[Federal Register Volume 85, Number 13 (Tuesday, January 21, 2020)]
[Proposed Rules]
[Pages 3273-3279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00442]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 85, No. 13 / Tuesday, January 21, 2020 /
Proposed Rules
[[Page 3273]]
SMALL BUSINESS ADMINISTRATION
13 CFR Parts 124, 125, and 129
RIN 3245-AH18
Use of Federal Surplus Personal Property for Veteran-Owned Small
Businesses and Small Businesses in Disaster Areas and Puerto Rico
AGENCY: U.S. Small Business Administration.
ACTION: Proposed rule.
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SUMMARY: This rule is proposing to expand access for certain small
business concerns in varying circumstances to the U.S. General Services
Administration's (GSA) Federal Surplus Personal Property Donation
Program in accordance with the Recovery Improvements for Small Entities
After Disaster Act of 2015 (RISE Act), the Veterans Small Business
Enhancement Act, and the John S. McCain National Defense Authorization
Act for Fiscal Year 2019 (NDAA). The statutes provide that small
businesses in disaster areas, veteran-owned small businesses, and small
business concerns located in Puerto Rico, respectively, should be
considered for surplus personal property distributions. SBA, in
coordination with GSA, is proposing certain procedures for determining
which firms may participate in GSA's existing surplus personal property
Program, and under what conditions.
DATES: Comments must be received on or before March 23, 2020.
ADDRESSES: You may submit comments, identified by RIN 3245-AH18 by any
of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
For Mail, Paper, Disk, or CD/ROM Submissions: Brenda
Fernandez, U.S. Small Business Administration, Office of Policy,
Planning and Liaison, 409 Third Street SW, 8th Floor, Washington, DC
20416.
Hand Delivery/Courier: Brenda Fernandez, U.S. Small
Business Administration, Office of Policy, Planning and Liaison, 409
Third Street SW, 8th Floor, Washington, DC 20416.
SBA will post all comments on www.regulations.gov. If you wish to
submit confidential business information (CBI) as defined in the User
Notice at www.regulations.gov, please submit the information to Brenda
Fernandez, U.S. Small Business Administration, Office of Policy,
Planning and Liaison, 409 Third Street SW, 8th Floor, Washington, DC
20416, or send an email to [email protected]. Highlight the
information that you consider to be CBI and explain why you believe SBA
should hold this information as confidential. SBA will review the
information and make the final determination on whether it will publish
the information.
FOR FURTHER INFORMATION CONTACT: Brenda Fernandez, Office of Policy,
Planning and Liaison, 409 Third Street SW, Washington, DC 20416; (202)
205-7337; [email protected].
SUPPLEMENTARY INFORMATION:
General Background
SBA is proposing this rule to implement three new statutory
programs regarding the transfer of surplus personal property to certain
small businesses. The first, authorized by section 2105 of Public Law
114-88 (Recovery Improvements for Small Entities After Disaster Act of
2015 or the RISE After Disaster Act of 2015 (RISE After Disaster Act)),
contains provisions authorizing the transfer of surplus personal
property to small businesses under certain conditions in disaster
areas. The second, authorized by Public Law 115-416 (Veterans Small
Business Enhancement Act), contains provisions authorizing the transfer
of surplus personal property to certain veteran-owned small businesses.
The third, authorized by section 861 of Public Law 115-232 (John S.
McCain National Defense Authorization Act for Fiscal Year 2019),
authorizes small business concerns located in Puerto Rico to also
receive federal surplus personal property under certain conditions.
After discussions with GSA, SBA has modified the title of this proposed
regulation to more clearly state that it covers the disposition of
``personal'' not ``real'' property through GSA's programs. Therefore,
the previous title for the proposed regulations, used in SBA's
designation sheet (Use of Federal Surplus Property for Veteran Owned
Small Businesses and Small Businesses in Disaster Areas and Puerto
Rico), was changed to ``Use of Federal Surplus Personal Property for
Veteran-Owned Small Businesses and Small Businesses in Disaster Areas
and Puerto Rico''.
