[Federal Register Volume 59, Number 53 (Friday, March 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6218]


[[Page Unknown]]

[Federal Register: March 18, 1994]


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SMALL BUSINESS ADMINISTRATION

13 CFR Parts 121 and 124

 

Small Business Size Regulations; Minority Small Business and 
Capital Ownership Development

AGENCY: Small Business Administration (SBA).

ACTION: Final rule.

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SUMMARY: The Small Business Administration amends its regulations 
governing the Minority Small Business and Capital Ownership Development 
program authorized by sections 7(j)(10) and 8(a) of the Small Business 
Act. Several statutory changes have been made affecting the 8(a) 
program that have not previously been incorporated in SBA's 
regulations. This final rule is needed to remove the inconsistencies 
that currently exist in SBA's regulations due to these statutory 
provisions, as well as a procedural inconsistency that currently exists 
between SBA's regulations and the Federal Acquisition Regulations.

EFFECTIVE DATE: April 18, 1994.

FOR FURTHER INFORMATION CONTACT:
Judith A. Roussel, Office of Minority Small Business and Capital 
Ownership Development, (202) 205-6410.

SUPPLEMENTARY INFORMATION: On August 21, 1989, SBA published a final 
rule in the Federal Register, 54 FR 34692, amending its regulations 
with respect to the Minority Small Business and Capital Ownership 
Development program authorized by sections 7(j)(10) and 8(a) of the 
Small Business Act, 15 U.S.C. Secs. 636(j)(10) and 637(a). That rule 
finalized SBA's implementation of the Business Opportunity Development 
Reform Act of 1988, Public Law 100-656, 102 Stat. 3853. SBA published 
technical amendments to this rule on August 27, 1990, 55 FR 34901. 
Several statutory changes have been made affecting the 8(a) program 
since these regulatory revisions and need to be incorporated into SBA's 
regulations. This final rule is needed to remove the inconsistencies 
that currently exist in SBA's regulations due to these statutory 
provisions.
    Section 203 of the Small Business Administration Reauthorization 
and Amendments Act of 1990, Public Law 101-574, 104 Stat. 2818, 
statutorily amended SBA's requirement that an applicant concern be in 
business for two years in order for it to be eligible for Program 
Participation. That law authorizes SBA to establish a minimum time in 
business requirement only if a possible waiver of that requirement is 
also provided. SBA's regulation concerning the two-year in business 
requirement, contained in 13 CFR 124.107, needs to be amended to 
identify the criteria for a waiver to the two-year in business rule. 
Confusion among 8(a) applicants has arisen because this regulation has 
not yet been amended.
    Public Law 101-574 also made three statutory changes, relating to 
participation in the 8(a) program by tribally-owned concerns, that need 
to be implemented in the regulations. The first of these changes 
overrides SBA's previous regulation concerning affiliation of tribally-
owned concerns for size purposes. Section 204 of Public Law 101-574, 
104 Stat. 2819, amended section 7(j)(10)(J)(ii) of the Small Business 
Act, 15 U.S.C. 636(j)(10)(J)(ii), to specify that, for purposes of the 
8(a) program, the size of a tribally-owned concern generally shall be 
determined without regard to its affiliation with the tribe, any entity 
of the tribal government, or any other business enterprise owned by the 
tribe. SBA's previous regulation permitted affiliation to be found with 
other tribally-owned entities based on one or more relationships other 
than common tribal ownership. This final rule incorporates the 
statutory language into SBA's regulations. The other two statutory 
