[Federal Register Volume 67, Number 50 (Thursday, March 14, 2002)]
[Rules and Regulations]
[Pages 11435-11437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5952]


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DEPARTMENT OF DEFENSE

48 CFR Parts 219 and 252

[DFARS Case 2001-D016]


Defense Federal Acquisition Regulation Supplement; Partnership 
Agreement Between DoD and the Small Business Administration

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: DoD has issued an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement a partnership 
agreement between DoD and the Small Business Administration (SBA). The 
partnership agreement streamlines procedures for contract awards under 
SBA's 8(a) Program.

DATES: Effective date: March 14, 2002.
    Comment date: Comments on the interim rule should be submitted to 
the address shown below on or before May 13, 2002, to be considered in 
the formation of the final rule.

ADDRESSES: Respondents may submit comments directly on the World Wide 
Web at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an 
alternative, respondents may e-mail comments to: [email protected]. 
Please cite DFARS Case 2001-D016 in the subject line of e-mailed 
comments.
    Respondents that cannot submit comments using either of the above 
methods may submit comments to: Defense Acquisition Regulations 
Council, Attn: Ms. Angelena Moy, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 
Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-0350. 
Please cite DFARS Case 2001-D016.
    At the end of the comment period, interested parties may view 
public comments on the World Wide Web at http://emissary.acq.osd.mil/dar/dfars.nsf.

FOR FURTHER INFORMATION CONTACT: Ms. Angelena Moy, (703) 602-1302.

SUPPLEMENTARY INFORMATION:

A. Background

    A partnership agreement between DoD and SBA, dated February 1, 
2002, permits DoD to award 8(a) contracts directly to 8(a) concerns, on 
behalf of SBA. The partnership agreement replaced a memorandum of 
understanding, which also permitted direct award of 8(a) contracts, and 
which was implemented in DFARS Subpart 219.8. This interim rule amends 
DFARS Subpart 219.8 to reflect the provisions of the new partnership 
agreement. The amendments include the following:
    1. Emphasis that SBA remains the prime contractor on all 8(a) 
contracts, continues to determine eligibility of concerns for contract 
award, and retains appeal rights under Section 19.810 of the Federal 
Acquisition Regulation. SBA delegates to DoD only the authority to sign 
contacts on its behalf.
    2. For negotiated acquisitions, authorization for the contracting 
officer to submit a request for an eligibility determination on all 
firms in the competitive range if discussions are to be conducted, or 
on all firms with a realistic chance of award if no discussions are to 
be conducted. Previously, the contracting officer

[[Page 11436]]

submitted eligibility determinations on no more than three of the most 
highly rated offerors.
    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 does not expect this 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 
affects only the administrative procedures used for award of contracts 
under the 8(a) Program. Therefore, DoD has not performed an initial 
regulatory flexibility analysis. DoD invites comments from small 
businesses and other interested parties. DoD also will consider 
comments from small entities concerning the affected DFARS subparts in 
accordance with 5 U.S.C. 610. Such comments should be submitted 
separately and should cite DFARS Case 2001-D016.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the rule does 
not impose any 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 that urgent and compelling reasons exist to publish an 
interim rule prior to affording the public an opportunity to comment. 
This interim rule implements a partnership agreement between DoD and 
SBA. The agreement streamlines procedures for awards under SBA's 8(a) 
Program by authorizing DoD to award contracts directly to 8(a) 
concerns. The partnership agreement became effective on February 1, 
2002. Comments received in response to this interim rule will be 
considered in the formation of the final rule.

List of Subjects in 48 CFR Parts 219 and 252

    Government procurement.

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

    Therefore, 48 CFR parts 219 and 252 are amended as follows:
    1. The authority citation for 48 CFR parts 219 and 252 continues to 
read as follows:

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

PART 219--SMALL BUSINESS PROGRAMS

    2. Section 219.800 is revised to read as follows:


219.800  General.

    (a) By Partnership Agreement (PA) dated February 1, 2002, between 
the Small Business Administration (SBA) and the Department of Defense 
(DoD), the SBA delegated to the Under Secretary of Defense 
(Acquisition, Technology, and Logistics) its authority under paragraph 
8(a)(1)(A) of the Small Business Act (15 U.S.C. 637(a)) to enter into 
8(a) prime contracts, and its authority under 8(a)(1)(B) of the Small 
Business Act to award the performance of those contracts to eligible 
8(a) Program participants. However, the SBA remains the prime 
contractor on all 8(a) contracts, continues to determine eligibility of 
concerns for contract award, and retains appeal rights under FAR 
19.810. The SBA delegates only the authority to sign contracts on its 
behalf. Consistent with the provisions of this subpart, this authority 
is hereby redelegated to DoD contracting officers within the United 
States, its territories and possessions, Puerto Rico, the Trust 
Territory of the Pacific Islands, and the District of Columbia, to the 
extent that it is consistent with any dollar or other restrictions 
established in individual warrants. This authority expires on September 
30, 2004.
    (b) Contracts awarded under the PA may be awarded directly to the 
8(a) participant on either a sole source or competitive basis. An SBA 
signature on the contract is not required.
    (c) Notwithstanding the PA, the contracting officer may elect to 
award a contract pursuant to the provisions of FAR Subpart 19.8.

    3. Section 219.804-2 is revised to read as follows:


219.804-2  Agency offering.

