[Federal Register Volume 63, Number 243 (Friday, December 18, 1998)]
[Rules and Regulations]
[Pages 70265-70281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33513]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 5, 6, 7, 8, 12, 13, 14, 15, 19, 26, 52, and 53
[FAC 97-10; FAR Case 97-307; Item I]
RIN 9000-AI20
Federal Acquisition Regulation; Historically Underutilized
Business Zone (HUBZone) Empowerment Contracting Program
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council have agreed on an interim rule amending
the Federal Acquisition Regulation (FAR) to implement revisions made to
Small Business Administration (SBA) regulations covering the
Historically Underutilized Business Zone (HUBZone) Empowerment
Contracting Program (hereinafter referred to as the HUBZone Program).
EFFECTIVE DATE: January 4, 1999.
Comment Date: Comments should be submitted to the FAR Secretariat
at the address shown below on or before February 16, 1999 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (MVR), 1800 F Street,
NW, Room 4035, Attn: Ms. Laurie Duarte, Washington, DC 20405.
E-Mail comments submitted over the Internet should be addressed to:
[email protected]
Please cite FAC 97-10, FAR case 97-307 in all correspondence
related to this case.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Victoria Moss, Procurement Analyst, at (202) 501-
4764. Please cite FAC 97-10, FAR case 97-307.
SUPPLEMENTARY INFORMATION:
A. Background
This interim rule amends FAR parts 5, 6, 7, 8, 12, 13, 14, 15, 19,
26, 52, and 53 to comply with the SBA's HUBZone Program regulations
contained in 13 CFR parts 121, 125, and 126 (63 FR 31896, June 11,
1998). The purpose of the HUBZone Program is to provide Federal
contracting assistance for qualified small business concerns located in
distressed communities in an effort to increase employment
opportunities, investment, and economic development in these
communities. The Program provides for set-asides for firms that meet
the definition of a HUBZone small business concern (SBC), sole source
awards to HUBZone SBCs, and price evaluation preferences for HUBZone
SBCs in acquisitions conducted using full and open competition; and
establishes a Governmentwide goal for HUBZone awards. Until September
30, 2000, ten Government agencies are required to comply with the prime
contract HUBZone Program. After that date, the Program will apply to
all Federal
[[Page 70266]]
agencies employing one or more contracting officers.
This regulatory action was not subject to Office of Management and
Budget review under Executive Order 12866, dated September 30, 1993,
and is not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
This interim 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., because the purpose
of the HUBZone Program is to provide Federal contracting assistance for
qualified small business concerns located in historically underutilized
business zones in an effort to increase employment opportunities,
investment, and economic development in these zones. An Initial
Regulatory Flexibility Analysis has been prepared and is summarized as
follows:
It is anticipated that the HUBZone Program will benefit small
business concerns by increasing the number of Government contracts
awarded to them. There is a statutory goal for Government HUBZone
small business concerns to receive 3 percent of contract dollars by
fiscal year 2003. The HUBZone Act of 1997, Title VI of Public Law
105-135, 111 Stat. 2592 (December 2, 1997), created the HUBZone
Program and directed the Administrator of the Small Business
Administration (SBA) to promulgate regulations to implement it. This
rule further implements the SBA rule. The small entities affected by
this rule are those that fit within the definition of a small
business concern, as defined by SBA in 13 CFR part 121 and new part
126, and that participate in Government contracting. Because the
program is new, we cannot estimate precisely the number or classes
of small entities that this rule will affect. However, the SBA
estimated that more than 30,000 small businesses will apply for
certification as qualified HUBZone small business concerns. This
rule requires that a firm be listed on SBA's list of eligible
HUBZone small business concerns in order to receive a contracting
preference. That requirement is addressed in SBAs rule. This FAR
rule requires that Government prime contractors with contracts that
require subcontracting plans seek out HUBZone small business
concerns as subcontractors as well as maintain records and report on
those subcontracts awarded to HUBZone small business concerns. These
requirements do not apply to small businesses. This rule does not
duplicate, overlap, or conflict with any other Federal rules. In
general, the drafters of this rule modeled its procurement
mechanisms, to the extent permitted by the SBA rule, on those
already in use within the Federal Government. This approach should
make the requirements of the rule immediately familiar to many small
businesses that already have extensive experience in dealing with
Government contracting offices. Moreover, each individual mechanism
was structured to strike an appropriate balance between the
interests of HUBZone and non-HUBZone small businesses, and to
minimize the overall burden of compliance on small business.
A copy of the analysis has been submitted to the Chief Counsel for
Advocacy of the Small Business Administration and may be obtained from
the FAR Secretariat. Comments are invited. Comments from small entities
concerning the affected FAR subparts also will be considered in
accordance with 5 U.S.C. 610. Such comments must be submitted
separately and should cite FAR case 97-307 in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. 3501, et seq.) is deemed to
apply because the interim rule contains information collection
requirements. The interim rule increases the collection requirements
currently approved under OMB Control Numbers 9000-0006 and 9000-0007.
OMB Control No. 9000-0006 burden hours have increased from 428,035
to 640,837 to reflect the additional burden of planning, maintaining
and reporting subcontract award data on HUBZone small businesses. In
addition, burden inappropriately attached to OMB Control No. 9000-0007
that related to planning and maintaining data was transferred to this
clearance. OMB Control No. 9000-0007 burden hours have been adjusted to
remove hours inappropriately included in this clearance and to add
hours to reflect the additional burden associated with reporting
HUBZone data. The net difference is an increase, from 90,924 to 91,570
hours. The appropriate paperwork has been forwarded to OMB.
D. Request for Comments Regarding Paperwork Burden
Members of the public are invited to comment on the recordkeeping
and information collection requirements and estimates set forth above.
Please send comments to: Office of Information and Regulatory Affairs,
Office of Management and Budget, Attn: Mr. Peter N. Weiss, FAR Desk
Officer, New Executive Office Building, Room 10102, 725 17th Street,
NW, Washington, DC 20503.
Also send a copy of any comments to the FAR Secretariat at the
address shown under ADDRESSES. Please cite the corresponding OMB
Clearance Number in all correspondence related to the estimate.
E. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary to conform the Federal Acquisition Regulation to revisions
made in 13 CFR parts 121, 125, and 126 on June 11, 1998, pertaining to
the Small Business Administration (SBA) HUBZone Program. The SBA final
rule became effective on September 9, 1998. Section 605 of the Small
Business Reauthorization Act of 1997 (Title VI of Public Law 105-135)
requires that, 180 days after the SBA issues its final regulations to
carry out the HUBZone Program, conforming amendments must be made to
the Federal Acquisition Regulation (December 8, 1998). However,
pursuant to Public Law 98-577 and FAR 1.501, public comments received
in response to this interim rule will be considered in formulating the
final rule.
List of Subjects in 48 CFR Parts 5, 6, 7, 8, 12, 13, 14, 15, 19,
26, 52, and 53
Government procurement.
Dated: December 14, 1998.
Ralph DeStefano,
Acting Director, Federal Acquisition Policy Division.
Therefore, 48 CFR Parts 5, 6, 7, 8, 12, 13, 14, 15, 19, 26, 52, and
53 are amended as set forth below:
1. The authority citation for 48 CFR Parts 5, 6, 7, 8, 12, 13, 14,
15, 19, 26, 52, and 53 continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 5--PUBLICIZING CONTRACT ACTIONS
2. Section 5.207 is amended by revising paragraph (d) to read as
follows:
5.207 Preparation and transmittal of synopses.
* * * * *
(d) Set-asides. When the proposed acquisition provides for a total
or partial small business set-aside or a HUBZone small business set-
aside, the appropriate CBD Numbered Note will be cited.
* * * * *
[[Page 70267]]
PART 6--COMPETITION REQUIREMENTS
3. Section 6.205 is added to read as follows:
6.205 Set-asides for HUBZone small business concerns.
(a) To fulfill the statutory requirements relating to the HUBZone
Act of 1997 (15 U.S.C. 631 note), contracting officers in participating
agencies (see 19.1302) may set aside solicitations to allow only
qualified HUBZone small business concerns to compete (see 19.1305).
(b) No separate justification or determination and findings is
required under this part to set aside a contract action for qualified
HUBZone small business concerns.
4. Section 6.302-5 is amended by adding paragraph (b)(6) to read as
follows:
6.302-5 Authorized or required by statute.
* * * * *
(b) * * *
(6) Sole source awards under the HUBZone Act of 1997--15 U.S.C.
657a (see 19.1306).
