[Federal Register Volume 64, Number 116 (Thursday, June 17, 1999)]
[Rules and Regulations]
[Pages 32742-32745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15148]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 12, 19, and 52

[FAC 97-12; FAR Case 98-011; Item III]
RIN 9000-AI33


Federal Acquisition Regulation; SBA's 8(a) Business Development 
Program

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA),

[[Page 32743]]

and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (the Councils) have agreed on an 
interim rule amending the Federal Acquisition Regulation (FAR) to 
implement revisions made to Small Business Administration (SBA) 
regulations pertaining to its 8(a) Business Development (8(a)BD) 
Program.

DATES: Effective June 17, 1999.
    Comment Date: Interested parties should submit comments to the FAR 
Secretariat at the address shown below on or before August 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. Address 
e-mail comments submitted via the Internet to: [email protected]. 
Please cite FAC 97-12, FAR case 98-011 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 97-12, FAR case 98-011.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule amends FAR parts 12, 19, and 52 to conform to 
recent amendments made by the Small Business Administration (SBA) to 
their regulations pertaining to the 8(a)BD Program. The SBA published a 
final rule in the Federal Register on June 30, 1998 (63 FR 35726). The 
SBA rule amended the eligibility procedures for admission to the 8(a)BD 
and contractual assistance programs. These changes involve 
administrative matters concerning requirement offerings, contract 
execution, contract administration, and SBA appeals.
    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

    DoD, GSA, and NASA do not expect the interim rule to have a 
significant economic impact on a substantial number of small entities 
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et 
seq., because the rule merely addresses changes made by the Small 
Business Administration (SBA) to 13 CFR parts 121, 124, and 134. The 
SBA has certified that the changes set forth in its rule will not have 
a significant economic impact on a substantial number of small entities 
because the changes do not increase the net number of current 8(a) 
certified small businesses or the net number of current 8(a) 
participants by more than 500 to 800 businesses, or less than 1 percent 
of all small businesses seeking Government contracts. Therefore, an 
Initial Regulatory Flexibility Analysis has not been performed. The 
Councils will consider comments from small entities concerning the 
affected FAR subparts in accordance with 5 U.S.C. 610. Interested 
parties must submit such comments separately and should cite 5 U.S.C 
601, et seq. (FAR case 98-011), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C. 
3501, et seq.

D. 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, 124, and 134 pertaining to the Small Business 
Administration (SBA) 8(a)BD Program. The SBA final rule became 
effective on June 30, 1998. However, pursuant to Pub. L. 98-577 and FAR 
1.501, the Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council will consider public comments received 
in response to this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 12, 19, and 52

    Government procurement.

    Dated: June 9, 1999.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
    Therefore, DoD, GSA, and NASA amend 48 CFR parts 12, 19, and 52 as 
set forth below:
    1. The authority citation for 48 CFR parts 12, 19, and 52 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 12--ACQUISITION OF COMMERCIAL ITEMS

    2. In section 12.102, amend paragraph (d)(3) by removing ``or''; in 
(d)(4) by removing the period and adding ``; or''; and add (d)(5) to 
read as follows:


12.102  Applicability.

* * * * *
    (d) * * *
    (5) Directly from another Federal agency.

PART 19--SMALL BUSINESS PROGRAMS

    3. In section 19.101, amend paragraph (g)(2) by revising the 
paragraph heading and the first sentence, and adding a sentence to the 
end of the paragraph to read as follows:


19.101  Explanation of terms.

* * * * *
    (g) * * *
    (2) Joint venture--acquisition and property sale assistance. 
Concerns bidding on a particular acquisition or property sale as joint 
ventures are considered as affiliated and controlling or having the 
power to control each other with regard to performance of the contract. 
* * * The rules governing 8(a) Program joint ventures are described in 
13 CFR 124.513.
* * * * *
    4. Revise section 19.302(a) to read as follows:


19.302  Protesting a small business representation.

    (a) An offeror, the SBA, or another interested party may protest 
the small business representation of an offeror in a specific offer. 
However, for competitive 8(a) contracts, the filing of a protest is 
limited to an offeror, the contracting officer, or the SBA.
* * * * *
    5. In section 19.800, redesignate paragraph (d) as (e); and add new 
paragraphs (d) and (f) to read as follows:


19.800  General.

* * * * *

[[Page 32744]]

    (d) The SBA refers to this program as the 8(a) Business Development 
(BD) Program.
* * * * *
    (f) When SBA has delegated its 8(a) Program contract execution 
authority to an agency, the contracting officer must refer to its 
agency supplement or other policy directives for appropriate guidance.


