[Federal Register Volume 84, Number 83 (Tuesday, April 30, 2019)]
[Rules and Regulations]
[Pages 18160-18161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08486]


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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: Final rule.

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SUMMARY: DoD is issuing a final rule amending 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: Effective April 30, 2019.

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

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD published a proposed rule in the Federal Register at 83 FR 
62554 on December 4, 2018, to implement section 2804 of the National 
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 
115-232). Section 2804 increases to $1 million the threshold 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. In addition, section 2804 removes the prohibition on 
setting aside these acquisitions valued above the threshold. As a 
result of these statutory changes, these acquisitions must be set aside 
for small business, if valued below $1 million, and may be set aside 
for small business, if valued at $1 million or more.
    There were no public comments submitted in response to the proposed 
rule. There are no changes made to the final rule, except to add a 
reference to 10 U.S.C. 2855.

II. 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 create any new provisions or clauses or impact 
any existing provisions or clauses.

III. 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.

IV. Executive Order 13771

    This rule is not subject to E.O. 13771, because this rule is not a 
significant regulatory action under E.O. 12866.

V. Regulatory Flexibility Act

    A final regulatory flexibility analysis has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. 
The FRFA is summarized as follows:
    DoD is issuing a final rule to amend the DFARS to implement section 
2804 of the NDAA for FY 2019. Section 2804 increases to $1 million the 
threshold 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. In addition, section 2804 removes the 
prohibition on setting aside these acquisitions valued above the 
threshold. As a result of these statutory changes, these acquisitions 
must be set aside for small business, if valued below $1 million, and 
may be set aside for small business, if valued at $1 million or more.
    No public comments were received in response to the initial 
regulatory flexibility analysis.
    The rule applies to contract awards for architect-engineer 
services,

[[Page 18161]]

including construction design. Data from the Federal Procurement Data 
System shows that, during FY 2017 and FY 2018, DoD awarded an average 
of 229 contracts per year for architect-engineer services to an average 
of 190 unique small entities per year. In FY 2017 and FY 2018, DoD 
awarded approximately 30 contracts per year for architect-engineer 
services valued at more than the prior threshold of $400,000 and less 
than the new threshold of $1 million. This rule requires future 
contracts in this range to be awarded pursuant to FAR part 19 set-aside 
procedures. DoD also awarded approximately 284 contracts per year for 
architect-engineer services valued at more than $1 million. This rule 
makes it possible for future contracts at those dollar values to be 
awarded pursuant to FAR part 19 set-aside procedures. There are more 
than 27,000 small entities listed in Small Business Administration's 
Dynamic Small Business Search that provide architect-engineer services. 
Of these entities, approximately 270 could benefit from this rule.
    This rule does not impose any new reporting, recordkeeping, or 
other compliance requirements for small entities.
    There are no known, significant alternatives that would meet the 
requirements of the applicable statute.

VI. 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 amended as follows:

PART 219--SMALL BUSINESS PROGRAMS

0
1. The authority citation for 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 that 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 million (10 U.S.C. 2855)'' in 
its place.

[FR Doc. 2019-08486 Filed 4-29-19; 8:45 am]
 BILLING CODE 5001-06-P