changes pertain to 8(a) joint ventures between tribally-owned concerns 
and large businesses. Section 205 of Public Law 101-574, 104 Stat. 
2819-20, increased the number of 8(a) joint ventures authorized between 
tribally-owned concerns and large businesses from two to five and 
extended, through September 30, 1994, the authorization for tribally-
owned 8(a) concerns to enter joint ventures with large businesses. This 
final rule incorporates these changes into the regulations.
    Additionally, Section 206 of Public Law 101-574, 104 Stat. 2820, 
extended SBA's surety bond waiver authority in section 7(j)(13)(D)(iii) 
of the Small Business Act, 15 U.S.C. 636(j)(13)(D)(iii), from October 
1, 1992, to October 1, 1994. This final rule adds that statutory 
revision.
    Section 207 of Public Law 101-574, 104 Stat. 2820, amended section 
8(a)(1) of the Small Business Act, 15 U.S.C. 637(a)(1), to authorize 
SBA to award a competitive 8(a) contract to a concern whose term of 
participation in the 8(a) program has expired if the concern was an 
eligible Program Participant on the date specified for receipt of 
offers contained in the contract solicitation. This final rule 
incorporates this provision into the regulations.
    Finally, a second, contract-specific waiver to SBA's 
nonmanufacturer rule (the requirement that, for a supply contract, a 
small business concern that is not itself the manufacturer must provide 
the product of a small business manufacturer) is added to the 
substantive size regulations for both 8(a) and small business set-aside 
contracts. This change incorporates the statutory change to the Small 
Business Act made by Section 210 of Public Law 101-574, 104 Stat. 2821. 
While the procedures for requesting and receiving such a waiver were 
published as a proposed rule in the Federal Register on September 21, 
1993, 58 FR 48981, a change is also needed to the substantive size 
rules recognizing this type of waiver.
    In addition to these changes (necessitated by Public Law 101-574), 
Section 10 of the Alaska Land Status Technical Corrections Act of 1992, 
Public Law 102-415, 106 Stat. 2112, 2115, eliminated the need for SBA 
to determine whether a specific Alaska Native Corporation (ANC) is 
economically disadvantaged in determining the eligibility of an ANC-
owned business entity for the 8(a) program. This final rule deletes 
SBA's regulatory provision requiring SBA to determine the economic 
disadvantage of an ANC prior to determining eligibility of an ANC-owned 
business entity. SBA's regulations concerning eligibility 
determinations in competitive 8(a) acquisitions are not consistent with 
the FAR regarding the same subject. The FAR authorize procuring agency 
contracting officers, in negotiated competitive 8(a) acquisitions, to 
submit to SBA for an eligibility determination only the 8(a) offeror 
determined by the procuring agency to be the apparent successful 
offeror. 48 CFR 19.805-2(c)(2). SBA's regulations have permitted a 
procuring agency contracting officer to submit all 8(a) offerors 
determined to be in the competitive range for eligibility 
determinations. The conflict in the two regulations has caused 
confusion and friction between SBA and procuring agencies. SBA believes 
that the FAR approach to eligibility determinations in negotiated 
competitive 8(a) acquisitions is the better approach and adopts it in 
this final rule.
    This final rule corrects a typographical error in the 8(a) 
regulations which, in a cross reference, inadvertently refers to the 
``developmental'' stage of program participation instead of the 
``transitional'' stage of program participation. It also changes 
references to the ``Office of Program Eligibility'' or ``OPE'' to the 
``Division of Program Certification and Eligibility'' or ``DPCE.''

