[Federal Register Volume 59, Number 194 (Friday, October 7, 1994)]
[Unknown Section]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-24914]
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[Federal Register: October 7, 1994]
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1815, 1819, 1852, and 1870
RIN 2700-AB94
Revision to NASA FAR Supplement Coverage on Contracting and
Subcontracting Policies and Procedures To Achieve Goals for Designated
Entities
agency: Office of Procurement, Contract Management Division, National
Aeronautics and Space Administration (NASA).
action: Proposed rule.
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summary: NASA proposes to provide further implementation of the
statutory goal to make at least eight percent of the funding for prime
contracts and subcontracts available to small business concerns or
other organizations owned or controlled by socially and economically
disadvantaged individuals, which include women, Historically Black
Colleges and Universities, and other minority educational institutions.
These categories of entities listed in the applicable statutes are
collectively identified as ``designated entities.''
dates: Comments are due no later than December 6, 1994.
addresses: Submit comments to Ms. Deborah O'Neill, Contract Management
Division (Code HK), Office of Procurement, NASA Headquarters,
Washington, DC 20546.
for further information contact: Ms. Deborah O'Neill, (202) 358-0440.
SUPPLEMENTARY INFORMATION:
Background
This rule establishes major policies with respect to contracting
and subcontracting with designated entities. With respect to prime
contracting, it ensures that designated entities are fully considered
for awards. Also, the consolidation or bundling of contract
requirements is controlled. With respect to subcontracting, it requires
specifying mandatory goals in solicitations for subcontracting with
designated entities, evaluating designated entity subcontracting goals
proposed by offerors, and including in contracts the designated entity
subcontracting goals in addition to the goals included in the
subcontracting plan required by 15 U.S.C. 637(d) as implemented in FAR
Subpart 19.7. NFS Subpart 1819.70 and the clause at 1852.219-76 are
substantially revised. A new subsection is added to NFS 1815.608. NFS
1870.303, Appendix I, Chapter 301, is amended to cover proposal
evaluation.
Availability of NASA FAR Supplement
The NASA FAR Supplement, of which this proposed coverage will
become a part, is codified in 48 CFR chapter 18, and is available in
its entirety on a subscription basis from the Superintendent of
Documents, Government Printing Office, Washington, DC 20402. Cite GPO
Subscription Stock Number 933-003-00000-1. It is not distributed to the
public, whether in whole or in part, directly by NASA.
Executive Order 12866
The Office of Information and Regulatory Affairs has determined
that this rule is significant under E.O. 12866. This regulation is
needed, because it provides the NASA policy regarding contracting and
subcontracting with designated entities. Regarding prime contract
awards, the policy ensures that designated entities are fully
considered for awards. Regarding subcontracting issues, the policy
requires specifying mandatory goals in solicitations for subcontracting
with designated entities, evaluating designated entity subcontracting
goals proposed by offerors, and including in contracts the designated
entity subcontracting goals in addition to the goals included in the
subcontracting plan required by 15 U.S.C. 637(d) as implemented in FAR
Subpart 19.7. Current regulations do not address these prime
contracting and subcontracting policies. The potential costs for this
regulatory action are nominal and are not quantifiable. Because the
subcontracting goals are included in the contract, costs for
contracting with or subcontracting to designated entities would
normally be charged to the Government. The potential benefits are the
increased direct awards or subcontracting awards to designated entities
which will broaden the base of NASA contractors. The value of
increasing the contract and subcontract opportunities to designated
entities cannot be measured, because it involves not only increases to
NASA's business base of qualified and eligible contractors but also
additional opportunities for designated entities to receive a fair
proportion of NASA awards to the maximum extent practicable.
Regulatory Flexibility Act
NASA certifies that this proposed rule will not have a significant
economic impact on a substantial number of small entities under the
Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
Paperwork Reduction Act
This rule does not impose any information collection subject to 44
U.S.C. chapter 35.
List of Subjects in 48 CFR Parts 1815, 1819, 1852, and 1870
Government procurement.
Diedre A. Lee,
Associate Administrator for Procurement.