GSA operates the Federal Surplus Personal Property Donation Program
(Program) under the Federal Property and Administrative Services Act of
1949, 63 Stat. 377, as amended, and other applicable laws, see 41 CFR
102-37. Currently, eligible state and local government agencies and
nonprofit organizations can obtain personal property that the federal
government no longer needs through the Program. More information is
available on the GSA website at https://www.gsa.gov/buying-selling/government-property-for-sale-or-disposal/personal-property-for-reuse-sale/for-state-agencies-and-public-organizations/.
The Veterans Small Business Enhancement Act
The Veterans Small Business Enhancement Act, Public Law No: 115-416
(1/3/19), codified in the Small Business Act at 15 U.S.C. 657b(g),
provides that veteran-owned small business should have access to
surplus government personal property. SBA is proposing to add a new
subpart F to 13 CFR part 125 to implement these changes.
SBA is proposing to add Sec. 125.100 to detail the requirements of
this Program. The proposed language is similar in some respects to the
surplus personal property regulations for SBA's 8(a) Business
Development (BD) program (13 CFR 124.405 How does a Participant obtain
Federal Government surplus property?), but does differ in some
significant ways. There are certain statutory requirements that are
unique to each program, and the differences in the regulations will
reflect that. Key to the difference is that the 8(a) BD program is a
business development program and the Small Business Act contains
several provisions with regard to the transfer of surplus personal
property that reflect this difference--specifically, that 8(a) BD
participants must retain received surplus personal property for the
duration of their time in the program and for one year after
graduation. This means that 8(a) BD
[[Page 3274]]
participants are subject to additional compliance requirements that
other parties that receive surplus personal property through GSA's
Program are not. Thus, there are additional compliance requirements
unique to the 8(a) program that are not necessary for veteran-owned
small businesses. GSA and the State Agencies for Surplus Property
(SASPs) already maintain a compliance and oversight role with regard
the distribution of surplus personal property. As such, veteran-owned
small business concerns that receive surplus personal property will
generally follow the same guidelines and procedures as other recipients
through GSA's Program. The proposed language in Sec. 125.100(a)
references the regulations that govern the GSA Program, and the
requirements that concerns will need to meet to use the Program.
SBA is proposing to add Sec. 125.100(b)(1) to incorporate the
requirement that concerns will need to be verified as a small business
owned and controlled by veterans by the Department of Veteran Affairs
in order to be eligible for this Program. 38 CFR part 74. This
requirement is incorporated directly from the Small Business Act and
can be found at 15 U.S.C. 657b(g)(2).
SBA is proposing to add Sec. 125.100(c) to provide the
requirements for the use of surplus personal property received, and
repercussions for misuse of the surplus personal property. The proposed
language references GSA and SASP guidelines for use of surplus personal
property, because as mentioned above, veteran-owned small businesses
will be treated similarly to other recipients with regard to use,
maintenance, and retention of surplus personal property.
SBA is proposing to add Sec. 125.100(d) to provide notice that
there are costs associated with receiving the surplus personal
property. As noted above, the costs will be calculated by the
individual SASP pursuant to 41 CFR 102-37 appendix B (e) and the SASP's
State Plan of Operation and veteran-owned small business concerns will
be treated similarly to other recipients.
SBA is proposing to add Sec. 125.100(e) to provide notice of the
type of title that veteran-owned small business concerns will receive.
They will not be receiving full title at the time of transfer. They
will be receiving conditional title and full title will transfer when
they have met all the requirements of GSA and the SASP. Once again as
noted above, this procedure will have veteran-owned small business
concerns treated in a similar manner to other recipients of surplus
personal property through GSA's Program.
RISE After Disaster Act
Section 2105 of the RISE After Disaster Act authorizes SBA to
transfer technology or surplus personal property to small business
concerns located in disaster areas. In order to implement the changes
made by section 2105 of the RISE After Disaster Act, SBA is proposing
to amend Sec. 124.405 and add a new subpart 129 to title 13 of the
Code of Federal Regulations.
