[Federal Register Volume 67, Number 169 (Friday, August 30, 2002)]
[Rules and Regulations]
[Pages 56122-56123]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-21869]


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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 2001-09; FAR Case 2000-302; Item III]
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: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on a final rule 
amending the Federal Acquisition Regulation (FAR) to adopt, as final, 
the first interim rule published at 65 FR 60542, October 11, 2000, 
which implemented portions of the Veterans Entrepreneurship and Small 
Business Development Act of 1999 which added a subcontracting plan goal 
for veteran-owned small businesses and a 3 percent Governmentwide 
agency goal for service-disabled veteran-owned small businesses, and 
the second interim rule published at 66 FR 53492, October 22, 2001, 
which implemented Section 803 of the Small Business Reauthorization Act 
of 2000 (part of the Consolidated Appropriations Act, 2001), which 
added an additional subcontracting plan goal for service-disabled 
veteran-owned small business concerns. Both rules, and the correction 
published January 14, 2002, are adopted as final without change.

DATES: Effective Date: August 30, 2002.

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, Procurement Analyst, at (202) 501-
0044. Please cite FAC 2001-09, FAR case 2000-302.

SUPPLEMENTARY INFORMATION:

A. Background

    The final rule amends the FAR to implement portions of the Veterans 
Entrepreneurship and Small Business Development Act of 1999 (Pub. L. 
106-50) and 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 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 service-disabled 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 under the clause at 
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 in the Federal Register two interim 
rules (65 FR 60542, October 11, 2000 (FAC 97-20) and 66 FR 53492, 
October 22, 2001 (FAC 2001-01), respectively); and a correction to the 
second interim rule (67 FR 1858, January 14, 2002 (FAC 2001-01 
Correction)), to implement the statutes.
    Four respondents submitted comments in response to the interim 
rule. The Councils considered all comments and made no changes as a 
result. However, three of the comments merit noting. The first comment 
was that the interim rule, as published on October 11, 2001, is flawed 
as 19.704(a)(1) and the clause at 52.219-9(d)(1) still contain the 
phrase ``a separate goal for service-disabled veteran-owned small 
business concerns is not required.'' Response: The appearance of that 
phrase in the Federal Register was an error and was subsequently 
corrected by the January 14, 2002, Federal Register notice.
    The second comment consists of several suggestions of policy steps 
that should be taken to implement the legislation. Response: The 
comment is outside the scope of the case, as it does not address any 
existing or proposed FAR coverage.
    The third comment suggests that the rule be modified to provide 
service-disabled veteran-owned small business concerns ``the benefit of 
every contracting preference afforded SDBs and women-owned small 
businesses * * *''. The comment also suggests limiting of competition 
for certain commodities or service that may be furnished by service-
disabled veteran-owned small business concerns. Response: Existing 
legislation does not permit adopting any of the suggestions contained 
in the comment.
    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 adds a new 
statutory subcontracting plan goal requirement for service-disabled 
veteran-owned small business concerns. A Final Regulatory Flexibility 
Analysis (FRFA) has been prepared and is summarized as follows:

    This final rule revises the Federal Acquisition Regulation to 
implement

[[Page 56123]]

portions of the Veterans Entrepreneurship and Small Business 
Development Act of 1999 (Pub. L. 106-50) and section 803 of the 
Small Business Reauthorization Act of 2000, part of the Consolidated 
Appropriations Act, 2001 (Pub. L. 106-554). The statutes added a 
separate subcontracting plan goal requirement for veteran-owned 
small business and another goal 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 
final rule that would accomplish the stated objectives.

    The FAR Secretariat has submitted a copy of the FRFA 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 
2, 4, 5, 7, 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 2001-09, FAR case 2000-302), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (Pub. L. 104-13) applies. 
However, this final rule requires contractors to report, as a separate 
item, information already collected and reported under OMB Control 
Numbers 9000-0006 and 9000-0007. The impact of this final rule 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.

List of Subjects in 48 CFR Parts 2, 4, 5, 7, 19, 52, and 53

    Government procurement.

    Dated: August 21, 2002.
Al Matera,
Director, Acquisition Policy Division.

Interim Rule Adopted as Final Without Change

    Accordingly, DoD, GSA, and NASA adopt the interim rules and 
correction amending 48 CFR parts 2, 4, 5, 7, 19, 52, and 53, which were 
published in the Federal Register at 65 FR 60542, October 11, 2000, the 
second interim rule at 66 FR 53492, October 22, 2001, and the 
correction to the second interim rule at 67 FR 1858, January 14, 2002, 
as a final rule without change.

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).
[FR Doc. 02-21869 Filed 8-29-02; 8:45 am]
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