[Federal Register Volume 70, Number 106 (Friday, June 3, 2005)]
[Proposed Rules]
[Pages 32553-32563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10935]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 19, 52, and 53

[FAR Case 2004-017]
RIN: 9000-AK18


Federal Acquisition Regulation; Small Business Credit for Alaskan 
Native Corporations and Indian Tribes

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) to implement section 702 of Public 
Law 107-117, as amended by section 3003 of Public Law 107-206 (43 
U.S.C. 1626). The law permits subcontracts awarded to certain Alaskan 
Native Corporations (ANCs) to be counted towards a contractor's goals 
for subcontracting with small business (SB) and small disadvantaged 
business (SDB) concerns. The law also permits Indian tribes to be 
counted towards a contractor's goal for subcontracting with SB.

DATES: Interested parties should submit comments in writing on or 
before August 2, 2005 to be considered in the formulation of a final 
rule.

ADDRESSES: Submit comments identified by FAR case 2004-017 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 2004-
017 in the subject line of the message.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VIR), 1800 F Street, NW., Room 4035, ATTN: Laurieann 
Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite FAR case 2004-
017 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. Rhonda Cundiff, Procurement 
Analyst, at (202) 501-0044. Please cite FAR case 2004-017.


SUPPLEMENTARY INFORMATION:

A. Background

    Section 702 of Public Law 107-117, as amended by section 3003 of 
Public Law 107-206, provides that subcontracts awarded to Alaskan 
Native Corporations (ANC) that are considered a minority and 
economically disadvantaged concern under the criteria at 43 U.S.C. 
1626(e)(1), and any of its direct and indirect subsidiary corporations, 
joint ventures, and partnerships that meet the requirements of 43 
U.S.C. 1626(e)(2), shall be counted towards the satisfaction of a 
contractor's goal for subcontracting with SB and SDB concerns. The law 
also provides that subcontracts awarded to Indian tribes may be counted 
towards the satisfaction of a contractor's goal for subcontracting with 
SB concerns. Such credit is taken even where the ANC or Indian tribe 
may be ``other than small'' under the Small Business Administration 
(SBA) regulations.
    In addition, section 3003 provides that ``where lower tier 
subcontracts exist, the ANC or Indian tribe shall designate the 
appropriate contractor or contractors to receive credit towards their 
small or small disadvantaged business subcontracting goals.'' 
Accordingly, the rule requires that, where one or more subcontractors 
are in the subcontract tier between the prime contractor and the ANC or 
Indian tribe, the ANC or Indian tribe shall designate the appropriate 
contractor to count the subcontract towards its small business and/or 
small disadvantaged subcontracting goals. In most cases, the 
appropriate contractor is the contractor that awarded the subcontract 
to the ANC or Indian tribe. Therefore, the revision includes a 
requirement that the ANC or Indian tribe give a copy of the designation 
to the contracting officer, the prime contractor, and the 
subcontractors in between. The Councils invite industry to comment on 
the feasibility of this approach and any alternatives for complying 
with the law.
    The law does not provide for such an ANC and any of its direct and 
indirect subsidiary corporations, joint ventures, and partnerships to 
be eligible for SDB or 8(a) certification unless the entity otherwise 
meets the requirements for certification under 15 U.S.C. 637. 
Similarly, the law does not provide for contractors to count 
subcontracts awarded to such an entity toward the evaluation of the 
extent of the participation of SDB concerns in the performance of 
certain North American Industry Classification System (NAICS) Industry 
codes unless the entity is certified as an SDB by SBA (FAR Subpart 
19.12). The FAR is being amended to implement these changes to 43 
U.S.C. 1626.

    The specific changes are as follows:
     FAR 19.701 and the clause at 52.219-9 are amended to add 
definitions for ANC and Indian tribes consistent with 43 U.S.C. 1601, 
et seq., and 25 U.S.C. 1452, respectively.

