[Federal Register Volume 65, Number 197 (Wednesday, October 11, 2000)]
[Rules and Regulations]
[Pages 60542-60552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-25874]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 4, 5, 7, 19, 52, and 53

[FAC 97-20; FAR Case 2000-302; Item I]
RIN 9000-AI93


Federal Acquisition Regulation; Veterans Entrepreneurship and 
Small Business Development Act of 1999

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 (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) to implement 
portions of the Veterans Entrepreneurship and Small Business 
Development Act of 1999 (Pub. L. 106-50). The Act established new 
assistance programs for veterans and service-disabled veterans who own 
and operate small businesses.

DATES: Effective Date: October 11, 2000.
    Comment Date: Interested parties should submit comments to the FAR 
Secretariat at the address shown below on or before December 11, 2000 
to be considered in the formulation of a final rule.

[[Page 60543]]


ADDRESSES: Submit written comments to: General Services Administration, 
FAR Secretariat (MVR), 1800 F Street, NW, Room 4035, Attn: Ms. Laurie 
Duarte, Washington, DC 20405
    Submit electronic comments via the Internet to: [email protected]. Please submit comments only and cite FAC 97-20, FAR case 
2000-302 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 97-20, FAR case 2000-302.

SUPPLEMENTARY INFORMATION:  

A. Background

    This interim rule amends the FAR to implement sections 501(c), 
502(a)(2), and 604(d) of the Veterans Entrepreneurship and Small 
Business Development Act of 1999 (Pub. L. 106-50). This Act established 
new assistance programs for veterans and service-disabled veterans who 
own and operate small businesses. Specifically, the Act--
    1. Defined the terms ``small business concern owned and controlled 
by veterans'' and ``small business concern owned and controlled by 
service-disabled veterans;''
    2. Established that veteran-owned and service-disabled veteran-
owned small businesses be afforded maximum practical opportunity to 
participate in the performance of contracts and subcontracts awarded by 
any Federal agency;
    3. Established a requirement to include a goal for veteran-owned 
small businesses in subcontracting plans under FAR 52.219-9;
    4. Established a 3 percent Governmentwide goal (based on the total 
value of all prime contract and subcontract awards) for participation 
by service-disabled veteran-owned small businesses; and
    5. Added data collection requirements for prime and subcontract 
awards to veteran-owned small businesses and service-disabled veteran-
owned small business concerns.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The changes 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 rule now expands the 
small business program by identifying new subgroups of small entities 
(i.e., veteran-owned small businesses and service-disabled veteran-
owned small businesses) for prime contracting and subcontracting 
opportunities. An Initial Regulatory Flexibility Analysis (IRFA) has 
been prepared and is summarized as follows:

    This interim rule amends the Federal Acquisition Regulation in 
order to comply with recently enacted legislation concerning small 
business concerns owned and controlled by veterans and service-
disabled veterans. It implements section 501(c), section 502(a)(2), 
and section 604(d) of the Veterans Entrepreneurship and Small 
Business Development Act of 1999 (Pub. L. 106-50). It is estimated 
that there are 4 to 5.5 million small businesses owned and 
controlled by veterans and 100,000 to 300,000 small businesses owned 
and controlled by service-disabled veterans. Section 604(d) of Title 
VI of the Act adds data collection requirements to the Federal 
Procurement Data System for prime contracts and subcontracts awarded 
to small business concerns owned and controlled by veterans and 
small business concerns owned and controlled by service-disabled 
veterans. This rule does not duplicate, overlap, or conflict with 
other relevant Federal rules. There are no significant alternatives 
to the interim rule that would accomplish the stated beneficial 
objectives.