Section 2105 of the RISE After Disaster Act, codified in the Small
Business Act at 15 U.S.C. 636(j)(13)(F)(ii), provides that SBA may
transfer technology or surplus personal property to a small business
concern located in a disaster area if the small business meets the
requirements for such a transfer, without regard to whether that small
business is a participant in the 8(a) BD program. If the concern is an
8(a) BD program Participant, the concern it should not have received
surplus personal property based on its status as an 8(a) BD program
Participant on or after the date of the disaster declaration. Section
2105 provides that the requirements for transferring surplus personal
property to a small business concern located in a disaster area shall
generally be the same as those applicable to transfers to 8(a) BD
program Participants. Section 2105 provides that a small business that
receives surplus personal property as a small business concern located
in a disaster area shall not subsequently receive surplus personal
property as an 8(a) BD program Participant during the 2-year period
beginning on the date on which the President declared the major
disaster. A small business concern eligible for surplus personal
property under a presidentially declared disaster may also be eligible
for surplus personal property for a 2-year period under a subsequent
presidentially declared disaster.
In order to implement the changes made by section 2105, SBA
proposes to amend Sec. 124.405 by updating the statutory reference
contained in paragraph (a) and by adding a new paragraph (b)(6) to
provide that 8(a) BD program Participants are not eligible to receive
surplus personal property under Sec. 124.405 if they have received
surplus personal property under proposed subpart A as a small business
concern located in a disaster area during the 2-year period beginning
on the date on which the President declared the applicable major
disaster.
In addition to the changes necessitated by section 2105, SBA is
also proposing several other changes to Sec. 124.405.
SBA is proposing to change the cross citation for the GSA and SASP
procedures in Sec. 124.405(a)(1). The change is needed to update the
cross reference because it has changed since publication. SBA is
proposing to change the language in paragraph (a)(2) to remove the term
``donable'' and in its place provide a more descriptive language,
because ``donable'' is not a defined term in GSA's surplus personal
property regulations.
SBA is proposing to amend Sec. 124.405(b)(3) to add a reference to
the nonprocurement debarment regulations contained in Title 2 of the
Code of Federal Regulations.
SBA is proposing to amend Sec. 124.405(c)(1) to provide clarity on
how the Program has been historically administered. Specifically, the
current regulations states that ``Participants may acquire surplus
Federal Property located in any state.'' That statement is true but
could be misleading as to an individual participant. The language was
intended to convey that Participants throughout the country could take
part, not that a Participant could acquire surplus personal property
from any State at any time. Currently, a Participant may only acquire
surplus personal property from the SASP in the state(s) where the
Participant currently operates. This is not a new policy and has been
clearly established by SBA's agreements with the SASPs. The new
proposed language more clearly articulates the current policy and SBA
believes will lead to less confusion now that there are additional
programs.
SBA is proposing to amend Sec. 124.405(d) to update the cross
references to GSA's regulations.
SBA is proposing to amend Sec. 124.405(f) to alter the method for
transferring title. Currently title transfers to the participant when
the agreement between the participant and the SASP is executed. SBA is
proposing to change this to the participant being given conditional
title to the surplus personal property pending the terms of the
agreement being executed and the firm meeting all the additional
requirements of this part. This change will align the 8(a) BD program
participant title terms with the other programs SBA is implementing
with this proposed rule, and with the general practice of GSA and the
SASP with treatment of title with regard to other donees. SBA believes
that aligning all these programs with similar title rules will simplify
the process for all the parties involved.
[[Page 3275]]
As noted above SBA is proposing to add a new subpart A to 13 CFR
part 129 to incorporate the provisions of section 2105. Part 129,
Contracts for Small Businesses Located in Disaster Areas, was recently
added by SBA Final Rule: National Defense Authorization Acts of 2016
and 2017, Recovery Improvements for Small Entities After Disaster Act
of 2015, and Other Small Business Government Contracting, 84 FR 65647
(Nov. 29, 2019). This proposed subpart to part 129 addresses how a
small business concern located in a disaster area would be able to
obtain surplus personal property. SBA is proposing to add Sec. 129.200
which will have one definition for this subpart. It is a definition for
``covered period''. This term is incorporated into SBA regulations as
defined in the Small Business Act at 15 U.S.C.
636(j)(f)(13)(F)(ii)(I)(aa).
SBA is also proposing to add Sec. 129.201 to implement the program
for transfer of surplus personal property. The provisions of proposed
Sec. 129.201 are based on SBA's proposed regulations governing the
transfer of surplus personal property to veteran-owned small business
concerns addressed above and under the 8(a) BD program regulations,
contained in 13 CFR 124.405.