Accordingly, 48 CFR parts 1815, 1819, 1852, and 1870 are proposed
to be amended as follows:
1. The authority citation for 48 CFR parts 1815, 1819, 1852, and
1870 continues to read as follows:
Authority: 42 U.S.C. 2473(c)(1).
PART 1815--CONTRACTING BY NEGOTIATION
2. Section 1815.608-72 is added to read as follows:
1815.608-72 NASA subcontracting goal.
In all solicitations which contain the clause at 1852.219-76, NASA
Subcontracting Goal, the contracting officer is required to prescribe a
mandatory goal for the use of ``designated entities'' as subcontractors
(See 1819.7005). Offers will be evaluated on the proposed designated
entity subcontracting goal, in comparison to the goal specified in the
solicitation, and on the offeror's proposed method of achieving the
goal. Evaluation of the designated entity subcontracting goal shall be
accomplished, at a minimum, as a separate element under a management
subfactor under the Mission Suitability factor so that it may have an
impact on the source selection decision.
PART 1819--SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
3. Subpart 1819.70 is revised to read as follows:
Subpart 1819.70--Contracting and Subcontracting Policies and Procedures
To Achieve Goals for Designated Entities
Sec.
1819.7001 Scope of subpart.
1819.7002 Definitions.
1819.7003 General policy.
1819.7004 Prime contracting policy.
1819.7005 Subcontracting policy.
1819.7006 Solicitation provisions and contract clauses.
1819.7001 Scope of subpart.
This subpart implements legislative provisions (Public Laws 101-
144, 101-507, and 102-389) which require the NASA Administrator to
ensure, to the fullest extent possible, that at least eight percent
(8%) of Federal funding for prime and subcontracts awarded in support
of authorized programs, including the space station by the time
operational status is obtained, be made available to small business
concerns or other organizations owned or controlled by socially and
economically disadvantaged individuals (within the meaning of section
8(a)(5) and (6) of the Small Business Act (15 U.S.C. 637(a) (5) and
(6)), including Historically Black Colleges and Universities and
minority educational institutions. For purposes of this subpart,
socially and economically disadvantaged individuals shall be deemed to
include women.
Sec. 1819.7002 Definitions.
Designated entities, as used in this subpart, means small business
concerns or other organizations owned and controlled by socially and
economically disadvantaged individuals, which include women,
Historically Black Colleges and Universities, and other minority
educational institutions.
Historically Black Colleges and Universities, as used in this
subpart, means institutions determined by the Secretary of Education to
meet the requirements of 34 CFR 608.2 and listed therein.
Minority educational institutions as used in this subpart, means
institutions determined by the Secretary of Education to meet the
requirements of 34 CFR 637.4.
Socially and economically disadvantaged individuals has the meaning
given such terms in section 8(a)(5) and (6) of the Small Business Act
(15 U.S.C. 637 (a)(5) and (6)). Public Law 101-507 designated that for
purposes of NASA's 8% goal, economically and socially disadvantaged
individuals shall be deemed to include women.
1819.7003 General policy.
(a) The Congress has indicated its desire to increase the
participation of designated entities in the aerospace industry,
particularly as NASA contractors and subcontractors. The agency's goal
is to award to such entities at least 8% of the funding provided for
prime contracts and subcontracts in support of authorized programs by
the end of fiscal year 1994. The participation of NASA prime
contractors, through their subcontracting practices, is essential to
meeting this goal.
(b) The 8% goal applies to the annual dollar obligations of the
agency. It is not an absolute goal for each center or program or an
absolute percentage to be placed in each contract containing a
subcontracting plan. While some procurement requirements (contracts)
offer subcontracting opportunities for designated entities equal to 8%
of the contract value, others will offer greater, and some less,
subcontracting opportunities. The aggregate comprises the agency's
total accomplishment in response to the legislative mandate.
1819.7004 Prime contracting policy.
(a) Contracting officers must seek out designated entities as
sources and give full consideration to these entities to satisfy
requirements in all NASA procurements. Since contracts with eligible
8(a) firms under the Small Business Administration section 8(a) program
count toward the attainment of NASA's goal, contracting officers must
make maximum use of this program in awarding prime contracts (see
procedures set forth in (FAR) 48 CFR Subpart 19.8).