    The FAR Secretariat has submitted a copy of the IRFA to the Chief 
Counsel for Advocacy of the Small Business Administration. Interested 
parties may obtain a copy from the FAR Secretariat. The Councils will 
consider comments from small entities concerning the affected FAR Parts 
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. (FAC 97-20, 
FAR case 2000-302), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 104-13) applies because the 
interim rule contains information collection requirements. Two existing 
OMB clearances are affected by this rule as follows:

Annual Reporting Burden for OMB Clearance 9000-0006

    We estimate the public reporting burden for this collection of 
information to average 50.54 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    We estimate the annual reporting burden is as follows:
    Respondents: 4,253.
    Responses per respondent: 3.44.
    Total annual responses: 14,631.
    Preparation hours per response: 50.54.
    Total response burden hours: 739,389.

Annual Reporting Burden for OMB Clearance 9000-0007

    We estimate the public reporting burden for this collection of 
information to average 15.9 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    We estimate the annual reporting burden is as follows:
    Respondents: 4,253.
    Responses per respondent: 1.67.
    Total annual responses: 7,098.
    Preparation hours per response: 15.9.
    Total response burden hours: 112,864.

D. Request for Comments Regarding Paperwork Burden

    Submit comments, including suggestions for reducing this burden, 
not later than December 11, 2000 to: FAR Desk Officer, OMB, Room 10102, 
NEOB, Washington, DC 20503, and a copy to the General Services 
Administration, FAR Secretariat (MVR), 1800 F Street, NW, Room 4035, 
Washington, DC 20405.
    We particularly invite public comments on: whether this collection 
of information is necessary for the proper performance of functions of 
the FAR, and will have practical utility; whether our estimate of the 
public burden of this collection of information is accurate, and based 
on valid assumptions and methodology; ways to enhance the quality, 
utility, and clarity of the information to be collected; and ways in 
which we can minimize the burden of the collection of information on 
those who are to respond, through the use of appropriate technological 
collection techniques or other forms of information technology.
    Requester may obtain a copy of the justifications from the General 
Services Administration, FAR Secretariat (MVR), Room 4035, Washington, 
DC 20405, telephone (202) 208-7312. Please cite OMB Control Numbers 
9000-0006 or 9000-0007 in all correspondence.

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

[[Page 60544]]

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 in order 
to implement portions of the Veterans Entrepreneurship and Small 
Business Development Act of 1999 (Pub. L. 106-50). However, pursuant to 
Public Law 98-577 and FAR 1.501, the Councils 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 2, 4, 5, 7, 19, 52, and 53

    Government procurement.

    Dated: October 3, 2000.
Al Matera,
Acting Director, Federal Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 5, 7, 19, 
52, and 53 as set forth below:
    1. The authority citation for 48 CFR parts 2, 4, 5, 7, 19, 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 2--DEFINITIONS OF WORDS AND TERMS

    2. Amend section 2.101 by adding, in alphabetical order, the 
definitions ``Service-disabled veteran-owned small business concern'' 
and ``Veteran-owned small business concern'' to read as follows:


2.101  Definitions.

* * * * *
    Service-disabled veteran-owned small business concern--
    (1) Means a small business concern--
    (i) Not less than 51 percent of which is owned by one or more 
service-disabled veterans or, in the case of any publicly owned 
business, not less than 51 percent of the stock of which is owned by 
one or more service-disabled veterans; and
    (ii) The management and daily business operations of which are 
controlled by one or more service-disabled veterans or, in the case of 
a veteran with permanent and severe disability, the spouse or permanent 
caregiver of such veteran.
    (2) Service-disabled veteran means a veteran, as defined in 38 
U.S.C. 101(2), with a disability that is service-connected, as defined 
in 38 U.S.C. 101(16).
* * * * *
    Veteran-owned small business concern means a small business 
concern--
    (1) Not less than 51 percent of which is owned by one or more 
veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any 
publicly owned business, not less than 51 percent of the stock of which 
is owned by one or more veterans; and
    (2) The management and daily business operations of which are 
controlled by one or more veterans.
* * * * *

PART 4--ADMINISTRATIVE MATTERS

    3. Amend section 4.602 by revising paragraph (a)(2); and in 
paragraph (d) by removing ``shall'' each time it is used (three times) 
and adding ``must'' in its place. The revised text reads as follows:


4.602  Federal Procurement Data System.

    (a) * * *
    (2) A means of measuring and assessing the impact of Federal 
contracting on the Nation's economy and the extent to which small, 
veteran-owned small, service-disabled veteran-owned small, HUBZone 
small, small disadvantaged, and women-owned small business concerns are 
sharing in Federal contracts; and
* * * * *

PART 5--PUBLICIZING CONTRACT ACTIONS

    4. Amend section 5.002 in the introductory paragraph by removing 
``shall'' and adding ``must'' in its place; and by revising paragraph 
(c) to read as follows:


5.002  Policy.

* * * * *
    (c) Assist small business concerns, veteran-owned small business 
concerns, service-disabled veteran-owned small business concerns, 
HUBZone small business concerns, small disadvantaged business concerns, 
and women-owned small business concerns in obtaining contracts and 
subcontracts.

PART 7--ACQUISITION PLANNING

    5. Amend section 7.105 in the introductory paragraph by removing 
``shall'' each time it is used (four times) and adding ``must'' in its 
place; and 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, veteran-owned small business, service-disabled veteran-
owned small business, HUBZone small business, small disadvantaged 
business, and women-owned small business concerns (see part 19), and 
the impact of any bundling that might affect their participation in the 
acquisition (see 7.107) (15 U.S.C. 644(e)). * * *
* * * * *

PART 19--SMALL BUSINESS PROGRAMS

    6. Amend section 19.000 in paragraph (a)(9) by removing ``and''; in 
paragraph (a)(10) by removing the period and adding ``; and'' in its 
place; and by adding paragraph (a)(11) to read as follows:


19.000  Scope of part.

    (a) * * *
    (11) The use of veteran-owned small business concerns and service-
disabled veteran-owned small business concerns.
* * * * *


19.001  [Amended]

    7. Amend section 19.001 in the definition ``Small disadvantaged 
business concern'' by removing ``52.212-3(c)(2)'' and adding ``52.212-
3(c)(4)'' in its place; and by removing ``52.212-3(c)(7)(ii)'' and 
adding ``52.212-3(c)(9)(ii)'' in its place.


19.201  [Amended]

    8. Amend section 19.201 in the first sentence of paragraph (a) by 
adding ``veteran-owned small business, service-disabled veteran-owned 
small business,'' before the word ``HUBZone''; and in the second 
sentence by removing ``shall'' and adding ``must'' in its place.


19.202-2  [Amended]

    9. Amend section 19.202-2 in the introductory paragraph by removing 
``shall'' and adding ``must'' in its place; and by adding ``veteran-
owned small business, service-disabled veteran-owned small business,'' 
before the word ``HUBZone''.


19.202-4  [Amended]

    10. Amend section 19.202-4 in the introductory paragraph by 
removing ``shall'' and adding ``must'' in its place; and by adding 
``veteran-owned small business, service-disabled veteran-owned small 
business,'' before the word ``HUBZone''.


19.202-5  [Amended]

    11. Amend section 19.202-5 in the introductory paragraph by 
removing ``shall'' and adding ``must'' in its place; and in paragraphs 
(a) and (b) by adding ``veteran-owned small business, service-disabled 
veteran-owned small business,'' before the word ``HUBZone''.

[[Page 60545]]

Subpart 19.3--Determination of Small Business Status for Small 
Business Programs

    12. The heading of subpart 19.3 is revised to read as set forth 
above.


19.301  [Amended]

    13. Amend section 19.301 in the first sentence of paragraph (d) by 
adding ``veteran-owned small business,'' before the word ``HUBZone''.


19.304  [Amended]

    14. Amend section 19.304 in paragraph (b) by removing ``52.212-
3(c)(2)'' and adding ``52.212-3(c)(4)'' in its place; and in paragraph 
(c) by removing ``52.212-3(c)(7)'' and adding ``52.212-3(c)(9)'' in its 
place.