John S. McCain National Defense Authorization Act for Fiscal Year 2019
(NDAA)
Section 861 of the John S. McCain National Defense Authorization
Act for Fiscal Year 2019 (NDAA), Public Law 115-232 (8/13/18) codified
in the Small Business Act at 15 U.S.C. 636(j)(13)(F)(iii), provides
that SBA may transfer technology or surplus personal property to a
small business concern located in Puerto Rico if the small business
meets the requirements for such a transfer, without regard to whether
that small business is a participant in the 8(a) BD program. SBA is
proposing to add a subpart B to part 129 to incorporate these changes.
SBA is proposing to add a new Sec. 129.300. This section will have
two definitions. The first definition is an incorporation of ``covered
period'', a defined term in the Small Business Act. Specifically, SBA
is proposing to incorporate the term ``covered period'' as defined at
15 U.S.C. 636(j)(13)(F)(iii)(I). SBA is proposing to adopt the
statutory language as is without modification. It should be noted that
this definition for covered period is different than the definition in
proposed Sec. 129.200. The two terms are defined separately in the
Small Business Act and therefore SBA is proposing to adopt the language
from the Act, as is, for each program. While it may be confusing to
have two definitions of the same term for similar programs, it would
not be proper for SBA to modify the clearly defined terms of the Small
Business Act.
The second definition is for the term, ``located in Puerto Rico.''
The Small Business Act directs that SBA may transfer technology or
surplus personal property to a ``Puerto Rico business'', but does not
define what a Puerto Rico business is. SBA has proposed that to be
eligible for a transfer a concern should be a small business and should
be located in Puerto Rico. Therefore, SBA has proposed that in order to
be considered located in Puerto Rico a firm should have a physical
location in Puerto Rico and be organized under the laws of Puerto Rico.
SBA believes that this requirement provides clear guidance for which
firms are eligible.
SBA is also proposing to add Sec. 129.301 to implement the program
for transfer of surplus personal property. The provisions of proposed
Sec. 129.301 are based on SBA's proposed regulations governing the
transfer of surplus personal property to veteran-owned small business
concerns addressed above and under the 8(a) BD program regulations,
contained in 13 CFR 124.405.
Compliance With Executive Orders 12866, 13563, 12988, 13132, 13771, 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
proposed rule is not a ``significant'' regulatory action for purposes
of Executive Order 12866. This is not a major rule under the
Congressional Review Act, 5 U.S.C. 801, et. seq.
Executive Order 13563
This executive order directs agencies to, among other things: (a)
Afford the public a meaningful opportunity to comment through the
internet on proposed regulations, with a comment period that should
generally consist of not less than 60 days; (b) provide for an ``open
exchange'' of information among government officials, experts,
stakeholders, and the public; and (c) seek the views of those who are
likely to be affected by the rulemaking, even before issuing a notice
of proposed rulemaking. As far as practicable or relevant, SBA
considered these requirements in developing this rule, as discussed
below.
1. Did the agency use the best available techniques to quantify
anticipated present and future costs when responding to E.O. 12866
(e.g., identifying changing future compliance costs that might result
from technological innovation or anticipated behavioral changes)?
To the extent possible, the agency utilized the most recent data
available in the Federal Procurement Data System--Next Generation,
System for Award Management and Electronic Subcontracting Reporting
System.
2. Public participation: Did the agency: (a) Afford the public a
meaningful opportunity to comment through the internet on any proposed
regulation, with a comment period that should generally consist of not
less than 60 days; (b) provide for an ``open exchange'' of information
among government officials, experts, stakeholders, and the public; (c)
provide timely online access to the rulemaking docket on
Regulations.gov;and (d) seek the views of those who are likely to be
affected by rulemaking, even before issuing a notice of proposed
rulemaking?
The proposed rule will have a 60 day comment period and will be
posted on www.regulations.gov to allow the public to comment
meaningfully on its provisions. In addition, the proposed rule was
discussed with GSA, the Department of Veterans Affairs and with
representatives of the National Association of State Agencies for
Surplus Property.