Section by Section Analysis

    The following is a section by section analysis of each provision of 
SBA's regulations that is affected by this final rule:
    Paragraphs 121.1102(a) and 124.112(c)(2) are amended to take into 
account the statutory amendments to the Small Business Act regarding 
affiliation of tribally-owned 8(a) concerns made by Section 204 of the 
Small Business Administration Reauthorization and Amendments Act of 
1990, Public Law 101-574, 104 Stat. 2814, 2819. This statute specifies 
that, in determining the size of a small business concern owned by a 
socially and economically disadvantaged Indian tribe (or a wholly owned 
business entity of such tribe) for either 8(a) program entry or 
contract award, each firm's size shall be determined independently 
without regard to its affiliation with the tribe, any entity of the 
tribal government, or any other business enterprise owned by the tribe, 
unless the Administrator determines that one or more such tribally-
owned business concerns have obtained, or are likely to obtain, a 
substantial unfair competitive advantage within an industry category. 
Prior to this statutory change, ownership by an Indian tribe, by 
itself, would not cause SBA to determine an 8(a) applicant/concern to 
be affiliated with the tribe or other entities owned by the tribe. 
Affiliation with other tribally-owned entities could have been caused 
by circumstances other than common tribal ownership (for example, 
affiliation through common management or common facilities). The two 
relevant paragraphs of SBA's regulations (one in the size regulations 
and one in the 8(a) regulations) are amended to provide for the 
statutory change.
    Paragraphs 121.906(b)(3) (for small business set aside contracts) 
and 121.1106(b)(3) (for 8(a) contracts) are amended to provide for a 
second exception to SBA's nonmanufacturer rule. The nonmanufacturer 
rule requires that, for a supply contract, a small business that is not 
itself the manufacturer of the items being procured must supply the 
product of a small business manufacturer. SBA's regulations previously 
provided for an exception to this requirement where there are no small 
business manufacturers or processors in the Federal market. Section 210 
of Public Law 101-574, 104 Stat. 2814, 2821, amended the Small Business 
Act to authorize a second exception where the Administrator accepts a 
determination by the contracting officer that no small business 
manufacturer or processor reasonably can be expected to offer a product 
meeting the specifications (including period for performance) required 
of an offeror by the solicitation. The regulations are amended to 
incorporate this statutory change.
    Section 124.107 is amended to take into account the statutory 
amendments to SBA's two-year in business rule made by Section 203 of 
the Small Business Administration Reauthorization and Amendments Act of 
1990, Public Law 101-574, 104 Stat. 2818-19. The statutory criteria for 
waiver of the two-year rule are repeated in this final rule. In 
addition, the rule clarifies that, if an applicant concern has 
performed only government contracts or only private sector contracts, 
the applicant's performance on those contracts alone will be reviewed 
to determine whether the applicant possesses a record of successful 
performance. This implementation avoids the possible interpretation 
that a waiver is available only to those concerns that have 
successfully performed both public and private sector contracts.
    Paragraph 124.111(a)(2)(ii) is amended to correct a typographical 
error. The paragraph speaks of maintaining eligibility in the 
transitional stage of Program Participation, but cross references to 
information on the developmental stage of Program Participation. This 
final rule amends the cross reference to refer to the transitional 
stage of Program Participation.
    Paragraphs 124.112(a)(1) and 124.112(c) are amended to include a 
reference to entities which are themselves owned by wholly-owned 
business entities of Indian tribes, in accord with section 204(b) of 
Public Law 101-574, 104 Stat. 2819.
    Paragraph 124.112(a)(3) is amended to eliminate the regulatory 
provision requiring SBA to determine whether a specific ANC is 
economically disadvantaged. Section 10 of the Alaska Land Status 
Technical Corrections Act of 1992, Public Law 102-415, 106 Stat. 2112, 
2115, amended Section 29(e) of the Alaska Native Claims Settlement Act 
(43 U.S.C. 1626(e)) to provide as follows:

    (e)(1) For all purposes of Federal law, a Native Corporation 
shall be considered to be a corporation owned and controlled by 
Natives and a minority and economically disadvantaged business 
enterprise if the Settlement Common Stock of the corporation and 
other stock of the corporation held by holders of Settlement Common 
Stock and by Natives and descendants of Natives, represents a 
majority of both the total equity of the corporation and the total 
voting power of the corporation for the purposes of electing 
directors.