* * * * *
PART 7--ACQUISITION PLANNING
5. Section 7.105 is amended by revising the third sentence of
paragraph (b)(1) to read as follows:
7.105 Contents of written acquisition plans.
* * * * *
(b) Plan of action--(1) Sources. * * * Include consideration of
small business, HUBZone small business, small disadvantaged business,
and women-owned small business concerns (see part 19). * * *
* * * * *
PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
6. Section 8.404 is amended by revising the first sentence of
paragraph (a) to read as follows:
8.404 Using schedules.
(a) General. When agency requirements are to be satisfied through
the use of Federal Supply Schedules as set forth in this subpart, the
simplified acquisition procedures of part 13, the small business set-
aside provisions of subpart 19.5, and the HUBZone program of subpart
19.13 do not apply, except for the provision at 13.303-2(c)(3). * * *
* * * * *
PART 9--CONTRACTOR QUALIFICATIONS
7. Section 9.104-3 is amended by revising the last sentence of
paragraph (b) to read as follows:
9.104-3 Application of standards.
* * * * *
(b) * * * If the pending contract requires a subcontracting plan
pursuant to Subpart 19.7, The Small Business Subcontracting Program,
the contracting officer shall also consider the prospective
contractor's compliance with subcontracting plans under recent
contracts.
* * * * *
PART 12--ACQUISITION OF COMMERCIAL ITEMS
8. Section 12.301 is amended at the end of paragraph (b)(2) by
removing the semicolon and adding a period; and adding a sentence to
read as follows:
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(b) * * *
(2) * * * Use the provision with its Alternate III in solicitations
issued by Federal agencies subject to the requirements of the HUBZone
Act of 1997 (see 19.1302);
* * * * *
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
9. Section 13.003 is amended by redesignating paragraph (b)(2) as
(b)(3) and adding a new paragraph (b)(2) to read as follows:
13.003 Policy.
* * * * *
(b) * * *
(2) The contracting officer may set aside for HUBZone small
business concerns (see 19.1305) an acquisition of supplies or services
that has an anticipated dollar value exceeding $2,500 and not exceeding
the simplified acquisition threshold. The contracting officer's
decision not to set aside an acquisition for HUBZone participation
below the simplified acquisition threshold is not subject to review
under subpart 19.4.
* * * * *
10. Section 13.005 is amended by adding paragraph (a)(9) to read as
follows:
13.005 Federal Acquisition Streamlining Act of 1994 list of
inapplicable laws.
(a) * * *
(9) 15 U.S.C. 631 note (HUBZone Act of 1997), except for 15 U.S.C.
657a(b)(2)(B), which is optional for the agencies subject to the
requirements of the Act.
* * * * *
PART 14--SEALED BIDDING
14.206 [Reserved]
11. Section 14.206 is removed and reserved.
12. Section 14.502 is amended by redesignating paragraph (b)(5) as
(b)(6) and adding a new paragraph (b)(5) to read as follows:
14.502 Conditions for use.
* * * * *
(b) * * *
(5) The use of a set-aside or price evaluation preference for
HUBZone small business concerns (see subpart 19.13).
* * * * *
PART 15--CONTRACTING BY NEGOTIATION
13. Section 15.503 is amended by revising paragraph (a)(2) to read
as follows:
15.503 Notifications to unsuccessful offerors.
(a) * * *
(2) Preaward notices for small business programs. (i) In addition
to the notice in paragraph (a)(1) of this section, the contracting
officer shall notify each offeror in writing prior to award, upon
completion of negotiations, determinations of responsibility, and, if
necessary, the process in 19.304(d)--
(A) When using a small business set-aside (see subpart 19.5);
(B) When a small disadvantaged business concern receives a benefit
based on its disadvantaged status (see subpart 19.11 and 19.1202) and
is the apparently successful offeror; or
(C) When using the HUBZone procedures in 19.1305 or 19.1307.
(ii) The notice shall state--
(A) The name and address of the apparently successful offeror;
(B) That the Government will not consider subsequent revisions of
the offeror's proposal; and
(C) That no response is required unless a basis exists to challenge
the small business size status, disadvantaged status, or HUBZone status
of the apparently successful offeror.
(iii) The notice is not required when the contracting officer
determines in writing that the urgency of the requirement necessitates
award without delay or when the contract is entered
[[Page 70268]]
into under the 8(a) program (see 19.805-2).
* * * * *
PART 19--SMALL BUSINESS PROGRAMS
14. Section 19.000 is amended by revising paragraphs (a)(3) and
(a)(8) to read as follows:
19.000 Scope of part.
(a) * * *
(3) Setting acquisitions aside for exclusive competitive
participation by small business concerns and HUBZone small business
concerns, and sole source awards to HUBZone small business concerns;
* * * * *
(8) The use of a price evaluation adjustment for small
disadvantaged business concerns, and the use of a price evaluation
preference for HUBZone small business concerns; and
* * * * *
15. Section 19.001 is amended by adding, in alphabetical order, the
definitions ``HUBZone'' and ``HUBZone small business concern'' to read
as follows:
19.001 Definitions.
* * * * *
HUBZone means a historically underutilized business zone, which is
an area located within one or more qualified census tracts, qualified
nonmetropolitan counties, or lands within the external boundaries of an
Indian reservation.
HUBZone small business concern means a small business concern that
appears on the List of Qualified HUBZone Small Business Concerns
maintained by the SBA.
* * * * *
16. Section 19.201 is amended by revising the first sentence of
paragraph (a); in paragraph (c) by removing the words ``small, small
disadvantaged and women-owned''; and revising paragraphs (d)(4),
(d)(6), (d)(7)(ii), (d)(8), and (d)(9) to read as follows:
19.201 General policy.
(a) It is the policy of the Government to provide maximum
practicable opportunities in its acquisitions to small business,
HUBZone small business, small disadvantaged business, and women-owned
small business concerns. * * *
* * * * *
(d) * * *
(4) Be responsible for the agency carrying out the functions and
duties in sections 8, 15, and 31 of the Small Business Act.
* * * * *
(6) Have supervisory authority over agency personnel to the extent
that their functions and duties relate to sections 8, 15, and 31 of the
Small Business Act.
(7) * * *
(ii) Whose principal duty is to assist the SBA's assigned
representative in performing functions and duties relating to sections
8, 15, and 31 of the Small Business Act;
(8) Cooperate and consult on a regular basis with the SBA in
carrying out the agency's functions and duties in sections 8, 15, and
31 of the Small Business Act;
(9) Make recommendations in accordance with agency procedures as to
whether a particular acquisition should be awarded under subpart 19.5
as a small business set-aside, under subpart 19.8 as a Section 8(a)
award, or under subpart 19.13 as a HUBZone set-aside.
* * * * *
19.202 [Amended]
17. Section 19.202 is amended in the first sentence by removing
``Subpart 19.5 or 19.8'' and adding ``subpart 19.5, 19.8, or 19.13.''
18. Section 19.202-2 is amended by revising the introductory
paragraph; and in paragraph (a) by adding ``and HUBZones'' after the
word ``areas''. The revised text reads as follows:
19.202-2 Locating small business sources.
The contracting officer shall, to the extent practicable, encourage
maximum participation by small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns in
acquisitions by taking the following actions:
* * * * *
19. Section 19.202-4 is amended by revising the introductory
paragraph to read as follows:
19.202-4 Solicitation.
The contracting officer shall encourage maximum response to
solicitations by small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns by
taking the following actions:
* * * * *
20. Section 19.202-5 is amended by revising paragraphs (a) and (b)
to read as follows:
19.202-5 Data collection and reporting requirements.
* * * * *
(a) Require each prospective contractor to represent whether it is
a small business, HUBZone small business, small disadvantaged business,
or women-owned small business concern (see the provision at 52.219-1,
Small Business Program Representations).
(b) Accurately measure the extent of participation by small
business, HUBZone small business, small disadvantaged business, and
women-owned small business concerns in Government acquisitions in terms
of the total value of contracts placed during each fiscal year, and
report data to the SBA at the end of each fiscal year (see subpart
4.6).
21. Section 19.202-6 is amended by removing the introductory text
and revising paragraph (a) to read as follows:
19.202-6 Determination of fair market price.
(a) The fair market price shall be the price achieved in accordance
with the reasonable price guidelines in 15.404-1(b) for--
(1) Total and partial small business set-asides (see subpart 19.5);
(2) HUBZone set-asides (see subpart 19.13);
(3) Contracts utilizing the price evaluation adjustment for small
disadvantaged business concerns (see subpart 19.11); and
(4) Contracts utilizing the price evaluation preference for HUBZone
small business concerns (see subpart 19.13).
