[Federal Register Volume 71, Number 36 (Thursday, February 23, 2006)]
[Proposed Rules]
[Pages 9303-9305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-1636]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 219 and 252

RIN 0750-AE93


Defense Federal Acquisition Regulation Supplement; Small Business 
Programs (DFARS Case 2003-D047)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule with request for comments.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to update text pertaining to small 
business programs. This proposed rule is a result of a transformation 
initiative undertaken by DoD to dramatically change the purpose and 
content of the DFARS.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before April 24, 2006, to be considered 
in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2003-D047, 
using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include DFARS Case 2003-D047 in the 
subject line of the message.
     Fax: (703) 602-0350.
     Mail: Defense Acquisition Regulations System, Attn: Ms. 
Deborah Tronic, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062.
     Hand Delivery/Courier: Defense Acquisition Regulations 
System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 
22202-3402.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Ms. Deborah Tronic, (703) 602-0289.

SUPPLEMENTARY INFORMATION: 

A. Background

    DFARS Transformation is a major DoD initiative to dramatically 
change the purpose and content of the DFARS. The objective is to 
improve the efficiency and effectiveness of the acquisition process, 
while allowing the acquisition workforce the flexibility to innovate. 
The transformed DFARS will contain only requirements of law, DoD-wide 
policies, delegations of FAR authorities, deviations from FAR 
requirements, and policies/procedures that have a significant effect 
beyond the internal operating procedures of DoD or a significant cost 
or administrative impact on contractors or offerors. Additional 
information on the DFARS Transformation initiative is available at 
http://www.acq.osd.mil/dpap/dars/dfars/transformation/index.htm.
    This proposed rule is a result of the DFARS Transformation 
initiative. The proposed DFARS changes--
     Update and clarify requirements for contracting with small 
business and small disadvantaged business concerns; and
     Delete text containing procedures for referring matters to 
the Small Business Administration; procedures for processing contract 
awards under the 8(a) Program; and information on the DoD test program 
for negotiation of comprehensive small business subcontracting plans. 
Text on these subjects will be relocated to the new DFARS companion 
resource, Procedures, Guidance, and Information (PGI). Additional 
information on PGI is available at http://www.acq.osd.mil/dpap/dars/pgi.
    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 
updates and clarifies DFARS text, but makes no significant change to 
DoD policy for contracting with small business concerns. 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 2003-D047.

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.

List of Subjects in 48 CFR Parts 219 and 252

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

    Therefore, DoD proposes to amend 48 CFR parts 219 and 252 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 219.000 is revised to read as follows:

[[Page 9304]]

219.000  Scope of part.

    This part also implements 10 U.S.C. 2323, which--
    (1) Is applicable to DoD through fiscal year 2009; and
    (2) Establishes goals for awards to small disadvantaged business 
(SDB) concerns, historically black colleges and universities (HBCUs), 
and minority institutions (MIs). See subpart 226.70 for policy on 
contracting with HBCU/MIs.


219.202-1  [Removed]

    3. Section 219.202-1 is removed.
    4. Section 219.602 is revised to read as follows:


219.602  Procedures.

    When making a nonresponsibility determination for a small business 
concern, follow the procedures at PGI 219.602.


219.602-1 and 219.602-3  [Removed]

    5. Sections 219.602-1 and 219.602-3 are removed.
    6. Section 219.702 is revised to read as follows:


219.702  Statutory requirements.

    (1) Section 834 of Public Law 101-189, as amended (15 U.S.C. 637 
note), requires DoD to establish a test program to determine whether 
comprehensive subcontracting plans on a corporate, division, or plant-
wide basis will reduce administrative burdens while enhancing 
subcontracting opportunities for small and small disadvantaged business 
concerns. See PGI 219.702 for the requirements of the test program.
    (2) Comprehensive subcontracting plans shall not be subject to 
application of liquidated damages during the period of the test program 
(Section 402, Public Law 101-574).


219.703  [Amended]

    7. Section 219.703 is amended in paragraph (a)(2)(B) by removing 
``Small, Small Disadvantaged and Women-Owned''.
    8. Section 219.704 is revised to read as follows:


219.704  Subcontracting plan requirements.

    (1) The goal for use of small disadvantaged business concerns shall 
include subcontracts with historically black colleges and universities 
and minority institutions (see subpart 226.70), in addition to 
subcontracts with small disadvantaged business concerns. Subcontracts 
with historically black colleges and universities and minority 
institutions do not have to be included in the small disadvantaged 
business goal in commercial items subcontracting plans.
    (2) In those subcontracting plans which specifically identify small 
businesses, prime contractors shall notify the administrative 
contracting officer of any substitutions of such firms. Notifications 
shall be in writing and shall occur within a reasonable period of time 
after award of the subcontract. Contractor-specified formats shall be 
acceptable.
    (3) See 215.304 for evaluation of offers in acquisitions that 
require a subcontracting plan.