This rule would merely put the substance of this statutory provision 
into SBA's 8(a) regulations.
    Redesignated paragraph 124.112(c)(2)(iv) and paragraph 
124.321(h)(2) are both amended to increase from two to five the number 
of 8(a) joint venture opportunities that an 8(a) tribally-owned concern 
is authorized to enter into with large business concerns. These 
amendments implement the change made to the Small Business act by 
Section 205 of Public Law 101-574, 104 Stat. 2814, 2819.
    Paragraph 124.305(f) is amended to reflect an extension of the 
surety bond exemption authority from October 1, 1992 to October 1, 
1994. This change is statutorily authorized by Section 206 of Public 
Law 101-574, 104 Stat. 2820.
    Section 124.307 is amended by adding a new paragraph (e) and 
Section 124.311 is amended by adding a new paragraph (i) to authorize 
SBA to award a competitive 8(a) contract to a concern whose program 
term has expired if the concern was an eligible Program Participant on 
the date specified in the contract solicitation for the receipt of 
offers. The change in Sec. 124.307 recognizes the authority established 
in Sec. 124.311(i) as an exception to the general requirement that an 
8(a) contract can be awarded only to a concern that is still a current 
Program Participant on the date of contract award. These changes are 
necessary to take into account the statutory revisions made by Section 
207 of Public Law 101-574, 104 Stat. 2820. Consistent with these 
changes, with current Sec. 19.805-2(c) of the Federal Acquisition 
Regulations (FAR), Title 48 of the Code of Federal Regulations, and 
with current SBA policy, Sec. 124.311(f)(4) is also amended to state 
that eligibility in the competitive 8(a) context is to be determined as 
of the date of a Participant's submission of its initial offer which 
includes price. In other words, so long as a firm was eligible on the 
date that it submitted its initial offer which included price, it would 
remain eligible despite changes in circumstances prior to award. So 
long as the award of the contract would be within the Participant's 
approved support level on the date that it submits its initial offer 
which includes price, the receipt of additional 8(a) contract support 
after that date and prior to award would not affect the concern's 
support level eligibility.
    Paragraph 124.311(f)(4) also is amended to make SBA's regulations 
consistent with the FAR in connection with eligibility determinations 
for competitive 8(a) awards. While it is SBA's view that because SBA is 
the agency charged with the responsibility of implementing the Small 
Business Act, including the 8(a) program, its regulations take 
precedence over the FAR in all matters interpreting the Small Business 
act, SBA believes that the FAR's approach to eligibility determinations 
in the context of negotiated procurements is the better approach. The 
change to SBA's regulations is needed to clear up the confusion that 
exists with procuring agency contracting officers and SBA personnel 
that are attempting to implement conflicting provisions of the FAR and 
SBA's regulations. SBA's regulations had permitted a procuring agency 
to submit all offerors within the competitive range. Under the approach 
taken by the FAR, and adopted in this rule by SBA, in a negotiated 
competitive 8(a) procurement, the procuring agency would submit to SBA 
for an eligibility determination only the 8(a) offeror determined by 
the procuring agency to be the apparent successful offeror.
    SBA believes that the revised rule is more consistent with the way 
size eligibility is determined in the small business set-aside context. 
In that area, when requested by the procuring agency contracting 
officer, SBA will determine the size eligibility only of the apparent 
successful offeror, not of some broader group of offerors. For 8(a) 
competitive requirements, if the apparent successful offeror is found 
to be ineligible, SBA then would go to the second highest ranked 
offeror, and so on, until an eligible 8(a) Participant was found. This 
rule would not preclude procuring agencies from sending a list of 
highest to lowest ranked Participants as determined by the procuring 
agency, but it would limit SBA's eligibility determination to one firm 
at a time until an eligible offeror was determined. Because this 
provision is a procedural rule, it is adopted as a final rule without 
the necessity of a proposed rule and an opportunity for public comment.
    Paragraph 124.321(h)(3) is amended by changing the sunset date for 
authorizing 8(a) joint ventures between tribally-owned 8(a) concerns 
and large businesses from September 30, 1991 to September 30, 1994.
    Paragraph 124.601(c) is amended by changing the reference to the 
procedures for size protests for the Department of Defense's Small 
Disadvantaged Business program from ``Sec. 121.9'' to ``Secs. 121.1601-
121.1608.'' The reference to Sec. 121.9 contained in Sec. 124.601(c) is 
a reference to the procedures relating to size protests and requests 
for size determinations. At the time Sec. 124.601(c) was added to SBA's 
regulations, Sec. 121.9 was entitled ``Protest of small business 
status.'' 13 CFR 121.9 (1989). When SBA's size regulations were amended 
in December 1989, see 54 Fed. Reg. 52634 (Dec. 21, 1989), the reference 
in Sec. 124.601(c) was not correspondingly changed. The substance of 
former Sec. 121.9 is currently contained in Secs. 121.1601 through 
121.1608. These sections are now entitled ``Procedures for Size 
Protests and Requests for Formal Size Determinations.'' 13 CFR 
121.1601-121.1608 (1993). Thus, this change merely updates the citation 
to SBA's size protest procedures.
    Paragraphs 124.602(f), 124.602(g), 124.604, 124.605(a)(3), and 
124.605(c)(1) are amended by changing the phrase ``Office of Program 
Eligibility'' to read ``Division of Program Certification and 
Eligibility.'' Paragraphs 124.602(g), 124.604, 124.607(d), 124.608(a), 
124.608(b), 124.608(b)(1), 124.608(b)(3), 124.608(c), 124.609(a), and 
124.609(b) are amended by changing the term ``OPE'' to read ``DPCE.'' 
These changes are intended to reflect an internal restructuring of 
SBA's Office of Minority Small Business and Capital Ownership 
Development.

