[Federal Register Volume 83, Number 233 (Tuesday, December 4, 2018)]
[Proposed Rules]
[Pages 62554-62555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26308]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 219

[Docket DARS-2018-0056]
RIN 0750-AK18


Defense Federal Acquisition Regulation Supplement: Small Business 
Set-Asides for Architect-Engineer and Construction Design Contracts 
(DFARS Case 2018-D057)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement a section of the National 
Defense Authorization Act for Fiscal Year 2019 regarding set-asides for 
architect-engineer and construction design contracts.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before February 4, 2019, to be considered 
in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2018-D057, using 
any of the following methods:
    [cir] Federal eRulemaking Portal: http://www.regulations.gov. 
Search for ``DFARS Case 2018-D057.'' Select ``Comment Now'' and follow 
the instructions provided to submit a Comment. Please include ``DFARS 
Case 2018-D057'' on any attached documents.
    [cir] Email: osd.dfars@mail.mil. Include DFARS Case 2018-D057 in 
the subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. 
Jennifer D. Johnson, OUSD(A&S)DPC/DARS, Room 3B941, 3060 Defense 
Pentagon, Washington, DC 20301-3060.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To 
confirm receipt of your comment(s), please check www.regulations.gov, 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Ms. Jennifer D. Johnson, telephone 
571-372-6100.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD is proposing to revise the DFARS to implement section 2804 of 
the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 
(Pub. L. 115-232), which amends the thresholds at 10 U.S.C. 2855 for 
small business set-asides of acquisitions for architect-engineer 
services, including construction design, in connection with military 
construction projects or military family housing projects. Section 2804 
requires these acquisitions to be set aside for small business if 
valued at less than $1,000,000. Section 2804 also removes the 
prohibition on setting aside these acquisitions; as a result, these 
acquisitions may now be set aside for small business, if valued at 
$1,000,000 or more.

II. Discussion and Analysis

    This rule proposes to delete paragraph (2) at DFARS 219.502-1. This 
paragraph prohibits small business set-asides of acquisitions for 
architect-engineer services for military construction or family housing 
projects valued at $400,000 or more. The remaining paragraphs would be 
combined into a single unnumbered paragraph. In addition, this rule 
proposes to revise the dollar value at DFARS 219.502-2, paragraph 
(a)(iii), from $400,000 to $1,000,000. This paragraph requires 
acquisitions for architect-engineer services for military construction 
or family housing projects to be set aside for small business below a 
certain dollar value.

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

    This rule does not propose to create any new provisions or clauses 
or impact any existing provisions or clauses.

[[Page 62555]]

IV. 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.

V. Executive Order 13771

    This proposed rule is not expected to be an E.O. 13771 regulatory 
action, because this rule is not significant under E.O. 12866.

VI. Regulatory Flexibility Act

    DoD does not expect this proposed rule to 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 rule impacts a small number of small entities. However, an 
initial regulatory flexibility analysis has been performed and is 
summarized as follows:
    DoD is proposing to revise the DFARS to implement section 2804 of 
the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 
(Pub. L. 115-232), which amends the thresholds at 10 U.S.C. 2855 for 
small business set-asides of acquisitions for architect-engineer 
services, including construction design, in connection with military 
construction projects or military family housing projects.
    The objective of this rule is to implement statutory changes to 10 
U.S.C. 2855 by removing the restriction on small business set-asides 
for these acquisitions and increasing the threshold for small business 
set-aside to $1,000,000. The legal basis for the rule is section 2804 
of the NDAA for FY 2019.
    The rule applies to contract awards for architect-engineer 
services, including construction design. Data from the Federal 
Procurement Data System shows that, during FY 2017, DoD awarded 232 
contracts for architect-engineer services to 187 unique small entities. 
In FY 2017, DoD awarded 41 contracts for architect-engineer services 
valued at more than the prior threshold of $400,000 and less than the 
new threshold of $1,000,000. This rule proposes to require future 
contracts in this range to be awarded pursuant to FAR part 19 set-aside 
procedures. DoD also awarded 290 contracts for architect-engineer 
services valued at more than $1,000,000. This rule proposes to make it 
possible for future contracts at those dollar values to be awarded 
pursuant to part 19 set-aside procedures. There are more than 33,000 
small entities listed in the Small Business Administration's Dynamic 
Small Business Search that provide architect-engineer services. Of 
these entities, approximately 300 could benefit from this rule.
    This rule does not impose any new reporting, recordkeeping, or 
other compliance requirements for small entities.
    This rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    There are no known alternatives that would meet the requirements of 
the applicable statute.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this rule on small 
entities. DoD will also consider comments from small entities 
concerning the existing regulations in subparts affected by this rule 
in accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C 610 (DFARS Case 2018-D057), 
in correspondence.

VII. 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 219

    Government procurement.

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

    Therefore, 48 CFR part 219 is proposed to be amended as follows:

PART 219--SMALL BUSINESS PROGRAMS

0
1. The authority citation for 48 CFR part 219 continues to read as 
follows:

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

0
2. Revise section 219.502-1 to read as follows:


219.502-1   Requirements for setting aside acquisitions.

    Do not set aside acquisitions for supplies which were developed and 
financed, in whole or in part, by Canadian sources under the U.S.-
Canadian Defense Development Sharing Program.


219.502-2   [Amended]

0
3. Amend section 219.502-2, in paragraph (a)(iii), by removing ``of 
under $400,000'' and adding ``under $1,000,000'' in its place.

[FR Doc. 2018-26308 Filed 12-3-18; 8:45 am]
 BILLING CODE 5001-06-P