[Federal Register Volume 71, Number 202 (Thursday, October 19, 2006)]
[Rules and Regulations]
[Pages 61687-61689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-17043]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1819 and 1852

RIN 2700-AD17


Small Business Innovation Research (SBIR) and Small Business 
Technology Transfer (STTR) Contractor Recertification of Program 
Compliance

AGENCY: National Aeronautics and Space Administration.

ACTION: Final rule.

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SUMMARY: This rule adopts the proposed rule published in the Federal 
Register on September 30, 2005 as final with minor, non-substantive 
editorial changes. The final rule amends the NASA FAR Supplement (NFS) 
to include a requirement for NASA's Small Business Innovation Research 
(SBIR) and the Small Business Technology Transfer (STTR) program 
contractors to complete a recertification of program compliance prior 
to final payment. This requirement is being established to facilitate 
the Government's ability to hold contractors accountable for compliance 
with Federal statute, regulation, and requirements associated with the 
SBIR and STTR programs. In addition, the final rule corrects the 
following in the proposed rule: Revises the section numbering of the 
prescription identified in NFS 1832.12 of the proposed rule from NFS 
1832.1200 to NFS 1819.7302(f); revises the numbering of the clause from 
NFS 1852.232-83 in the proposed rule to NFS 1852.219-85 in the final 
rule; makes minor revisions to conform clause titles with those in the 
clause prescriptions; revises the Supplementary Information, Paragraph 
B. Regulatory Flexibility Act to expand the justification that the rule 
does not have a significant economic impact on small entities; and 
makes other minor editorial corrections.

DATES: Effective Date: October 19, 2006.

FOR FURTHER INFORMATION CONTACT: Marilyn J. Seppi, NASA, Office of 
Procurement, Contract Management Division, (202) 358-0447, e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

A. Background

    NASA published a proposed rule in the Federal Register on September 
30, 2005 (70 FR 57240-57242). The public comment period ended on 
November 29, 2005. One public comment was received. The comment stated 
that the proposed rule constituted an undue burden and would have a 
significant (adverse) impact on small businesses. The respondent also 
objected to long-standing SBIR/STTR program requirements relating to 
limitations on subcontracting. NASA's Response: Regarding the issue of 
additional burden, NASA believes that it is in the Government's best 
interest to implement the proposed rule requiring SBIR/STTR contractors 
to recertify their compliance with Program requirements prior to final 
payment to hold contractors accountable for Program compliance and to 
enable the pursuit of criminal and civil cases when noncompliance 
constitutes a fraud against the Government. NASA believes that the 
additional burden resulting from the recertification statement 
requirement is minimal. The respondent's comment objecting to current 
SBIR/STTR program requirements relating to limitations on 
subcontracting is noted; however, these are existing program 
requirements that apply regardless of this rule. Therefore, this final 
rule amends NASA FAR Supplement Parts 1819 and 1852 to require that all 
research and development contracts awarded under the SBIR and STTR 
Programs include the clause at 1852.219-85, Conditions for Final 
Payment--SBIR and STTR Contracts. This clause provides direction to the 
contractor regarding completion and submission of a recertification 
requirement prior to and as a condition of final payment. In addition, 
the rule requires use of the clauses at 1852.219-80, Limitation on 
Subcontracting--SBIR Phase I Program, 1852.219-81, Limitation on 
Subcontracting--SBIR Phase II Program, and 1852.219-82, Limitation on 
Subcontracting--STTR Program, in the respective SBIR and STTR contracts 
to delineate the subcontracting limitations necessary for contract 
performance. The rule also requires the use of clauses at 1852.219-83, 
Limitation of the Principal Investigator--SBIR Program, and 1852.219-
84, Limitation of the Principal Investigator--STTR Program, 
respectively, to describe the employment requirements of the principal 
investigator.
    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

    NASA certifies that this rule will not 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 
recertification prior to final payment to awardees is merely an updated 
statement by the contractor provided in the representations and 
certifications submitted with the proposal in accordance with the Small 
Business Administration's SBIR Program Directive. The information 
included in the contractor's statement addresses subcontracting 
limitations and contracting officer consent requirements which are part 
of a contractor's normal contract administration responsibilities in 
monitoring compliance with contract and program requirements. 
Accordingly, the recertification is not considered to have a 
significant impact.

C. Paperwork Reduction Act

    The Paperwork Reduction Act applies because the changes to the NFS 
impose recordkeeping or information collections, or collection of 
information from offerors or contractors. The Office of Management and 
Budget under 44

[[Page 61688]]

U.S.C. 3501, et seq., has approved this as a new collection under OMB 
Control Number 2700-0124.

List of Subjects in 48 CFR 1819 and 1852

    Government procurement.

Tom Luedtke,
Assistant Administrator for Procurement.

