[Federal Register Volume 70, Number 189 (Friday, September 30, 2005)]
[Rules and Regulations]
[Pages 57458-57459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-19473]



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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 19 and 52

[FAC 2005-06; FAR Case 2004-036; Item VI]
RIN 9000-AK11


Federal Acquisition Regulation; Addition of Landscaping and Pest 
Control Services to the Small Business Competitiveness Demonstration 
Program

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 to finalize, 
without change, the interim rule published in the Federal Register at 
70 FR 11740, March 9, 2005. This rule implements Section 821 of the 
Ronald W. Reagan National Defense Authorization Act for Fiscal Year 
2005. Section 821 added landscaping and pest control services to the 
Small Business Competitiveness Demonstration Program.

DATES: Effective Date: September 30, 2005.

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. Kimberly Marshall, Procurement 
Analyst, at (202) 219-0986. Please cite FAC 2005-06, FAR case 2004-036.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule finalizes, without change, the interim rule published in 
the Federal Register at 70 FR 11740, March 9, 2005. The rule implements 
Section 821 of the Ronald W. Reagan National Defense Authorization Act 
for Fiscal Year 2005 (Public Law 108-375). Section 821 amended Section 
717 of the Small Business Competitiveness Demonstration Program Act of 
1988 (15 U.S.C. 644 note) by adding landscaping and pest control 
services to the program. As a result, agencies are precluded from 
considering acquisitions for landscaping and pest control services over 
the emerging small business reserve, currently $25,000, for small 
business set-asides unless the set-asides are needed to meet their 
assigned goals.
    The Councils published the interim rule in the Federal Register at 
70 FR 11740, March 9, 2005, with a request for comments by May 9, 2005. 
One respondent submitted a comment in response to the interim rule. The 
comment is addressed below.
    Comment: The rule should be changed to provide small businesses, 
including ``mom and pop'' businesses, the first opportunity to compete 
for awards under NAICS codes 561730 and 561710.
    Councils' response: The rule implements a statute which added 
landscaping and pest control services to the Small Business 
Competitiveness Demonstration Program. The Councils have no authority 
to change the statute or implementing regulation to make the suggested 
change. The Councils note, however, that the rule applies only to 
acquisitions over the emerging small business reserve amount which is 
currently $25,000. Agencies will continue to set-aside, for emerging 
small businesses, acquisitions at or below the emerging small business 
reserve amount consistent with the requirements in FAR subparts 
19.1007(c). In addition, agencies are allowed to reinstate the small 
business set-asides if needed to meet their assigned goals.
    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 Regulatory Flexibility Act, 5 U.S.C. 601, et seq., pertains to 
this final rule and a Final Regulatory Flexibility Analysis (FRFA) has 
been performed. The analysis is summarized as follows:

Final Regulatory Flexibility Analysis

    This final rule amends FAR Parts 19 and 52 to implement Section 
821 of the Ronald W. Reagan National Defense Authorization Act for 
Fiscal Year 2005, Public Law 108-375, which amends Section 717 of 
the Small Business Competitiveness Demonstration Program Act of 1988 
(15 U.S.C. 644 note). Section 821 provides for the addition of two 
North American Industry Classification System (NAICS) codes, 
landscaping (561730) and pest control services (561710) to the Small 
Business Competitiveness Demonstration Program under the designated 
industry groups.
    The changes inform the agencies of the new additions to the 
Small Business Competitiveness Demonstration Program and also gives 
the Contracting Officer the specific ``Emerging small business 
reserve amount'' of $25,000 for the designated groups.
    The objective of the final rule is to further assess the ability 
of small business concerns to compete successfully in certain 
industry categories without competition being restricted by the use 
of small business set-asides. The implementation of section 821 of 
the Ronald W. Reagan National Defense Authorization Act for Fiscal 
Year 2005, Public Law 108-375 will change the FAR as follows: (1) 
revises the designated industry groups to include Exterminating and 
Pest Control Services and Landscaping Services in FAR 19.1002(1) and 
19.1005; (2) deletes the word ``four'' before designated industry 
groups in the FAR.
    There was one comment that addressed the IRFA. The comment is 
addressed below:
    Comment: The rule should be changed to provide small businesses, 
including ``mom and pop'' businesses, the first opportunity to 
compete for awards under NAICS codes 561730 and 561710.
    Agency's Response: The rule implements a statute which added 
landscaping and pest control services to the Small Business 
Competitiveness Demonstration Program. The Councils have no 
authority to change the statute or implementing regulation to make 
the suggested change. The Councils note, however, that the rule 
applies only to acquisitions over the emerging small business 
reserve amount which is currently $25,000. Agencies will continue to 
set-aside, for emerging small businesses, acquisitions at or below 
the emerging small business reserve amount consistent with the 
requirements in FAR subparts 19.1007(c). In addition, agencies are 
allowed to reinstate the small business set-asides if needed to meet 
their assigned goals.
    The final rule will apply to all small business concerns that 
compete on Federal procurements falling under NAICS codes 561730 and 
561710. Based on Governmentwide data retrieved from the Federal 
Procurement Data System (FPDS) for the specified NAICS codes, 
approximately 141 small business concerns were awarded contracts of 
$25,000 or more on an unrestricted basis in fiscal year 2002 for 
NAICS code 561730. This represents about 88 percent of all contracts 
awarded with unrestricted competition for that NAICS code. In fiscal 
year 2003 there were 116 contracts awarded to small business 
concerns on an unrestricted basis, which represents approximately 81 
percent of all contracts awarded with unrestricted competition for 
that NAICS codes. FPDS data also show that 25 small business 
concerns were awarded contracts of $25,000 or more on an 
unrestricted basis in fiscal year 2002 for NAICS code 561710. This 
represents about 56 percent of all contracts awarded with 
unrestricted competition for that NAICS code. In fiscal year 2003 
there were 17 contracts awarded to small business concerns on an 
unrestricted basis, which represents approximately 77 percent of all 
contracts awarded with unrestricted competition for that NAICS 
codes. It is estimated that small business concerns will continue to 
be successful in winning at least one-half to three-fourths of 
awards on an unrestricted