219.705-2  [Removed]

    9. Section 219.705-2 is removed.
    10. Section 219.708 is amended by revising paragraph (b)(1) to read 
as follows:


219.708  Solicitation provisions and contract clauses.

    (b)(1)(A) Use the clause at 252.219-7003, Small Business 
Subcontracting Plan (DoD Contracts), in solicitations and contracts 
that contain the clause at FAR 52.219-9, Small Business Subcontracting 
Plan.
    (B) In contracts with contractors that have comprehensive 
subcontracting plans approved under the test program described in 
219.702, use the clause at 252.219-7004, Small Business Subcontracting 
Plan (Test Program), instead of the clauses at 252.219-7003, Small 
Business Subcontracting Plan (DoD Contracts), and FAR 52.219-9, Small 
Business Subcontracting Plan.
* * * * *
    11. Section 219.800 is amended by revising paragraph (a) to read as 
follows:


219.800  General.

    (a) By Partnership Agreement (PA) 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 the PA, this authority is hereby redelegated to DoD 
contracting officers. This authority expires on September 30, 2006. A 
copy of the PA is available at PGI 219.800.
* * * * *
    12. Section 219.803 is revised to read as follows:


219.803  Selecting acquisitions for the 8(a) Program.

    When selecting acquisitions for the 8(a) Program, follow the 
procedures at PGI 219.803.
    13. Section 219.804-2 is revised to read as follows:


219.804-2  Agency offering.

    When processing requirements under the PA, follow the procedures at 
PGI 219.804-2.


219.804-3  [Removed]

    14. Section 219.804-3 is removed.
    15. Section 219.805-2 is revised to read as follows:


219.805-2  Procedures.

    When processing requirements under the PA, follow the procedures at 
PGI 219.805-2 for requesting eligibility determinations.
    16. Sections 219.808-1 and 219.811 are revised to read as follows:


219.808-1  Sole source.

    For sole source requirements processed under the PA, follow the 
procedures at PGI 219.808-1.


219.811  Preparing the contracts.

    For preparing awards under the PA, follow the procedures at PGI 
219.811.


219.811-1 and 219.811-2  [Removed]

    17. Sections 219.811-1 and 219.811-2 are removed.
    18. Section 219.811-3 is amended by revising paragraph (3) to read 
as follows:


219.811-3  Contract clauses.

* * * * *
    (3) Use the clause at 252.219-7011, Notification to Delay 
Performance, in solicitations and purchase orders issued under the PA 
cited in 219.800.


219.812  [Removed]

    19. Section 219.812 is removed.
    20. Section 219.1101 is added to read as follows:


219.1101  General.

    The determination to use or suspend the price evaluation adjustment 
for DoD acquisitions can be found at http://www.acq.osd.mil/dpap/dars/classdev/index.htm.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    21. Section 252.219-7003 is amended by revising the section 
heading, the

[[Page 9305]]

clause title and date, the introductory text preceding paragraph (a), 
and paragraph (g) to read as follows:


252.219-7003  Small business subcontracting plan (DoD contracts).

* * * * *
SMALL BUSINESS SUBCONTRACTING PLAN (DOD CONTRACTS) (XXX 2006)
    This clause supplements the Federal Acquisition Regulation 52.219-
9, Small Business Subcontracting Plan, clause of this contract.
* * * * *
    (g) In those subcontracting plans which specifically identify small 
businesses, the Contractor shall notify the Administrative Contracting 
Officer of any substitutions of such firms. Notifications shall be in 
writing and shall occur within a reasonable period of time after award 
of the subcontract. Contractor-specified formats shall be acceptable.
    22. Section 252.219-7004 is amended by revising the section 
heading, the clause title and date, and paragraph (d) to read as 
follows:


252.219-7004  Small business subcontracting plan (test program).

* * * * *
SMALL BUSINESS SUBCONTRACTING PLAN (TEST PROGRAM) (XXX 2006)
* * * * *
    (d) The failure of the Contractor or subcontractor to comply in 
good faith with (1) the clause of this contract entitled ``Utilization 
of Small Business Concerns,'' or (2) an approved plan required by this 
clause, shall be a material breach of the contract.

[FR Doc. 06-1636 Filed 2-22-06; 8:45 am]
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