Comment Now!” icon, complete the required fields, and enter or attach your comments.
          • Mail: Submit all written comments to Peter Hood, NMFS Southeast Regional Office, 263 13th Avenue South, St. Petersburg, FL 33701.

            Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by NMFS. All comments received are a part of the public record and will generally be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address), confidential business information, or otherwise sensitive information submitted voluntarily by the sender will be publicly accessible. NMFS will accept anonymous comments (enter “N/A” in the required fields if you wish to remain anonymous).

          Electronic copies of Amendment 51, which includes an environmental assessment, a fishery impact statement, a Regulatory Flexibility Act analysis, and a regulatory impact review, may be obtained from the Southeast Regional Office website at https://www.fisheries.noaa.gov/action/amendment-51-establish-gray-snapper-status-determination-criteria-and-modify-annual-catch.

          FOR FURTHER INFORMATION CONTACT:

          Peter Hood, NMFS Southeast Regional Office, telephone: 727-824-5305, email: peter.hood@noaa.gov.

        SUPPLEMENTARY INFORMATION:
        NMFS and the Council manage the Gulf reef fish fishery, which includes gray snapper, under the FMP. The Council prepared the FMP and NMFS implements the FMP through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).
        Background
        The Magnuson-Stevens Act requires NMFS and regional fishery management councils to prevent overfishing and achieve, on a continuing basis, the OY from federally managed fish stocks. These mandates are intended to ensure fishery resources are managed for the greatest overall benefit to the nation, particularly with respect to providing food production and recreational opportunities, and protecting marine ecosystems.
        Unless otherwise noted, all weights in this proposed rule are in round weight.

        Gray snapper in the Gulf exclusive economic zone (EEZ) are managed as a single stock with a stock annual catch limit (ACL), and a stock annual catch target (ACT). There is no allocation of the stock ACL between the commercial and recreational sectors. Gray snapper occur in estuaries and shelf waters of the Gulf, and are particularly abundant off south and southwest Florida. Generally, the fishing season is open year-round, January 1 through December 31. However, accountability measures (AMs) for gray snapper specify that if commercial and recreational landings exceed the stock ACL in a fishing year, then during the following fishing year if the stock ACL is reached or is projected to be reached, the commercial and recreational sectors will be closed for the remainder of the fishing year. The gray snapper ACL and AMs were implemented in 2012 (76 FR 82044; December 29, 2011) and the stock ACL of 2.42 million lb (1.1 million kg) was not exceeded between 2012 and 2018. Preliminary review of the most recent landings data indicate this ACL is not likely to be exceeded in 2019. However, landings in 2014 and 2016 did exceed the ACLs proposed in this rule.
        In 2018, the stock status of gray snapper was evaluated for the first time through a Southeast Data, Assessment, and Review benchmark stock assessment (SEDAR 51). The Council's Scientific and Statistical Committee (SSC) reviewed SEDAR 51 and accepted the assessment as the best scientific information available. The SSC determined that the stock is undergoing overfishing as of 2015, which was the last year of data included in the assessment, because the fishing mortality rate (F) exceeded the current maximum fishing mortality threshold (MFMT). The SSC was not able to determine whether the stock is overfished, because the maximum sustainable yield (MSY) and minimum stock size threshold (MSST) for gray snapper are not specified in the FMP.
        SEDAR 51 could not estimate the actual MSY with the best scientific information available. Therefore, the Council considered alternatives for an MSY proxy that uses the spawning potential ratio (SPR). The SPR is the ratio of the average number of eggs per fish over its lifetime when the stock is fished compared to the same value when the stock is not fished. The SPR assumes that a certain amount of fish must survive and spawn in order to replenish the stock. Analyses of stocks with various life histories suggest that, in general, the MSY is most commonly associated with the yield when fishing at an F that corresponds to an SPR between 30 and 40 percent.