* * * * *
Subpart 19.3--Determination of Status as a Small Business, HUBZone
Small Business, or Small Disadvantaged Business Concern
22. The heading of Subpart 19.3 is revised to read as set forth
above.
23. Section 19.301 is amended by revising the first sentence of
paragraph (d) to read as follows:
19.301 Representation by the offeror.
* * * * *
(d) If the SBA determines that the status of a concern as a small
business, HUBZone small business, small disadvantaged business, or
women-owned small business has been misrepresented in order to obtain a
set-aside contract, an 8(a) subcontract, a subcontract that is to be
included as part or all of a goal contained in a subcontracting plan,
or a prime or subcontract to be awarded as a result, or in furtherance
of any other provision of
[[Page 70269]]
Federal law that specifically references Section 8(d) of the Small
Business Act for a definition of program eligibility, the SBA may take
action as specified in Section 16(d) of the Act. * * *
24. Section 19.306 is redesignated as 19.307; and a new 19.306 is
added to read as follows:
19.306 Protesting a firm's status as a HUBZone small business concern.
(a) For sole source acquisitions, the SBA or the contracting
officer may protest the apparently successful offeror's HUBZone small
business status. For all other acquisitions, an offeror, the
contracting officer, or the SBA may protest the apparently successful
offeror's HUBZone small business concern status.
(b) Protests relating to whether a HUBZone small business concern
is a small business for purposes of any Federal program are subject to
the procedures of subpart 19.3. Protests relating to small business
size status for the acquisition and the HUBZone qualifying requirements
will be processed concurrently by SBA.
(c) All protests shall be in writing and shall state all specific
grounds for the protest. Assertions that a protested concern is not a
HUBZone small business concern, without setting forth specific facts or
allegations, is insufficient. An offeror shall submit its protest to
the contracting officer. The contracting officer and the SBA shall
submit their protests to SBA's Associate Administrator for the HUBZone
Program (AA/HUB).
(d) An offeror's protest must be received by close of business on
the fifth business day after bid opening (in sealed bid acquisitions)
or by close of business on the fifth business day after notification by
the contracting officer of the apparently successful offeror (in
negotiated acquisitions). Any protest received after these time limits
is untimely. Any protest received prior to bid opening or notification
of intended award, whichever applies, is premature and shall be
returned to the protester.
(e) Except for premature protests, the contracting officer shall
forward any protest received, notwithstanding whether the contracting
officer believes that the protest is insufficiently specific or
untimely, to: AA/HUB, U.S. Small Business Administration, 409 3rd
Street, SW, Washington, DC 20416.
(f) SBA will determine the HUBZone status of the protested HUBZone
small business concern within 15 business days after receipt of a
protest. If SBA does not contact the contracting officer within 15
business days, the contracting officer may award the contract to the
apparently successful offeror, unless the contracting officer has
granted SBA an extension. The contracting officer may award the
contract after receipt of a protest if the contracting officer
determines in writing that an award must be made to protect the public
interest.
(g) SBA will notify the contracting officer, the protester, and the
protested concern of its determination. The determination is effective
immediately and is final unless overturned on appeal by SBA's Associate
Deputy Administrator for Government Contracting and 8(a) Business
Development (ADA/GC&8(a)BD).
(h) The protested HUBZone small business concern, the protester, or
the contracting officer may file appeals of protest determinations with
SBA's ADA/GC&8(a)BD. The ADA/GC&8(a)BD must receive the appeal no later
than 5 business days after the date of receipt of the protest
determination. SBA will dismiss any appeal received after the 5-day
period.
(i) The appeal must be in writing. The appeal must identify the
protest determination being appealed and must set forth a full and
specific statement as to why the decision is erroneous or what
significant fact the AA/HUB failed to consider.
(j) The party appealing the decision must provide notice of the
appeal to the contracting officer and either the protested HUBZone
small business concern or the original protester, as appropriate. SBA
will not consider additional information or changed circumstances that
were not disclosed at the time of the AA/HUB's decision or that are
based on disagreement with the findings and conclusions contained in
the determination.
(k) The ADA/GC&8(a)BD will make its decision within 5 business days
of the receipt of the appeal, if practicable, and will base its
decision only on the information and documentation in the protest
record as supplemented by the appeal. SBA will provide a copy of the
decision to the contracting officer, the protester, and the protested
HUBZone small business concern. The ADA/GC&8(a)BD's decision is the
final decision.
24a. In newly redesignated 19.307, the section heading and
paragraph (a) are revised to read as follows:
19.307 Solicitation provision.
(a)(1) The contracting officer shall insert the provision at
52.219-1, Small Business Program Representations, in solicitations
exceeding the micro-purchase threshold when the contract 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.
(2) The provision shall be used with its Alternate I in
solicitations issued by DoD, NASA, or the Coast Guard that are expected
to exceed the threshold at 4.601(a).
(3)(i) The provision shall be used with its Alternate II in
solicitations issued by the following agencies on or before September
30, 2000:
(A) Department of Agriculture.
(B) Department of Defense.
(C) Department of Energy.
(D) Department of Health and Human Services.
(E) Department of Housing and Urban Development.
(F) Department of Transportation.
(G) Department of Veterans Affairs.
(H) Environmental Protection Agency.
(I) General Services Administration.
(J) National Aeronautics and Space Administration.
(ii) The provision shall be used with its Alternate II in
solicitations issued by all Federal agencies after September 30, 2000.
* * * * *
25. Section 19.402 is amended by revising paragraph (c)(1) to read
as follows:
19.402 Small Business Administration procurement center
representatives.
* * * * *
(c) * * *
(1) Reviewing proposed acquisitions to recommend--
(i) The setting aside of selected acquisitions not unilaterally set
aside by the contracting officer.
(ii) New qualified small, HUBZone small, small disadvantaged, and
women-owned small business sources, and
(iii) Breakout of components for competitive acquisitions.
* * * * *
26. Section 19.501 is amended--
(a) In the third and fourth sentences of paragraph (a) by adding
``small business'' after the word ``A'' in each instance;
(b) In the first sentence of paragraph (b) by adding ``small
business'' after the word ``a''; and in the second and third sentences
by removing the word ``which'' and adding ``that'' in each instance;
and
(c) By redesignating paragraphs (c) through (g) as (d) through (h),
respectively; adding a new paragraph (c); and by revising newly
designated paragraphs (d) and (h) to read as follows:
[[Page 70270]]
19.501 General.
* * * * *
(c) For acquisitions exceeding the simplified acquisition
threshold, the requirement to set aside an acquisition for HUBZone
small business concerns (see 19.1305) takes priority over the
requirement to set aside the acquisition for small business concerns.
(d) The contracting officer shall review acquisitions to determine
if they can be set aside for small business, giving consideration to
the recommendations of agency personnel having cognizance of the
agency's small business programs. The contracting officer shall
document why a small business set-aside is inappropriate when an
acquisition is not set aside for small business, unless a HUBZone small
business set-aside or HUBZone small business sole source award is
anticipated. If the acquisition is set aside for small business based
on this review, it is a unilateral set-aside by the contracting
officer. Agencies may establish threshold levels for this review
depending upon their needs.
* * * * *
(h) Except as authorized by law, a contract may not be awarded as a
result of a small business set-aside if the cost to the awarding agency
exceeds the fair market price.
27. Section 19.502-1 is revised to read as follows:
19.502-1 Requirements for setting aside acquisitions.
(a) The contracting officer shall set aside an individual
acquisition or class of acquisitions for competition among small
businesses when--
(1) It is determined to be in the interest of maintaining or
mobilizing the Nations full productive capacity, war or national
defense programs; or
(2) Assuring that a fair proportion of Government contracts in each
industry category is placed with small business concerns; and the
circumstances described in 19.502-2 or 19.502-3(a) exist.
(b) This requirement does not apply to purchases of $2,500 or less,
or purchases from required sources of supply under part 8 (e.g.,
Federal Prison Industries, Committee for Purchase from People Who are
Blind or Severely disabled, and Federal Supply Schedule contracts).
28. Section 19.502-2 is amended by revising the section heading; in
the first sentence of paragraph (a) by adding ``for small business''
after the word ``aside''; and revising the last sentence; in the first
sentence of paragraph (c) by adding ``small business'' after the word
``For'', and removing the word ``which'' and adding ``that''; and in
paragraph (d) by adding ``small business'' after the word ``when''. The
revised text reads as follows:
19.502-2 Total small business set-asides.
