[Federal Register Volume 66, Number 204 (Monday, October 22, 2001)]
[Rules and Regulations]
[Pages 53492-53500]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26300]



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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 19, 52, and 53

[FAC 2001-01; FAR Case 2000-302; Item V]
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 the 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 to amend the Federal Acquisition Regulation (FAR) to implement 
section 803 of the Small Business Reauthorization Act of 2000, part of 
the Consolidated Appropriations Act, 2001. Section 803 amended section 
8(d) of the Small Business Act by adding an additional subcontracting 
plan goal requirement for service-disabled veteran-owned small business 
concerns.

DATES: Effective Date: October 22, 2001.
    Comment Date: Interested parties should submit comments to the FAR 
Secretariat at the address shown below on or before December 21, 2001 
to be considered in the formulation of a final rule.

ADDRESSES: Submit written comments to: General Services Administration, 
FAR Secretariat (MVP), 1800 F Street, NW., Room 4035, Attn: Ms. Laurie 
Duarte, Washington, DC 20405.
    Submit electronic comments via the Internet to: farcase.2000--
[email protected]
    Please submit comments only and cite FAC 2001-01, 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. Rhonda Cundiff at (202) 501-0044. Please cite FAR 
case 2000-302.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule amends the FAR to implement section 803 of the 
Small Business Reauthorization Act of 2000, part of the Consolidated 
Appropriations Act, 2001 (Pub. L. 106-554).
    The Veterans Entrepreneurship and Small Business Development Act of 
1999 (Pub. L. 106-50) established new assistance programs for veterans 
and service-disabled veterans who own and operate small businesses. 
Specifically, the Act--
     Defines the terms ``small business concern owned and 
controlled by veterans'' and ``small business concern owned and 
controlled by service-disabled veterans'';
     Establishes 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;
     Establishes a requirement to include a goal for veteran-
owned small businesses in subcontracting plans underFAR 52.219-9;
     Establishes 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
     Adds data collection requirements for prime and 
subcontract awards to veteran-owned small businesses and service 
disabled veteran-owned small business concerns.
    DoD, GSA, and NASA published an interim FAR rule in the Federal 
Register at 65 FR 60542, October 11, 2000, to implement this statute. 
Twenty-nine respondents submitted comments in response to the interim 
rule. The Councils considered all comments and made no changes as a 
result. Two public comments merit noting. The first recommended that 
the FAR specifically reference the statutory 3 percent goal for 
service-disabled veteran-owned small business. The Councils have not 
adopted this recommendation. The FAR does not specify the statutory 
Governmentwide goals for any small business category because they have 
no regulatory purpose for agencies. Statutory goals for small 
businesses are established on a Governmentwide basis. Within these 
Governmentwide goals, SBA negotiates separate annual goals for each 
small business category with each agency. The individual agency goals 
attempt to reflect the agency mission and its contracting requirements, 
and these individual agency goals may be higher or lower than the 
Governmentwide goal. SBA then tracks cumulative agency achievements 
against the Governmentwide goal. Accordingly, specifying the 3 percent 
service-disabled veteran-owned small business goals in the FAR is 
inappropriate in that only the goal negotiated with SBA is relevant to 
that agency. The second public comment recommended that the FAR 
establish a requirement for a separate subcontracting plan goal for 
service-disabled veteran-owned small business. The Councils concur in 
this recommendation, but could not make this change in the first 
interim rule. That rule was based solely on the Veterans 
Entrepreneurship and Small Business Development Act of 1999. Section 
501(c) of the Act established a subcontracting plan goal requirement 
for veteran-owned small businesses, but not for service-disabled 
veteran-owned small businesses. The interim rule accurately reflected 
this statutory change.
    However, section 803 of the Small Business Reauthorization Act of 
2000, part of the Consolidated Appropriations Act, 2001 (Pub. L. 106-
554) was subsequently enacted on December 21, 2000. Section 803 amended 
section 8(d) of the Small Business Act (15 U.S.C 637(d)) by adding an 
additional subcontracting plan goal requirement for service-disabled 
veteran-owned small business concerns. This interim rule adds the new 
statutory subcontracting plan goal requirement for service-disabled 
veteran-owned small business concerns.
    Public comments are specifically sought on the service-disabled 
veteran-owned small business subcontracting plan goal changes. Since 
public comments received in response to the first interim rule have 
already been addressed, only comments on the issue unique to the second 
interim rule need to be submitted.
    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 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 adds a new 
statutory subcontracting plan goal requirement for service-disabled 
veteran-owned small business concerns. An Initial Regulatory 
Flexibility Analysis (IRFA) has been prepared and is summarized as 
follows:

    This interim rule amends the Federal Acquisition Regulation to 
implement section 803 of the Small Business Reauthorization Act of 
2000, part of the Consolidated Appropriations Act, 2001 (Pub. L. 
106-554).

