[Federal Register Volume 61, Number 83 (Monday, April 29, 1996)]
[Rules and Regulations]
[Pages 18686-18689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10541]
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DEPARTMENT OF DEFENSE
48 CFR Parts 215, 219, 236, 242, 252, and 253
[DFARS Case 95-D039]
Defense Federal Acquisition Regulation Supplement; Small
Disadvantaged Business Concerns
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
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SUMMARY: The Department of Defense suspended the sections of the
Defense Federal Acquisition Regulation Supplement (DFARS) that
prescribe the set-aside of acquisitions for small disadvantaged
businesses (SDBs). The Department is issuing this final rule to
implement initiatives designed to limit the adverse impact of this
suspension. The efforts of a government-wide group
[[Page 18687]]
to reform affirmative action programs in procurement continue. This
action was reviewed by the Office of Management and Budget under
Executive Order 12866.
EFFECTIVE DATE: April 29, 1996.
FOR FURTHER INFORMATION CONTACT:
Ms. Susan Schneider, (703) 602-0131.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule amends the Defense Federal Acquisition Regulation
Supplement (DFARS) to implement initiatives designed to facilitate
awards to SDBs while taking account of the Supreme Court's decision in
Adarand Constructors, Inc. v. Pena, 115 S.Ct. 2097 (1995). This DFARS
rule includes contracting procedures that: (1) expand the use of the
evaluation factor for SDBs to include competitive awards based on other
than price or price-related factors; (2) consider small, small
disadvantaged, and women-owned small business subcontracting as a
factor in the evaluation of past performance; (3) clarify that the
contracting officer will weigh enforceable commitments to use small
businesses, SDBs, women-owned small businesses, historically black
colleges and universities, and minority institutions more heavily than
non-enforceable ones, if the commitment to use such firms is included
in the solicitation as a source selection criterion; (4) require prime
contractors to notify the contracting officer of any substitutions of
firms that are not small, small disadvantaged, or women-owned small
businesses for the firms listed in the subcontracting plan; and (5)
establish a test program of an SDB evaluation preference that would
remove bond cost differentials between SDBs and other businesses as a
factor in most source selections for construction acquisitions.
A proposed rule was published in the Federal Register on December
14, 1995 (60 FR 64135), with a correction published on December 21,
1995 (60 FR 66246). DoD considered all comments received in response to
the proposed rule.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act applies. A final regulatory
flexibility analysis has been performed and is available by writing the
Defense Acquisition Regulations Council, PDUSD(A&T)DP(DAR), 3062
Defense Pentagon, Washington, DC 20301-3062.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (Pub. L. 104-13) applies. OMB
has approved the information collection requirement under OMB Control
Number 0704-0386.
List of Subjects in 48 CFR Parts 215, 219, 236, 242, 252, and 253
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR Parts 215, 219, 236, 242, 252, and 253 are
amended as follows:
PART 215--CONTRACTING BY NEGOTIATION
1. The authority citation for 48 CFR Parts 215, 219, 236, 242, 252,
and 253 continues to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
2. Section 215.605 is amended by revising the section title and
paragraphs (b)(ii)(B) and (b)(ii)(E), and by adding paragraph (b)(iv)
to read as follows:
215.605 Evaluation factors and subfactors.
(b) * * *
(ii) * * *
(B) The extent of commitment to use such firms (for example,
enforceable commitments are to be weighted more heavily than non-
enforceable ones);
* * * * *
(E) When not otherwise required by 215.608(a)(2), past performance
of the offerors in complying with requirements of the clause at FAR
52.219-8, Utilization of Small, Small Disadvantaged and Women-Owned
Small Business Concerns, and 52.219-9, Small, Small Disadvantaged and
Women-Owned Small Business Subcontracting Plan; and
* * * * *
(iv) When an evaluation includes the criterion in paragraph
(b)(ii)(A) of this section, the small, small disadvantaged, or women-
owned small businesses considered in the evaluation shall be listed in
any subcontracting plan submitted pursuant to FAR 52.219-9 to
facilitate compliance with 252.219-7003(g).
* * * * *
3. Section 215.608 is amended by redesignating existing paragraph
(a) as paragraph (a)(1) and by adding paragraph (a)(2) to read as
follows:
215.608 Proposal evaluation.
(a) * * *
(2) When a past performance evaluation is required by FAR 15.605,
and the solicitation includes the clause at FAR 52.219-8, Utilization
of Small, Small Disadvantaged and Women-Owned Small Business Concerns,
the evaluation shall include the past performance of offerors in
complying with requirements of that clause. When a past performance
evaluation is required by FAR 15.605, and the solicitation includes the
clause at FAR 52.219-9, Small, Small Disadvantaged and Women-Owned
Small Business Subcontracting Plan, the evaluation shall include the
past performance of offerors in complying with requirements of that
clause.