(a) * * * The small business reservation does not preclude the
award of a contract with a value not greater than $100,000 under
Subpart 19.8, Contracting with the Small Business Administration, under
19.1006(c), Emerging small business set-aside, or under 19.1305,
HUBZone set-aside procedures.
* * * * *
19.502-4 [Amended]
29. Section 19.502-4 is amended in the first sentence of paragraph
(a) by adding ``small business'' after the word ``Total''.
19.502-5 [Amended]
30. Section 19.502-5 is amended in the second sentences of
paragraphs (b) and (c) by adding ``small business'' after the word
``total'' in each instance; and in paragraph (g) by adding ``small
business'' after the word ``class''.
31. Section 19.503 is amended by revising the section heading to
read as set forth below; in the second sentence of paragraph (a) by
adding ``small business'' after the word ``class''; in paragraph (b) by
adding ``for small business'' after the word ``acquisitions''; in
paragraph (c) introductory text by adding ``small business'' after the
word ``class''; and in the first sentence of paragraph (d) by adding
``small business'' after the word ``class'' both times it appears.
19.503 Setting aside a class of acquisitions for small business.
32. Section 19.506 is amended by revising the section heading,
paragraph (a), the last sentence of paragraph (b), and paragraph (c) to
read as follows:
19.506 Withdrawing or modifying small business set-asides.
(a) If, before award of a contract involving a small business set-
aside, the contracting officer considers that award would be
detrimental to the public interest (e.g., payment of more than a fair
market price), the contracting officer may withdraw the small business
set-aside determination whether it was unilateral or joint. The
contracting officer shall initiate a withdrawal of an individual small
business set-aside by giving written notice to the agency small
business specialist and the SBA procurement center representative, if
one is assigned, stating the reasons. In a similar manner, the
contracting officer may modify a unilateral or joint class small
business set-aside to withdraw one or more individual acquisitions.
(b) * * * However, the procedures are not applicable to automatic
dissolutions of small business set-asides (see 19.507) or dissolution
of small business set-asides under $100,000.
(c) The contracting officer shall prepare a written statement
supporting any withdrawal or modification of a small business set-aside
and include it in the contract file.
33. Section 19.507 is amended by revising the section heading to
read as set forth below; and in the first sentence of paragraph (a) by
adding ``small business'' after the word ``a''.
19.507 Automatic dissolution of a small business set-aside.
Subpart 19.7--The Small Business Subcontracting Program
34. The heading of Subpart 19.7 is revised to read as set forth
above.
35. Section 19.702 is amended by revising the introductory
paragraph and (b)(4) to read as follows:
19.702 Statutory requirements.
Any contractor receiving a contract for more than the simplified
acquisition threshold shall agree in the contract that small business,
HUBZone small business, small disadvantaged business, and women-owned
small business concerns shall have the maximum practicable opportunity
to participate in contract performance consistent with its efficient
performance. It is further the policy of the United States that its
prime contractors establish procedures to ensure the timely payment of
amounts due pursuant to the terms of their subcontracts with small
business, HUBZone small business, small disadvantaged business, and
women-owned small business concerns.
* * * * *
(b) * * *
(4) For modifications to contracts within the general scope of the
contract that do not contain the clause at 52.219-8, Utilization of
Small Business Concerns (or equivalent prior clauses; e.g., contracts
awarded before the enactment of Public Law 95-507).
* * * * *
36. Section 19.703 is amended by revising the introductory text of
paragraph (a) and (a)(1); in paragraph (b) by revising the first
sentence and adding a sentence to the end of the paragraph to read as
follows:
19.703 Eligibility requirements for participating in the program.
(a) To be eligible as a subcontractor under the program, a concern
must
[[Page 70271]]
represent itself as a small business, HUBZone small business, small
disadvantaged business, or woman-owned small business concern.
(1) To represent itself as a small business, HUBZone small
business, or women-owned small business concern, a concern must meet
the appropriate definition in 19.001.
* * * * *
(b) A contractor acting in good faith may rely on the written
representation of its subcontractor regarding the subcontractor's
status as a small business, HUBZone small business, or women-owned
small business concern. * * * Protests challenging HUBZone small
business concern status shall be filed in accordance with 13 CFR
126.800.
37. Section 19.704 is amended by revising paragraphs (a)(1),
(a)(2), (a)(3), (a)(6), (a)(8), (a)(9), (a)(11), and the first sentence
of paragraph (b) to read as follows:
19.704 Subcontracting plan requirements.
(a) * * *
(1) Separate percentage goals for using small business, HUBZone
small business, small disadvantaged business, and women-owned small
business concerns as subcontractors;
(2) A statement of the total dollars planned to be subcontracted
and a statement of the total dollars planned to be subcontracted to
small business, HUBZone small business, small disadvantaged business,
and women-owned small business concerns;
(3) A description of the principal types of supplies and services
to be subcontracted and an identification of types planned for
subcontracting to small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns;
* * * * *
(6) A statement as to whether or not the offeror included indirect
costs in establishing subcontracting goals, and a description of the
method used to determine the proportionate share of indirect costs to
be incurred with small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns;
* * * * *
(8) A description of the efforts the offeror will make to ensure
that small business, HUBZone small business, small disadvantaged
business, and women-owned small business concerns have an equitable
opportunity to compete for subcontracts;
(9) Assurances that the offeror will include the clause at 52.219-
8, Utilization of Small Business Concerns (see 19.708(a)), in all
subcontracts that offer further subcontracting opportunities, and that
the offeror will require all subcontractors (except small business
concerns) that receive subcontracts in excess of $500,000 ($1,000,000
for construction) to adopt a plan that complies with the requirements
of the clause at 52.219-9, Small Business Subcontracting Plan (see
19.708(b));
* * * * *
(11) A description of the types of records that will be maintained
concerning procedures adopted to comply with the requirements and goals
in the plan, including establishing source lists; and a description of
the offeror's efforts to locate small business, HUBZone small business,
small disadvantaged business, and women-owned small business concerns
and to award subcontracts to them.
(b) Contractors may establish, on a plant or division-wide basis, a
master plan (see 19.701) that contains all the elements required by the
clause at 52.219-9, Small Business Subcontracting Plan, except goals. *
* *
* * * * *
38. Section 19.705-2 is amended by revising the last sentence of
paragraph (d) to read as follows:
19.705-2 Determining the need for a subcontracting plan.
* * * * *
(d) * * * In determining when subcontracting plans should be
required, as well as when and with whom plans should be negotiated, the
contracting officer shall consider the integrity of the competitive
process, the goal of affording maximum practicable opportunity for
small business, HUBZone small business, small disadvantaged business,
and women-owned small business concerns to participate, and the burden
placed on offerors.
39. Section 19.705-4 is amended by revising the last sentence of
paragraph (b), the second and last sentences of paragraph (c), the
first sentence of paragraph (d)(1), (d)(5), and the first sentence of
paragraph (d)(6) to read as follows:
19.705-4 Reviewing the subcontracting plan.
* * * * *
(b) * * * If the plan, although responsive, evidences the bidder's
intention not to comply with its obligations under the clause at
52.219-8, Utilization of Small Business Concerns, the contracting
officer may find the bidder nonresponsible.
(c) * * * Subcontracting goals should be set at a level that the
parties reasonably expect can result from the offeror expending good
faith efforts to use small business, HUBZone small business, small
disadvantaged business, and women-owned small business subcontractors
to the maximum practicable extent. * * * An incentive subcontracting
clause (see 52.219-10, Incentive Subcontracting Program), may be used
when additional and unique contract effort, such as providing technical
assistance, could significantly increase subcontract awards to small
business, HUBZone small business, or women-owned small business
concerns.
(d) * * *
(1) Obtain information available from the cognizant contract
administration office, as provided for in 19.706(a), and evaluate the
offeror's past performance in awarding subcontracts for the same or
similar products or services to small business, HUBZone small business,
small disadvantaged business, and women-owned small business concerns.
* * *
* * * * *
(5) Evaluate subcontracting potential, considering the offeror's
make-or-buy policies or programs, the nature of the supplies or
services to be subcontracted, the known availability of small business,
HUBZone small business, small disadvantaged business, and women-owned
small business concerns in the geographical area where the work will be
performed, and the potential contractor's long-standing contractual
relationship with its suppliers.
(6) Advise the offeror of available sources of information on
potential small business, HUBZone small business, small disadvantaged
business, and women-owned small business subcontractors, as well as any
specific concerns known to be potential subcontractors. * * *
* * * * *
40. Section 19.705-6 is amended by revising paragraphs (a) and (b)
to read as follows:
19.705-6 Postaward responsibilities of the contracting officer.