3. Flexibility: Did the agency identify and consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public?
Yes, the proposed rule implements statutory provisions and will
provide clarification to rules that were requested by agencies and
stakeholders. In addition, SBA is proposing changes that will allow
potential small business participants to participate in the GSA Program
in as similar a manner as other participants do without additional
regulatory requirements.
Executive Order 12988
This action meets applicable standards set forth set forth in
section 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice
Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
This action does not have any retroactive or preemptive effect.
Executive Order 13132
A rule has implications for federalism under Executive Order 13132
(Federalism), if it has a substantial
[[Page 3276]]
direct effect 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. This proposed
rule would implement new policies allowing more small businesses to
participate in the GSA Program administered by the SASPs. SBA has
analyzed this proposed rule and have determined that it is consistent
with the fundamental federalism principles and preemption requirements
described in Executive Order 13132. We note that this rule would impose
a reporting requirement specific to state agencies that participate in
the Program to provide federal technology or surplus personal property
to small business concerns located in disaster areas, designated as
veteran-owned small businesses, and in Puerto Rico. However, given the
potential for application and annual reporting burdens on the States
and Territories, particularly Puerto Rico, SBA does solicit comments on
the issue of whether this rule has implications for federalism.
Executive Order 13771
This proposed rule is expected not to be subject to Executive Order
13771 because the proposed rule is a transfer rule. The benefits to
small businesses in disaster areas, veteran-owned small businesses, and
small business concerns located in Puerto Rico produced by this rule
are a transfer of benefits from other entities who may have received
the surplus personal property in their place.
Paperwork Reduction Act, 44 U.S.C. Ch. 35
For the purposes of the Paperwork Reduction Act, SBA has determined
that this proposed rule would not impose new government-wide reporting
requirements on small business concerns. SBA and GSA have discussed the
possible implication of the new regulations, and do not believe that
any new requirements are being added to GSA's Programs in a addition to
the requirements already in place for recipients of surplus personal
property. GSA has specific forms for its Surplus Property Program, but
these proposed amendments will require no changes to those forms. See
Standard Form 123, Transfer Order Surplus Personal Property, OMB
Control Number 3090-0014 (expires 3/31/22). SBA welcomes comments on
whether the proposed regulations would affect the already approved
collections.
However, this rule would does have a reporting requirement specific
to state agencies that participate in the Program to provide federal
technology or surplus personal property to small business concerns
located in disaster areas, designated as veteran-owned small
businesses, and in Puerto Rico. GSA already has a specific form to
collect data from SASPs with regard to the surplus personal property
donation Program. See GSA Form 3040, State Agency Monthly Donation
Report of Surplus Property, OMB Control Number 3090-0112 (expires 3/31/
2022).
Concerning the verification of veteran-owned small businesses, the
Department of Veteran Affairs already has the authority to verify
qualified small business concerns. 38 CFR part 74. The Department of
Veterans Affairs is responsible to update its public database
accordingly. https://www.va.gov/osdbu/verification/. SASPs will rely on
the accurately updated information to make decisions. Concerning the
designation of a ``disaster area'' the term is defined in the RISE Act
as area for which the President has declared a major disaster during
the covered period; namely, the 2-year period beginning on the date of
the declaration of the applicable major disaster.
SBA invites public comments on the proposed changes to the
regulations requiring reporting from SASPs to the Federal Government.
Comments must be received by the deadline stated in the DATES section
of this rule. Refer to the ADDRESSES section for instructions on how
and where to submit.
Regulatory Flexibility Act, 5 U.S.C. 601-612
According to the Regulatory Flexibility Act (RFA), 5 U.S.C. 601,
when an agency issues a rulemaking, it must ``prepare and make
available for public comment an initial regulatory analysis'' which
will ``describe the impact of the proposed rule on small entities.''