(b) Existing contracts or options will normally not be reduced in
scope or otherwise restructured to increase opportunities for
designated entities at the prime contract level. In rare instances,
taking such action may be accomplished with approval of the Associate
Administrator for Procurement.
(c) Consolidated Contracts. Prior to effecting a contracting
consolidation valued at $5 million or more, including options, which
will not be exclusively reserved for small or 8(a) firms, an impact
assessment on the effects of consolidation on present and future
contracting and subcontracting opportunities of designated entities
shall be prepared by the center, submitted to Headquarters Code HS,
concurred in by Code K and the cognizant Associate Administrator, and
approved by the Associate Deputy Administrator (Technical).
(d) Protests involving size status and those involving designated
entity status for other than women-owned businesses shall be referred
to the U.S. Small Business Administration for handling. Protests to
NASA regarding women-owned businesses claiming designated entity status
shall be resolved by the agency.
(e) Public Laws 101-144, 101-507, and 102-389 state that the status
of a small business concern or other organization as a designated
entity is determined by whether the entity is owned or controlled by
socially and economically disadvantaged individuals, including women.
To provide consistency with section 8(a)(4) of the Small Business Act
(15 U.S.C. 637(a)(4)), NASA applies a restrictive interpretation of
this legislation by requiring ownership and control by socially and
economically disadvantaged individuals.
1819.7005 Subcontracting policy.
(a) All contracts which are required to include a subcontracting
plan (see (FAR) 48 CFR 19.702) must contain a separate percentage goal
for using designated entities as subcontractors. This separate goal
will not be entered on the subcontracting plan but will be specified in
the clause at 1852.219-76, NASA Subcontracting Goal. The total dollars
planned to be subcontracted to small disadvantaged business concerns
stated in the subcontracting plan will be included in determining the
designated entity subcontracting goal. The designated entity
subcontracting goal also includes planned subcontracts with small
business concerns owned and controlled by women, Historically Black
Colleges and Universities, and other minority educational institutions.
(b) After a careful assessment of the statement of work associated
with each procurement, contracting officers would insert in
solicitations that have subcontracting opportunities an appropriate
subcontracting goal for designated entities. The contracting officer
shall confer with the small business specialist during the assessment
stage since the specialist has knowledge and information regarding the
pool of designated entities available to fulfill the subcontracting
opportunities. The goals should be set at a level that can be
reasonably achieved by the contractor expending good faith efforts to
use designated entities as subcontractors to the maximum practicable
extent. The designated entity subcontracting goals will be stated as
mandatory goals in solicitations.
(c) Contracting officers shall include the mandatory designated
entity subcontracting goal in the presolicitation notice (see (FAR) 48
CFR 5.204) and in any draft Request for Proposal that is issued. The
contracting officer and the small business specialist will consider all
comments received in response to either the presolicitation notice or
the draft Request for Proposal prior to determining the mandatory goal
in the formal solicitation.
(d) In negotiated acquisitions, an initial proposal will not be
rejected as unacceptable solely as a result of an offeror proposing a
goal that is less than the mandatory goal. Subsequent to the evaluation
of proposals, in which the proposed goal shall be evaluated as a
separate element under a management subfactor under the Mission
Suitability factor, consistent with NFS 1815.608-72, the contracting
officer shall negotiate with the apparently successful offeror(s) to
establish the designated entity subcontracting goal to be inserted in
the contract.
(e) If a bidder, in response to a sealed bid solicitation, takes
exception to the specified mandatory subcontracting goal, the bid shall
not be rejected as nonresponsive. If the bidder is selected for award,
the contracting officer may request the bidder to offer a revised
designated entity subcontracting goal by a specified date. If the
bidder's response indicates that the bidder does not intend to use its
best efforts to provide the designated entities the maximum practicable
opportunity to participate in performance of the contract, the
contracting officer may find the bidder nonresponsible.