19.402  [Amended]

    15. Amend section 19.402 in paragraph (c)(1)(ii) by adding 
``veteran-owned small, service-disabled veteran-owned small,'' before 
the word ``HUBZone''.

    16. Amend section 19.702 by revising the introductory paragraph to 
read as follows:


19.702  Statutory requirements.

    Any contractor receiving a contract for more than the simplified 
acquisition threshold must agree in the contract that small business, 
veteran-owned small business, service-disabled veteran-owned small 
business, HUBZone small business, small disadvantaged business, and 
women-owned small business concerns will 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, veteran-owned small business, service-disabled veteran-
owned small business, HUBZone small business, small disadvantaged 
business, and women-owned small business concerns.
* * * * *
    17. Amend section 19.703 by revising the introductory text of 
paragraph (a), paragraph (a)(1) and the first sentence of paragraph 
(b); in the fifth sentence of paragraph (b) by removing ``shall'' and 
adding ``must'' in its place; and adding a sixth sentence to paragraph 
(b). The revised and added text reads as follows:


19.703  Eligibility requirements for participating in the program.

    (a) To be eligible as a subcontractor under the program, a concern 
must represent itself as a small business, veteran-owned small 
business, service-disabled veteran-owned small business, HUBZone small 
business, small disadvantaged business, or woman-owned small business 
concern.
    (1) To represent itself as a small business, veteran-owned small 
business, service-disabled veteran-owned small business, HUBZone small 
business, or woman-owned small business concern, a concern must meet 
the appropriate definition in 2.101 or 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, veteran-owned small business, service-
disabled veteran-owned small business, HUBZone small business, or a 
woman-owned small business concern. * * * Protests challenging HUBZone 
small business concerns status must be filed in accordance with 13 CFR 
126.800.
    18. Amend section 19.704 by revising paragraph (a)(1); and in 
paragraphs (a)(2), (a)(3), (a)(6), (a)(8), and (a)(11) by adding 
``veteran-owned small business,'' before the word ``HUBZone''. The 
revised text reads as follows:


19.704  Subcontracting plan requirements.

    (a) * * *
    (1) Separate percentage goals for using small business, veteran-
owned small business, HUBZone small business, small disadvantaged 
business, and women-owned small business concerns as subcontractors. 
Service-disabled veteran-owned small business concerns meet the 
definition of veteran-owned small business concerns, and offerors may 
include them within the subcontracting plan goal for veteran-owned 
small business concerns. A separate goal for service-disabled veteran-
owned small business concerns is not required;.
* * * * *


19.705-2  [Amended]

    19. Amend section 19.705-2 in the introductory paragraph by 
removing ``shall'' and adding ``must'' in its place; and in the last 
sentence of paragraph (d) by removing ``shall'' and adding ``must'' in 
its place, and adding ``veteran-owned small business (including 
service-disabled veteran-owned small business),'' before the word 
``HUBZone''.

    20. Amend section 19.705-4 by--
    a. Removing from the introductory paragraph ``shall'' and adding 
``must'' in its place;
    b. Adding in the second and last sentences of paragraph (c), and 
paragraphs (d)(1) and (d)(5) ``veteran-owned small business,'' before 
the word ``HUBZone''; and
    c. Revising paragraph (d)(6) to read as follows:


19.705-4  Reviewing the subcontracting plan.

* * * * *
    (d) * * *
    (6) Advise the offeror of available sources of information on 
potential small business, veteran-owned small business, service-
disabled veteran-owned 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. 
If the offerors proposed goals are questionable, the contracting 
officer must emphasize that the information should be used to develop 
realistic and acceptable goals. The contracting officer should ensure 
that the contractor has considered the use of service-disabled veteran-
owned small businesses in developing its veteran-owned small business 
goal (see 19.704(a)(1) and 52.219-9(d)(1)).
* * * * *


19.705-7  [Amended]

    21. Amend section 19.705-7 in paragraph (a) by adding in the first 
sentence ``veteran-owned small business (including service-disabled 
veteran-owned small business),'' before the word ``HUBZone''; and in 
the third and fourth sentences of paragraph (d) by adding ``veteran-
owned small business (including service-disabled veteran-owned small 
business),'' before the word ``HUBZone''.


