[Federal Register Volume 71, Number 74 (Tuesday, April 18, 2006)]
[Rules and Regulations]
[Pages 19812-19813]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-3672]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

RIN 3245-AE92


Small Business Size Standards; Correction

AGENCY: U.S. Small Business Administration.

ACTION: Correcting amendment.

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SUMMARY: This document contains a correction to the final regulations 
which were published in the Federal Register of Friday, May 21, 2004 
(69 FR 29192). The regulations amended several definitions and made 
procedural and technical amendments to cover several of the U.S. Small 
Business Administration's (SBA's or Agency's) programs.

DATES: Effective April 18, 2006.

FOR FURTHER INFORMATION CONTACT: Gary Jackson, Assistant Administrator, 
Office of Size Standards, (202) 205-6618, or [email protected].

SUPPLEMENTARY INFORMATION:

Background

    On May 21, 2004 the SBA published a final rule amending its size 
regulations (69 FR 29192). These regulations are used to determine 
eligibility for all SBA and Federal programs that require an entity to 
be a small business concern. Section 121.404 was amended to address the 
treatment of the acquisition of a small business concern by another 
concern during contract performance. Specifically, the final regulation 
states that the new entity must submit a written self-certification 
that it is small to the procuring agency so that the agency can count 
the award, options or orders issued pursuant to the contract towards 
its small business goals. In the preamble to the final rule, however, 
the SBA explained that the

amended regulations now state that the new entity must submit a 
written self-certification that it is small to the procuring agency 
so that the agency can count the award options, or orders issued 
pursuant to that contract, towards its small business goals.

69 FR 29192, 29198 (May 21, 2004). According to the preamble, it is 
clear that the self-certifications for novations and change-of-name 
agreements affected the subsequent options and orders, but not the 
original contract award or any option or order executed before the 
novation or change-of-name agreement.

Need for Correction

    The final regulatory text, however, contained an error that has 
caused some confusion. The SBA misplaced a comma in the final rule, 
which has caused many readers to interpret section 121.404 to require 
concerns to submit a self-certification as a small business at the time 
of a novation or change-of-name so that the procuring agency can count 
the original contract award towards its small business goals. This 
interpretation is incorrect, however, as the procuring agency was 
already given credit towards its small business goals for the original 
contract award. Section 121.404 is only meant to address whether the 
procuring agency can count any future award options or orders issued 
pursuant to the contract toward the agency's small business goals, if 
there has been a novation or change-of-name during contract 
performance. Therefore, the removal of the comma after the word award 
will eliminate any doubt as to the SBA's intent regarding this 
provision.

List of Subjects in 13 CFR Part 121

    Administrative practice and procedure, Government procurement, 
Government property, Grant programs--business, Loan programs--business, 
Small businesses.

0
Accordingly, 13 CFR part 121 is corrected by making the following 
correcting amendment:

[[Page 19813]]

PART 121--SMALL BUSINESS SIZE REGULATIONS

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1. The authority citation for part 121 continues to read as follows:

    Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 637(a), 644, and 
662(5); and Pub.L. 105-135, sec. 401 et seq., 111 Stat. 2592.

0
2. Revise paragraph (i) of Sec.  121.404 to read as follows:


Sec.  121.404  When does SBA determine the size status of a business 
concern?

* * * * *
    (i) At the time a novation or change-of-name agreement has been 
executed pursuant to FAR subject 42.12, the new entity must submit a 
written self-certification that it is small to the procuring agency so 
that the agency can count the award options, or orders issued pursuant 
to the contract, towards its small business goals.
* * * * *

    Dated: March 14, 2006.
Anthony Martoccia,
Associate Deputy Administrator for Government Contracting and Business 
Development.
[FR Doc. 06-3672 Filed 4-17-06; 8:45 am]
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