Compliance With Executive Orders 12612, 12778, and 12866, the 
Regulatory Flexibility Act (5 U.S.C. 601, et seq.), and the Paperwork 
Reduction Act (44 U.S.C. Ch. 35)

    SBA certifies that this final rule will not be considered a 
significant rule within the meaning of Executive Order 12866 and will 
not have a significant economic impact on a substantial number of small 
entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 
601, et seq. This rule is necessary to resolve several points relating 
to eligibility for SBA's Section 8(a) program. It will have no effect, 
however, on the amount or dollar value of any contract requirement or 
the number of requirements reserved for the 8(a) program. As such, it 
is not likely to have an annual economic effect of $100 million or 
more, result in a major increase in costs or prices, or have a 
significant adverse effect on competition or the United States economy.
    For purposes of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA 
certifies that this final rule contains no new reporting or record 
keeping requirements.
    For purposes of Executive Order 12612, SBA certifies that this rule 
does not have any federalism implications warranting the preparation of 
a Federalism Assessment.
    For purposes of Executive Order 12778, SBA certifies that this rule 
is drafted, to the extent practicable, in accordance with the standards 
set forth in Section 2 of that Order.

List of Subjects

13 CFR Part 121

    Government procurement, Government property, Grant programs--
business, Loan programs--business, Small businesses.

13 CFR Part 124

    Government procurement, Minority businesses, Tribally-owned 
concerns, Hawaiian natives, Reporting and recordkeeping requirements, 
Technical assistance.

    For the reasons set forth above, parts 121 and 124 of Title 13, 
Code of Federal Regulations, are amended as follows:

PART 121--[AMENDED]

    1. The authority citation for 13 CFR part 121 continues to read as 
follows:

    Authority: 15 U.S.C. 632(a), 634(b)(6), 637(a) and 644(c).

    2. Section 121.906(b)(3) is revised to read as follows:


Sec. 121.906  Manufactured products under small business set-aside 
procurements.

* * * * *
    (b) * * *
    (3) The Administrator may waive the requirement set forth in 
paragraph (b)(1)(iii) of this section that the end item must be 
manufactured by a small business manufacturer, for a particular 
procurement, after reviewing and accepting a determination by the 
contracting officer that no small business manufacturer or processor 
reasonably can be expected to offer a product meeting the 
specifications (including period for performance) required of an 
offeror by the solicitation, or for a product or class of products, 
after determining that no small business manufacturer or processor is 
available to participate in the Federal procurement market.
* * * * *
    3. Section 121.1102 is amended by adding new paragraph (a)(3) to 
read as follows:


Sec. 121.1102  Establishment of the size standard.

    (a) * * *
    (3) In determining the size of a small business concern owned by a 
socially and economically disadvantaged Indian tribe (or a wholly owned 
business entity of such tribe) for either 8(a) program entry or 
contract award, each firm's size shall be determined independently 
without regard to its affiliation with the tribe, any entity of the 
tribal government, or any other business enterprise owned by the tribe, 
unless the Administrator determines that one or more such tribally-
owned business concerns have obtained, or are likely to obtain, a 
substantial unfair competitive advantage within an industry category.
* * * * *
    4. Section 121.1106(b)(3) is revised to read as follows:


Sec. 121.1106  Manufactured products under section 8(a) contracts.