19.706  [Amended]

    22. Amend section 19.706 in paragraphs (b) and (c) by adding 
``veteran-owned small business (including service-disabled veteran-
owned small business),'' before the word ``HUBZone''.


19.708  [Amended]

    23. Amend section 19.708 in paragraphs (c)(1), (c)(2), and (c)(3) 
by adding ``veteran-owned small business (including service-disabled 
veteran-owned small business),'' before the word ``HUBZone''.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    24. Amend section 52.212-3 by--
    a. Revising the date of the provision;
    b. Adding in paragraph (a), in alphabetical order, the definitions 
``Service-disabled veteran-owned small

[[Page 60546]]

business concern'' and ``Veteran-owned small business concern'';
    c. Redesignating paragraphs (c)(2) through (c)(7) as (c)(4) through 
(c)(9), respectively, and adding new paragraphs (c)(2) and (c)(3);
    d. Removing from the ``Note'' paragraph in newly designated 
paragraph (c)(5), ``(c)(4) and (c)(5)'' and adding ``(c)(6) and 
(c)(7)'' in its place;
    e. Removing from Alternate I ``(Oct 1998)'' and adding ``(Oct 
2000)'' in its place, and removing ``(c)(8)'' and adding ``(c)(10)'' in 
its place; redesignating paragraph ``(8)'' as ``(10)'' and removing 
``(c)(7)'' and adding ``(c)(9)'' in its place;
    f. Removing from Alternate II ``(Oct 1998)'' and adding ``(Oct 
2000)'' in its place, and removing ``(c)(7)(iii)'' and adding 
``(c)(9)(iii)'' in its place; and
    g. Removing from Alternate III ``(Jan 1999)'' and adding ``(Oct 
2000)'' in its place, and removing ``(c)(9)'' and adding ``(c)(11)'' in 
its place; designating the second paragraph of Alternate III as 
paragraph (c)(11); and removing from newly designated paragraph 
(c)(11)(ii) ``(c)(9)(i)'' and adding ``(c)(11)(i)'' in its place.
    The revised text reads as follows:


52.212-3  Offeror Representations and Certifications--Commercial Items.

* * * * *

Offeror Representations and Certifications--Commercial Items (Oct. 
2000)

    (a) * * *
* * * * *
    Service-disabled veteran-owned small business concern--
    (1) Means a small business concern--
    (i) Not less than 51 percent of which is owned by one or more 
service--disabled veterans or, in the case of any publicly owned 
business, not less than 51 percent of the stock of which is owned by 
one or more service-disabled veterans; and
    (ii) The management and daily business operations of which are 
controlled by one or more service-disabled veterans or, in the case 
of a veteran with permanent and severe disability, the spouse or 
permanent caregiver of such veteran.
    (2) Service-disabled veteran means a veteran, as defined in 38 
U.S.C. 101(2), with a disability that is service-connected, as 
defined in 38 U.S.C. 101(16).
* * * * *
    Veteran-owned small business concern means a small business 
concern--
    (1) Not less than 51 percent of which is owned by one or more 
veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any 
publicly owned business, not less than 51 percent of the stock of 
which is owned by one or more veterans; and
    (2) The management and daily business operations of which are 
controlled by one or more veterans.
* * * * *
    (c) * * *
    (2) Veteran-owned 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 it [  ] is, [  ] is not a veteran-owned small business 
concern.
    (3) Service-disabled veteran-owned small business concern. 
[Complete only if the offeror represented itself as a veteran-owned 
small business concern in paragraph (c)(2) of this provision.] The 
offeror represents as part of its offer that it [  ] is, [  ] is not 
a service-disabled veteran-owned small business concern.
* * * * *