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     FAR 19.703 is amended to add paragraph (c). Paragraph 
(1)(i) authorizes contractors to count awards to ANCs towards the 
satisfaction of the contractor's SB and SDB goals regardless of the 
size status of the ANC, and to provide for the ANC to designate which 
contractor is to receive the credit; and paragraph (c)(1)(ii) 
authorizes contractors to count awards to Indian tribes towards the 
satisfaction of the contractor's SB goals, regardless of the size 
status of the Indian tribe.
    Paragraph (c)(1)(iii) is added to provide that where one or more 
subcontractors are in the subcontract tier between the prime contractor 
and the ANC or Indian tribe, the ANC or Indian tribe shall designate 
the appropriate contractor to count the subcontract towards its small 
business and/or small disadvantaged subcontracting goals. In most 
cases, the appropriate contractor is the contractor that awarded the 
subcontract to the ANC or Indian tribe. Paragraph (d)(2) is added to 
provide that a contractor acting in good faith may rely on the written 
representation of an ANC or Indian tribe as to eligibility and 
incorporates the procedures at 26.103(b) through (e) in the event of a 
challenge of such a representation.
     FAR 19.704, the clause at 52.219-9, and the instructions 
for the SF 294, ``Subcontracting Report for Individual Contracts,'' and 
SF 295, ``Summary Subcontract Report,'' are amended to permit 
subcontracts awarded to certain ANCs to be counted towards the 
satisfaction of a contractor's goal for subcontracting with SB and SDB 
concerns, and to permit subcontracts awarded to Indian tribes to be 
counted towards the satisfaction of a contractor's goal for 
subcontracting with SB concerns.
     FAR 19.704 and the clause at 52.219-9 are amended to 
provide where one or more subcontractors are in the subcontract tier 
between the prime contractor and the ANC or Indian tribe, the ANC or 
Indian tribe shall designate which subcontractor(s) or prime 
contractor(s) will be able to count the subcontract towards its small 
business and small disadvantaged subcontracting goals.
     The clause at 52.219-9(j)(2) stipulates that awards to 
ANCs that are not certified SDBs may not be counted towards the 
evaluation of the extent of participation of SDB concerns in the 
performance of contracts in the NAICS Industry Subsectors.
     The instructions for the SF 294 and SF 295 are revised to 
include a cross-reference to the FAR 19.703 eligibility requirements 
for participation in the small business subcontracting program; to 
incorporate administrative corrections to ensure consistency in 
reporting of goals and actual performance; and for technical edits.
    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 law allows other 
than small business Federal contractors to receive SDB and/or SB 
subcontract credit for subcontracts awarded to Indian tribes and ANCs, 
regardless of whether they are SB, SBA-certified SDBs, or certified 
8(a) firms. SBs and certified SDBs may be adversely impacted to the 
extent that there are Indian tribes or ANCs that are large businesses 
and may now be more likely to be used as subcontractors or suppliers on 
Federal contracts. It is estimated that there are 562 Indian tribes and 
ANCs. Information was not available on the number of these entities 
that were large business, SB, or SDB. 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 revises the Federal Acquisition Regulation in 
order to comply with 43 U.S.C. 1626 which allows other than small 
business Federal contractors to receive small business (SB) 
subcontracting credit for subcontracts awarded to Indian tribes, 
regardless of whether they are small business. Additionally, the law 
allows other than small business Federal contractors to receive 
small business and small disadvantaged business (SDB) subcontracting 
credit for subcontracts awarded to Alaskan Native Corporations 
(ANCs) which are considered a minority and economically 
disadvantaged concern under the criteria at 43 U.S.C. 1626(e)(1) and 
any of its direct and indirect subsidiary corporations, joint 
ventures, and partnerships that meet the requirements of 43 U.S.C. 
1626(e)(2), regardless of whether they are small businesses, SBA-
certified SDBs, or certified 8(a) firms.
    This proposed rule implements section 702 of the 2002 Department 
of Defense Supplemental Appropriation, as amended by section 3003 of 
the 2002 Supplemental Appropriations for Further Recovery From and 
Response To Terrorist Attacks on the United States. The objective of 
the statute is to encourage large business contractors to utilize 
ANCs and Indian tribes as subcontractors and suppliers on Federal 
contracts.
    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 law 
allows other than small business Federal contractors to receive 
small disadvantaged business and/or small business subcontract 
credit for subcontracts awarded to Indian tribes and ANCs. The rule 
will impose no new reporting or recordkeeping requirements on small 
entities.

    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 19, 52, and 53 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 2004-017), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 104-13) applies because the 
proposed rule contains information collection requirements. 
Accordingly, the FAR Secretariat has submitted a request for approval 
of a revision to the information collection requirements of OMB Control 
Numbers 9000-0006, Subcontracting Plans/Subcontracting Report for 
Individual Contracts (SF 294), and 9000-0007, Summary Subcontract 
Report (SF 295), to the Office of Management and Budget under 44 U.S.C. 
3501, et seq. Public comments concerning these requests will be invited 
through subsequent Federal Register notices.

    Annual Reporting Burden:

    Public reporting burden for this collection of information is 
estimated to average 11 hours per response for 9000-0006, and 16.2 
hours per response for 9000-0007, including the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    The annual reporting burden is estimated as follows:

    9000-0006 (Current Annual Reporting and Recordkeeping):
    Respondents: 4,253.
    Responses per respondent: 3.44.
    Total annual responses: 14,622.
    Average burden hours per response: 50.52.
    Total response burden hours: 739,225.