* * * * *
(a) Notifying the SBA of the award by sending a copy of the award
document to the Area Director, Office of Government Contracting, in the
SBA area office where the contract will be performed.
(b) Forwarding a copy of each commercial plan and any associated
approvals to the Area Director, Office of Government Contracting, in
the SBA
[[Page 70272]]
area office where the contractor's headquarters is located.
* * * * *
41. Section 19.705-7 is amended in the first sentence of paragraph
(a), and in the third and fourth sentences of paragraph (d) by removing
the words ``small, small disadvantaged'' and adding ``small business,
HUBZone small business, small disadvantaged business,'' in each
instance; and revising the introductory text of paragraph (f) to read
as follows:
19.705-7 Liquidated damages.
* * * * *
(f) With respect to commercial plans approved under the clause at
52.219-9, Small Business Subcontracting Plan, the contracting officer
that approved the plan shall--
* * * * *
42. Section 19.706 is amended by revising paragraphs (b) and (c) to
read as follows:
19.706 Responsibilities of the cognizant administrative contracting
officer.
* * * * *
(b) Information on the extent to which the contractor is meeting
the plan's goals for subcontracting with eligible small business,
HUBZone small business, small disadvantaged business, and women-owned
small business concerns;
(c) Information on whether the contractor's efforts to ensure the
participation of small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns are in
accordance with its subcontracting plan;
* * * * *
43. Section 19.708 is amended by revising the section heading; in
the introductory text of paragraph (a) by removing the words ``Small,
Small Disadvantaged and Women-Owned''; by revising paragraph (b); and
in paragraphs (c)(1), (c)(2), and (c)(3) by adding ``business, HUBZone
small business,'' after the word ``small'' the first time it is used.
The revised text reads as follows:
19.708 Contract clauses.
* * * * *
(b)(1) The contracting officer shall, when contracting by
negotiation, insert the clause at 52.219-9, Small Business
Subcontracting Plan, in solicitations and contracts that offer
subcontracting possibilities, are expected to exceed $500,000
($1,000,000 for construction of any public facility), and are required
to include the clause at 52.219-8, Utilization of Small Business
Concerns, unless the acquisition is set aside or is to be accomplished
under the 8(a) program. When contracting by sealed bidding rather than
by negotiation, the contracting officer shall use the clause with its
Alternate I. When contracting by negotiation, and subcontracting plans
are required with initial proposals as provided for in 19.705-2(d), the
contracting officer shall use the clause with its Alternate II.
(2) The contracting officer shall insert the clause at 52.219-16,
Liquidated Damages--Subcontracting Plan, in all solicitations and
contracts containing the clause at 52.219-9, Small Business
Subcontracting Plan, or the clause with its Alternate I or II.
* * * * *
44. Section 19.800 is amended by adding paragraph (d) to read as
follows:
19.800 General.
* * * * *
(d) Before deciding to set aside an acquisition in accordance with
subpart 19.5 or 19.13, the contracting officer should review the
acquisition for offering under the 8(a) Program. In making this
decision, contracting officers in participating agencies (see 19.1302)
are advised that SBA will give first priority to HUBZone 8(a) concerns.
19.803 [Amended]
45. Section 19.803 is amended at the end of paragraph (c) by
removing the period and adding ``(but see 19.800(d)).''.
46. Section 19.804-2 is amended by revising paragraph (a)(12) to
read as follows:
19.804-2 Agency offering.
(a) * * *
(12) Identification of all known 8(a) concerns, including HUBZone
8(a) concerns, that have expressed an interest in this specific
requirement as a result of self-marketing, response to sources sought,
or publication of advanced acquisition requirements.
* * * * *
47. Section 19.1006 is amended by revising the last sentence of
paragraph (b)(1) to read as follows:
19.1006 Procedures.
* * * * *
(b) Designated industry groups. (1) * * * Acquisitions in the
designated industry groups shall continue to be considered for
placement under the 8(a) Program (see subpart 19.8) and the HUBZone
Program (see subpart 19.13).
* * * * *
48. Section 19.1102 is amended by revising paragraph (b) to read as
follows:
19.1102 Applicability.
* * * * *
(b) The price evaluation adjustment shall not be used in
acquisitions that--
(1) Are less than or equal to the simplified acquisition threshold;
(2) Are awarded pursuant to the 8(a) Program;
(3) Are set aside for small business concerns; or
(4) Are set aside for HUBZone small business concerns.
49. Section 19.1202-2 is amended by revising paragraph (b)(1) to
read as follows:
19.1202-2 Applicability.
* * * * *
(b) * * *
(1) Small business set-asides (see subpart 19.5) and HUBZone set-
asides (see subpart 19.13);
* * * * *
50. Subpart 19.13, consisting of sections 19.1301 through 19.1308,
is added to read as follows:
Subpart 19.13--Historically Underutilized Business Zone (HUBZone)
Program
Sec.
19.1301 General.
19.1302 Applicability.
19.1303 Status as a qualified HUBZone small business concern.
19.1304 Exclusions.
19.1305 HUBZone set-aside procedures.
19.1306 HUBZone sole source awards.
19.1307 Price evaluation preference for HUBZone small business
concerns.
19.1308 Contract clauses.
Authority: 41 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
Subpart 19.13--Historically Underutilized Business Zone (HUBZone)
Program
19.1301 General.
(a) The Historically Underutilized Business Zone (HUBZone) Act of
1997 (15 U.S.C. 631 note) created the HUBZone Program (sometimes
referred to as the ``HUBZone Empowerment Contracting Program'').
(b) The purpose of the HUBZone Program is to provide Federal
contracting assistance for qualified small business concerns located in
historically underutilized business zones, in an effort to increase
employment opportunities, investment, and economic development in those
areas.
19.1302 Applicability.
(a) Until September 30, 2000, the procedures in this subpart apply
only to acquisitions made by the following Federal agencies:
(1) Department of Agriculture.
(2) Department of Defense.
[[Page 70273]]
(3) Department of Energy.
(4) Department of Health and Human Services.
(5) Department of Housing and Urban Development.
(6) Department of Transportation.
(7) Department of Veterans Affairs.
(8) Environmental Protection Agency.
(9) General Services Administration.
(10) National Aeronautics and Space Administration.
(b) On or after September 30, 2000, the procedures in this subpart
will apply to all Federal agencies that employ one or more contracting
officers.
19.1303 Status as a qualified HUBZone small business concern.
(a) Status as a qualified HUBZone small business concern is
determined by the Small Business Administration (SBA) in accordance
with 13 CFR part 126.
(b) If the SBA determines that a concern is a qualified HUBZone
small business concern, it will issue a certification to that effect
and will add the concern to the List of Qualified HUBZone Small
Business Concerns on its Internet website at http://www.sba.gov/
hubzone. The concern must appear on the list to be a HUBZone small
business concern.
(c) A joint venture (see 19.101) may be considered a HUBZone small
business if the business entity meets all the criteria in 13 CFR
126.616.
(d) Except for construction or services, any HUBZone small business
concern (nonmanufacturer) proposing to furnish a product that it did
not itself manufacture must furnish the product of a HUBZone small
business concern manufacturer to receive a benefit under this subpart.
19.1304 Exclusions.
This subpart does not apply to--
(a) Requirements that can be satisfied through award to--
(1) Federal Prison Industries, Inc. (see subpart 8.6); or
(2) Javits-Wagner-O'Day Act participating non-profit agencies for
the blind or severely disabled (see subpart 8.7);
(b) Orders under indefinite delivery contracts (see subpart 16.5);
(c) Orders against Federal Supply Schedules (see subpart 8.4);
(d) Requirements currently being performed by an 8(a) participant
or requirements SBA has accepted for performance under the authority of
the 8(a) Program, unless SBA has consented to release the requirements
from the 8(a) Program;
(e) Requirements that do not exceed the micro-purchase threshold;
or
(f) Requirements for commissary or exchange resale items.
19.1305 HUBZone set-aside procedures.
(a) A participating agency contracting officer shall set aside
acquisitions exceeding the simplified acquisition threshold for
competition restricted to HUBZone small business concerns when the
requirements of paragraph (b) of this section can be satisfied. The
contracting officer shall consider HUBZone set-asides before
considering HUBZone sole source awards (see 19.1306) or small business
set-asides (see subpart 19.5).
(b) To set aside an acquisition for competition restricted to
HUBZone small business concerns, the contracting officer must have a
reasonable expectation that--
(1) Offers will be received from two or more HUBZone small business
concerns; and
(2) Award will be made at a fair market price.
