[Federal Register Volume 78, Number 88 (Tuesday, May 7, 2013)]
[Rules and Regulations]
[Pages 26504-26506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10841]



13 CFR Part 127

RIN 3245-AG55

Women-Owned Small Business Federal Contract Program

AGENCY: U.S. Small Business Administration.

ACTION: Interim final rule.


SUMMARY: The U.S. Small Business Administration (SBA) is amending its 
regulations to implement Section 1697 of the National Defense 
Authorization Act for Fiscal Year 2013 (NDAA). Section 1697 of the NDAA 
removed the statutory limitation on the dollar amount of a contract 
that women-owned small businesses can compete for under the Women-Owned 
Small Business (WOSB) Program. As a result, contracting officers may 
now set-aside contracts under the WOSB Program at any dollar level, as 
long as the other requirements for a set-aside under the program are 

DATES: Effective Date: This rule is effective on May 7, 2013.
    Applicability Date: This rule applies to all solicitations issued 
on or after the effective date.
    Comment Date: Comments must be received on or before June 6, 2013.

ADDRESSES: You may submit comments, identified by RIN 3245-AG55 by any 
of the following methods:
     Federal Rulemaking Portal: http://www.regulations.gov and 
follow the instructions for submitting comments.
     Mail, for paper, disk, or CD-ROM submissions: LeAnn 
Delaney, Assistant Director, Office of Contract Assistance, 409 Third 
Street SW., Washington, DC 20416.
     Hand Delivery/Courier: LeAnn Delaney, Assistant Director, 
Office of Contract Assistance.
    SBA will post all comments on http://www.Regulations.gov. If you 
wish to submit confidential business information (CBI) as defined in 
the User Notice at http://www.Regulations.gov, please submit the 
information to LeAnn Delaney and highlight the information that you 
consider to be CBI and explain why you believe this information should 
be held confidential. SBA will review the information and make a final 
determination of whether the information will be published or not.

FOR FURTHER INFORMATION CONTACT: LeAnn Delaney, Assistant Director, 
Office of Contract Assistance, at (202) 205-6460 or by email at 
[email protected].


I. Background

    The Women-Owned Small Business (WOSB) Program, set forth in section 
8(m) of the Small Business Act, 15 U.S.C. 637(m), authorizes Federal 
contracting officers to restrict competition to eligible Women-Owned 
Small Businesses (WOSBs) or Economically Disadvantaged Women-Owned 
Small Business (EDWOSBs) for Federal contracts in certain industries. 
Section 8(m) of the Small Business Act (Act) sets forth certain 
criteria for the WOSB Program, including the eligibility and contract 
requirements for the program. For example, the Act had stated that 
contracting officers could only set-aside a requirement under the 
program if the anticipated award price of the contract did not exceed 
$5 million in the case of manufacturing contracts and $3 million in the 
case of all other contracts. Recently, SBA had amended its regulations 
to adjust these statutory thresholds for inflation so that the 
anticipated award price of the contract awarded under the WOSB Program 
must not exceed $6.5 million in the case of manufacturing contracts and 
$4 million in the case of all other contracts. See 77 FR 1861 (Jan. 12, 
    Even with this adjustment for inflation, these dollar value 
restrictions on awards under the program limited a contracting 
officer's ability to set-aside contracts for WOSBs or EDWOSBs. As a 
result, Section 1697 of the National Defense Authorization Act for 
Fiscal Year 2013, Public Law 112-239, amended the Small Business Act 

[[Page 26505]]

removed these dollar value limitations. As a result, contracting 
officers may now set-aside any contract for EDWOSBs or WOSBS under the 
program if: (1) There is a reasonable expectation that, in industries 
in which WOSBs are underrepresented, two or more EDWOSBs will submit 
offers for the contract or, in industries where WOSBs are substantially 
underrepresented, two or more WOSBs will submit offers for the 
contract; and (2) in the estimation of the contracting officer, the 
contract can be awarded at a fair and reasonable price. The anticipated 
contract can be for any dollar amount.

II. Section-by-Section Analysis

    In order to implement this statutory change, SBA is amending Sec.  
127.503(a)(2) and Sec.  127.503(b)(2) by removing the anticipated 
contract dollar thresholds for determining when the contracting officer 
may set-aside a requirement for WOSBs or EDWOSBs. Therefore, the 
regulation now contains no limitation on the anticipated award price 
for a WOSB or EDWOSB set-aside.