Section 605 of the RFA allows an agency to certify a rule, in lieu of
preparing an analysis, if the proposed rulemaking is not expected to
have a significant economic impact on a substantial number of small
entities. Although the rulemaking will impact all veteran-owned small
businesses and small business concerns in disaster areas and Puerto
Rico, SBA does not believe the impact will be significant. After
discussions with GSA, SBA believes that the proposed regulation will
have an impact on a substantial number of entities, but that it will
not have a significant economic impact. SBA reached this conclusion
because the overall amount of donated personal property will not
change. The proposed regulation will be implementing statutory changes
with regard to the mix of how that property is distributed among the
various eligible entities, but neither GSA or SBA believe that the
overall impact on all relevant parties will be significant given that
the regulation is not changing the total value of personal property
distributed.
The Federal Surplus Personal Property Donation Program enables
certain nonfederal organizations to obtain personal property that the
federal government no longer needs. SASPs maintain the list of eligible
organizations and these generally include: Public agencies, nonprofit
educational and public health agencies, nonprofit and public programs
for the elderly, public airports, and educational agencies of special
interest to the Armed Services. More information on the list of
eligible entities can be found at http://www.nasasp.org/findmystate.html. In fiscal year 2018 GSA donated through this program
personal property with original acquisition value of $418,158,102. It
should be noted that this reflects the value of the property when it
was acquired, not when it was donated. SBA does not have accurate data
to reflect the value at time of donation, but does believe the value
would be significantly less than the value at which the property was
acquired.
As noted above this proposed regulation will have an effect on a
substantial number of entities. First, it will have an impact on all
the entities currently entitled to receive surplus property. SBA does
not have a number for all those entities, but that number does include
approximately 4,400 participants in SBA's 8(a) BD program. In addition
to the entities already eligible for GSA's Program, these proposed
regulations will also have an impact on new entities that will be
allowed to take part once these regulations go into effect. As of
December 9, 2019, the Department of Veteran Affairs has a total of
13,853 verified service-disabled-veteran owned small businesses and
veteran-owned small businesses. Those businesses would be eligible to
participate in GSA's Program under the proposed regulations. Further,
as of November 2019, SBA used data from the federal procurement data
system to identify approximately 3,400 small firms in Puerto Rico that
are currently engaged in business with the federal government. Finally,
according to the 2012 economic census there are approximately 7.7
million small businesses in the United States with employees. Under the
proposed
[[Page 3277]]
regulations any small business located in a major disaster area may be
eligible for the Program. Under this proposed regulation it is possible
that any small business in the United States could potentially be a
participant, because a major disaster could happen anywhere and at any
time. This is a variable that cannot be known with certainty at this
time. Therefore, SBA is operating under the assumption that all small
businesses could be affected at some point in the future.
The provisions of this proposed regulation are implementing three
distinct and new statutory provisions enacted by Congress and detailed
above. Therefore, it is necessary for SBA to take some action in order
to implement the new statutory requirements. SBA in conjunction with
GSA has reviewed possible alternatives to this proposed regulation. One
alternative discussed was for SBA and GSA to enter into one or several
memorandums of understanding with regard to additional potential
program participants. As noted above, participants in SBA's 8(a) BD
program are currently able to participate in GSA's Program.
Participation in the GSA Program by 8(a) BD participants is governed by
both regulations issued by SBA and memorandums of understanding entered
into by SBA, GSA, and the various SASPs. In implementing the new
statutory provisions SBA believes that following the previous example
of the 8(a) BD program is the best course of action and has therefore
chosen to implement the statutes by regulation. Going through the
formal regulation process allows SBA to craft the rules for the
programs with direct input from the public, and to have a place within
SBA's regulations that interested parties may go to review the
requirements of the various programs. While SBA believes that the
formal rule making process is the best alternative for implementation,
SBA is still open to comments on the issue. If any possible impacted
parties would like to provide comments on either the considered
alternative or another alternative that SBA has not considered, please
follow the instructions above to do so.
SBA is also aware that the statutes implementing these programs and
other programs for distribution of surplus personal property do not use
the same language. SBA does not think that this proposed regulation, or
the various statutes conflict with each other. SBA believes that these
proposed regulations will help provide clarity around any issues or
differences between the various statutes. That said, SBA welcomes
comments from any impacted parties about whether the proposed
regulations as written conflict with other statutes or regulations.
