[Federal Register Volume 59, Number 238 (Tuesday, December 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30558]


[[Page Unknown]]

[Federal Register: December 13, 1994]



DEFENSE LOGISTICS AGENCY

48 CFR Part 5452

 

DLA Acquisition Regulation; Small Business and Small 
Disadvantaged Business Concerns

AGENCY: Defense Logistics Agency, Defense.

ACTION: Proposed rule and requests for comments.

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SUMMARY: The Defense Federal Acquisition Regulation Supplement (DFARS) 
48 CFR Parts 219 and 252 provide regulatory coverage incorporating two 
standard clauses giving small disadvantaged business (SDB) concerns a 
ten percent evaluation preference in competitive acquisitions where 
award is based on price and price related factors. The Defense 
Logistics Agency Regulation (DLAR) 48 CFR parts 5419 and 5452, as 
proposed in the Federal Register of April 28, 1994 (59 FR 21954) would 
provide regulatory coverage incorporating two nonstandard clauses in 
domestic bulk petroleum solicitations and contracts concerning small 
business set-asides and evaluation preference for SDB concerns into 
DLAR on a permanent basis. These two DFARS and two DLAR clauses concern 
preferential consideration for SDBs under small business set-asides and 
the ten percent evaluation preference for SDB concerns on unrestricted 
procurements. Comments are hereby requested on the proposed DFARS and 
DLAR coverage, which reduces the SDB preference from ten to five 
percent. The proposed coverage is being published in the Federal 
Register because it is expected to have an effect beyond the internal 
operating procedures of DLA, and in some cases, may have a modest 
impact on contractors.

DATES: Comments on the proposed DFARS and DLAR rules must be submitted 
in writing to the address shown below on or before January 12, 1995 to 
be considered in the formulation of the final rules.

ADDRESSES: Interested parties should submit written comments to Defense 
Logistics Agency, Directorate of Procurement, Contract Policy Team 
(AQPLL), Ms. Melody Reardon, Cameron Station, Alexandria, Virginia 
22306-6100. FAX: (703) 274-0310.

FOR FURTHER INFORMATION CONTACT:
Ms. Melody Reardon, Defense Logistics Agency, AQPLL (703) 274-6431.

SUPPLEMENTARY INFORMATION:

A. Background

    Section 1207 of Public Law 99-661, as amended, sets a goal for the 
Department of Defense to award five percent of contract performance 
dollars to SDB concerns, historically black colleges, and universities, 
and minority institutions. To achieve this goal, the law permits the 
payment of contract prices up to 10 percent above fair market price. 
The implementing DFARS coverage includes an across-the-board evaluation 
factor of 10 percent. Offers from non-SDB concerns on unrestricted 
procurements are increased by adding an evaluation factor of ten 
percent to their offers (evaluation preference). On partial small 
business set-asides, the DFARS permits award to SDB concerns at prices 
up to ten percent above the highest non-set-aside award price 
(preferential consideration). Decreasing the percentage from ten to 
five percent will save taxpayers at least $3 million a year, while 
continuing to provide SDB firms an opportunity to participate in fuel 
procurements and allowing DLA to continue meeting the 5 percent SDB 
award goal.

B. Regulatory Flexibility Act

    This deviation may have a modest impact on a few SDB fuel 
suppliers. However, the proposed rule is not expected to 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. since the projected SDB award percentages in the two most affected 
fuels programs should only be decreased by one-tenth of a percent or 
less. An initial regulatory flexibility analysis has, therefore, not 
been performed. Comments are invited from small businesses and other 
interested parties. Comments from small entities concerning the 
affected DFARS sections will also be considered in accordance with 
section 610 of the Act. Such comments must be submitted separately and 
cite this case in correspondence.

C. Paperwork Reduction Act

    The proposed rules do not impose any reporting or record keeping 
requirements that require the approval of OMB under 44 U.S.C. 3501, et 
seq.

List of Subjects in 48 CFR Parts 219, 252, 5419, and 5452

    Government procurement.

    Therefore, it is proposed that 48 CFR chapter 2 and proposed 
chapter 54 (as proposed in the Federal Register of April 28, 1994 (59 
FR 21954)) be amended as follows:

PART 219--SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS

    1. The authority citation for part 219 continues to read as 
follows:

    Authority: 41. U.S.C. 421 and FAR subpart 1.3.

    2. Section 219.7002 is amended by revising paragraphs (a) 
introductory text, (b), (c), and (d) to read as follows:


219.7002  Procedures.

    (a) Give offers from small disadvantaged business concerns a 
preference in evaluation by adding a factor on ten percent, except five 
percent for Defense Fuel Supply Center procurements, to the price of 
all offers, except--
* * * * *
    (b) Apply the factor on a line item by line item basis or apply it 
to any group of items on which award may be made. Add other evaluation 
factors such as transportation costs or rent free use of Government 
facilities to the offers before applying the ten percent factor, except 
use a five percent factor for Defense Fuel Supply Center procurements.
    (c) Do not evaluate offers using the preference when it would cause 
award to be made at a price that exceeds fair market price by more than 
ten percent, except five percent for Defense Fuel Supply Center 
procurements.
    (d) In partial small business set-aside, use the evaluation 
preference procedures set forth in the clause at 252.219-7001, Notice 
of Partial Small Business Set-Aside with Preferential Consideration for 
Small Disadvantaged Business Concerns, instead of the procedures in 
paragraphs (a) through (c) of this section. For Defense Fuel Supply 
Center procurements only, use the clause with its Alternate II.
    3. Section 219.7003 is revised to read as follows:


219.7003  Solicitation provisions and contract clauses.

    Use the clause at 252.219-7006, Notice of Evaluation Preference for 
Small Disadvantaged Business Concerns, in solicitations and Contracts 
involving the evaluation preference, except those that include the 
clause at 252.219-7001, Notice of Partial Small Business Set-Aside with 
Preferential Consideration for Small Disadvantaged Business Concerns. 
Use the clause with its Alternate I when the contracting officer 
determines that there are no small disadvantaged business manufacturers 
that can meet the requirement of the solicitation. Defense Fuel Supply 
Center shall also use Alternate II.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    4. The authority citation for Part 252 continues to read as 
follows:

    Authority: 41 U.S.C. 421 and FAR subpart 1.3.