    (1) For requirements processed under the PA cited in 219.800 (but 
see paragraph (2) of this subsection for procedures related to purchase 
orders that do not exceed the simplified acquisition threshold), the 
notification to the SBA must clearly indicate that the requirement is 
being processed under the PA. All notifications should be submitted in 
writing, using facsimile or electronic mail, when possible, and must 
specify that--
    (i) Under the PA, an SBA acceptance or rejection of the offering is 
required within 5 working days of receipt of the offering; and
    (ii)(A) For sole source requirements, an SBA acceptance must 
include a size verification and a determination of the 8(a) firm's 
program eligibility, and, upon acceptance, the contracting officer will 
solicit a proposal, conduct negotiations, and make award directly to 
the 8(a) firm; or
    (B) For competitive requirements, upon acceptance, the contracting 
officer will solicit offers, conduct source selection, and, upon 
receipt of an eligibility verification, award a contract directly to 
the selected 8(a) firm.
    (2) Under the PA cited in 219.800, no separate agency offering or 
SBA acceptance is needed for requirements that are issued under 
purchase orders that do not exceed the simplified acquisition 
threshold. After an 8(a) contractor has been identified, the 
contracting officer must establish the prices, terms, and conditions 
with the 8(a) contractor and must prepare a purchase order consistent 
with the procedures in Part 213 and FAR Part 13, including the 
applicable clauses required by this subpart. No later than the day that 
the purchase order is provided to the 8(a) contractor, the contracting 
officer must provide to the cognizant SBA Business Opportunity 
Specialist, using facsimile, electronic mail, or any other means 
acceptable to the SBA district office--
    (i) A copy of the signed purchase order; and
    (ii) A notice stating that the purchase order is being processed 
under the PA. The notice also must indicate that the 8(a) contractor 
will be deemed eligible for award and will automatically begin work 
under the purchase order unless, within 2 working days after SBA's 
receipt of the purchase order, the 8(a) contractor and the contracting 
officer are notified that the 8(a) contractor is ineligible for award.
    (3) The notification to SBA must identify any joint venture 
proposed for performance of the contract. SBA must approve a joint 
venture before award of an 8(a) contract involving the joint venture.
    (4) For competitive requirements for construction to be performed 
overseas, submit the notification to SBA Headquarters.


219.804-3  [Amended]

    4. Section 219.804-3 is amended by removing ``MOU'' and adding in 
its place ``PA''.

    5. Section 219.805-2 is amended by revising paragraph (c) 
introductory text and paragraph (c)(ii) to read as follows:

[[Page 11437]]

219.805-2  Procedures.

    (c) For requirements processed under the PA cited in 219.800--
* * * * *
    (ii) For negotiated acquisitions, the contracting officer may 
submit a request for an eligibility determination on all firms in the 
competitive range if discussions are to be conducted, or on all firms 
with a realistic chance of award if no discussions are to be conducted.


219.806  [Amended]

    6. Section 219.806 is amended as follows:
    a. In the introductory text, by removing ``MOU'' and adding in its 
place ``PA'';
    b. In paragraph (1), by removing ``shall'' and adding in its place 
``must''; and
    c. In paragraph (2), in the last sentence, by removing ``shall'' 
and adding in its place ``must''.


219.808-1  [Amended]

    7. Section 219.808-1 is amended in the introductory text by 
removing ``MOU'' and adding in its place ``PA''.


219.811-1  [Amended]

    8. Section 219.811-1 is amended as follows:
    a. In paragraph (a), in the first sentence, by removing ``MOU'' and 
adding in its place ``PA'' and by removing ``shall'' and adding in its 
place ``must'';
    b. In paragraph (a), in the second and last sentences by removing 
``shall'' and adding in its place ``must''; and
    c. In paragraph (b) introductory text, by removing ``MOU'' and 
adding in its place ``PA''.


219.811-2  [Amended]

    9. Section 219.811-2 is amended by removing ``MOU'' and adding in 
its place ``PA'' and by removing ``shall'' and adding in its place 
``must''.


219.811-3  [Amended]

    10. Section 219.811-3 is amended in paragraphs (1) and (2) by 
removing ``MOU'' and adding in its place ``PA''.


219.812  [Amended]

    11. Section 219.812 is amended in paragraph (d), in the first 
sentence, by removing ``MOU'' and adding in its place ``PA''.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    12. Section 252.219-7009 is amended by revising the clause date, 
paragraph (a), and paragraph (c) introductory text to read as follows:


252.219-7009  Section 8(a) direct award.

    As prescribed in 219.811-3(1), use the following clause:

Section 8(a) Direct Award (Mar 2002)

    (a) This contract is issued as a direct award between the 
contracting office and the 8(a) Contractor pursuant to the 
Partnership Agreement dated February 1, 2002, between the Small 
Business Administration (SBA) and the Department of Defense. 
Accordingly, the SBA, even if not identified in Section A of this 
contract, is the prime contractor and retains responsibility for 
8(a) certification, for 8(a) eligibility determinations and related 
issues, and for providing counseling and assistance to the 8(a) 
Contractor under the 8(a) Program. The cognizant SBA district office 
is:

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[To be completed by the Contracting Officer at the time of award]
* * * * *
    (c) The 8(a) Contractor agrees that--
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[FR Doc. 02-5952 Filed 3-13-02; 8:45 am]
BILLING CODE 5001-08-P