(f) In solicitations, proposals, and resulting contracts, the
designated entity subcontracting goal should be stated as a percentage
of the total contract value rather than as a percentage of the total
planned subcontracting dollars. Subcontracting plans shall conform to
the requirements of (FAR) 48 CFR 52.219-9, i.e., the goals included in
the plans shall be expressed in terms of percentages of total planned
subcontracting dollars. Also, SF 294 and SF 295 reports shall continue
to be completed in accordance with the instructions on these forms.
1819.7006 Solicitation provisions and contract clauses.
(a) The contracting officer shall insert the provision at 1852.219-
73, Small Business and Small Disadvantaged Business Subcontracting
Plan, in solicitations containing the clause at (FAR) 48 CFR 52.219-9.
Insert in the last sentence the number of calendar days after the
contracting officer's request that the offeror must submit a complete
plan. When offerors are to include subcontracting plans in their
initial offers as contemplated by (FAR) 48 CFR 19.705-2(d), or if a
noncompetitive solicitation will be issued, the contracting officer may
use the provision with its Alternate I.
(b) The contracting officer shall insert the clause at 1852.219-75,
Small Business and Small Disadvantaged Business Subcontracting
Reporting, in solicitations and contracts containing the clause at
(FAR) 48 CFR 52.219-9. Those current contracts containing
subcontracting plans and designated by NASA Headquarters (Code HC)
shall be amended to require quarterly submission of the SF 295.
(c) In all solicitations and contracts which contain the clause at
(FAR) 48 CFR 52.219-9, Small Business and Small Disadvantaged Business
Subcontracting Plan, the contracting officer shall insert the clause at
1852.219-76, NASA Subcontracting Goal, when contracting by negotiation.
In all solicitations and contracts which contain the clause at (FAR) 48
CFR 52.219-9, the contracting officer shall insert the clause at
1852.219-76 with its Alternate I, when contracting by sealed bidding.
(1) In solicitations and contracts which do not contain the clause
at (FAR) 48 CFR 52.219-9, and when the contract value is expected to
exceed the small purchase limitation, the contracting officer shall
insert the clause at 1852.219-76 with its Alternate II, except as
provided in paragraph (c)(2) of this section.
(2) In solicitations and contracts which do not contain the clause
at (FAR) 48 CFR 52.219-9, and when the contract value is expected to
exceed $500,000 ($1,000,000 for construction), and the contractor is a
small business which is not a designated entity, the contracting
officer may use the clause at 1852.219-76 instead of the clause at
1852.219-76 with its Alternate II. The basic clause should be used when
the contracting officer determines that the procurement offers
subcontracting opportunities with designated entities.
PART 1852--SOLICITATION AND CONTRACT CLAUSES
4. Section 1852.219-76 is revised to read as follows:
1852.219-76 NASA Subcontracting Goal.
As prescribed in 1819.7006(c), insert the following clause:
NASA Subcontracting Goal (XXX 1994)
(a) Definitions.
Designated entities, as used in this clause, means small
business concerns or other organizations owned and controlled by
socially and economically disadvantaged individuals, which include
women, Historically Black Colleges and Universities, and other
minority educational institutions.
Historically Black Colleges and Universities, as used in this
clause, means institutions determined by the Secretary of Education
to meet the requirements of 34 CFR 608.2 and listed therein.
Minority educational institutions, as used in this clause, means
institutions determined by the Secretary of Education to meet the
requirements of 34 CFR 637.4.
Socially and economically disadvantaged individuals has the
meaning given such terms in section 8(a) (5) and (6) of the Small
Business Act (15 U.S.C. 637(a) (5) and (6)) and includes women for
purposes of this clause.
(b) The NASA Administrator is required to ensure, to the fullest
extent possible, that at least 8% of the funding provided for prime
and subcontracts awarded in support of authorized programs,
including the space station by the time operational status is
obtained, is made available to designated entities.
(c)(1) A mandatory goal of ____ percent [the Contracting Officer
shall insert the goal] for the use of designated entities as
subcontractors is established for this acquisition. This designated
entity subcontracting goal is stated as a percentage of the total
contract value, not the total planned subcontracting dollars. The
goal shall include the value of subcontracts with designated
entities that contribute directly to contract performance.
