[Federal Register Volume 63, Number 249 (Tuesday, December 29, 1998)]
[Rules and Regulations]
[Pages 71722-71723]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-34365]



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Part VII

Department of Defense

General Services Administration

National Aeronautics and Space Administration

Office of Management and Budget
_______________________________________________________________________



48 CFR Parts 19 and 52



Reform of Affirmative Action in Federal Procurement; Interim Final Rule 
and Notice

  Federal Register / Vol. 63, No. 249 / Tuesday, December 29, 1998 / 
Rules and Regulations  

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 19 and 52

[FAC 97-07 Addendum; FAR Case 97-004B Correction]
RIN 9000-AH59


Federal Acquisition Regulation; Reform of Affirmative Action in 
Federal Procurement; Corrections

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule; Correcting amendments.

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SUMMARY: The Department of Defense, the General Services 
Administration, and the National Aeronautics and Space Administration 
have agreed to issue an addendum to correct Federal Acquisition 
Circular (FAC) 97-07 to make amendments to the Federal Acquisition 
Regulation (FAR) concerning programs for small disadvantaged business 
(SDB) concerns. These changes are needed to provide additional time for 
subcontractors to become certified under rules issued by the Small 
Business Administration. These amendments allow contractors acting in 
good faith to accept the self-representation of subcontractors as to 
their status as small disadvantaged business concerns. It is 
anticipated that by July 1, 1999, a sufficient number of firms will 
have been certified and the changes made by this rule rescinded. After 
that date, solicitations will require contractors to use certified SDBs 
as subcontractors to take advantage of the SDB Participation Program. 
No other aspects of FAC 97-07 are being modified.

DATES: Effective Date: January 1, 1999.
    Applicability Date: The policies, provisions, and clauses of this 
Addendum apply for all solicitations issued on or after January 1, 
1999.
    Comment Date: Comments should be submitted to the FAR Secretariat 
at the address shown below on or before March 1, 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 97-07 Addendum, FAR case 97-004B, in all 
correspondence related to this case.

FOR FURTHER INFORMATION CONTACT:

Ms. Victoria Moss, Procurement Analyst Federal Acquisition Policy 
Division, General Services Administration, 1800 F Street, NW, 
Washington, DC 20405, Telephone: (202) 501-4764
      or
Mr. Mike Sipple, Procurement Analyst, Contract Policy and 
Administration, Director, Defense Procurement, Department of Defense 
3060 Defense Pentagon, Washington, DC 20301-3060, Telephone: (703) 695-
8567.

    For general information, call the FAR Secretariat at (202) 501-
4755.

SUPPLEMENTARY INFORMATION:

A. Background

    On July 1, 1998, DoD, GSA, and NASA issued FAC 97-07 to make 
amendments to the FAR concerning programs for small disadvantaged 
business concerns. This document revises the rule published at 63 FR 
36120, July 1, 1998, to allow contractors acting in good faith to rely 
upon the self-representations of their subcontractors as to their 
status as a small disadvantaged business concern.
    Urgent and compelling reasons exist to promulgate this rule without 
prior opportunity for public comment. This action is necessary to amend 
regulations that will become effective on January 1, 1999, to reflect 
the current scarcity of certified small disadvantaged business 
subcontractors.
    This regulatory action was not subject to Office of Management and 
Budget review under Executive Order 12866, dated September 30, 1993. 
This is not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    These changes modify the manner in which a firm, acting as a 
subcontractor, may indicate that it is a small disadvantaged business 
concern (SDB). On June 30, 1998, the Small Business Administration 
(SBA) issued rules concerning the certification and eligibility of 
SDBs. SBA prepared and issued an analysis of that rule's impact on 
small entities at that time. The acquisition programs designed to 
assist SDB subcontractors were issued in Federal Acquisition Circular 
97-07 at 63 FR 36120, July 1, 1998. At that time, an Initial Regulatory 
Flexibility Analysis was prepared discussing the impact of the 
programs. The changes in this Addendum do not affect the impact of the 
acquisition programs on small entities; they merely revise the manner 
in which a firm is considered eligible under the programs. Therefore, 
the Initial Regulatory Flexibility Analysis published with FAC 97-07 is 
unaffected by these changes and remains valid.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose recordkeeping or information collection 
requirements, or collection of information from offerors, contractors, 
or members of the public which require the approval of OMB under 44 
U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 19 and 52

    Government procurement.

    Dated: December 22, 1998.
Victoria Moss,
Acting Director, Federal Acquisition Policy Division.
FEDERAL ACQUISITION CIRCULAR

FAC 97-07 Addendum

    Federal Acquisition Circular (FAC) 97-07 Addendum is issued under 
the authority of the Secretary of Defense, the Administrator of General 
Services, and the Administrator for the National Aeronautics and Space 
Administration.
    The policies, provisions, and clauses of this Addendum are 
effective for all solicitations issued on or after January 1, 1999.

    Dated: December 21, 1998.
Carol F. Covey,
Acting Director, Defense Procurement.
Ida M. Ustad,
Deputy Associate Administrator, Office of Acquisition Policy, General 
Services Administration.