    25. Amend section 52.219-1 by--
    a. Revising the date of the provision;
    b. Adding paragraphs (b)(4) and (b)(5);
    c. Revising the heading of paragraph (c) and adding, in 
alphabetical order, the definitions ``Service-disabled veteran-owned 
small business concern'' and ``Veteran-owned small business concern'';
    d. Removing ``, as used in this provision,'' from the definitions 
``Small business concern'' and ``Women-owned small business concern'';
    e. Adding in the introductory text of paragraph (d)(2) ``HUBZone 
small,'' after the word ``small,'' the first time it appears;
    f. Removing from Alternate I ``(Nov 1999)'' and adding ``(Oct 
2000)'' in its place, removing ``(b)(4)'' and adding ``(b)(6)'' in its 
place; redesignating paragraph (4) as paragraph (b)(6); removing from 
newly designated paragraph (b)(6)(ii) ``(b)(4)(i)'' and adding 
``(b)(6)(i)'' in its place; and
    g. Removing from Alternate II ``(Nov 1999)'' and adding ``(Oct 
2000)'' in its place, and removing ``(b)(5)'' and adding ``(b)(7)'' in 
its place; and redesignating paragraph (5) of Alternate II as paragraph 
(b)(7). The revised text reads as follows:


52.219-1  Small Business Program Representations.

* * * * *

Small Business Program Representations (Oct. 2000)

* * * * *
    (b) * * *
    (4) [Complete only if the offeror represented itself as a small 
business concern in paragraph (b)(1) of this provision.] The offeror 
represents as part of its offer that it [  ] is, [  ] is not a 
veteran-owned small business concern.
    (5) [Complete only if the offeror represented itself as a 
veteran-owned small business concern in paragraph (b)(4) of this 
provision.] The offeror represents as part of its offer that it [  ] 
is, [  ] is not a service-disabled veteran-owned small business 
concern.
    (c) Definitions. As used in this provision--
    Service-disabled veteran-owned small business concern--
    (1) Means a small business concern--
    (i) Not less than 51 percent of which is owned by one or more 
service-disabled veterans or, in the case of any publicly owned 
business, not less than 51 percent of the stock of which is owned by 
one or more service-disabled veterans; and
    (ii) The management and daily business operations of which are 
controlled by one or more service-disabled veterans or, in the case 
of a veteran with permanent and severe disability, the spouse or 
permanent caregiver of such veteran.
    (2) Service-disabled veteran means a veteran, as defined in 38 
U.S.C. 101(2), with a disability that is service-connected, as 
defined in 38 U.S.C. 101(16).
* * * * *
    Veteran-owned small business concern means a small business 
concern--
    (1) Not less than 51 percent of which is owned by one or more 
veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any 
publicly owned business, not less than 51 percent of the stock of 
which is owned by one or more veterans; and
    (2) The management and daily business operations of which are 
controlled by one or more veterans.
* * * * *

    26. Amend section 52.219-8 by revising the date of the clause and 
paragraphs (a), (c), and (d) to read as follows:


52.219-8  Utilization of Small Business Concerns.

* * * * *

Utilization of Small Business Concerns (Oct. 2000)

    (a) It is the policy of the United States that small business 
concerns, veteran-owned small business concerns, service-disabled 
veteran-owned small business concerns, HUBZone small business 
concerns, small disadvantaged business concerns, and women-owned 
small business concerns 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, veteran-owned small business concerns, service-
disabled veteran-owned small business concerns, HUBZone small 
business concerns, small disadvantaged business concerns, and women-
owned small business concerns.
* * * * *
    (c) Definitions. As used in this contract--
    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.
    Service-disabled veteran-owned small business concern--
    (1) Means a small business concern--

[[Page 60547]]