* * * * *
    (b) * * *
    (3) The Administrator may waive the requirement set forth in 
paragraph (b)(1)(iii) of this section that the end item must be 
manufactured by a small business manufacturer, for a particular 
procurement, after reviewing and accepting a determination by the 
contracting officer that no small business manufacturer or processor 
reasonably can be expected to offer a product meeting the 
specifications (including period for performance) required of an 
offeror by the solicitation, or for a product or class of products, 
after determining that no small business manufacturer or processor is 
available to participate in the Federal procurement market.
* * * * *

PART 124--[AMENDED]

    5. The authority citation for part 124 continues to read as 
follows:

    Authority: 15 U.S.C. 634(b)(6), 636(j), 637(a), 637(d) and 
Public Law 99-661, sec. 1207, Public Law 100-656, and Public Law 
101-37.

    6. Section 124.107 is amended by revising the introductory text, by 
redesignating paragraphs (b) and (c) as paragraphs (c) and (d), 
respectively, by revising paragraph (a), and by adding a new paragraph 
(b) to read as follows:


Sec. 124.107  Potential for success.

    Except for tribally-owned applicant concerns which must meet the 
requirements of Sec. 124.112(c)(6), SBA will approve a concern for 
Program Participation only when it finds that the applicant concern 
possesses reasonable prospects for success in competing in the private 
sector and has been in business in its primary industry classification 
for two full years, unless a waiver for the two-year in business 
requirement is granted pursuant to paragraph (b) of this section.
    (a) Unless a waiver is granted pursuant to paragraph (b) of this 
section, an applicant concern must demonstrate that it has been in 
business in the primary industry classification in which it seeks 8(a) 
certification for two full years prior to the date of its 8(a) 
application by submitting income tax returns showing revenues for each 
of the two previous years.
    (b) The requirement that an applicant concern be in business for 
two full years may be waived, and the concern shall be considered to 
have demonstrated reasonable prospects for success, if each of the five 
conditions set forth in paragraph (b)(1) of this section are met.
    (1) The two-year in business requirement may be waived if--
    (i) The individual or individuals upon whom eligibility is to be 
based have substantial and demonstrated business management experience;
    (ii) The prospective Program Participant has demonstrated technical 
experience to carry out its business plan with a substantial likelihood 
for success;
    (iii) The prospective Program Participant has adequate capital to 
sustain its operations and carry out its business plan;
    (iv) The prospective Program Participant has a record of successful 
performance on contracts from governmental and/or nongovernmental 
sources in the primary industry category in which the prospective 
Program Participant is seeking Program certification; and
    (v) The prospective Program Participant has, or can demonstrate its 
ability to timely obtain, the personnel, facilities, equipment, and any 
other requirements needed to perform such contracts.
    (2) In order to be eligible for a waiver of the two-year in 
business requirement, an applicant concern that has been in business 
for less than two years must indicate in its application that it seeks 
a waiver, must provide information on governmental and nongovernmental 
contracts in progress and completed (including letters of reference) to 
establish successful contract performance, and must demonstrate how it 
otherwise meets the five conditions for waiver.
    (3) SBA shall consider an applicant's performance on both 
government and private sector contracts if the applicant has performed 
contracts in both arenas. In such a case, an applicant's performance on 
both types of contracts will be reviewed to determine whether the firm 
has an overall successful performance record. If, however, the 
applicant has performed only government contracts or only private 
sector contracts, the applicant's performance on those contracts alone 
will be reviewed to determine whether the applicant possesses a record 
of successful performance.
* * * * *
    7. Section 124.111(a)(2)(ii) is revised to read as follows:


Sec. 124.111  Continued 8(a) program eligibility.