    Dated: December 22, 1998.
James A. Balinskas,
Acting Associate Administrator for Procurement, National Aeronautics 
and Space Administration.
    Therefore, 48 CFR Parts 19 and 52 are amended as set forth below:
    1. The authority citation for 48 CFR Parts 19 and 52 continues to 
read as follows:

    Authority: 41 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 19--SMALL BUSINESS PROGRAMS

    2. Section 19.001 is amended by revising the definition of ``Small 
disadvantaged business concern'' to read as follows:

[[Page 71723]]

19.001   Definitions.

* * * * *
    Small disadvantaged business concern, as used in this part, means--
    (1) For prime contractors (except for 52.212-3(c)(2) and 52.219-
1(b)(2) for general statistical purposes and 52.212-3(c)(7)(ii), 
52.219-22(b)(2), and 52.219-23(a) for joint ventures under the price 
evaluation adjustment for small disadvantaged business concerns), an 
offeror that represents, as part of its offer, that it is a small 
business under the size standard applicable to the acquisition; and 
either--
    (i) It has received certification as a small disadvantaged business 
concern consistent with 13 CFR part 124, subpart B; and
    (A) No material change in disadvantaged ownership and control has 
occurred since its certification;
    (B) Where the concern is owned by one or more disadvantaged 
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
    (C) It is listed, on the date of its representation, on the 
register of small disadvantaged business concerns maintained by the 
Small Business Administration; or
    (ii) It has submitted a completed application to the Small Business 
Administration or a private certifier to be certified as a small 
disadvantaged business concern in accordance with 13 CFR part 124, 
subpart B, and a decision on that application is pending, and that no 
material change in disadvantaged ownership and control has occurred 
since its application was submitted. In this case, a contractor must 
receive certification as an SDB by the SBA prior to contract award.
    (2) For subcontractors, an offeror that represents, as part of its 
offer, that it is a small business under the size standard applicable 
to the acquisition and that it meets the definition of a small 
disadvantaged business in 13 CFR 124.1002.
* * * * *
    3. Section 19.703 is amended by revising paragraph (b) to read as 
follows:


19.703   Eligibility requirements for participating in the program.

* * * * *
    (b) A contractor acting in good faith may rely on the written 
representation of its subcontractor regarding the subcontractor's 
status as a small, small disadvantaged, or a woman-owned small business 
concern. The contractor, the contracting officer, or any other 
interested party can challenge a subcontractor's size status 
representation by filing a protest, in accordance with 13 CFR 121.1601 
through 121.1608. Protests challenging a subcontractor's small 
disadvantaged business representation shall be filed in accordance with 
13 CFR 124.1015 through 124.1022.
    4. Section 19.1202-4 is amended by adding paragraph (c) to read as 
follows:


19.1202-4   Procedures.

* * * * *
    (c) A contractor acting in good faith may rely on the written 
representation of its subcontractor regarding the subcontractor's 
status as a small disadvantaged business concern.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    5. Section 52.219-8 is amended by revising paragraph (c) of the 
clause to read as follows:


52.219-8  Utilization of Small, Small Disadvantaged, and Women-Owned 
Small Business Concerns.

* * * * *

Utilization of Small, Small Disadvantaged, and Women-Owned Small 
Business Concerns (Jan 1999)

* * * * *
    (c) As used in this clause, the term ``small business concern'' 
shall mean a small business as defined pursuant to section 3 of the 
Small Business Act and relevant regulations promulgated pursuant 
thereto. The term ``small business concern owned and controlled by 
socially and economically disadvantaged individuals'' shall mean a 
small business concern that represents, as part of its offer, that 
it meets the definition of a small disadvantaged business concern in 
13 CFR 124.1002.
* * * * *
    6. Section 52.219-25 is amended by revising paragraph (a) of the 
clause to read as follows:


52.219-25   Small Disadvantaged Business Participation Program--
Disadvantaged Status and Reporting.

* * * * *

Small Disadvantaged Business Participation Program--Disadvantaged 
Status and Reporting (Jan 1999)

    (a) Disadvantaged status for joint venture partners, team 
members, and subcontractors. This clause addresses disadvantaged 
status for joint venture partners, teaming arrangement members, and 
subcontractors and is applicable if this contract contains small 
disadvantaged business (SDB) participation targets. The Contractor 
shall obtain representations of small disadvantaged status from 
joint venture partners and teaming arrangement members through use 
of a provision substantially the same as paragraph (b)(1)(i) of the 
provision at FAR 52.219-22, Small Disadvantaged Business Status. The 
Contractor shall confirm that a joint venture partner or team 
member, representing itself as a small disadvantaged business 
concern, is included in the SBA's on-line list of SDBs at http://
www.sba.gov or by contacting the SBA's Office of Small Disadvantaged 
Business Certification and Eligibility. The Contractor acting in 
good faith may rely on a written representation of its subcontractor 
regarding the subcontractor's status as a small disadvantaged 
business concern as defined in 13 CFR 124.1002.
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[FR Doc. 98-34365 Filed 12-28-98; 8:45 am]
BILLING CODE 6820-EP-P