(c) A participating agency may set aside acquisitions exceeding the
micro-purchase threshold, but not exceeding the simplified acquisition
threshold, for competition restricted to HUBZone small business
concerns at the sole discretion of the contracting officer, provided
the requirements of paragraph (b) of this section can be satisfied.
(d) If the contracting officer receives only one acceptable offer
from a qualified HUBZone small business concern in response to a set
aside, the contracting officer should make an award to that concern. If
the contracting officer receives no acceptable offers from HUBZone
small business concerns, the HUBZone set-aside shall be withdrawn and
the requirement, if still valid, set aside for small business concerns,
as appropriate (see subpart 19.5).
(e) The procedures at 19.202-1 and, except for acquisitions not
exceeding the simplified acquisition threshold, at 19.402 apply to this
section. When the SBA intends to appeal a contracting officer's
decision to reject a recommendation of the SBA procurement center
representative to set aside an acquisition for competition restricted
to HUBZone small business concerns, the SBA procurement center
representative shall notify the contracting officer, in writing, of its
intent within 5 working days of receiving the contracting officer's
notice of rejection. Upon receipt of notice of SBA's intent to appeal,
the contracting officer shall suspend action on the acquisition unless
the head of the contracting activity makes a written determination that
urgent and compelling circumstances, which significantly affect the
interests of the Government, exist. Within 15 working days of SBA's
notification to the contracting officer, SBA shall file its formal
appeal with the head of the contracting activity, or that agency may
consider the appeal withdrawn. The head of the contracting activity
shall reply to SBA within 15 working days of receiving the appeal. The
decision of the head of the contracting activity shall be final.
19.1306 HUBZone sole source awards.
(a) A participating agency contracting officer may award contracts
to HUBZone small business concerns on a sole source basis without
considering small business set-asides (see subpart 19.5), provided--
(1) Only one HUBZone small business concern can satisfy the
requirement;
(2) The anticipated price of the contract, including options, will
not exceed--
(i) $5,000,000 for a requirement within the Standard Industrial
Classification (SIC) codes for manufacturing; or
(ii) $3,000,000 for a requirement within any other SIC code;
(3) The requirement is not currently being performed by a non-
HUBZone small business concern;
(4) The acquisition is greater than the simplified acquisition
threshold (see part 13);
(5) The HUBZone small business concern has been determined to be a
responsible contractor with respect to performance; and
(6) Award can be made at a fair and reasonable price.
(b) The SBA has the right to appeal the contracting officer's
decision not to make a HUBZone sole source award.
19.1307 Price evaluation preference for HUBZone small business
concerns.
(a) The price evaluation preference for HUBZone small business
concerns shall be used in acquisitions conducted using full and open
competition. The preference shall not be used--
(1) In acquisitions expected to be less than or equal to the
simplified acquisition threshold;
(2) Where price is not a selection factor so that a price
evaluation preference would not be considered (e.g., Architect/Engineer
acquisitions);
(3) Where all fair and reasonable offers are accepted (e.g., the
award of multiple award schedule contracts).
(b) The contracting officer shall give offers from HUBZone small
business concerns a price evaluation preference by adding a factor of
10 percent to all offers, except--
[[Page 70274]]
(1) Offers from HUBZone small business concerns that have not
waived the evaluation preference;
(2) Otherwise successful offers from small business concerns;
(3) Otherwise successful offers of eligible products under the
Trade Agreements Act when the acquisition equals or exceeds the dollar
threshold in 25.402; and
(4) Otherwise successful offers where application of the factor
would be inconsistent with a Memorandum of Understanding or other
international agreement with a foreign government (see agency
supplement).
(c) The factor of 10 percent shall be applied on a line item basis
or to any group of items on which award may be made. Other evaluation
factors, such as transportation costs or rent-free use of Government
facilities, shall be added to the offer to establish the base offer
before adding the factor of 10 percent.
(d) A concern that is both a HUBZone small business concern and a
small disadvantaged business concern shall receive the benefit of both
the HUBZone small business price evaluation preference and the small
disadvantaged business price evaluation adjustment (see subpart 19.11).
Each applicable price evaluation preference or adjustment shall be
calculated independently against an offeror's base offer. These
individual preference and adjustment amounts shall both be added to the
base offer to arrive at the total evaluated price for that offer.
19.1308 Contract clauses.
(a) The contracting officer shall insert the clause 52.219-3,
Notice of Total HUBZone Set-Aside, in solicitations and contracts for
acquisitions that are set aside for HUBZone small business concerns
under 19.1305 or 19.1306.
(b) The contracting officer shall insert the clause at 52.219-4,
Notice of Price Evaluation Preference for HUBZone Small Business
Concerns, in solicitations and contracts for acquisitions conducted
using full and open competition. The clause shall not be used in
acquisitions that do not exceed the simplified acquisition threshold.
PART 26--OTHER SOCIOECONOMIC PROGRAMS
26.104 [Amended]
51. Section 26.104 is amended in paragraph (a) by removing the
words ``Small, Small Disadvantaged and Women-Owned''.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52. Section 52.212-3 is amended by adding Alternate III following
Alternate II to read as follows:
52.212-3 Offeror Representations and Certifications--Commercial Items.
* * * * *
Alternate III (Jan 1999). As prescribed in 12.301(b)(2), add the
following paragraph (c)(9) to the basic provision:
(9) HUBZone small business concern. [Complete only if the
offeror represented itself as a small business concern in paragraph
(c)(1) of this provision.] The offeror represents as part of its
offer that--
(i) It {time} is, {time} is not a HUBZone small business
concern listed, on the date of this representation, on the List of
Qualified HUBZone Small Business Concerns maintained by the Small
Business Administration, and no material change in ownership and
control, principal place of ownership, or HUBZone employee
percentage has occurred since it was certified by the Small Business
Administration in accordance with 13 CFR part 126; and
(ii) It {time} is, {time} is not a joint venture that complies
with the requirements of 13 CFR part 126, and the representation in
paragraph (c)(9)(i) of this provision is accurate for the HUBZone
small business concern or concerns that are participating in the
joint venture. [The offeror shall enter the name or names of the
HUBZone small business concern or concerns that are participating in
the joint venture: ________________________________.] Each HUBZone
small business concern participating in the joint venture shall
submit a separate signed copy of the HUBZone representation.
53. Section 52.212-5 is amended in the clause by revising (b)(3)
and (b)(4); redesignating (b)(9) through (b)(20) as (b)(12) through
(b)(23), respectively; and adding new paragraphs (b)(9), (b)(10), and
(b)(11) 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 (Jan. 1999)
* * * * *
(b) * * *
__ (3) 52.219-8, Utilization of Small Business Concerns (15
U.S.C. 637 (d)(2) and (3)).
__ (4) 52.219-9, Small Business Subcontracting Plan (15 U.S.C.
637(d)(4)).
* * * * *
__ (9) 52.219-3, Notice of HUBZone Small Business Set-Aside (Jan
1999).
__ (10) 52.219-4, Notice of Price Evaluation Preference for
HUBZone Small Business Concerns (Jan 1999) (if the offeror elects to
waive the preference, it shall so indicate in its offer).
__ (11) 52.222-21, Prohibition of Segregated Facilities (Feb
1999).
* * * * *
54. Section 52.219-1 is amended by revising the introductory
paragraph; in the introductory text of Alternate I by revising
``19.306(a)(1)'' to read ``19.307(a)(1)''; and adding Alternate II
following Alternate I to read as follows:
52.219-1 Small Business Program Representations.
As prescribed in 19.307(a)(1), insert the following provision:
* * * * *
Alternate II (Jan 1999). As prescribed in 19.307(a)(3), add the
following paragraph (b)(5) to the basic provision:
(5) [Complete only if offeror represented itself as a small
business concern in paragraph (b)(1) of this provision.] The offeror
represents, as part of its offer, that--
(i) It {time} is, {time} is not a HUBZone small business
concern listed, on the date of this representation, on the List of
Qualified HUBZone Small Business Concerns maintained by the Small
Business Administration, and no material change in ownership and
control, principal place of ownership, or HUBZone employee
percentage has occurred since it was certified by the Small Business
Administration in accordance with 13 CFR part 126; and
(ii) It {time} is, {time} is not a joint venture that complies
with the requirements of 13 CFR part 126, and the representation in
paragraph (b)(5)(i) of this provision is accurate for the HUBZone
small business concern or concerns that are participating in the
joint venture. [The offeror shall enter the name or names of the
HUBZone small business concern or concerns that are participating in
the joint venture: ____________.] Each HUBZone small business
concern participating in the joint venture shall submit a separate
signed copy of the HUBZone representation.