(2) The offeror should make an independent assessment of its
subcontracting opportunities and is encouraged to propose a goal
higher than that specified in paragraph (c)(1) of this clause. The
designated entity subcontracting goal proposed by the offeror, and
the methods for achieving the proposed goal, will be evaluated as
indicated in the solicitation.
(3) To effectively achieve the goal specified in paragraph
(c)(1) of this clause consistent with efficient contract
performance, the Contractor shall perform the functions listed in
paragraph (e) of the clause at (FAR) 48 CFR 52.219-9, Small Business
and Small Business Disadvantaged Subcontracting Plan, for all
designated entities which may become potential subcontractors.
(d) The Contractor may rely in good faith on a written
representation of a subcontractor that such subcontractor has the
status of a designated entity.
(e) Failure of the Contractor to comply in good faith with the
requirements of this clause shall constitute a material breach of
the contract.
(End of clause)
Alternate I (XXX 1994)
When contracting by sealed bidding rather than by negotiation,
substitute the following paragraph (c)(2) for paragraph (c)(2) of the
basic clause:
(c)(2) Failure of the bidder to accept the goal specified in
paragraph (c)(1) of this clause may make the bidder ineligible for
award.
Alternate II (XXX 1994)
When the solicitation and contract do not contain the clause at
(FAR) 48 CFR 52.219-9, Small Business and Small Disadvantaged Business
subcontracting Plan, and when the contract amount is expected to exceed
the small purchase limitation, substitute the following paragraph (c)
for paragraph (c) of the basic clause:
(c) The Contractor agrees to assist NASA to achieve the statutory
goal described in paragraph (b) of this clause by using its best
efforts to award subcontracts to designated entities to the fullest
extent consistent with efficient contract performance.
PART 1870--NASA SUPPLEMENTARY REGULATIONS
4. In Appendix I to section 1870.303, Chapter 3, the introductory
text to paragraph 301.1.a is revised to read as follows:
Appendix I to 1870.303--NASA Source Evaluation Board Procedures
(Handbook)
* * * * *
Chapter 3--Evaluation Factors, Subfactors and Elements
* * * * *
301 Mission Suitability
1. Evaluation subfactors
a. Evaluation subfactors are the weighted areas within the Mission
Suitability factor that further identify, for proposal preparation and
evaluation purposes, the content of the factor. Examples of Mission
Suitability subfactors found by experience to be relevant to many
procurements are: understanding of the Requirement; Management Plan;
Key Personnel; Corporate or Company Resources; and Excellence of
Proposed Design for hardware procurements. Citation of these specific
subfactors is not intended to be restrictive or all inclusive. However,
as stated in NFS 1815.608-72, evaluation of the designated entities
subcontracting goal shall be accomplished, at a minimum, as a separate
element under a management subfactor under the Mission Suitability
factor. The nature and thrust of the requirements and objectives of the
procurement may logically call for the use of some subfactors titled
and described in a somewhat different manner than those described
below:
* * * * *
5. In Appendix I to section 1870.303, chapter 3, paragraph
301.1.e.(1) is revised to read as follows:
Appendix I to 1870.303--NASA Source Evaluation Board Procedures
(Handbook)
* * * * *
Chapter 3--Evaluation Factors, Subfactors and Elements
* * * * *
301 Mission Suitability
1. * * *
e. (1) In structuring evaluation subfactors and elements, emphasis
should be placed on identification of significant discriminators, or
``key swingers''--the essential information required to support a
source selection decision. Too many subfactors and elements are
detrimental to effective evaluation of proposals and may result in a
leveling or averaging out of scores over all proposals. To avoid this
negative effect, the number of subfactors under Mission Suitability
shall be no more than 4 and the number of elements no more than 8
except for the separate evaluation of designated entities either as a
separate element or a separate subfactor under Mission Suitability (See
NFS 1815.608-72). Other evaluation factors shall also be limited to
only essential subfactors and elements. Further, care should be taken
to avoid overlap and redundancy by clearly defining each evaluation
subfactor and element. Avoiding such overlap assures an offeror is not
scored in two or more areas for the same work.
* * * * *
[FR Doc. 94-24914 Filed 10-6-94; 8:45 am]
BILLING CODE 7510-01-M