    5. Section 252.219-7001 is amended by adding Alternate II as 
follows:


215.219-7001  Notice of partial small business set-aside with 
preferential consideration for small disadvantaged business concerns.

* * * * *

Alternate II (Jun 1994)

    As prescribed in 219.7003, substitute the following paragraph 
(c)(2)(i)(B) for paragraph (c)(2)(i)(B):
    (B) A price that does not exceed the award price on the non-set-
aside portion by more than 5 percent.

    6. Section 252.219-7006 is amended by adding Alternate II as 
follows:


252.219-7006  Notice of evaluation preference for small disadvantaged 
business concerns.

* * * * *

Alternate II (Jun 1994)

    As prescribed in 219.7002(d), substitute the following paragraph 
(b) for paragraph (b) of the clause:
    (b) Evaluation Preference:
    (1) Offers will be evaluated by adding a factor of 5 percent to 
the price of all offers, except--
    (i) Offers from small disadvantaged business concerns, which 
have not waived the preference;.
    (ii) Offers from historically black colleges and universities or 
minority institutions, which have not waived the preference;
    (iii) Otherwise successful offers of--
    (A) Eligible products under the Trade Agreements act when the 
dollar threshold for application of the Act is exceeded;
    (B) Qualifying country end products (as defined in the Defense 
Federal Acquisition Regulation Supplement clause at 252.225-7001, 
Buy American Act and Balance of Payments Program); and
    (iv) Offers where application of the factor would be 
inconsistent with a Memorandum of Understanding or other 
international agreement with a foreign government.
    (2) The 5 percent factor will be applied on a line item by line 
item basis or to any group of items on which award may be made. 
Other evaluation factors described in the solicitation will be 
applied before application of the 5 percent factor. The 5 percent 
factor. will not be applied if using the preference would cause the 
contract award to be made at a price which exceeds the fair market 
price by more than 5 percent.

[The following amendments are to part 5452, which was proposed to be 
added on April 28, 1994 (59 FR 21954)]

PART 5452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    7. The authority citation for Part 5452 continues to read as 
follows:

    Authority: 5 U.S.C. 301, U.S.C. 2202, 48 CFR part 1, subpart 
1.3, and 48 CFR part 201, subpart 201.3.

    8. The clause heading is revised and paragraphs (b) and (c) of the 
clause at 5452.219-9F05 are redesignated as paragraphs (c) and (d) and 
revised to read as follows:


5452.219-9F05  Notice of evaluation preference for small disadvantaged 
business concerns (Jul 1994).

* * * * *

5452.219-9F05--Notice of Evaluation Preference for Small Disadvantaged 
Business Concerns (Jul 1994) (DFSC) (Deviation)

* * * * *
    (c) Evaluation Preference.
    (1) After all other evaluation factors described in this 
solicitation are applied, offers will be evaluated by adding a 
factor of 5 percent to the price of all offers, except--
    (i) Offers from SDB concerns that have not waived the 
preference;
    (ii) Otherwise successful offers of eligible products under the 
Trade Agreements Act when the dollar threshold for application of 
the Act is exceeded.
    (2) The 5 percent factor will be applied on a line item by line 
item basis or to any group of items on which award may be made. 
Other evaluation factors described in the solicitation will be 
applied before application of the 5 percent factor. However, in no 
event may award be made to an SDB concern at a price that exceeds 
fair market price (as determined under FAR 19.806-2) by more than 5 
percent.
    (d) Waiver of Evaluation Preference. An SDB may elect to waive 
the preference, in which case the 5 percent factor will be added to 
its offer for evaluation purposes.
    [  ] Offeror elects to waive the preference in paragraph (c) 
above.

[End of Clause]

    9. The clause heading and paragraph (c)(2) of the clause of section 
5452.219-9F06 are revised to read as follows:


5452.219-9F06  Notice of partial small business set-aside with 
preferential consideration for small disadvantaged business concerns.

* * * * *

5452.219-9F06--Notice of Partial Small Business Set-Aside with 
Preferential Consideration for Small Disadvantaged Business concerns 
(Jul 1994) (DFSC) (Deviation)

* * * * *
    (c) * * *
    (2) Offers from SDB concerns will be reviewed first to determine 
if an award can be made to an SDB concern at its offered price, 
beginning with the SDB concern offering the lowest evaluated price 
for that item. Awards to SDB concerns on the set-aside portion of 
this procurement will be made at the price offered by the SDB 
concern if that evaluated price does not exceed the highest award 
price on the non-set-aside portion by more than 5 percent, as 
adjusted for transportation charges and other factors. If the SDB 
price exceeds the highest non-set-aside price by more than 5 
percent, the SDB offer will be treated as a small business and the 
procedures set forth in (d) below will apply.

[End of Clause]

* * * * *
Margaret J. Janes,
Assistant Executive Director (Procurement Policy).
[FR Doc. 94-30558 Filed 12-12-94; 8:45 am]
BILLING CODE 5000-04-M