    (i) Not less than 51 percent of which is owned by one or more 
service-disabled veterans or, in the case of any publicly owned 
business, not less than 51 percent of the stock of which is owned by 
one or more service-disabled veterans; and
    (ii) The management and daily business operations of which are 
controlled by one or more service-disabled veterans or, in the case 
of a veteran with permanent and severe disability, the spouse or 
permanent caregiver of such veteran.
    (2) Service-disabled veteran means a veteran, as defined in 38 
U.S.C. 101(2), with a disability that is service-connected, as 
defined in 38 U.S.C. 101(16).
    Small business concern means a small business as defined 
pursuant to Section 3 of the Small Business Act and relevant 
regulations promulgated pursuant thereto.
    Small disadvantaged business concern means a small business 
concern that represents, as part of its offer that--
    (1) It has received certification as a small disadvantaged 
business concern consistent with 13 CFR part 124, subpart B;
    (2) No material change in disadvantaged ownership and control 
has occurred since its certification;
    (3) 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
    (4) It is identified, on the date of its representation, as a 
certified small disadvantaged business in the database maintained by 
the Small Business Administration (PRO-Net).
    Veteran-owned small business concern means a small business 
concern--
    (1) Not less than 51 percent of which is owned by one or more 
veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any 
publicly owned business, not less than 51 percent of the stock of 
which is owned by one or more veterans; and
    (2) The management and daily business operations of which are 
controlled by one or more veterans.
    Women-owned small business concern means a small business 
concern--
    (1) That 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
    (2) Whose management and daily business operations are 
controlled by one or more women.
    (d) Contractors acting in good faith may rely on written 
representations by their subcontractors regarding their status as a 
small business concern, a veteran-owned small business concern, a 
service-disabled veteran-owned small business concern, a HUBZone 
small business concern, a small disadvantaged business concern, or a 
women-owned small business concern.
    (End of clause)

    27. Amend section 52.219-9 by--
    a. Revising the date of the clause;
    b. Adding to the first and second sentences of paragraph (c) 
``veteran-owned small business,'' before the word ``HUBZone'';
    c. Revising paragraph (d)(1);
    d. Redesignating paragraphs (d)(2)(iii) through (d)(2)(v) as 
(d)(2)(iv) through (d)(2)(vi), and adding a new (d)(2)(iii);
    e. Redesignating paragraphs (d)(3)(ii) through (d)(3)(iv) as 
(d)(3)(iii) through (d)(3)(v), and adding a new paragraph (d)(3)(ii);
    f. Revising paragraph (d)(5);
    g. Redesignating paragraphs (d)(6)(ii) through (d)(6)(iv) as 
(d)(6)(iii) through (d)(6)(v), and adding a new paragraph (d)(6)(ii);
    h. Adding to paragraph (d)(8) ``veteran-owned small business,'' 
before the word ``HUBZone'';
    i. Revising paragraph (d)(10)(iii);
    j. Adding to the introductory text of paragraph (d)(11), 
(d)(11)(i), and (d)(11)(ii) ``veteran-owned small business,'' before 
the word ``HUBZone'';
    k. Redesignating paragraphs (d)(11)(iii)(B) through (d)(11)(iii)(E) 
as (d)(11)(iii)(C) through (d)(11)(iii)(F), and adding a new paragraph 
(d)(11)(iii)(B);
    l. Removing from paragraph (d)(11)(iv)(B) the word ``and''; 
removing the period at the end of (d)(11)(iv)(C) and adding ``; and'' 
in its place; and adding new paragraph (d)(11)(iv)(D);
    m. Adding in paragraphs (e)(1) (twice), (e)(2), (e)(3), and (e)(4) 
``veteran-owned small business,'' before the word ``HUBZone'';
    n. Removing from Alternate I ``(Jan 1999)'' and adding ``(Oct 
2000)'' in its place; and by adding ``veteran-owned small business,'' 
before the word ``HUBZone'' (twice) in paragraph (c) of the Alternate; 
and
    o. Removing from Alternate II ``(Jan 1999)'' and adding ``(Oct 
2000)'' in its place; and by adding ``veteran-owned small business,'' 
before the word ``HUBZone'' (twice) in paragraph (c) of the Alternate. 
The revised text reads as follows:


52.219-9  Small Business Subcontracting Plan.