52.219-2 [Amended]
55. Section 52.219-2 is amended in the introductory text by
revising ``19.306(c)'' to read ``19.307(c)''.
56. Sections 52.219-3 and 52.219-4 are added to read as follows:
52.219-3 Notice of total HUBZone set-aside.
As prescribed in 19.1308(a), insert the following clause:
Notice of Total HUBZone Set-Aside (Jan 1999)
(a) Definition. HUBZone small business concern, as used in this
clause, means a small business concern that appears on the List of
Qualified HUBZone Small Business Concerns maintained by the Small
Business Administration.
(b) General. (1) Offers are solicited only from HUBZone small
business concerns. Offers received from concerns that are not
HUBZone small business concerns shall not be considered.
(2) Any award resulting from this solicitation will be made to a
HUBZone small business concern.
[[Page 70275]]
(c) Agreement. A HUBZone small business concern agrees that in
the performance of the contract, in the case of a contract for--
(1) Services (except construction), at least 50 percent of the
cost of personnel for contract performance will be spent for
employees of the concern or employees of other HUBZone small
business concerns;
(2) Supplies (other than acquisition from a nonmanufacturer of
the supplies), at least 50 percent of the cost of manufacturing,
excluding the cost of materials, will be performed by the concern or
other HUBZone small business concerns;
(3) General construction, at least 15 percent of the cost of the
contract performance incurred for personnel will be spent on the
concern's employees or the employees of other HUBZone small business
concerns; or
(4) Construction by special trade contractors, at least 25
percent of the cost of the contract performance incurred for
personnel will be spent on the concern's employees or the employees
of other HUBZone small business concerns.
(d) A HUBZone joint venture agrees that, in the performance of
the contract, the applicable percentage specified in paragraph (c)
of this clause will be performed by the HUBZone small business
participant or participants.
(e) A HUBZone small business concern nonmanufacturer agrees to
furnish in performing this contract only end items manufactured or
produced by HUBZone small business manufacturer concerns. This
paragraph does not apply in connection with construction or service
contracts.
(End of clause)
52.219-4 Notice of price evaluation preference for HUBZone small
business concerns.
As prescribed in 19.1308(b), insert the following clause:
Notice of Price Evaluation Preference for HUBZone Small Business
Concerns (Jan 1999)
(a) Definition. HUBZone small business concern, as used in this
clause, means a small business concern that appears on the List of
Qualified HUBZone Small Business Concerns maintained by the Small
Business Administration.
(b) Evaluation preference. (1) Offers will be evaluated by
adding a factor of 10 percent to the price of all offers, except--
(i) Offers from HUBZone small business concerns that have not
waived the evaluation preference;
(ii) Otherwise successful offers from small business concerns;
(iii) Otherwise successful offers of eligible products under the
Trade Agreements Act when the dollar threshold for application of
the Act is exceeded (see 25.402 of the Federal Acquisition
Regulation (FAR)); and
(iv) Otherwise successful offers where application of the factor
would be inconsistent with a Memorandum of Understanding or other
international agreement with a foreign government.
(2) The factor of 10 percent shall be applied on a line item
basis or to any group of items on which award may be made. Other
evaluation factors described in the solicitation shall be applied
before application of the factor.
(3) A concern that is both a HUBZone small business concern and
a small disadvantaged business concern will receive the benefit of
both the HUBZone small business price evaluation preference and the
small disadvantaged business price evaluation adjustment (see FAR
clause 52.219-23). Each applicable price evaluation preference or
adjustment shall be calculated independently against an offeror's
base offer.
These individual preference amounts shall be added together to
arrive at the total evaluated price for that offer.
(c) Waiver of evaluation preference. A HUBZone small business
concern may elect to waive the evaluation preference, in which case
the factor will be added to its offer for evaluation purposes. The
agreements in paragraph (d) of this clause do not apply if the
offeror has waived the evaluation preference.
{time} Offeror elects to waive the evaluation preference.
(d) Agreement. A HUBZone small business concern agrees that in
the performance of the contract, in the case of a contract for
(1) Services (except construction), at least 50 percent of the
cost of personnel for contract performance will be spent for
employees of the concern or employees of other HUBZone small
business concerns;
(2) Supplies (other than procurement from a nonmanufacturer of
such supplies), at least 50 percent of the cost of manufacturing,
excluding the cost of materials, will be performed by the concern or
other HUBZone small business concerns;
(3) General construction, at least 15 percent of the cost of the
contract performance incurred for personnel will be will be spent on
the concern's employees or the employees of other HUBZone small
business concerns; or
(4) Construction by special trade contractors, at least 25
percent of the cost of the contract performance incurred for
personnel will be spent on the concern's employees or the employees
of other HUBZone small business concerns.
(e) A HUBZone joint venture agrees that in the performance of
the contract, the applicable percentage specified in paragraph (d)
of this clause will be performed by the HUBZone small business
participant or participants.
(f) A HUBZone small business concern nonmanufacturer agrees to
furnish in performing this contract only end items manufactured or
produced by HUBZone small business manufacturer concerns. This
paragraph does not apply in connection with construction or service
contracts.
(End of clause)
57. Section 52.219-8 is revised to read as follows:
52.219-8 Utilization of small business concerns.
As prescribed in 19.708(a), insert the following clause:
Utilization of Small Business Concerns (Jan 1999)
(a) It is the policy of the United States that small business
concerns, HUBZone small business concerns, small business concerns
owned and controlled by socially and economically disadvantaged
individuals, and small business concerns owned and controlled by
women shall have the maximum practicable opportunity to participate
in performing contracts let by any Federal agency, including
contracts and subcontracts for subsystems, assemblies, components,
and related services for major systems. It is further the policy of
the United States that its prime contractors establish procedures to
ensure the timely payment of amounts due pursuant to the terms of
their subcontracts with small business concerns, HUBZone small
business concerns, small business concerns owned and controlled by
socially and economically disadvantaged individuals, and small
business concerns owned and controlled by women.
(b) The Contractor hereby agrees to carry out this policy in the
awarding of subcontracts to the fullest extent consistent with
efficient contract performance. The Contractor further agrees to
cooperate in any studies or surveys as may be conducted by the
United States Small Business Administration or the awarding agency
of the United States as may be necessary to determine the extent of
the Contractor's compliance with this clause.
(c) Definitions. As used in this contract
(1) Small business concern means a small business as defined
pursuant to section 3 of the Small Business Act and relevant
regulations promulgated pursuant thereto.
(2) HUBZone small business concern means a small business
concern that appears on the List of Qualified HUBZone Small Business
Concerns maintained by the Small Business Administration.
(3) Small business concern owned and controlled by socially and
economically disadvantaged individuals means an offeror that
represents, as part of its offer, that--
(i) It is a small business under the size standard applicable to
the acquisition;
(ii) It has received certification as a small disadvantaged
business concern consistent with 13 CFR part 124, Subpart B;
(iii) No material change in disadvantaged ownership and control
has occurred since its certification;
(iv) Where the concern is owned by one or more individuals, the
net worth of each individual upon whom the certification is based
does not exceed $750,000 after taking into account the applicable
exclusions set forth at 13 CFR 124.104(c)(2); and
(v) It is listed, on the date of its representation, on the
register of small disadvantaged business concerns maintained by the
Small Business Administration.
(4) Small business concern owned and controlled by women means a
small business concern--
(i) Which is at least 51 percent owned by one or more women, or,
in the case of any publicly owned business, at least 51 percent of
the stock of which is owned by one or more women; and
[[Page 70276]]
(ii) Whose management and daily business operations are
controlled by one or more women; and
(d) Contractors acting in good faith may rely on written
representations by their subcontractors regarding their status as a
small business concern, a HUBZone small business concern, a small
business concern owned and controlled by socially and economically
disadvantaged individuals, or a small business concern owned and
controlled by women.
(End of clause)
58. Section 52.219-9 is amended--
a. By revising the section and clause headings;
b. By revising the first and second sentences of paragraph (c);
c. By revising the first sentence of paragraph (d)(1);
d. By redesignating (d)(2)(iii) and (d)(2)(iv) as (d)(2)(iv) and
(d)(2)(v) and adding a new (d)(2)(iii);
e. By revising paragraph (d)(3);
f. In the first sentence of paragraph (d)(5) by adding ``HUBZone
small,'' after the words ``or small,'';
g. By revising paragraph (d)(6);
h. In paragraph (d)(8) by adding ``business, HUBZone small
business,'' after the words ``that small''; and adding ``business,''
after ``small disadvantaged'';
i. In paragraph (d)(9) by removing the word ``in'' the first time
it is used and adding ``of'' in its place; and removing the words
``Small, Small Disadvantaged and Women-Owned'';
j. By revising paragraph (d)(11);
k. By revising paragraphs (e)(1), (e)(2), (e)(3), and (e)(4);
l. In paragraph (i)(1) by removing the words ``Small, Small
Disadvantaged and Women-Owned''; and
m. By revising Alternates I and II to read as follows:
52.219-9 Small business subcontracting plan.