        After reviewing the SEDAR 51 assessment, the SSC recommended that the MSY proxy be set at the yield when fishing at an F corresponding to a 30 percent SPR (F30%SPR), which is consistent with the current MFMT for gray snapper, set in 1999. However, the Council noted that the Gulf red snapper proxy is set at the yield associated when fishing at an F corresponding 26 percent SPR (F26%SPR), which allows for a larger yield at a given stock size. After further analyses and review, the SSC determined that the yield when fishing at F26%SPR is scientifically acceptable as a proxy for MSY, but, because of the uncertainty in the SEDAR 51 assessment, maintained its previous recommendation of the more risk-averse MSY proxy using the yield when fishing at F30%SPR. The Council selected the yield when fishing at F26%SPR for an MSY proxy to balance protection of the gray snapper stock with an increase in social and economic benefits for fishers targeting the species that is expected to result from allowing more harvest.
        As a result of the increasing uncertainty with long-range projections, the SSC only provided overfishing limit (OFL) and acceptable biological catch (ABC) recommendations for the gray snapper stock through 2021. From SEDAR 51, the OFLs associated with the MSY proxy selected by the Council are 2.58 million lb (1.17 million kg) for 2020, and 2.57 million lb (1.17 million kg) for 2021, and the ABCs recommended by the SSC are 2.51 million lb (1.14 million kg) for 2020 and subsequent years.
        Management Measure Contained in This Proposed Rule
        If implemented, this proposed rule would revise the ACL for the Gulf gray snapper stock, and remove the ACT.
        Annual Catch Limits and Annual Catch Target
        The current ACL for gray snapper is 2.42 million lb (1.1 million kg) and was established based on average landings from 1999 through 2008. The current ACT is set 14 percent below the ACL, at 2.08 million lb.
        To determine the new ACLs, the Council used its ACL/ACT control rule to determine whether to apply a buffer to the ABC recommendations to account for management uncertainty. The results indicated that an 11 percent buffer is appropriate. When applied to the 2020-2021 ABC recommendations, the resulting gray snapper stock ACLs in this proposed rule would be 2.24 million lb (1.02 million kg) for the 2020 fishing year. For 2021 and subsequent fishing years, the ACL would be set at 2.23 million lb (1.01 million kg). The Council decided to remove the ACT for gray snapper because it has not been used for management since its implementation in 2012.
        Management Measures Contained in Amendment 51 But Not Codified Through This Proposed Rule
        Amendment 51 would modify the OFL and ABC for the gray snapper stock as previously explained. Amendment 51 would also modify the MFMT and specify the MSY, MSST, and OY for the stock. NMFS uses the MSST and MFMT to determine whether a stock is overfished or undergoing overfishing, respectively. If the stock biomass falls below the MSST, then the stock is considered overfished and the Council would then need to develop a rebuilding plan capable of returning the stock to a level that allows the stock to achieve MSY on a continuing basis. In years when there is a stock assessment, if fishing mortality exceeds the MFMT, a stock is considered to be undergoing overfishing, because this level of fishing mortality, if continued, would reduce the stock biomass to an overfished condition. In years in which there is no assessment, overfishing occurs if landings exceed the OFL.

        Amendment 51 would set the MSY proxy as the yield when fishing at F26%
          SPR. MFMT would be changed from F30%
          SPR to F26%
          SPR, and the MSST would be 50 percent of the biomass at MSY or the MSY proxy. The OY would be the yield when fishing at 90 percent of FMSY(or MSY proxy). As noted previously, under the current MFMT, overfishing was occurring as of 2015. Under the proposed MFMT of F26%
          SPR, projections from SEDAR 51 suggest overfishing ended in 2017. Under the proposed MSST, the stock would not be overfished.
        Classification
        Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with the FMP, the Magnuson-Stevens Act, and other applicable laws, subject to further consideration after public comment.
        This rule has been determined to be not significant for purposes of Executive Order 12866. This rule is not an E.O. 13771 regulatory action because this rule is not significant under E.O. 12866.

        The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. The factual basis for this certification is as follows. A copy of the full analysis is available from NMFS (see ADDRESSES).