19.802  [Amended]

    6. Amend section 19.802 by revising the citation ``13 CFR 124.101-
113'' to read ``13 CFR 124.101-112''.
    7. In section 19.804-2, revise paragraphs (a)(5), (a)(8), (a)(9), 
and (a)(12) through (a)(14); redesignate paragraph (a)(15) as (a)(16), 
and add a new paragraph (a)(15) to read as follows:


19.804-2  Agency offering.

    (a) * * *
    (5) Any special restrictions or geographical limitations on the 
requirement (for construction, include the location of the work to be 
performed).
* * * * *
    (8) The acquisition history, if any, of the requirement, including 
the names and addresses of any small business contractors that have 
performed this requirement during the previous 24 months.
    (9) A statement that prior to the offering no solicitation for the 
specific acquisition has been issued as a small business or HUBZone 
set-aside and that no other public communication (such as a notice in 
the Commerce Business Daily) has been made showing the contracting 
agency's clear intention to set-aside the acquisition for small 
business or HUBZone small business concerns.
* * * * *
    (12) Identification of all known 8(a) concerns, including HUBZone 
8(a) concerns, that have expressed an interest in being considered for 
the specific requirement.
    (13) Identification of all SBA field offices that have asked for 
the acquisition for the 8(a) Program.
    (14) A request, if appropriate, that a requirement with an 
estimated contract value under the applicable competitive threshold be 
awarded as an 8(a) competitive contract (see 19.805-1(d)).
    (15) A request, if appropriate, that a requirement with a contract 
value over the applicable competitive threshold be awarded as a sole 
source contract (see 19.805-1(b)).
* * * * *
    8. Amend section 19.804-3 by revising paragraph (a); and adding 
paragraphs (c) and (d) to read as follows:


19.804-3  SBA acceptance.

    (a) Upon receipt of the contracting agency's offer, the SBA will 
determine whether to accept the requirement for the 8(a) Program. The 
SBA's decision whether to accept the requirement will be transmitted to 
the contracting agency in writing within 10 working days of receipt of 
the offer if the contract is likely to exceed the simplified 
acquisition threshold and within 2 days of receipt if the contract is 
at or below the simplified acquisition threshold. The contracting 
agency may grant an extension of these time periods. If SBA does not 
respond to an offering letter within 10 days, the contracting activity 
may seek SBA's acceptance through the Associate Administrator (AA)/
8(a)BD.
* * * * *
    (c) For acquisitions not exceeding the simplified acquisition 
threshold, when the contracting activity makes an offer to the 8(a) 
Program on behalf of a specific 8(a) firm and does not receive a reply 
to its offer within 2 days, the contracting activity may assume the 
offer is accepted and proceed with award of an 8(a) contract.
    (d) As part of the acceptance process, SBA will review the 
appropriateness of the SIC code designation assigned to the requirement 
by the contracting activity.
    (1) SBA will not challenge the SIC code assigned to the requirement 
by the contracting activity if it is reasonable, even though other SIC 
codes may also be reasonable.
    (2) If SBA and the contracting activity are unable to agree on a 
SIC code designation for the requirement, SBA may refuse to accept the 
requirement for the 8(a) Program, appeal the contracting officer's 
determination to the head of the agency pursuant to 19.810, or appeal 
the SIC code designation to the SBA Office of Hearings and Appeals 
under subpart C of 13 CFR part 134.
    9. Revise section 19.804-4 to read as follows:


19.804-4  Repetitive acquisitions.

    In order for repetitive acquisitions to be awarded through the 8(a) 
Program, there must be separate offers and acceptances. This allows the 
SBA to determine--
    (a) Whether the requirement should be a competitive 8(a) award;
    (b) A nominated firm's eligibility, whether or not it is the same 
firm that performed the previous contract;
    (c) The effect that contract award would have on the equitable 
distribution of 8(a) contracts; and
    (d) Whether the requirement should continue under the 8(a) Program.
    10. Add sections 19.804-5 and 19.804-6 to read as follows:


19.804-5  Basic ordering agreements.