* * * * *
Small Business Subcontracting Plan (Jan 1999)
* * * * *
(c) The offeror, upon request by the Contracting Officer, shall
submit and negotiate a subcontracting plan, where applicable, that
separately addresses subcontracting with small business, HUBZone
small business concerns, small disadvantaged business, and women-
owned small business concerns. If the offeror is submitting an
individual contract plan, the plan must separately address
subcontracting with small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns,
with a separate part for the basic contract and separate parts for
each option (if any). * * *
(d) * * *
(1) Goals, expressed in terms of percentages of total planned
subcontracting dollars, for the use of small business, HUBZone small
business, small disadvantaged business, and women-owned small
business concerns as subcontractors. * * *
(2) * * *
(iii) Total dollars planned to be subcontracted to HUBZone small
business concerns;
* * * * *
(3) A description of the principal types of supplies and
services to be subcontracted, and an identification of the types
planned for subcontracting to--
(i) Small business concerns;
(ii) HUBZone small business concerns;
(iii) Small disadvantaged business concerns; and
(iv) Women-owned small business concerns.
* * * * *
(6) A statement as to whether or not the offeror in included
indirect costs in establishing subcontracting goals, and a
description of the method used to determine the proportionate share
of indirect costs to be incurred with--
(i) Small business concerns;
(ii) HUBZone small business concerns;
(iii) Small disadvantaged business concerns; and
(iv) Women-owned small business concerns.
* * * * *
(11) A description of the types of records that will be
maintained concerning procedures that have been adopted to comply
with the requirements and goals in the plan, including establishing
source lists; and a description of the offeror's efforts to locate
small business, HUBZone small business, small disadvantaged
business, and women-owned small business concerns and award
subcontracts to them. The records shall include at least the
following (on a plant-wide or company-wide basis, unless otherwise
indicated):
(i) Source lists (e.g., PRO-Net), guides, and other data that
identify small business, HUBZone small business, small disadvantaged
business, and women-owned small business concerns.
(ii) Organizations contacted in an attempt to locate sources
that are small business, HUBZone small business, small disadvantaged
business, or women-owned small business concerns.
(iii) Records on each subcontract solicitation resulting in an
award of more than $100,000, indicating--
(A) Whether small business concerns were solicited and, if not,
why not;
(B) Whether HUBZone small business concerns were solicited and,
if not, why not;
(C) Whether small disadvantaged business concerns were solicited
and, if not, why not;
(D) Whether women-owned small business concerns were solicited
and, if not, why not; and
(E) If applicable, the reason award was not made to a small
business concern.
(iv) Records of any outreach efforts to contact--
(A) Trade associations;
(B) Business development organizations; and
(C) Conferences and trade fairs to locate small, HUBZone small,
small disadvantaged, and women-owned small business sources.
(v) Records of internal guidance and encouragement provided to
buyers through--
(A) Workshops, seminars, training, etc.; and
(B) Monitoring performance to evaluate compliance with the
program's requirements.
(vi) On a contract-by-contract basis, records to support award
data submitted by the offeror to the Government, including the name,
address, and business size of each subcontractor. Contractors having
commercial plans need not comply with this requirement.
(e) * * *
(1) Assist small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns by
arranging solicitations, time for the preparation of bids,
quantities, specifications, and delivery schedules so as to
facilitate the participation by such concerns. Where the
Contractor's lists of potential small business, HUBZone small
business, small disadvantaged business, and women-owned small
business subcontractors are excessively long, reasonable effort
shall be made to give all such small business concerns an
opportunity to compete over a period of time.
(2) Provide adequate and timely consideration of the
potentialities of small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns in
all ``make-or-buy'' decisions.
(3) Counsel and discuss subcontracting opportunities with
representatives of small business, HUBZone small business, small
disadvantaged business, and women-owned small business firms.
(4) Provide notice to subcontractors concerning penalties and
remedies for misrepresentations of business status as small, HUBZone
small, small disadvantaged, or women-owned small business for the
purpose of obtaining a subcontract that is to be included as part or
all of a goal contained in the Contractor's subcontracting plan.
* * * * *
Alternate I (Jan 1999). When contracting by sealed bidding rather
than by negotiation, substitute the following paragraph (c) for
paragraph (c) of the basic clause:
(c) The apparent low bidder, upon request by the Contracting
Officer, shall submit a subcontracting plan, where applicable, that
separately addresses subcontracting with small business, HUBZone
small business, small disadvantaged business, and women-owned small
business concerns. If the bidder is submitting an individual
contract plan, the plan must separately address subcontracting with
small business, HUBZone small business, small disadvantaged
business, and women-owned small business concerns, with a separate
part for the basic contract and separate parts for each option (if
any). The plan shall be included in and made a part of the resultant
contract. The subcontracting plan shall be submitted within the time
specified by the Contracting Officer. Failure to submit the
subcontracting plan shall make
[[Page 70277]]
the bidder ineligible for the award of a contract.
Alternate II (Jan 1999). As prescribed in 19.708(b)(1), substitute
the following paragraph (c) for paragraph (c) of the basic clause:
(c) Proposals submitted in response to this solicitation shall
include a subcontracting plan that separately addresses
subcontracting with small business, HUBZone small business, small
disadvantaged business, and women-owned small business concerns. If
the offeror is submitting an individual contract plan, the plan must
separately address subcontracting with small business, HUBZone small
business, small disadvantaged business, and women-owned small
business concerns, with a separate part for the basic contract and
separate parts for each option (if any). The plan shall be included
in and made a part of the resultant contract. The subcontracting
plan shall be negotiated within the time specified by the
Contracting Officer. Failure to submit and negotiate a
subcontracting plan shall make the offeror ineligible for award of a
contract.
59. Section 52.219-10 is amended by revising paragraph (a) of the
clause; and in the first sentence of paragraph (b) by removing
``concerns'' the first time it is used and adding ``HUBZone small
business,'' in its place. The revised text reads as follows:
52.219-10 Incentive Subcontracting Program.
* * * * *
Incentive Subcontracting Program (Jan 1999)
(a) Of the total dollars it plans to spend under subcontracts,
the Contractor has committed itself in its subcontracting plan to
try to award certain percentages to small business, HUBZone small
business, small disadvantaged business, and women-owned small
business concerns, respectively.
* * * * *
52.219-16 [Amended]
60. Section 52.219-16 is amended by revising the date of the clause
to read ``(JAN 1999)''; and in paragraph (a) and the second sentence of
paragraph (b) of the clause by removing the words ``Small, Small
Disadvantaged and Women-Owned''.
52.219-22 [Amended]
61. Section 52.219-22 is amended in the introductory paragraph by
revising ``19.306(b)'' to read ``19.307(b)''.
52.226-1 [Amended]
62. Section 52.226-1 is amended by revising the date of the clause
to read ``(JAN 1999)''; and in paragraph (a) of the clause by removing
the words ``Small, Small Disadvantaged and Women-Owned''.
PART 53--FORMS
63. Section 53.219 is amended by revising paragraph (a); and in
paragraph (b) by revising the revision date of the form to read ``(Rev.
12/98)''.
53.219 Small business programs.
* * * * *
(a) SF 294 (Rev. 12/98), Subcontracting Report for Individual
Contracts. (See 19.704(a)(10).) SF 294 is authorized for local
reproduction and a copy is furnished for this purpose in part 53 of the
loose-leaf edition of the FAR.
* * * * *
64. Sections 53.301-294 and 53.301-295 are revised to read as
follows:
53.301-294 Subcontracting Report for Individual Contracts.
BILLING CODE 6820-EP-P
[[Page 70278]]
[GRAPHIC] [TIFF OMITTED] TR18DE98.001
[[Page 70279]]
[GRAPHIC] [TIFF OMITTED] TR18DE98.002
[[Page 70280]]
53.301-295 Summary Subcontract Report.
[GRAPHIC] [TIFF OMITTED] TR18DE98.003
[[Page 70281]]
[GRAPHIC] [TIFF OMITTED] TR18DE98.004
[FR Doc. 98-33513 Filed 12-16-98; 8:45 am]
BILLING CODE 6820-EP-C