0
Accordingly, 48 CFR parts 1819 and 1852 are amended as follows:
0
1. The authority citation for 48 CFR parts 1819 and 1852 continues to 
read as follows:

    Authority: 42 U.S.C. 2473(c)(1).

PART 1819--SMALL BUSINESS PROGRAMS

0
2. Add Subpart 1819.73 to read as follows:
Subpart 1819.73--Small Business Innovation Research (SBIR) and Small 
Business Technology Transfer (STTR) Programs 1819.7301 Scope of 
subpart.
Sec.
1819.7301 Scope of subpart.
1819.7302 NASA contract clauses.

Subpart 1819.73--Small Business Innovation Research (SBIR) and 
Small Business Technology Transfer (STTR) Programs


1819.7301  Scope of subpart.

    The Small Business Innovation Research (SBIR) and Small Business 
Technology Transfer (STTR) Programs were established and issued under 
the authority of the Small Business Act codified at 15 U.S.C. 631, as 
amended, and the Small Business Innovation Development Act of 1982 
(Pub. L. 97-219), codified with amendments at 15 U.S.C. 638. The Small 
Business Act requires that the Small Business Administration (SBA) 
issue SBIR and STTR Program Policy Directives for the general conduct 
of the SBIR/STTR Programs within the Federal Government. The statutory 
purpose of the SBIR Program is to strengthen the role of innovative 
small business concerns (SBCs) in federally-funded research or research 
and development (R/R&D). Specific program purposes are to: Stimulate 
technological innovation; use small business to meet Federal R/R&D 
needs; foster and encourage participation by socially and economically 
disadvantaged SBCs, and by SBCs that are 51-percent owned and 
controlled by women, in technological innovation; and increase private 
sector commercialization of innovations derived from Federal R/R&D, 
thereby increasing competition, productivity and economic growth. 
Federal agencies participating in the SBIR/STTR Programs (SBIR/STTR 
agencies) are obligated to follow the guidance provided by the SBA 
Policy Directive. NASA is required to ensure its policies, regulations, 
and guidance on the SBIR/STTR Programs are consistent with SBA's Policy 
Directive. Contracting officers are required to insert the applicable 
clauses identified in 1819.7302 in all SBIR and STTR contracts.


1819.7302  NASA contract clauses.

    (a) Contracting officers shall insert the clause at 1852.219-80, 
Limitation on Subcontracting--SBIR Phase I Program, in all Phase I 
contracts awarded under the Small Business Innovation Research (SBIR) 
Program established pursuant to Public Law 97-219 (the Small Business 
Innovation Development Act of 1982).
    (b) Contracting officers shall insert the clause at 1852.219-81, 
Limitation on Subcontracting--SBIR Phase II Program, in all Phase II 
contracts awarded under the Small Business Innovation Research (SBIR) 
Program established pursuant to Public Law 97-219 (the Small Business 
Innovation Development Act of 1982).
    (c) Contracting officers shall insert the clause at 1852.219-82, 
Limitation on Subcontracting--STTR Program, in all contracts awarded 
under the Small Business Technology Transfer (STTR) Program established 
pursuant to Public Law 97-219 (the Small Business Innovation 
Development Act of 1982).
    (d) Contracting officers shall insert the clause at 1852.219-83, 
Limitation of the Principal Investigator--SBIR Program, in all 
contracts awarded under the Small Business Innovation Research (SBIR) 
Program established pursuant to Public Law 97-219 (the Small Business 
Innovation Development Act of 1982).
    (e) Contracting officers shall insert the clause at 1852.219-84, 
Limitation of the Principal Investigator--STTR Program, in all 
contracts awarded under the Small Business Technology Transfer (STTR) 
Program established pursuant to Public Law 97-219 (the Small Business 
Innovation Development Act of 1982).
    (f) Contracting officers shall insert the clause at 1852.219-85, 
Conditions for Final Payment--SBIR and STTR Contracts, in all contracts 
awarded under the Small Business Technology Transfer (STTR) Program and 
in all Phase I and Phase II contracts awarded under the Small Business 
Technology Transfer (STTR) Small Business Innovation Research (SBIR) 
Program established pursuant to Public Law 97-219 (the Small Business 
Innovation Development Act of 1982).

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. Add sections 1852.219-80, 1852.219-81, 1852.219-82, 1852.219-83, 
1852.219-84, and 1852.219-85 to read as follows:


1852.219-80  Limitation on Subcontracting--SBIR Phase I Program.

    As prescribed in 1819.7302(a), insert the following clause:

Limitation on Subcontracting--SBIR Phase I Program(Oct 2006)

    The Contractor shall perform a minimum of two-thirds of the 
research and/or analytical effort (total contract price less profit) 
conducted under this contract. Any deviation from this requirement 
must be approved in advance and in writing by the Contracting 
Officer.