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basis when these designated industry groups are added to the Small 
Business Competitiveness Demonstration Programs given the history of 
their success in recent unrestricted competitive Government 
acquisitions falling under NAICS codes 561730 and 561710. Additional 
data retrieved from FPDS show that the number of small business set-
asides for NAICS code 561730 in fiscal years 2002 and 2003 combined 
was approximately 952 and the number of small business set-asides 
for NAICS code 561710 in fiscal years 2002 and 2003 combined was 
approximately 96. 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 
previously set-aside acquisitions for services falling within NAICS 
codes 561730 and 561710 will now be included in the designated 
industry groups of the Small Business Competitiveness Demonstration 
Program. FAR 19.1007(b) states that ``Solicitations for acquisitions 
in any of the designated industry groups that have an anticipated 
dollar value greater than the emerging small business reserve amount 
must not be considered for small business set-asides under FAR 19.5. 
However, agencies may reinstate the use of small business set-asides 
as necessary to meet their assigned goals, but only within 
organizational units that failed to meet the small business 
participation goal. Acquisitions in the designated industry groups 
must continue to be considered for placement under the 8(a) Program 
(see Subpart 19.8), the HUBZone Program (see Subpart 19.13), and the 
Service-Disabled Veteran-Owned Small Business Procurement Program 
(see Subpart 19.14).'' Given the large number of awards made under 
these NAICS codes, it is anticipated that the addition of the two 
NAICS codes to the Small Business Competitiveness Demonstration 
Program will promote an increased number of opportunities for small 
business concerns to develop teaming arrangements and joint 
ventures.
    The purpose of the Competitiveness Demonstration Program is to 
assess the ability of small businesses to compete successfully in 
certain industry categories without competition being restricted by 
the use of small business set-asides. This portion of the program is 
limited to the four designated industry groups listed in FAR 19.1005 
and will include the addition of landscaping and pest control 
services to the designated industry groups. The final rule imposes 
no reporting, recordkeeping, or other compliance requirements.
    The final rule does not duplicate, overlap, or conflict with any 
other Federal rules. There are no practical alternatives that will 
accomplish the objectives of this final rule.
    Interested parties may obtain a copy of the FRFA from the FAR 
Secretariat. The FAR Secretariat has submitted a copy of the FRFA to 
the Chief Counsel for Advocacy of the Small Business Administration.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the 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.

List of Subjects in 48 CFR Parts 19 and 52

    Government procurement.

    Dated: September 22, 2005.
Julia B. Wise,
Director, Contract Policy Division.

Interim Rule Adopted as Final Without Change

0
Accordingly, the interim rule amending 48 CFR parts 19 and 52, which 
was published at 70 FR 11740, March 9, 2005, is adopted as a final rule 
without change.
[FR Doc. 05-19473 Filed 9-29-05; 8:45 am]
BILLING CODE 6820-EP-S