* * * * *
PART 219--SMALL BUSINESS PROGRAMS
4. The heading of Part 219 is revised to read as set forth above.
5. Section 219.704 is amended by adding paragraph (a)(4) to read as
follows:
219.704 Subcontracting plan requirements.
(a) * * *
(4) In those subcontracting plans which specifically identify
small, small disadvantaged, and women-owned small businesses, prime
contractors shall notify the administrative contracting officer of any
substitutions of firms that are not small, small disadvantaged, or
women-owned small businesses for the firms listed in the subcontracting
plan. Notifications shall be in writing and shall occur within a
reasonable period of time after award of the subcontract. Contractor-
specified formats shall be acceptable.
6. Section 219.1006 is amended by revising paragraph (b)(1)(B) to
read as follows:
219.1006 Procedures.
(b)(1) * * *
(B) The evaluation preference at 219.70 shall not be used. However,
note the test program at 219.72 for construction acquisitions.
* * * * *
7. Section 219.7001 is amended by revising paragraph (a) to read as
follows:
219.7001 Applicability.
(a) The evaluation preference shall be used in competitive
acquisitions except as provided in paragraph (b) of this section and in
219.1006(b)(1)(B).
* * * * *
8. Subpart 219.72 is added to read as follows:
[[Page 18688]]
Subpart 219.72--Evaluation Preference for Small Disadvantaged
Business (SDB) Concerns in Construction Acquisitions--Test Program
Sec.
219.7200 Policy.
219.7201 Administration of the test program.
219.7202 Applicability.
219.7203 Procedures.
219.7204 Contract clause.
219.72--Evaluation Preference for Small Disadvantaged Business
(SDB) Concerns in Construction Acquisitions--Test Program
219.7200 Policy.
DoD policy is to ensure that, during this test program, offers from
small disadvantaged business (SDB) concerns shall be given an
evaluation preference in construction acquisitions.
219.7201 Administration of the test program.
The test program will be conducted over a 36-month period. The test
program will be conducted by all DoD contracting activities that award
construction contracts. The focal point for the test program is the
Director, Small and Disadvantaged Business Utilization, Office of the
Under Secretary of Defense for Acquisition and Technology (Director,
SADBU). The military departments and defense agencies shall submit
status reports to the Director, SADBU. The first status report shall be
submitted 18 months after initiation of the test program; the second
status report shall be submitted 36 months after initiation of the test
program. These reports shall specify the impact of the evaluation
preference over each of the reporting periods of the test program, and
shall provide recommendations with respect to continuation and/or
modification of the evaluation preference.
219.7202 Applicability.
(a) The evaluation preference shall be used in competitive
acquisitions for construction (see definition in FAR Subpart 36.1) when
work is to be performed inside the United States, its territories or
possessions, Puerto Rico, the Trust Territory of the Pacific Islands,
or the District of Columbia.
(b) Do not use the evaluation preference in acquisitions which--
(1) Are less than or equal to the simplified acquisition threshold;
(2) Are set aside for small businesses; or
(3) Are awarded under section 8(a) procedures.
(c) The evaluation preference need not be applied when the head of
the contracting activity determines that the evaluation preference is
having a disproportionate impact on non-SDB concerns or
nondisadvantaged small business concerns.
219.7203 Procedures.
(a) Solicitations that require bonding shall require offerors to
separately state bond costs in the offer. Bond costs include the costs
of bid, performance, and payment bonds.
(b) Evaluate total offers. If the apparently successful offeror is
an SDB concern, no preference-based evaluation is required under this
subpart.
(c) If the apparently successful offeror is not an SDB concern,
evaluate offers excluding bond costs. If, after excluding bond costs,
the apparently successful offeror is an SDB concern, add bond costs
back to all offers, and give offers from SDB concerns a preference in
evaluation by adding a factor of 10 percent to the total price of all
offers, except--
(1) Offers from SDBs which have not waived the evaluation
preference; and
(2) Offers from historically black colleges and universities or
minority institutions, which have not waived the evaluation preference.
(d) When using the procedures in 236.303-70, Additive or deductive
items, the evaluation preference in this subpart shall be applied.
219-7204 Contract clause.
Use the clause at 252.219-7008, Notice of Evaluation Preference for
Small Disadvantaged Business Concerns--Construction Acquisitions--Test
Program, in all solicitations--
(1) That involve the evaluation preference of this subpart; and
(2) Where work is to be performed inside the United States, its
territories or possessions, Puerto Rico, the Trust Territory of the
Pacific Islands, or the District of Columbia.
PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
9. Section 236.303-70 is amended by revising the introductory text
of paragraph (c)(2) to read as follows:
236.303-70 Additive or deductive items.
* * * * *
(c) * * *
(2) Evaluate all bids, including those using the procedures in
219.7203, on the basis of the same additive or deductive bid items.
* * * * *
PART 242--CONTRACT ADMINISTRATION
10. Subpart 242.15 is added to read as follows:
Subpart 242.15--Contractor Performance Information
Sec.
