[Federal Register Volume 69, Number 170 (Thursday, September 2, 2004)]
[Proposed Rules]
[Pages 53780-53781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20003]



[[Page 53779]]

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Part II





Department of Defense

General Services Administration

National Aeronautics and Space Administration





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48 CFR Parts 19 and 52



Federal Acquisition Regulation; Applicability of SDB and HUBZone Price 
Evaluation Factor; Proposed Rule

  Federal Register / Vol. 69, No. 170 / Thursday, September 2, 2004 / 
Proposed Rules  

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 19 and 52

[FAR Case 2003-015]
RIN 9000-AK02


Federal Acquisition Regulation; Applicability of SDB and HUBZone 
Price Evaluation Factor

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are proposing to amend the 
Federal Acquisition Regulation (FAR), at the request of the Small 
Business Administration, in order to remove some of the exceptions to 
the applicability of the Small Disadvantaged Business (SDB) and HUBZone 
price evaluation factor.

DATES: Interested parties should submit comments in writing on or 
before November 1, 2004, to be considered in the formulation of a final 
rule.

ADDRESSES: Submit comments identified by FAR case 2003-015 by any of 
the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web Site: http://www.acqnet.gov/far/ProposedRules/proposed.htm. Click on the FAR case number to submit comments.
     E-mail: [email protected]. Include FAR case 2003-
015 in the subject line of the message.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (V), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, 
Washington, DC 20405.
    Instructions: Please submit comments only and cite FAR case 2003-
015 in all correspondence related to this case. All comments received 
will be posted without change to http://www.acqnet.gov/far/ProposedRules/proposed.htm, including any personal information 
provided.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (202) 501-4755 
for information pertaining to status or publication schedules. For 
clarification of content, contact Ms. Cecelia Davis, Procurement 
Analyst, at (202) 219-0202. Please cite FAR case 2003-015.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule proposes to amend FAR 19.1103(a) and FAR 19.1307(b) in 
order to remove the exceptions to the Small Disadvantaged Business 
(SDB) and HUBZone preference programs that direct the contracting 
officer not to apply a price evaluation adjustment to offers of 
eligible products in acquisitions subject to the Trade Agreements Act 
(19 U.S.C. 2501, et seq.) or where application of the factor would be 
inconsistent with a Memorandum of Understanding (MOU) or other 
international agreement.
    The Councils are proposing these changes for the following reasons:
     These exceptions result in more favorable treatment for 
offers of eligible products or qualifying country products than an 
offer from a U.S. large business, or, in the case of the SDB 
preference, even an offer from a U.S. small business. The basic goal of 
the trade agreements and other international agreements is to provide 
nondiscriminatory treatment for certain foreign products, not 
preferential treatment.
     The Trade Agreements Act (19 U.S.C. 2511(f)) specifically 
restricts the authority of the President to authorize the waiver of any 
small business or minority preferences.
     With regard to the exception relating to MOUs or other 
international agreements, DoD MOUs do not override small business 
preferences. The Councils were unable to identify any other MOU or 
international agreement that is inconsistent with the application of a 
preference for small business. If any international agreement 
supercedes a small business preference, it should be specifically 
identified, either in the FAR if it is Governmentwide, or in an agency 
supplement. The contracting officer is not in a position to know when 
application of the factor would be inconsistent with an MOU or 
international agreement.
    Conforming amendments are required in the associated clauses at 
52.219-4, Notice of Price Evaluation Preference for HUBZone Small 
Business Concerns, and 52.219-23, Notice of Price Evaluation Adjustment 
for Small Disadvantaged Business Concerns. Conforming date changes are 
also required for the clause at 52.212-5, Contract Terms and Conditions 
Required to Implement Statutes or Executive Orders--Commercial Items.
    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 it would reduce the 
exceptions to the preference for small disadvantaged businesses and 
HUBZone small businesses. An Initial Regulatory Flexibility Analysis 
(IRFA) has been prepared and will be provided to the Chief Counsel for 
Advocacy for the Small Business Administration. The Analysis is 
summarized as follows:

    This proposed rule was initiated at the request of the Small 
Business Administration in order to remove preferential treatment 
for certain offers of foreign products in acquisitions intending to 
provide a preference for small disadvantaged business concerns or 
HUBZone small business concerns. The objective of this proposed rule 
is to remove exceptions to the Small Disadvantaged Business (SDB) 
and HUBZone preference programs that direct the contracting officer 
not to apply a price evaluation adjustment to offers of eligible 
products in acquisitions subject to the Trade Agreements Act or 
where application of the factor would be inconsistent with a 
Memorandum of Understanding (MOU) or other international agreement. 
The legal basis for the proposed rule is 19 U.S.C. 2501, et seq. and 
15 U.S.C. 631(note). The proposed rule applies to all offerors in 
acquisitions that provide a preference for small disadvantaged 
business concerns or HUBZone small business concerns. Because of the 
reduced exceptions to the preferences, this rule will have a 
beneficial impact all domestic concerns, especially small entities 
that are small disadvantaged business concerns or HUBZone small 
business concerns.

    The FAR Secretariat has submitted a copy of the IRFA to the Chief 
Counsel for Advocacy of the Small Business Administration. A copy of 
the IRFA may be obtained 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. Comments must be submitted separately 
and should cite 5 U.S.C 601, et seq. (FAR case 2003-015), in 
correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
changes to the FAR do not impose information collection requirements 
that require the approval of the Office of Management and Budget under 
44 U.S.C. 3501, et seq.

[[Page 53781]]

List of Subjects in 48 CFR Parts 19 and 52

    Government procurement.

    Dated: August 26, 2004.
Laura Auletta,
Director, Contract Policy Division.

    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 19 and 
52 as set forth below:

    1. The authority citation for 48 CFR parts 19 and 52 is revised to 
read as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 19--SMALL BUSINESS PROGRAMS


19.1103  [Amended]

    2. Amend section 19.1103 by--
    a. Adding ``or'' to the end of paragraph (a)(1);
    b. Removing paragraphs (a)(2), (a)(3), and (a)(5); and 
redesignating paragraph (a)(4) as (a)(2); and
    c. Removing ``; or'' from the end of newly redesignated paragraph 
(a)(2) and adding a period in its place.


19.1307  [Amended]

    3. Amend section 19.1307 by--
    a. Adding ``or'' to the end of paragraph (b)(1);
    b. Removing the semicolon from the end of paragraph (b)(2) and 
adding a period in its place; and
    c. Removing paragraphs (b)(3) and (b)(4).

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.212-5  [Amended]

    4. Amend section 52.212-5 by--
    a. Revising the date of the clause to read ``(Date)'';
    b. Removing ``(Jan 1999)'' from paragraph (b)(3) of the clause and 
adding ``(Date)'' in its place; and
    c. Removing ``(June 2003)'' from paragraph (b)(10)(i) of the clause 
and adding ``(Date)'' in its place.


52.219-4  [Amended]

    5. Amend section 52.219-4 by--
    a. Revising the date of the clause to read ``(Date)''; and
    b. Adding ``and'' to the end of paragraph (b)(1)(i) of the clause; 
removing the semicolon from the end of paragraph (b)(1)(ii) and adding 
a period in its place; and removing paragraphs (b)(1)(iii) and 
(b)(1)(iv).
    6. Amend section 52.219-23 by revising the date of the clause and 
paragraph (b)(1) to read as follows:


52.219-23  Notice of Price Evaluation Adjustment for Small 
Disadvantaged Business Concerns.

* * * * *

NOTICE OF PRICE EVALUATION ADJUSTMENT FOR SMALL DISADVANTAGED BUSINESS 
CONCERNS (DATE)

* * * * *
    (b) Evaluation adjustment. (1) The Contracting Officer will 
evaluate offers by adding a factor of ------------------ [Contracting 
Officer insert the percentage] percent to the price of all offers, 
except--
    (i) Offers from small disadvantaged business concerns that have not 
waived the adjustment; and
    (ii) For DoD, NASA, and Coast Guard acquisitions, an otherwise 
successful offer from a historically black college or university or 
minority institution.
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[FR Doc. 04-20003 Filed 9-1-04; 8:45 am]
BILLING CODE 6820-EP-S