    (a) * * *
    (2) * * *
    (ii) For purposes of maintaining continued program eligibility of a 
Program Participant in the transitional stage of the 8(a) program, an 
individual whose personal net worth exceeds $750,000, as calculated 
pursuant to Sec. 124.106(a)(2)(i), will not be considered economically 
disadvantaged. (See, Sec. 124.303 for discussion of the transitional 
stage of 8(a) Program Participation).
* * * * *
    8. Section 124.112(a)(1) is amended by adding the parenthetical 
phrase ``(or wholly owned business entities of such tribes)'' after the 
term ``Indian tribes.''
    9. Section 124.112 is amended by removing paragraph (a)(3)(i), by 
redesignating paragraph (a)(3)(ii) as paragraph (a)(3)(i), and by 
adding new paragraph (a)(3)(ii) to read as follows:


Sec. 124.112  Concerns owned by Indian tribes, including Alaska Native 
Corporations.

    (a) * * *
    (3) * * *
    (ii) An ANC that meets the requirements set forth in paragraph 
(a)(3)(i) of this section shall be deemed economically disadvantaged 
and need not establish that it is economically disadvantaged pursuant 
to paragraph (b)(2) of this section. See section 29(e) of the Alaska 
Native Claims Settlement Act, 43 U.S.C. 1626(e).
* * * * *
    10. In Sec. 124.112, the introductory text of paragraph (c) is 
amended by adding the parenthetical phrase ``(or wholly owned business 
entities of such tribe)'' after the term ``Indian tribe.''
    11. Section 124.112 is amended by revising paragraph (c)(2)(i), by 
redesignating paragraph (c)(2)(iii) as paragraph (c)(2)(iv), and by 
adding a new paragraph (c)(2)(iii) to read as follows:


Sec. 124.112  Concerns owned by Indian tribes, including Alaska Native 
Corporations.

* * * * *
    (c) * * *
    (2) * * *
    (i) A tribally-owned applicant concern must qualify as a small 
business concern as defined for purposes of Government procurement in 
part 121 of this title. The particular size standard to be applied 
shall be based on the primary industry classification of the applicant 
concern.
* * * * *
    (iii) In determining the size of a small business concern owned by 
a socially and economically disadvantaged Indian tribe (or a wholly 
owned business entity of such tribe) for either 8(a) program entry or 
contract award, each firm's size shall be determined independently 
without regard to its affiliation with the tribe, any entity of the 
tribal government, or any other business enterprise owned by the tribe, 
unless the Administrator determines that one or more such tribally-
owned business concerns have obtained, or are likely to obtain, a 
substantial unfair competitive advantage within an industry category.
* * * * *
    12. Newly redesignated paragraph (c)(2)(iv) of section 124.112 is 
further amended by removing ``two'' and adding ``five'' in place 
thereof in the introductory text.
    13. Section 124.305(f) is revised to read as follows:


Sec. 124.305  Statutory exemptions from the Miller Act bonds.

* * * * *
    (f) Expiration date. The exemptions described in this section are 
authorized only until October 1, 1994, and apply only to those 
contracts awarded on or after August 21, 1989.
    14. Section 124.307 is amended by adding new paragraph (e) to read 
as follows:


Sec. 124.307  Contractual assistance.

* * * * *
    (e) Except as provided in Sec. 124.311(i), an 8(a) concern must be 
an eligible Program Participant on the date of contract award.
    15. Section 124.311(f)(4) is revised to read as follows:


Sec. 124.311  8(a) competition.

* * * * *
    (f) * * *
    (4)(i) In a sealed bid acquisition, upon the receipt of offers, the 
procuring agency shall submit to SBA a list of offerors ranked in the 
order of their standing for award (that is, lowest bid, second low bid, 
etc.) with the total evaluated price for each offer, differentiating 
between basic requirements and any options.
    (ii) In a negotiated acquisition, the procuring agency shall 
transmit to SBA the offeror determined by the procuring agency to be 
the apparent successful offeror. Such a referral generally shall be 
made at the time the procuring agency transmits the 8(a) contract 
documents to SBA for signature, unless the contracting officer has made 
a responsibility referral to SBA under FAR 19.809. In the case of such 
a referral, SBA shall determine eligibility when the responsibility 
referral is made to SBA, and may determine responsibility both at the 
time of the referral and at the time of award.
    (iii) Eligibility shall be determined as of the date of a 
Participant's submission of its initial offer which includes price. In 
addition, eligibility is determined for each competitive 8(a) 
acquisition independent of other 8(a) acquisitions for which a 
Participant has submitted an offer, but for which no award has been 
made.