242.1503 Procedures.
242.1503 Procedures.
Evaluations should consider any notifications submitted under
paragraph (g) of the clause at 252.219-7003, Small, Small Disadvantaged
and Women-Owned Small Business Subcontracting Plan (DoD Contracts).
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
11. Section 252.219-7003 is amended by revising the clause date to
read ``(APR 1996)'' and by adding paragraph (g) to read as follows:
252.219-7003 Small, small disadvantaged and women-owned small business
subcontracting plan (DoD contracts).
* * * * *
(g) In those subcontracting plans which specifically identify
small, small disadvantaged, and women-owned small businesses, the
Contractor shall notify the Administrative Contracting Officer of
any substitutions of firms that are not small, small disadvantaged,
or women-owned small businesses for the firms listed in the
subcontracting plan. Notifications shall be in writing and shall
occur within a reasonable period of time after award of the
subcontract. Contractor-specified formats shall be acceptable.
12. Section 252.219-7008 is added to read as follows:
252.219-7008 Notice of evaluation preference for small disadvantaged
business concerns--construction acquisitions--test program.
As prescribed in 219.7204, use the following clause:
NOTICE OF EVALUATION PREFERENCE FOR SMALL DISADVANTAGED BUSINESS
CONCERNS--CONSTRUCTION ACQUISITIONS--TEST PROGRAM (APR 1996)
(a) Definitions.
As used in this clause--
``Historically black colleges and universities (HBCUs),'' means
institutions determined by the secretary of Education to meet the
requirements of 34 CFR Section 608.2. The term also means any
nonprofit research institution that was an integral part of such a
college or university before November 14, 1986.
``Minority institutions,'' means institutions meeting the
requirements of paragraphs (3),
[[Page 18689]]
(4), and (5) of Section 1046(3) of the Higher Education Act of 1965
(20 U.S.C. 1135d-5(3)). The term also includes Hispanic-serving
institutions as defined in Section 316(b)(1) of such Act (20 U.S.C.
1059c(b)(1)).
``Small disadvantaged business (SDB) concern,'' means a small
business concern, owned and controlled by individuals who are both
socially and economically disadvantaged, as defined by the Small
Business Administration at 13 CFR Part 124, the majority of earnings
of which directly accrue to such individuals. This term also means a
small business concern owned and controlled by an economically
disadvantaged Indian tribe or Native Hawaiian organization which
meets the requirements of 13 CFR 124.112 or 13 CFR 124.113,
respectively.
(b) Evaluation preference.
(1) Offerors shall separately state bond costs in the offer.
Bond costs include the costs of bid, performance, and payment bonds.
(2) Offers will be evaluated initially based on their total
prices. If the apparently successful offeror is an SDB concern, no
preference-based evaluation will be conducted.
(3) If the apparently successful offeror is not an SDB concern,
offers will be evaluated based on their prices excluding bond costs.
If, after excluding bond costs, the apparently successful offeror is
an SDB concern, bond costs will be added back to all offers, and
offers from SDB concerns will be given a preference in evaluation by
adding a factor of 10 percent to the total price of all offers,
except--
(i) Offers from SDBs which have not waived the evaluation
preference; and
(ii) Offers from HBCUs or minority institutions, which have not
waived the evaluation preference.
(c) Waiver of evaluation preference.
A small disadvantaged business, historically black college or
university, or minority institution offeror may elect to waive the
preference. The agreements in paragraph (d) of this clause do not
apply to offers which waive the preference.
________Offeror elects to waive the preference.
(d) Agreements.
A small disadvantaged business concern, historically black
college or university, or minority institution offeror, which did
not waive the preference, agrees that in performance of the
contract, in the case of a contract for--
(i) General construction, at least 15 percent of the cost of the
contract, excluding the cost of materials, will be performed by
employees of the concern.
(ii) Construction by special trade contractors, at least 25
percent of the cost of the contract, excluding the cost of
materials, will be performed by employees of the concern.
(End of clause)
PART 253--FORMS
13. Section 253.204-70 is amended by revising paragraph (e)(3) to
read as follows:
253.204-70 DD Form 350, Individual Contracting Action Report.
* * * * *
(e) * * *
(3) Block E3, Next Low Offer.
(i) Complete Block E3 only if Block E2 is completed, or the
evaluation preference for small disadvantaged business concerns in
construction acquisitions set forth in subpart 219.72 is applied.
Otherwise, leave Block E3 blank.
(ii) If Block E2 is completed, enter the offered price from the
small business firm that would have been the low offeror if qualified
nonprofit agencies employing people who are blind or severely disabled
had not participated in the acquisition. In the evaluation preference
for small disadvantaged business concerns in construction acquisitions
set forth in subpart 219.72 is applied, enter the offered price from
the non-SDB concern that would have been the successful offeror if the
evaluation preference had not been applied. Enter the amount in whole
dollars.
* * * * *
[FR Doc. 96-10541 Filed 4-26-96; 8:45 am]
BILLING CODE 5000-04-M