(End of clause)


1852.219-81  Limitation on Subcontracting--SBIR Phase II Program.

    As prescribed in 1819.7302(b), insert the following clause:

Limitation on Subcontracting--SBIR Phase II Program (Oct 2006)

    The Contractor shall perform a minimum of one-half of the 
research and/or analytical effort (total contract price less profit) 
conducted under this contract. Any deviation from this requirement 
must be approved in advance and in writing by the Contracting 
Officer. Since the selection of R&D contractors is substantially 
based on the best scientific and technological sources, it is 
important that the Contractor not subcontract technical or 
scientific work without the Contracting Officer's advance approval.


(End of clause)


1852.219-82  Limitation on Subcontracting--STTR Program.

    As prescribed in 1819.7302(c), insert the following clause:

Limitation on Subcontracting--STTR Program(Oct 2006)

    The Contractor shall perform a minimum of 40 percent of the work 
under this contract (total contract price including cost sharing if 
any, less profit if any). A minimum of 30 percent of the work under 
this contract shall be performed by the research institution. Since 
the selection of R&D contractors is substantially based on the best 
scientific and technological sources, it is important that the 
Contractor not subcontract technical or scientific work without the 
Contracting Officer's advance approval.


(End of clause)


1852.219-83  Limitation of the Principal Investigator--SBIR Program.

    As prescribed in 1819.7302(d), insert the following clause:

[[Page 61689]]

Limitation of the Principal Investigator--SBIR Program(Oct 2006)

    The primary employment of the principal investigator (PI) shall 
be with the small business concern (SBC)/Contractor during the 
conduct of this contract. Primary employment means that more than 
one-half of the principal investigator's time is spent in the employ 
of the SBC/Contractor. This precludes full-time employment with 
another organization. Deviations from these requirements must be 
approved in advance and in writing by the Contracting Officer and 
are not subject to a change in the firm-fixed price of the contract. 
The PI for this contract is (insert name).


(End of Clause)


1852.219-84  Limitation of the Principal Investigator--STTR Program.

    As prescribed in 1819.7302(e), insert the following clause:

Limitation of the Principal Investigator--STTR Program (Oct 2006)

    (a) The primary employment of the principal investigator (PI) 
identified in paragraph (b) of this clause is with the small 
business concern (SBC)/Contractor or the research institution (RI). 
Primary employment means that more than one-half of the principal 
investigator's time is spent in the employ of the SBC/Contractor or 
RI.
    (b) The PI is considered to be key personnel in the performance 
of this contract. The SBC/Contractor, whether or not the employer of 
the PI, shall exercise primary management direction and control over 
the PI and be overall responsible for the PI's performance under 
this contract. Deviations from these requirements must be approved 
in advance and in writing by the Contracting Officer and are not 
subject to a change in the firm-fixed price of the contract. The PI 
for this contract is (insert name).


(End of Clause)


1852.219-85  Conditions for Final Payment--SBIR and STTR Contracts.

    As prescribed in 1819.7302(f), insert the following clause:

Conditions for Final Payment--SBIR AND STTR Contracts(Oct 2006)

    As a condition for final payment under this contract, the 
Contractor shall provide the following certifications as part of its 
final payment invoice request:
    During performance of this contract--
    1. Essentially equivalent work performed under this contract has 
not been proposed for funding to another Federal agency;
    2. No other Federal funding award has been received for 
essentially equivalent work performed under this contract;
    3. Deliverable items submitted under this contract have not been 
submitted as deliverable items under another Federal funding award;
    4. For SBIR contracts: The subcontracting limitation set forth 
in this contract was not exceeded except as approved in writing by 
the Contracting Officer on (insert date of approval or modification 
number.);
    5. For STTR contracts: The subcontracting limitation set forth 
in this contract was not exceeded;
    6. For SBIR contracts: The primary employment of the principal 
investigator (PI) identified in this SBIR contract was with the 
Contractor, except as approved in writing by the Contracting Officer 
on (insert date of approval or modification number); and
    7. For STTR contracts: The primary employment of the principal 
investigator (PI) identified in this STTR contract was the SBC/
Contractor or the research institution (RI). The PI identified in 
the STTR contract was considered key in the performance of this 
contract. The SBC/Contractor, whether or not the employer of the PI, 
did exercise primary management direction and control over the PI 
and was overall responsible for the PI's performance under this 
contract. Any substitutions of this individual were approved in 
writing by the Contracting Officer on (insert date of approval or 
modification number).
    I understand that the willful provision of false information or 
concealing a material fact in this representation is a criminal 
offense under Title 18 USC, Section 1001, False Statements, as well 
as Title 18 U.S.C., Section 287, False Claims.


(End of Clause)

 [FR Doc. E6-17043 Filed 10-18-06; 8:45 am]
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