    Example. Participant X has an approved 8(a) support level of $1 
million. To date, X has received no 8(a) contract support. X submits 
offers that include price on five separate 8(a) competitive 
procurements (each with a $500,000 base year). The $1 million 
support level is not an eligibility bar to the Participant receiving 
any or all of the five acquisitions for which it submitted an offer 
because at the time that it submitted its offers, it was eligible to 
receive each contract independent of the other four contracts. In 
this example, it is possible that X is ultimately awarded all five 
contracts, even though the five taken together would be in excess of 
its applicable support level. Once awards have actually been made in 
excess of the $1 million support level, any subsequent offers would 
be made in the face of ineligibility.
* * * * *
    16. Section 124.311 is further amended by revising the introductory 
text in paragraph (f)(5), redesignating paragraphs (f)(5)(iii) and 
(f)(5)(iv) as paragraphs (f)(5)(iv) and (f)(5)(v), respectively, adding 
a new paragraph (f)(5)(iii), and revising the first sentence of newly 
redesignated paragraph (f)(5)(v) to read as follows:


Sec. 124.311  8(a) competition.

* * * * *
    (f) * * *
    (5) Within 5 working days after receipt of the procuring agency's 
request for an eligibility determination, the SBA will determine 
whether any firm identified is eligible for award of the contract, 
including:
* * * * *
    (iii) If the procurement is to be restricted within a particular 
stage of program participation or a particular geographical area, 
whether the firm is within the required stage of development or 
location;
* * * * *
    (v) If the firm is in the transitional stage, whether it has 
exceeded its approved business support level by more than 25 percent 
(or will exceed such level if it is awarded the contract at issue), and 
whether it has achieved its competitive business mix targets under 
124.312. * * *
* * * * *
    17. Section 124.311 is further amended by adding the following new 
paragraph (i) to read as follows:


Sec. 124.311  8(a) competition.

* * * * *
    (i) Award to firms whose program terms have expired. A concern that 
has completed its term of participation in the 8(a) program, as set 
forth in Sec. 124.110, may be awarded a competitive 8(a) contract if it 
was a Program Participant eligible for award of the contract on the 
date specified for receipt of offers contained in the contract 
solicitation.


Sec. 124.321  [Amended]

    18. Section 124.321(h)(2) is amended by removing ``two'' and adding 
``five'' in its place.
    19. Section 124.321(h)(3) is amended by removing ``September 30, 
1991'' and adding ``September 30, 1994.''


Sec. 124.601  [Amended]

    20. Section 124.601(c) is amended by removing the reference to a 
``Sec. 121.9'' and adding ``Secs. 121.1601-121.1608.''


Secs. 124.602, 124.604 and 124.605  [Amended]

    21. Sections 124.602(f), 124.602(g), 124.604, 124.605(a)(3), and 
124.605(c)(1) are amended by revising the phrase ``Office of Program 
Eligibility'' to read ``Division of Programs Certification and 
Eligibility'' wherever it appears.


Secs. 124.602, 124.604, 124.607 and 124.608  [Amended]

    22. Sections 124.602(g), 124.604, 124.607(d), 124.608(a), 
124.608(b) introductory text, 124.608(b)(1), 124.608(b)(3), 124.608(c), 
124.609(a), and 124.609(b) are amended by revising the term ``OPE'' to 
read ``DPCE'' wherever it appears.

    Dated: January 14, 1994.
Erskine B. Bowles,
Administrator.
[FR Doc. 94-6218 Filed 3-17-94; 8:45 am]
BILLING CODE 8025-01-M