[Federal Register Volume 65, Number 72 (Thursday, April 13, 2000)]
[Rules and Regulations]
[Pages 19858-19859]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-9084]


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DEPARTMENT OF DEFENSE

48 CFR Part 226

[DFARS Case 99-D300]


Defense Federal Acquisition Regulation Supplement; Utilization of 
Indian Organizations and Indian-Owned Economic Enterprises

AGENCY: Department of Defense (DoD).

ACTION:  Final rule

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SUMMARY: The Acting Director of Defense Procurement has issued a final 
rule amending the Defense Federal Acquisition Regulation Supplement 
(DFARS) to revise procedures pertaining to the Indian Incentive 
Program. The Program provides for incentive payments to Government 
contractors that use Indian organizations and Indian-owned economic 
enterprises as subcontractors. This rule reflects new statutory 
provisions that permit small business concerns to participate in the 
Indian Incentive Program.

EFFECTIVE DATE: April 13, 2000.

FOR FURTHER INFORMATION CONTACT: Ms. Susan Schneider, Defense 
Acquisition Regulations Council, PDUSD (AT&L) DP (DAR), IMD 3D139, 3062 
Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0262; 
telefax (703) 602-0350. Please cite DFARS Case 99-D300.

SUPPLEMENTARY INFORMATION:

A. Background

    The rule revises DFARS Subpart 226.1 to update procedures 
pertaining to the Indian Incentive Program. Section 504 of the Indian 
Financing Act of 1974 (25 U.S.C. 1544) established the Indian Incentive 
Program, which provides for payment of incentives to Government 
contractors that use Indian organizations and Indian-owned economic 
enterprises as subcontractors. Prior to fiscal year 1999, annual 
appropriations acts restricted DoD payments under the Program to those 
contractors that submitted small business subcontracting plans pursuant 
to 15 U.S.C. 637(d) or Section 854 of Public Law 101-89 (15 U.S.C. 637 
note). Since small business concerns are not required to submit 
subcontracting plans, small businesses were excluded from participation 
in the Indian Incentive Program under DoD contracts. Section 8024 of 
the DoD Appropriations Act for Fiscal Year 1999 (Public Law 105-262) 
and Section 8024 of the DoD Appropriations Act for Fiscal Year 2000 
(Public Law 106-79) eliminated the requirements for a DoD contractor to 
submit a subcontracting plan before it may participate in the Indian 
Incentive Program.
    DoD implements the Indian Incentive Program through use of the 
clause at Federal Acquisition Regulation (FAR) 52.226-1, Utilization of 
Indian Organizations and Indian-Owned Economic Enterprises. The FAR and 
DFARS previously prescribed use of the clause in only those DoD 
contracts that contain subcontracting plan requirements. On October 26, 
1999, a proposed FAR rule was published at 64 FR 57964 to remove the 
FAR requirements for DoD use of the clause; these DFARS amendments 
replace the FAR requirements.
    DoD published a proposed rule at 64 FR 63003 on November 18, 1999. 
Thirty-six sources submitted comments on the proposed rule. DoD 
considered all comments in the development of the final rule. The final 
rule differs from the proposed rule in that it lowers the dollar 
threshold for us of the clause at FAR 52.226-1, to provide increased 
opportunity or small business concerns to participate in the Indian 
Incentive Program.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD expects this final 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. A final regulatory 
flexibility analysis has been prepared and its summarized as follows:
    The legal basis for the rule is Section 504 of the Indian Financing 
Act of 1974 (25 U.S.C. 1544); Section 8024 of the DoD Appropriations 
Act for Fiscal Year 1999 (Public Law 105-262); and Section 8024 of the 
DoD Appropriations Act for Fiscal Year 2000 (Public Law 106-79). This 
rule will apply to all DoD contractors that have the clause at FAR 
52.226-1, Utilization of Indian Organizations and Indian-Owned Economic 
Enterprises, incorporated into their contracts. The proposed rule 
required use of the clause at FAR 52.226-1 in construction contracts 
valued at $1,000,000 or more, and in other than construction contracts 
valued

[[Page 19859]]

at $500,000 or more, except those awarded using FAR Part 12 (Commercial 
Item) procedures. As a result of public comments received, and to 
provide increased opportunity for small business concerns to 
participate in the Indian Incentive Program, the final rule lowers the 
dollars threshold for use of the clause to the simplified acquisition 
threshold ($100,000), for all contracts except those awarded using FAR 
Part 12 procedures. The rule does not impose any new reporting, 
recordkeeping, or other compliance requirements, and does not 
duplicate, overlap, or conflict with any other Federal rules. The rule 
is expected to have a beneficial effect on small business concerns, 
because small businesses are now eligible to receive incentive payments 
for the use of Indian organizations and Indian-owned economic 
enterprises as subcontractors.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the rule does 
not impors any information collection requirements that require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

List of Subjects in 48 CFR Part 226

    Government procurement.

Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.

    Therefore, 48 CFR part 226 is amended as follows:
    1. The authority citation for 48 CFR part 226 continues to read as 
follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 226--OTHER SOCIOECONOMIC PROGRAMS

    2. Sections 226.103 and 226.104 are revised to read as follows:


226.103  Procedures.

    (f) The contracting officer must submit a request for funding of 
the Indian incentive to the Office of Small and Disadvantaged Business 
Utilization, Office of the Under Secretary of Defense (Acquisition, 
Technology, and Logistics) (OUSD (AT&L) SADBU, 1777 North Kent Street, 
Suite 9100, Arlington, VA 22209. Upon receipt of funding from OUSD 
(AT&L) SADBU, the contracting officer must issue a contract 
modification to add the Indian incentive funding for payment of the 
contractor's request for adjustment as described at FAR 52.226-1, 
Utilization of Indian Organizations and Indian-Owned Economic 
Enterprises.


226.104  Contract Clause.

    Use the following prescription instead of the prescription at FAR 
26.104(a):
    (a) Use the clause at FAR 52.226-1, Utilization of Indian 
Organizations and Indian-Owned Economic Enterprises, in solicitations 
and contracts that--
    (1) Do not use FAR part 12 procedures; and
    (2) Are for supplies or services expected to exceed the simplified 
acquisition threshold.

[FR Doc. 00-9084 Filed 4-12-00; 8:45 am]
BILLING CODE 5000-04-M