[Federal Register Volume 83, Number 211 (Wednesday, October 31, 2018)]
[Rules and Regulations]
[Pages 54681-54682]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-23681]



Defense Acquisition Regulations System

48 CFR Part 252

[Docket DARS-2018-0051]
RIN 0750-AK34

Defense Federal Acquisition Regulation Supplement: Update of 
Clause on Section 8(a) Direct Award (DFARS Case 2018-D052)

AGENCY: Defense Acquisition Regulations System, Department of Defense 

ACTION: Final rule.


SUMMARY: DoD is issuing a final rule to amend the Defense Federal 
Acquisition Regulation Supplement (DFARS) to remove an obsolete 
requirement from a DFARS clause.

DATES: Effective October 31, 2018.

FOR FURTHER INFORMATION CONTACT: Ms. Jennifer D. Johnson, telephone 


I. Background

    DoD is amending the DFARS to remove an obsolete requirement from 
the clause at DFARS 252.219-7009, Section 8(a) Direct Award. The clause 
currently requires 8(a) contractors to obtain written approval from the 
Small Business Administration (SBA) and the contracting officer prior 
to subcontracting the performance of any contract requirements. This 
requirement no longer exists in SBA's regulations on the 8(a) Business 
Development Program at 13 CFR part 124.

II. Discussion and Analysis

    This rule deletes paragraph (c)(2) of the clause at DFARS 252.219-
7009. This paragraph contains the obsolete requirement for an 8(a) 
contractor to obtain written approval from SBA and the contracting 
officer prior to subcontracting performance of contract requirements. 
The remaining paragraphs (c) and (c)(1) are combined into a single 
paragraph (c). This rule also updates an outdated reference in 
paragraph (c)(1) and makes other minor editorial changes.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    This rule revises the clause at DFARS 252.219-7009, Section 8(a) 
Direct Award. This clause currently applies to solicitations and 
contracts below the simplified acquisition threshold (SAT) and to the 
acquisition of commercial items, including commercially available off-
the-shelf (COTS) items, as defined at Federal Acquisition Regulation 
(FAR) 2.101.
    DoD is continuing to apply this clause to solicitations and 
contracts below the SAT and to the acquisition of commercial items, 
including COTS items. This rule merely removes an obsolete requirement 
to obtain approval from the contracting officer and SBA prior to 
subcontracting work under an 8(a) contract. Not applying this guidance 
to contracts below the SAT and to the acquisition of commercial items, 
including COTS items, would exclude contracts with 8(a) Program 
participants that are intended to be

[[Page 54682]]

covered by this rule and undermine the overarching purpose of the rule. 
Consequently, DoD plans to apply the rule to contracts below the SAT 
and to the acquisition of commercial items, including COTS items.

IV. Expected Cost Savings

    This rule impacts only 8(a) Program participants who do business, 
or want to do business, with DoD. Currently, 8(a) Program participants 
who have DoD contracts must obtain written approval from SBA and the 
contracting officer before subcontracting the performance of any 
contract requirements in accordance with DFARS clause 252.219-7009. 
Removal of the requirement to obtain this approval is expected to 
result in savings for DoD contractors who are 8(a) Program 
    The following is a summary of the estimated public and Government 
cost savings calculated in perpetuity in 2016 dollars at a 7-percent 
discount rate:

                        Summary                                Public           Government           Total
Present Value..........................................       ($9,713,886)       ($4,856,943)      ($14,570,829)
Annualized Costs.......................................          (679,972)          (339,986)        (1,019,958)
Annualized Value Costs (as of 2016 if Year 1 is 2019)..          (555,060)          (277,530)          (832,590)

    To access the full Regulatory Cost Analysis for this rule, go to 
the Federal eRulemaking Portal at www.regulations.gov, search for 
``DFARS Case 2018-D052,'' click ``Open Docket,'' and view ``Supporting 

V. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

VI. Executive Order 13771

    This final rule is considered to be an E.O. 13771 deregulatory 
action. The total annualized value of the cost savings is $832,590. 
Details on the estimated cost savings can be found in section IV. of 
this preamble.

VII. Publication of This Final Rule for Public Comment Is Not Required 
by Statute

    The statute that applies to the publication of the FAR is Office of 
Federal Procurement Policy statute (codified at title 41 of the United 
States Code). Specifically, 41 U.S.C. 1707(a)(1) requires that a 
procurement policy, regulation, procedure, or form (including an 
amendment or modification thereof) must be published for public comment 
if it relates to the expenditure of appropriated funds, and has either 
a significant effect beyond the internal operating procedures of the 
agency issuing the policy, regulation, procedure, or form, or has a 
significant cost or administrative impact on contractors or offerors. 
This final rule is not required to be published for public comment, 
because DoD is not issuing a new regulation; rather, this rule merely 
removes an obsolete requirement from the DFARS, updates an outdated 
reference and makes minor editorial changes.

VIII. Regulatory Flexibility Act

    Because a notice of proposed rulemaking and an opportunity for 
public comment are not required to be given for this rule under 41 
U.S.C. 1707(a)(1) (see section VII. of this preamble), the analytical 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
are not applicable. Accordingly, no regulatory flexibility analysis is 
required, and none has been prepared.

IX. Paperwork Reduction Act

    The rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Part 252

    Government procurement.

Jennifer Lee Hawes,
Regulatory Control Officer, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 252 is amended as follows:


1. The authority citation for part 252 continues to read as follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.

2. Amend section 252.219-7009 by--
a. Removing the clause date of ``(SEP 2007)'' and adding ``(OCT 2018)'' 
in its place;
b. In paragraph (a), removing ``Partnership Agreement dated'' and 
adding ``Partnership Agreement'' in its place; and
c. Revising paragraph (c) to read as follows:

252.219-7009   Section 8(a) direct award.

* * * * *
    (c.) The 8(a) Contractor agrees that it will notify the Contracting 
Officer, simultaneous with its notification to the SBA (as required by 
SBA's 8(a) regulations at 13 CFR 124.515), when the owner or owners 
upon whom 8(a) eligibility is based plan to relinquish ownership or 
control of the concern. Consistent with section 407 of Public Law 100-
656, transfer of ownership or control shall result in termination of 
the contract for convenience, unless the SBA waives the requirement for 
termination prior to the actual relinquishing of ownership and control.
* * * * *
[FR Doc. 2018-23681 Filed 10-30-18; 8:45 am]