[Federal Register Volume 81, Number 248 (Tuesday, December 27, 2016)]
[Rules and Regulations]
[Pages 94941-94942]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30873]


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SMALL BUSINESS ADMINISTRATION

13 CFR Parts 125, 126, and 127

RIN 3245-AG24


Small Business Mentor Prot[eacute]g[eacute] Programs; Correction

AGENCY: U.S. Small Business Administration.

ACTION: Correcting amendments.

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SUMMARY: The U.S. Small Business Administration (SBA) published a final 
rule in the Federal Register on July 25, 2016, amending its regulations 
to establish a new Government-wide mentor-prot[eacute]g[eacute] program 
for all small business concerns, consistent with SBA's mentor-
prot[eacute]g[eacute] program for Participants in SBA's 8(a) Business 
Development (BD) program. The rule also made several additional changes 
to current size, 8(a), Office of Hearings and Appeals, and HUBZone 
regulations, concerning among other things, ownership and control, 
changes in primary industry, economic disadvantage of a Native Hawaiian 
Organization (NHO), standards of review, and interested party status 
for some appeals. This document makes several technical corrections to 
that final rule, eliminating a portion of a sentence concerning joint 
venture profits.

DATES: Effective December 27, 2016.

FOR FURTHER INFORMATION CONTACT: Michael McLaughlin, Office of Policy, 
Planning & Liaison, U.S. Small Business Administration, 409 Third 
Street SW., Washington, DC 20416; 202-205-5353; 
michael.mclaughlin@sba.gov.

SUPPLEMENTARY INFORMATION: The final rule published on July 25, 2016, 
at 81 FR 48557, contained errors that must be corrected in order ensure 
consistency within the regulations and to avoid public uncertainty or 
confusion.
    On October 19, 2016, SBA issued a correction pertaining to 8(a) 
joint venture profits. 81 FR 71981. As SBA explained, due to the change 
made to Sec.  121.103(h), which eliminated the ability of a joint 
venture to be populated with individuals intended to perform contracts 
awarded to the joint venture, a conforming correction was needed to 
Sec.  124.513(c), which references populated joint ventures. 
Specifically, Sec.  124.513(c)(4) provided that in the case of a 
populated separate legal entity joint venture, 8(a) Participant(s) must 
receive profits from the joint venture commensurate with their 
ownership interests in the joint venture. Because SBA eliminated 
populated joint ventures, that provision was superfluous and was 
deleted. SBA's 8(a) joint venture rule now states that the 8(a) 
Participant(s) in a joint venture must receive profits from the joint 
venture commensurate with the work performed by the 8(a) 
Participant(s). 13 CFR 124.513(c)(4). This change was necessary because 
under the mentor prot[eacute]g[eacute] program, a prot[eacute]g[eacute] 
may perform as little as 40% of the total work performed by the joint 
venture in aggregate. It would not make sense to require a firm to 
receive 51% of the profits for doing only 40% of the work.
    The same language that SBA corrected in the 8(a) regulations is 
currently in place for joint ventures under all small mentor 
prot[eacute]g[eacute], Service-Disabled Veteran-Owned, Women-Owned and 
HUBZone small business programs. SBA's intent was for profits to be 
commensurate with the work performed by each member of the joint 
venture. These rules currently state that in the case of a separate 
legal entity, the firm must receive profits commensurate with their 
ownership interests in the joint venture, which is contrary to SBA's 
intent. Consequently, SBA is correcting Sec. Sec.  125.8(b)(2)(iv), 
125.18(b)(2)(iv), 126.616(c)(4) and 127.506(c)(4) to the make the rules 
consistent with 124.513(c)(4) and across all programs.

List of Subjects

13 CFR 125

    Government contracts, Government procurement, Reporting and 
recordkeeping requirements, Small businesses, Technical assistance, 
Veterans.

13 CFR 126

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

13 CFR 127

    Government contracts, Reporting and recordkeeping requirements, 
Small businesses.

    Accordingly, 13 CFR parts 125, 126, and 127 are corrected by making 
the following correcting amendments:

PART 125--GOVERNMENT CONTRACTING PROGRAMS

0
1. The authority citation for part 125 continues to read as follows:

    Authority: 15 U.S.C. 632(p), (q), 634(b)(6), 637, 644, 657f, and 
657q.


0
2. In Sec.  125.8, revise paragraph (b)(2)(iv) to read as follows:


Sec.  125.8  What requirements must a joint venture satisfy to submit 
an offer for a procurement or sale set aside or reserved for small 
business?

* * * * *
    (c) * * *
    (2) * * *
    (iv) Stating that each participant must receive profits from the 
joint venture commensurate with the work performed by the concern;
* * * * *

0
3. In Sec.  125.18, revise paragraph (b)(2)(iv) to read as follows:


Sec.  125.18  What requirements must an SDVO SBC meet to submit an 
offer on a contract?

* * * * *
    (b) * * *
    (2) * * *
    (iv) Stating that the SDVO SBC(s) must receive profits from the 
joint venture commensurate with the work performed by the SDVO SBC;
* * * * *

PART 126--HUBZONE PROGRAM

0
4. The authority citation for part 126 continues to read as follows:

    Authority: 15 U.S.C. 632(a), 632(j), 632(p), 644; and 657a; Pub. 
L. 111-240, 24 Stat. 2504.


0
5. In Sec.  126.616, revise paragraph (c)(4) to read as follows:


Sec.  126.616  What requirements must a joint venture satisfy to submit 
an offer on a HUBZone contract?

* * * * *
    (c) * * *
    (4) Stating that the HUBZone SBC(s) must receive profits from the 
joint venture commensurate with the work performed by the HUBZone SBC;
* * * * *

[[Page 94942]]

PART 127--WOMEN-OWNED SMALL BUSINESS FEDERAL CONTRACT PROGRAM

0
6. The authority citation for part 127 continues to read as follows:

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


0
7. In Sec.  127.506, revise paragraph (c)(4) to read as follows:


Sec.  127.506  May a joint venture submit an offer on an EDWOSB or WOSB 
requirement?

* * * * *
    (c) * * *
    (4) Stating that the WOSB(s) must receive profits from the joint 
venture commensurate with the work performed by the WOSB;
* * * * *

    Dated: December 16, 2016.
A. John Shoraka,
Associate Administrator, Office of Government Contracting & Business 
Development.
[FR Doc. 2016-30873 Filed 12-23-16; 8:45 am]
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