III. Justification for Publication as an Interim Final Rule

    In general, SBA publishes a rule for public comment before issuing 
a final rule in accordance with the Administrative Procedures Act (APA) 
and SBA regulations. 5 U.S.C. 553 and 13 CFR 101.108. The APA provides 
an exception to this standard rulemaking process where an agency finds 
good cause to adopt a rule without prior public participation. 5 U.S.C. 
553(b)(3)(B). The good cause requirement is satisfied when prior public 
participation is impracticable, unnecessary, or contrary to the public 
interest. Under such circumstances, an agency may publish an interim 
final rule without soliciting public comment.
    First, SBA believes that Section 1697 of the NDAA is effective 
immediately; the section does not require SBA to issue regulations in 
order to implement the provisions. However, SBA must remove the 
limitations in its regulations or they would be inconsistent with the 
statute, and lead to confusion among the public and other federal 
agencies. Since SBA is merely conforming its regulations to the statute 
without interpretation or policy changes, the Agency does not believe 
that it is necessary to issue the rule as a proposed rule.
    Second, according to the Small Business Goaling Report for Fiscal 
Year 2011, the Federal government awarded only 3.97% of its contracts 
to WOSBs. See http://www.fpdsng.com/fpdsng_cms/index.php/reports. This 
is short of the statutory 5% goal for WOSBs. The purpose of the WOSB 
Program is to assist agencies in achieving the statutorily mandated 5% 
government-wide goal for procurement from women-owned small businesses. 
By removing the limitations on the dollar amount of a contract award 
that can be set-aside for WOSBs or EDWOSBs in the regulations, the SBA 
will be clarifying that there are more contracting opportunities for 
WOSBs, which should result in more contracts being awarded to this 
group of small businesses. Consequently, the SBA believes it is 
necessary to implement this rule as quickly as possible.
    Finally, we note that the public will still have the opportunity to 
offer comments on this rule, which will be reviewed by the SBA. 
Accordingly, SBA finds that good cause exists to publish this rule as 
an interim final rule as quickly as possible.

IV. Justification for Immediate Effective Date of Interim Final Rule

    The APA requires that ``publication or service of a substantive 
rule shall be made not less than 30 days before its effective date, 
except * * * as otherwise provided by the agency for good cause found 
and published with the rule.'' 5 U.S.C. 553(d)(3). SBA finds that good 
cause exists to make this final rule effective the same day it is 
published in the Federal Register.
    The purpose of the APA provision is to provide interested and 
affected members of the public sufficient time to adjust their behavior 
before the rule takes effect. For the reasons set forth above in 
Section III, ``Justification for Publication as Interim Final Rule'', 
SBA finds that good cause exists for making this interim final rule 
effective immediately, instead of observing the 30-day period between 
publication and effective date. Nonetheless, the public may provide 
comments to SBA by the deadline for comments. SBA will review any 
comments received.

V. Compliance With Executive Orders 12866, 12988, 13132, and the 
Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory 
Flexibility Act (5 U.S.C. 601-612)

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
rule does constitute a significant regulatory action under E.O. 12866; 
however this is not a major rule under the Congressional Review Act 
(CRA), 5 U.S.C. 800. Accordingly, the next section contains SBA's 
Regulatory Impact Analysis.

Regulatory Impact Analysis

1. Is there a need for the regulatory action?
    This regulatory action amends regulations that implement Section 
1697 of the NDAA. These amendments are necessary because without such 
amendments the SBA's WOSB Program rule will conflict with the statute. 
Such conflict and inconsistency causes confusion to members of the 
procurement community, including small businesses, and could limit the 
number of contracts available to WOSBs and EDWOSBs under the program.
2. What are the potential benefits and costs of this regulatory action?
    The benefits of this rule are that there will not be a conflict 
between the SBA's rules and the statute, and more contracts should be 
available for WOSBs and EDWOSBs under the program.
3. What are the alternatives to this final rule?
    SBA does not believe there are any alternatives other than to 
implement the statute, as enacted.

Executive Order 12988

    This action meets applicable standards set forth in Sections 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden. The action does not 
have retroactive or preemptive effect.

Executive Order 13132

    For the purpose of Executive Order 13132, SBA has determined that 
the interim final rule will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore SBA has determined that this 
interim final rule has no federalism implications warranting the 
preparation of a federalism assessment.

Paperwork Reduction Act, 44 U.S.C., Ch. 35

    For the purpose of the Paperwork Reduction Act, 44 U.S.C., Chapter 
35, SBA has determined that this rule does not impose additional 
reporting or recordkeeping requirements.

Regulatory Flexibility Act (RFA), 5 U.S.C., 601-612

    Because this rule is an interim final rule, there is no requirement 
for SBA to

[[Page 26506]]

prepare an Initial Regulatory Flexibility Act analysis. The RFA 
requires administrative agencies to consider the effect of their 
actions on small entities, small non-profit businesses, and small local 
governments. Pursuant to the RFA, when an agency issues a rule the 
agency must prepare analysis that describes whether the impact of the 
rule will have a significant economic impact on a substantial number of 
small entities. However, the RFA requires such analysis only where 
notice and comment rulemaking is required but as discussed above, SBA 
has determined that there is good cause to publish this interim final 
rule without the need for public notice and comment.

List of Subjects in 13 CFR Part 127

    Administrative practice and procedure, Government procurement, 
Reporting and recordkeeping requirements, Small businesses.

    For the reasons stated in the preamble, SBA amends 13 CFR Part 127 
as follows:


1. The authority citation for part 127 continues to read as follows:

    Authority:  15 U.S.C. 632, 634(b)(6), 637(m), and 644.

2. Amend Sec.  127.503 by revising paragraphs (a)(1), (a)(2), (b)(1) 
and (b)(2) to read as follows:

Sec.  127.503  When is a contracting officer authorized to restrict 
competition under this part?

    (a) * * *
    (1) Two or more EDWOSBs will submit offers for the contract; and
    (2) Contract award may be made at a fair and reasonable price.
    (b) * * *
    (1) Two or more WOSBs will submit offers (this includes EDWOSBs, 
which are also WOSBs); and
    (2) Contract award may be made at a fair and reasonable price.
* * * * *

Karen G. Mills,
[FR Doc. 2013-10841 Filed 5-3-13; 4:15 pm]