There are no new compliance or other costs imposed by the proposed
rule on small business concerns. The proposed rule expands the access
to GSA's Program on to more small business concerns under varying
circumstances, without significant costs. The benefits to small
businesses in disaster areas, veteran-owned small businesses, and small
business concerns located in Puerto Rico produced by this rule are a
transfer of benefits from other entities who may have received the
surplus personal property in their place. The firms must adhere to
certain regulations regarding certification or status relevant to
designation as a small business concern.
For the reasons discussed, SBA certifies that this proposed rule
would not have a significant economic impact on a substantial number of
small business concerns.
List of Subjects
13 CFR Part 124
Administrative practice and procedure, Government procurement,
Hawaiian natives, Indians--business and finance, Minority businesses,
Reporting and recordkeeping requirements, Technical assistance.
13 CFR Part 125
Government contracts, Government procurement, Reporting and
recordkeeping requirements, Small business, Technical assistance,
Veterans.
13 CFR Part 129
Administrative practice and procedure, Government contracts,
Government procurement, Government property, Small businesses.
Accordingly, for the reasons stated in the preamble, SBA proposes
to amend 13 CFR parts 124, 125, and 129 as follows:
PART 124--8(a) BUSINESS DEVELOPMENT/ SMALL DISADVANTAGED BUSINESS
STATUS DETERMINATIONS
0
1. The authority citation for part 124 continues to read as follows:
Authority: 15 U.S.C. 634(b)(6), 636(j), 637(a), 637(d), 644 and
Pub. L. 99-661, Pub. L. 100-656, sec. 1207, Pub. L. 101-37, Pub. L.
101-574, section 8021, Pub. L. 108-87, and 42 U.S.C. 9815.
0
2. Amend Sec. 124.405 by:
0
a. Revising the second sentence of paragraph (a)(1) and paragraph
(a)(2);
0
b. Revising paragraph (b)(3);
0
c. Adding paragraph (b)(6);
0
d. Revising the heading of paragraph (c) and paragraph (c)(1)
introductory text;
0
e. Revising the heading of paragraph (d) and paragraph (d)(1); and
0
f. Revising paragraph (f).
The revisions and addition read as follows:
Sec. 124.405 How does a Participant obtain Federal Government
surplus property?
(a) * * *
(1) * * * The procedures set forth in 41 CFR part 102-37 and this
section will be used to transfer surplus personal property to eligible
Participants.
(2) The surplus personal property which may be transferred to SASPs
for further transfer to eligible Participants includes all personal
property which has become available for donation pursuant to 41 CFR
102-37.30.
(b) * * *
(3) Not be debarred, suspended, or declared ineligible under Title
2 or Title 48 of the Code of Federal Regulations;
* * * * *
(6) Not have received property under part 129 subpart B of this
chapter, during the applicable period described in that subpart.
(c) Use of acquired surplus personal property. (1) Eligible
Participants may acquire Federal surplus personal property from the
SASP in the State(s) where the Participant is located and operates,
provided the Participant represents in writing:
* * * * *
(d) Procedures for acquiring Federal Government surplus personal
property. (1) Participants may participate in the GSA Federal Surplus
Personal Property Donation Program administered by the SASPs. See
generally 41 CFR 102-37 and/or Sec. 102-37.125.
* * * * *
(f) Title. Upon execution of the SASP distribution document, the
Participant has conditional title only to the surplus personal property
during the applicable period of restriction. Full title to the surplus
personal property will vest in the donee only after the donee has met
all of the requirements of this part.
* * * * *
PART 125--GOVERNMENT CONTRACTING PROGRAMS
0
3. The authority citation for part 125 continues to read as follows:
Authority: 15 U.S.C. 632(p), (q), 634(b)(6), 637, 644, 657b,
657(f), and 657r.
0
4. Add subpart F to read as follows:
[[Page 3278]]
Subpart F--Surplus Personal Property for Veteran Owned Small
Business Programs
Sec. 125.100 How does a small business concern owned and controlled
by veterans, obtain Federal Surplus personal property?
(a) General. (1) Pursuant to 15 U.S.C. 657b(g), eligible small
business concerns owned and controlled by veterans may receive surplus
Federal Government property from State Agencies for Surplus Property
(SASPs). The procedures set forth in 41 CFR part 102-37 and this
section will be used to transfer surplus personal property to such
concerns.