    9000-0006 (Proposed Annual Reporting and Recordkeeping):
    Respondents: 4,253.
    Responses per respondent: 3.44.

[[Page 32555]]

    Total annual responses: 14,631.
    Average burden hours per response: 55.34.
    Total response burden hours: 809,248.
    Total program change is an additional 70,023 hours.

    9000-0007 (Current Annual Reporting and Recordkeeping):
    Respondents: 4,253.
    Responses per respondent: 1.66.
    Total annual responses: 7,098.
    Average burden hours per response: 15.9.
    Total response burden hours: 112,864.

    9000-0007 (Proposed Annual Reporting and Recordkeeping):
    Respondents: 4,253.
    Responses per respondent: 1.75.
    Total annual responses: 7,449.
    Average burden hours per response: 16.2.
    Total response burden hours: 120,674.

    Total program change is an additional 7,810 hours.

D. Request for Comments Regarding Paperwork Burden

    Submit comments, including suggestions for reducing this burden, 
not later than August 2, 2005 to: FAR Desk Officer, OMB, Room 10102, 
NEOB, Washington, DC 20503, and a copy to the General Services 
Administration, FAR Secretariat (VIR), 1800 F Street, NW., Room 4035, 
Washington, DC 20405.
    Public comments are particularly invited 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 (VIR), Room 4035, Washington, 
DC 20405, telephone (202) 501-4755. Please cite OMB Control Numbers 
9000-0006, Subcontracting Plans/Subcontracting Report for Individual 
Contracts (SF 294), and 9000-0007, Summary Subcontract Report (SF 295), 
in all correspondence.

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

    Government procurement.

    Dated: May 24, 2005.
Julia B. Wise,
Director, Contract Policy Division.

    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 19, 52, 
and 53 as set forth below:

    1. The authority citation for 48 CFR parts 19, 52, and 53 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

    2. Amend section 19.701 by adding, in alphabetical order, the 
definitions ``Alaskan Native Corporation (ANC)'' and ``Indian tribe'' 
to read as follows:


19.701  Definitions.

* * * * *
    Alaskan Native Corporation (ANC) means any Regional Corporation, 
Village Corporation, Urban Corporation, or Group Corporation organized 
under the laws of the State of Alaska in accordance with the Alaska 
Native Claims Settlement Act, as amended (43 U.S.C. 1601, et seq.), and 
which is considered a minority and economically disadvantaged concern 
under the criteria at 43 U.S.C. 1626(e)(1). This definition also 
includes ANC direct and indirect subsidiary corporations, joint 
ventures, and partnerships that meet the requirements of 43 U.S.C. 
1626(e)(2).
* * * * *
    Indian tribe means any Indian tribe, band, group, pueblo, or 
community, including native villages and native groups (including 
corporations organized by Kenai, Juneau, Sitka, and Kodiak) as defined 
in the Alaska Native Claims Settlement Act (43 U.S.C.A. 1601, et seq.), 
that is recognized by the Federal Government as eligible for services 
from the Bureau of Indian Affairs in accordance with 25 U.S.C. 1452(c).
* * * * *
    3. Amend section 19.703 in the introductory text of paragraph (a) 
by removing ``To'' and adding ``Except as provided in paragraph (c) of 
this section, to''; and adding paragraph (c) to read as follows:


19.703  Eligibility requirements for participating in the program.

* * * * *
    (c)(1) In accordance with 43 U.S.C. 1626, the following procedures 
apply:
    (i) Subcontracts awarded to an ANC shall be counted towards the 
designated contractor's subcontracting goals for small business and 
small disadvantaged business (SDB) concerns, regardless of the size 
status of the ANC.
    (ii) Subcontracts awarded to an Indian tribe shall be counted 
towards the designated contractor's subcontracting goal for small 
business, regardless of the size status of the Indian tribe.
    (iii) Where one or more subcontractors are in the subcontract tier 
between the prime contractor and the ANC or Indian tribe, the ANC or 
Indian tribe shall designate the appropriate contractor to count the 
subcontract towards its small business and/or small disadvantaged 
subcontracting goals. In most cases, the appropriate contractor is the 
contractor that awarded the subcontract to the ANC or Indian tribe. The 
ANC or Indian tribe will give a copy of the designation to the 
contracting officer, the prime contractor, and the subcontractors in 
between.
    (2) A contractor acting in good faith may rely on the written 
representation of an ANC or an Indian tribe as to eligibility unless an 
interested party challenges its status or the contracting officer has 
independent reason to question its status. In the event of a challenge 
of a representation of an ANC or Indian tribe, the interested parties 
shall follow the procedures at 26.103(b) through (e).
    4. Amend section 19.704 by revising paragraphs (a)(1), (a)(2), 
(a)(3), and (a)(6) to read as follows:


19.704  Subcontracting plan requirements.

    (a) * * *
    (1) Separate percentage goals for using small business (including 
ANC and Indian tribes), veteran-owned small business, service-disabled 
veteran-owned small business, HUBZone small business, small 
disadvantaged business (including ANCs), and women-owned small business 
concerns as subcontractors;
    (2) A statement of the total dollars planned to be subcontracted 
and a statement of the total dollars planned to be subcontracted to 
small business (including ANC and Indian tribes), veteran-owned small 
business, service-disabled veteran-owned small business, HUBZone small 
business, small disadvantaged business (including ANCs), and women-
owned small business concerns;
    (3) A description of the principal types of supplies and services 
to be subcontracted and an identification of types planned for 
subcontracting to small business (including ANC and Indian tribes), 
veteran-owned small business, service-disabled veteran-owned small 
business, HUBZone small business, small disadvantaged business

[[Page 32556]]

(including ANCs), and women-owned small business concerns;
* * * * *
    (6) A statement as to whether or not the offeror included indirect 
costs in establishing subcontracting goals, and a description of the 
method used to determine the proportionate share of indirect costs to 
be incurred with small business (including ANC and Indian tribes), 
veteran-owned small business, service-disabled veteran-owned small 
business, HUBZone small business, small disadvantaged business 
(including ANCs), and women-owned small business concerns;
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    5. Amend section 52.219-9 by--
    a. Revising the date of the clause;
    b. In paragraph (b), by adding, in alphabetical order, the 
definitions ``Alaskan Native Corporation (ANC)'' and ``Indian tribe'' 
and
    c. Adding text to the end of paragraph (d)(1); and revising 
paragraphs (d)(2)(ii), (d)(2)(vi), and (d)(6)(i) to read as follows:


52.219-9  Small Business Subcontracting Plan.

* * * * *
    SMALL BUSINESS SUBCONTRACTING PLAN (DATE)
* * * * *
    (b) * * *
    Alaskan Native Corporation (ANC) means any Regional Corporation, 
Village Corporation, Urban Corporation, or Group Corporation 
organized under the laws of the State of Alaska in accordance with 
the Alaska Native Claims Settlement Act, as amended (43 U.S.C. 1601, 
et seq.), and which is considered a minority and economically 
disadvantaged concern under the criteria at 43 U.S.C. 1626(e)(1). 
This definition also includes ANC direct and indirect subsidiary 
corporations, joint ventures, and partnerships that meet the 
requirements of 43 U.S.C. 1626(e)(2).
* * * * *
    Indian tribe means any Indian tribe, band, group, pueblo, or 
community, including native villages and native groups (including 
corporations organized by Kenai, Juneau, Sitka, and Kodiak) as 
defined in the Alaska Native Claims Settlement Act (43 U.S.C.A. 
1601, et seq.), that is recognized by the Federal Government as 
eligible for services from the Bureau of Indian Affairs in 
accordance with 25 U.S.C. 1452(c).
* * * * *
    (d) * * *
    (1) * * * In accordance with 43 U.S.C. 1626, subcontracts 
awarded to an ANC shall be counted towards the designated 
Contractor's subcontracting goals for small business and small 
disadvantaged business (SDB) concerns, regardless of the size status 
of the ANC, and subcontracts awarded to an Indian tribe shall be 
counted towards the designated Contractor's subcontracting goal for 
small business, regardless of the size status of the Indian tribe. 
Where one or more subcontractors are in the subcontract tier between 
the prime Contractor and the ANC or Indian tribe, the ANC or Indian 
tribe shall designate the appropriate Contractor to count the 
subcontract towards its small business and/or small disadvantaged 
subcontracting goals. In most cases, the appropriate Contractor is 
the Contractor that awarded the subcontract to the ANC or Indian 
tribe. The ANC or Indian tribe shall give a copy of the designation 
to the Contracting Officer, the prime Contractor, and the 
subcontractors in between.
    (2) * * *
    (ii) Total dollars planned to be subcontracted to small business 
concerns (including ANC and Indian tribes);
* * * * *
    (vi) Total dollars planned to be subcontracted to small 
disadvantaged business concerns (including ANCs); and
* * * * *
    (6) * * *
    (i) Small business concerns (including ANC and Indian tribes);
* * * * *

PART 53--FORMS


53.219  [Amended]

    6. Amend section 53.219 in paragraphs (a) and (b) by removing 
``(Rev. 10/01)'' and adding ``(Rev. Date)'' in their place.

    7. Revise sections 53.301-294 and 53.301-295 to read as follows:


53.301-294  Subcontracting Report for Individual Contracts.

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53.301-295  Summary Subcontract Report.

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[FR Doc. 05-10935 Filed 6-2-05; 8:45 am]
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