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Section 803 supplements the Veterans Entrepreneurship and Small 
Business Development Act of 1999 (Pub. L. 106-50) by adding a 
separate subcontracting plan goal requirement for service-disabled 
veteran-owned small business concerns. There are approximately 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. This rule does not duplicate, overlap, or 
conflict with other relevant Federal regulations. There are no 
alternatives to the interim rule that would accomplish the stated 
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 
19, 52, and 53 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 2001-01, FAR case 2000--302), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 104-13) applies; however, this 
interim rule only requires contractors to report, as a separate item, 
information already collected and reported under OMB Control Numbers 
9000-0006 and 9000-0007. The impact on the information collection hours 
of these OMB clearances is so small as to be within the estimating 
parameters of these clearances. Therefore, the clearances have not been 
changed.

D. Determination to Issue an Interim Rule

    A determination has been made under 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 in order to implement section 803 of the Small Business 
Reauthorization Act of 2000, part of the Consolidated Appropriations 
Act, 2001 (Pub. L. 106-554). However, pursuant to Pub. L. 98-577 and 
FAR 1.501, the Councils will consider public comments received in 
response to this interim rule in formulating the final rule.

List of Subjects in 48 CFR parts 19, 52, and 53

    Government procurement.

    Dated: October 12, 2001.
Al Matera,
Director, Acquisition Policy Division.


    Therefore, DoD, GSA, and NASA amend 48 CFR parts 19, 52, and 53 as 
set forth below:
    1. The authority citation for 48 CFR parts 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 19--SMALL BUSINESS PROGRAMS


19.704 and 19.705  [Amended]

    2. Amend sections 19.704 and 19.705 as follows:
    a. Add ``service-disabled veteran-owned small business,'' after the 
phrase ``veteran-owned small business,'' in the following sections:

19.704(a)(1), (a)(2), (a)(3), (a)(6), (a)(8), and (a)(11)
19.705-4(c) (twice)
19.705-4(d)(1) and (d)(5);

and
    b. Remove ``(including service-disabled veteran-owned small 
business)'' and add ``, service-disabled veteran-owned small business'' 
in the following sections:

19.705-2(d)
19.705-7(a)
19.705-7(d) (twice)
19.706(b)
19.706(c)
19.708(c)(1), (c)(2), and (c)(3).

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    3. Amend section 52.219-9 as follows:
    a. Revise the date of the clause;
    b. Add ``service-disabled veteran-owned small business,'' after the 
phrase ``veteran-owned small business,'' in the following sections:

    52.219-9(c) (twice)
    52.219-9(d)(1), (d)(8), (d)(11), (d)(11)(i), and (d)(11)(ii)
    52.219-9(e)(1) (twice), (e)(2) and (e)(3)
    Alternate I(c) (twice)
    Alternate II(c) (twice);

and
    c. Redesignate paragraphs (d)(2)(iv) through (d)(2)(vi) as 
(d)(2)(v) through (d)(2)(vii), respectively; and add a new paragraph 
(d)(2)(iv);
    d. Redesignate paragraphs (d)(3)(iii) through (d)(3)(v) as 
(d)(3)(iv) through (d)(3)(vi), respectively; and add a new paragraph 
(d)(3)(iii);
    e. In the second sentence of paragraph (d)(5), add ``service-
disabled veteran-owned small,'' after the phrase ``veteran-owned 
small,'';
    f. Redesignate paragraphs (d)(6)(iii) through (d)(6)(v) as 
(d)(6)(iv) through (d)(6)(vi), respectively; and add a new paragraph 
(d)(6)(iii);
    g. In the second sentence of paragraph (d)(10)(iii), add ``HUBZone 
small business concerns,'' after the phrase ``service-disabled veteran-
owned small business concerns,'';
    h. Redesignate paragraphs (d)(11)(iii)(C) through (d)(11)(iii)(F) 
as (d)(11)(iii)(D) through (d)(11)(iii)(G), respectively; and add a new 
paragraph (d)(11)(iii)(C); and
    i. In Alternates I and II of the clause, remove ``(Oct 2000)'' and 
add ``(Oct 2001)'' in their places.
    The revised and added text reads as follows:


52.219-9  Small Business Subcontracting Plan.

* * * * *

SMALL BUSINESS SUBCONTRACTING PLAN (OCT 2001)

* * * * *
    (d) * * *
    (2) * * *
    (iv) Total dollars planned to be subcontracted to service-
disabled veteran-owned small business;
* * * * *
    (3) * * *
    (iii) Service-disabled veteran-owned small business concerns;
* * * * *
    (6) * * *
    (iii) Service-disabled veteran-owned small business concerns;
* * * * *
    (11) * * *
    (iii) * * *
    (C) Whether service-disabled veteran-owned small business 
concerns were solicited and, if not, why not;

* * * * *
    4. In section 52.219-10, revise the date of the clause; and in 
paragraph (a) and the first sentence of paragraph (b) of the clause, 
remove ``(including service-disabled veteran-owned small business)'' 
and add ``, service-disabled veteran-owned small business'' in their 
places. The revised text reads as follows:


52.219-10  Incentive Subcontracting Program.

* * * * *

INCENTIVE SUBCONTRACTING PROGRAM (OCT 2001)

* * * * *

PART 53--FORMS


53.219  [Amended]

    5. Amend section 53.219 in paragraphs (a) and (b) by removing

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``(Rev. 10/00)'' and adding ``(Rev. 10/01)'' in their places.

    6. Revise sections 53.301-294 and 53.301-295 to read as follows:
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[FR Doc. 01-26300 Filed 10-19-01; 8:45 am]
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