        A description of the action, why it is being considered, and the objectives of and legal basis for this action are contained in the SUMMARY section of the preamble.
        The Magnuson-Stevens Act provides the statutory basis for this proposed rule. No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting or recordkeeping compliance requirements are introduced in this proposed rule.
        The proposed rule concerns recreational and commercial fishing for gray snapper in Federal waters of the Gulf. It directly affects both anglers (recreational fishers) and commercial fishing businesses that harvest gray snapper in the Gulf EEZ.
        Anglers are not considered small entities as that term is defined in 5 U.S.C. 601(6), whether fishing from for-hire fishing, private or leased vessels. Therefore, neither estimates of the number of anglers nor the impacts on them are required or provided in this analysis.
        Any business that operates a commercial fishing vessel that harvests gray snapper in the Gulf EEZ must have a valid Federal Gulf reef fish permit attached to that vessel. From 2013 through 2017, an annual average of 387 permitted vessels reported landing gray snapper. An estimated 295 businesses operate that average number of vessels that land gray snapper annually. All of these businesses are expected to operate primarily in the Gulf commercial fishing industry (NAICS code 11411).
        For Regulatory Flexibility Act purposes, NMFS has established a small business size standard for businesses, including their affiliates, whose primary industry is commercial fishing (see 50 CFR 200.2). A business primarily involved in commercial fishing (NAICS 11411) is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and its combined annual receipts are not in excess of $11 million for all of its affiliated operations worldwide.
        From 2013 through 2017, federally-permitted vessels that reported landing gray snapper received an average of $1,018 (2017 dollars) annually from gray snapper landings and $127,707 (2017 dollars) annually from all landings. Based on those revenues, NMFS has determined that all of the businesses directly affected by the proposed action are small.
        This proposed rule would reduce the current gray snapper stock ACL from a constant 2.42 million lb (1.10 million kg) to 2.24 million lb (1.02 million kg) in 2020 and 2.23 million lb (1.01 million kg) in 2021 and subsequent years. That is a decrease of 0.18 to 0.19 million lb (0.82 to 0.86 million kg), which is a reduction of the stock ACL by 7.44 percent to 7.85 percent.
        Between 2013 and 2017, the commercial sector accounted for an average of 7.5 percent of the total gray snapper landings in the Gulf, and an average of 83.0 percent of commercial sector landings were made by federally-permitted vessels. NMFS used those average percentages to estimate that the 180,000 lb (81,647 kg) reduction in the stock ACL in 2020 could result in a 13,500 lb (6,124 kg) decrease in commercial landings in 2020, and the 190,000 lb (86,183 kg) reduction in the stock ACL in 2021 and thereafter could reduce commercial landings by 14,250 lb (6,464 kg). Moreover, because permitted vessels report their gray snapper landings in pounds gutted weight, those possible reductions would be equivalent to 10,186 lb (4,620 kg) gutted weight in 2020 and 10,828 lb (4,911 kg) gutted weight in years thereafter. However, any actual decrease in commercial landings would require a closure of the commercial season before the end of the fishing year. A closure would occur if the sum of commercial and recreational landings exceeded the stock ACL during the previous year, and if the sum of commercial and recreational landings reached or was projected to reach the stock ACL in the current year. There have been no closures of the commercial season in recent years. Landings data for 2018 and preliminary data for 2019 indicate combined landings for those years were under the current and proposed stock ACLs, which suggests there would be no closures.
        If there were a closure as a result of the reduction in the stock ACL, there would be a reduction of federally-permitted vessels' collective dockside revenues that ranges from $28,419 to $30,001 (2017 dollars), assuming an average dockside price of gray snapper of $2.79 per lb (2017 dollars), gutted weight. Each of the 387 vessels would lose from $73 to $78 in the year of the closure, on average, which represents a 0.06 percent reduction of the average total income ($127,707). The average impact on the 295 small businesses would be $96 to $102 (2017 dollars).
        The information provided supports a determination that this proposed rule would not have a significant economic impact on the average annual 295 commercial fishing businesses and their combined 387 federally permitted fishing vessels that harvest gray snapper from the Gulf. As a result, an initial regulatory flexibility analysis is not required and none has been prepared.

          List of Subjects in 50 CFR Part 622
          Annual catch limit, Fisheries, Fishing, Gray snapper, Gulf, Reef fish.

          Dated: June 22, 2020.
          Samuel D. Rauch III,
          Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service.

        For the reasons set out in the preamble, 50 CFR part 622 is proposed to be amended as follows:

          PART 622—FISHERIES OF THE CARIBBEAN, GULF OF MEXICO, AND SOUTH ATLANTIC

        1. The authority citation for part 622 continues to read as follows:

          Authority:
           16 U.S.C. 1801 et seq.

        2. In § 622.41, revise paragraph (l) to read as follows:

          § 622.41
           Annual catch limits (ACLs), annual catch targets (ACTs), and accountability measures (AMs).

          (l) Gray snapper. If the sum of the commercial and recreational landings, as estimated by the SRD, exceeds the stock ACL, then during the following fishing year, if the sum of commercial and recreational landings reaches or is projected to reach the stock ACL, the AA will file a notification with the Office of the Federal Register to close the commercial and recreational sectors for the remainder of that fishing year. The stock ACL for gray snapper, in round weight, is 2.24 million lb (1.02 million kg) for the 2020 fishing year, and 2.23 million lb (1.01 million kg) for the 2021 and subsequent fishing years.

      [FR Doc. 2020-13774 Filed 7-2-20; 8:45 am]
      BILLING CODE 3510-22-P