    (a) The contracting activity must offer, and SBA must accept, each 
order under a basic ordering agreement (BOA) in addition to offering 
and accepting the BOA itself.
    (b) SBA will not accept for award on a sole-source basis any order 
that would cause the total dollar amount of orders issued under a 
specific BOA to exceed the competitive threshold amount in 19.805-1.
    (c) Once an 8(a) concern's program term expires, the concern 
otherwise exits the 8(a) Program, or becomes other than small for the 
SIC code assigned under the BOA, SBA will not accept new orders for the 
concern.


19.804-6  Multiple award and Federal Supply Schedule contracts.

    (a) Separate offers and acceptances must not be made for individual 
orders under multiple award or Federal Supply Schedule (FSS) contracts. 
SBA's acceptance of the original multiple award or FSS contract is 
valid for the term of the contract.
    (b) The requirements of 19.805-1 do not apply to individual orders 
that exceed the competitive threshold as long as the original contract 
was competed.
    (c) An 8(a) concern may continue to accept new orders under a 
multiple award or FSS contract even after a concern's program term 
expires, the concern otherwise exits the 8(a) Program, or the concern 
becomes other than small for the SIC code assigned under the contract.
    11. Amend section 19.805-1 in paragraph (a)(2) by removing ``award 
price'' and adding ``total value'' in its place; and revise paragraphs 
(b)(2) and (d) to read as follows:


19.805-1  General.

* * * * *
    (b) * * *
    (2) SBA accepts the requirement on behalf of a concern owned by an 
Indian tribe or an Alaska Native Corporation.
* * * * *
    (d) The SBA Associate Administrator for 8(a) Business Development 
(AA/8(a)BD) may approve an agency request for a competitive 8(a) award 
below the competitive thresholds. Such requests will be approved only 
on a limited basis and will be primarily granted where technical 
competitions are appropriate or where a large number of responsible 
8(a) firms are available for competition. In determining whether a 
request to compete below the threshold will be approved, the AA/8(a)BD 
will, in part, consider the extent to which the requesting agency is 
supporting the 8(a)

[[Page 32745]]

Program on a noncompetitive basis. The agency may include 
recommendations for competition below the threshold in the offering 
letter or by separate correspondence to the AA/8(a)BD.


19.805-2  [Amended]

    12. Amend section 19.805-2 as follows:
    a. Remove paragraph (a);
    b. Redesignate paragraphs (b) through (e) as (a) through (d), 
respectively;
    c. In new redesignated paragraph (a), remove the words ``the SBA 
instructions provided under''; and
    d. In new redesignated paragraph (d), revise ``13 CFR 124.111(c)'' 
to read ``13 CFR 124.517''.


19.806  [Amended]

    13. In section 19.806, amend paragraph (c) by adding ``within 10 
working days'' after the word ``price.''
    14. Revise section 19.808-2 to read as follows:


19.808-2  Competitive.

    In competitive 8(a) acquisitions subject to part 15, the 
contracting officer conducts negotiations directly with the competing 
8(a) firms. Conducting competitive negotiations among 8(a) firms prior 
to SBA's formal acceptance of the acquisition for the 8(a) Program may 
be grounds for SBA's not accepting the acquisition for the 8(a) 
Program.
    15. Revise section 19.809 to read as follows:


19.809  Preaward considerations.

    The contracting officer should request a preaward survey of the 
8(a) contractor whenever considered useful. If the results of the 
preaward survey or other information available to the contracting 
officer raise substantial doubt as to the firm's ability to perform, 
the contracting officer must refer the matter to SBA for Certificate of 
Competency consideration under subpart 19.6.
    16. Amend section 19.810 by revising paragraphs (a) and (b) to read 
as follows:


19.810  SBA appeals.

    (a) The SBA Administrator may submit the following matters for 
determination to the agency head if the SBA and the contracting officer 
fail to agree on them:
    (1) The decision not to make a particular acquisition available for 
award under the 8(a) Program.
    (2) A contracting officer's decision to reject a specific 8(a) firm 
for award of an 8(a) contract after SBA's acceptance of the requirement 
for the 8(a) Program.
    (3) The terms and conditions of a proposed 8(a) contract, including 
the contracting activity's SIC code designation and estimate of the 
fair market price.
    (b) Notification of a proposed appeal to the agency head by the SBA 
must be received by the contracting officer within 5 working days after 
the SBA is formally notified of the contracting officer's decision. The 
SBA will provide the agency Director for Small and Disadvantaged 
Business Utilization a copy of this notification of the intent to 
appeal. The SBA must send the written appeal to the head of the 
contracting activity within 15 working days of SBA's notification of 
intent to appeal or the contracting activity may consider the appeal 
withdrawn. Pending issuance of a decision by the agency head, the 
contracting officer must suspend action on the acquisition. The 
contracting officer need not suspend action on the acquisition if the 
contracting officer makes a written determination that urgent and 
compelling circumstances that significantly affect the interests of the 
United States will not permit waiting for a decision.
* * * * *
    17. In section 19.811-1, revise the last sentence in the 
introductory text of paragraph (c); and add paragraph (d) to read as 
follows:


19.811-1  Sole source.

* * * * *
    (c) * * * Appropriate blocks on the Standard Form (SF) 26 or 1442 
will be asterisked and a continuation sheet appended as a tripartite 
agreement which includes the following:
* * * * *
    (d) For acquisitions not exceeding the simplified acquisition 
threshold, the contracting officer may use the alternative procedures 
in paragraph (c) of this subsection with the appropriate simplified 
acquisition forms.


19.811-2  [Amended]

    18. Amend the introductory text of section 19.811-2(a) by adding 
``as a tripartite agreement'' after the word ``appended''.
    19. Amend section 19.812 by revising paragraph (d) to read as 
follows:


19.812  Contract administration.

* * * * *
    (d) An 8(a) contract, whether in the base or an option year, must 
be terminated for convenience if the 8(a) concern to which it was 
awarded transfers ownership or control of the firm or if the contract 
is transferred or novated for any reason to another firm, unless the 
Administrator of the SBA waives the requirement for contract 
termination (13 CFR 124.515). The Administrator may waive the 
termination requirement only if certain conditions exist. Moreover, a 
waiver of the requirement for termination is permitted only if the 8(a) 
firm's request for waiver is made to the SBA prior to the actual 
relinquishment of ownership or control, except in the case of death or 
incapacity where the waiver must be submitted within 60 days after such 
an occurrence. The clauses in the contract entitled ``Special 8(a) 
Contract Conditions'' and ``Special 8(a) Subcontract Conditions'' 
require the SBA and the 8(a) subcontractor to notify the contracting 
officer when ownership of the firm is being transferred. When the 
contracting officer receives information that an 8(a) contractor is 
planning to transfer ownership or control to another firm, the 
contracting officer must take action immediately to preserve the option 
of waiving the termination requirement. The contracting officer should 
determine the timing of the proposed transfer and its effect on 
contract performance and mission support. If the contracting officer 
determines that the SBA does not intend to waive the termination 
requirement, and termination of the contract would severely impair 
attainment of the agency's program objectives or mission, the 
contracting officer should immediately notify the SBA in writing that 
the agency is requesting a waiver. Within 15 business days thereafter, 
or such longer period as agreed to by the agency and the SBA, the 
agency head must either confirm or withdraw the request for waiver. 
Unless a waiver is approved by the SBA, the contracting officer must 
terminate the contract for convenience upon receipt of a written 
request by the SBA. This requirement for a convenience termination does 
not affect the Government's right to terminate for default if the cause 
for termination of an 8(a) contract is other than the transfer of 
ownership or control.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.219-18  [Amended]

    20. Amend section 52.219-18 by revising the date of the clause to 
read ``(JUNE 1999)''; by removing paragraph (a)(1) of the clause; and 
redesignating paragraphs (a)(2) and (a)(3) as (a)(1) and (a)(2), 
respectively.

[FR Doc. 99-15148 Filed 6-16-99; 8:45 am]
BILLING CODE 6820-EP-P