* * * * *

Small Business Subcontracting Plan (Oct. 2000)

    (d) * * *
    (1) Goals, expressed in terms of percentages of total planned 
subcontracting dollars, for the use of small business, veteran-owned 
small business, HUBZone small business, small disadvantaged 
business, and women-owned small business concerns as subcontractors. 
Service-disabled veteran-owned small business concerns meet the 
definition of veteran-owned small business concerns, and offerors 
may include them within the subcontracting plan goal for veteran-
owned small business concerns. A separate goal for service-disabled 
veteran-owned small business concerns is not required. The offeror 
shall include all subcontracts that contribute to contract 
performance, and may include a proportionate share of products and 
services that are normally allocated as indirect costs.
    (2) * * *
    (iii) Total dollars planned to be subcontracted to veteran-owned 
small business concerns;
* * * * *
    (3) * * *
    (ii) Veteran-owned small business concerns;
* * * * *
    (5) A description of the method used to identify potential 
sources for solicitation purposes (e.g., existing company source 
lists, the Procurement Marketing and Access Network (PRO-Net) of the 
Small Business Administration (SBA), veterans service organizations, 
the National Minority Purchasing Council Vendor Information Service, 
the Research and Information Division of the Minority Business 
Development Agency in the Department of Commerce, or small, HUBZone, 
small disadvantaged, and women-owned small business trade 
associations). A firm may rely on the information contained in PRO-
Net as an accurate representation of a concern's size and ownership 
characteristics for the purposes of maintaining a small, veteran-
owned small, HUBZone small, small disadvantaged, and women-owned 
small business source list. Use of PRO-Net as its source list does 
not relieve a firm of its responsibilities (e.g., outreach, 
assistance, counseling, or publicizing subcontracting opportunities) 
in this clause.
    (6) * * *
    (ii) Veteran-owned small business concerns;
* * * * *
    (10) * * *
    (iii) Submit Standard Form (SF) 294, Subcontracting Report for 
Individual Contracts, and/or SF 295, Summary Subcontract Report, in 
accordance with paragraph (j) of this clause. The reports shall 
provide information on subcontract awards to small business 
concerns, veteran-owned small business concerns, service-disabled 
veteran-owned small business concerns, small disadvantaged business 
concerns, women-owned small business concerns, and Historically 
Black Colleges and Universities and Minority Institutions. Reporting 
shall be in accordance with the instructions on the forms or as 
provided in agency regulations.
* * * * *
    (11) * * *
    (iii) * * *
    (B) Whether veteran-owned small business concerns were solicited 
and, if not, why not;
* * * * *
    (iv) * * *
    (D) Veterans service organizations.
* * * * *
    (End of clause)


52.219-10  [Amended]

    28. Amend section 52.219-10 by revising the date of the clause to 
read ``(Oct 2000)''; by adding in paragraph (a)

[[Page 60548]]

``veteran-owned small business (including service-disabled veteran-
owned small business),'' before the word ``HUBZone''; and by adding in 
paragraph (b) ``veteran-owned small business (including service-
disabled veteran-owned small business),'' before the word ``HUBZone'', 
and adding a comma following ``goals for small business''.

PART 53--FORMS


53.219  [Amended]

    29. Amend section 53.219 in paragraphs (a) and (b) by removing 
``(Rev. 12/98)'' and adding ``(Rev. 10/00)'' in their place.

    30. Revise sections 53.301-294 and 53.301-295 to read as follows:
BILLING CODE 6820-EP-P

[[Page 60549]]

53.301-294  Subcontracting Report for Individual Contracts.
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[[Page 60550]]


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[[Page 60551]]




53.301-295  Summary Subcontract Report.
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[[Page 60552]]


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[FR Doc. 00-25874 Filed 10-10-00; 8:45 am]
BILLING CODE 6820-EP-C