(2) The surplus personal property which may be transferred to SASPs
for further transfer to eligible small business concerns owned and
controlled by veterans includes all surplus personal property which has
become available for donation pursuant to 41 CFR 102-37.30.
(b) Eligibility to receive Federal surplus personal property. To be
eligible to receive Federal surplus personal property, on the date of
transfer a concern must:
(1) Be a small business concern owned and controlled by veterans,
that has been verified by the Secretary of Veterans Affairs under
section 8127 of title 38, United States Code;
(2) Not be debarred, suspended, or declared ineligible under Title
2 or Title 48 of the Code of Federal Regulations; and
(3) Be engaged or expect to be engaged in business activities
making the item useful to it.
(c) Use of acquired surplus personal property. (1) Eligible
concerns may acquire Federal surplus personal property from the SASP in
the State(s) where the concern located and operates, provided the
concern represents and agrees in writing:
(i) As to what the intended use of the surplus personal property is
to be;
(ii) That it will use the surplus personal property to be acquired
in the normal conduct of its business activities or be liable for the
fair rental value from the date of its receipt;
(iii) That it will not sell or transfer the surplus personal
property to be acquired to any party other than the Federal Government
as required by GSA and SASP requirements and guidelines;
(iv) That, at its own expense, it will return the surplus personal
property to a SASP if directed to do so by SBA, including where the
concern has not used the property as intended within one year of
receipt;
(v) That, should it breach its agreement not to sell or transfer
the surplus personal property, it will be liable to the Federal
Government for the established fair market value or the sale price,
whichever is greater, of the property sold or transferred; and
(vi) That it will give GSA and SASP access to inspect the surplus
personal property and all records pertaining to it.
(2) A concern receiving surplus personal property pursuant to this
section assumes all liability associated with or stemming from the use
of the property, and all costs associated with the use and maintenance
of the property.
(d) Costs. Concerns acquiring surplus personal property from a SASP
may be required to pay a service fee to the SASP in accordance with 41
CFR 102-37.280. In no instance will any SASP charge a concern more for
any service than their established fees charged to other transferees.
(e) Title. Upon execution of the SASP distribution document, the
firm receiving the property has only conditional title to the property
during the applicable period of restriction. Full title to the property
will vest in the donee only after the donee has met all of the
requirements of this part and the requirements of GSA and the SASP that
it received the property from.
PART 129--CONTRACTS FOR SMALL BUSINESSES LOCATED IN DISASTER AREAS,
AND SURPLUS PERSONAL PROPERTY FOR SMALL BUSINESSES LOCATED IN
DISASTER AREAS AND PUERTO RICO
0
5. The authority citation for part 129 is revised to read as follows:
Authority: 15 U.S.C. 636(j)(13)(F)(ii), (iii), and 644(f).
0
6. The heading of part 129 is revised to read as set forth above.
0
7. Redesignate Sec. Sec. 129.200, 129.300, 129.400, and 129.500, as
129.101, 129.102, 129.103, and 129.104, respectively;
0
8. Redesignate Sec. 129.100 and newly redesignated Sec. Sec. 129.101,
129.102, 129.103, and 129.104 as subpart A;
0
9. Add subpart A heading and subparts B and C to read as follows:
Subpart A--Contracts for Small Businesses Located in Disaster Areas
Subpart B--Surplus Personal Property for Small Businesses Located in
Disaster Areas
Sec.
129.200 What definitions are important in this subpart?
129.201 How does a small business concern located in a disaster area
obtain Federal surplus personal property?
Subpart C--Surplus Personal Property for Small Businesses Located in
Puerto Rico
129.300 What definitions are important in this subpart?
129.301 How does a small business concern located in a Puerto Rico
obtain Federal surplus personal property?
Subpart B--Surplus Personal Property for Small Businesses Located
in Disaster Areas
Sec. 129.200 What definitions are important in this subpart?
Covered period means the 2-year period beginning on the date on
which the President declared the applicable major disaster.
Sec. 129.201 How does a small business concern located in a disaster
area obtain Federal surplus personal property?
(a) General. Pursuant to 15 U.S.C. 636(j)(13)(F)(ii) eligible small
business concerns located in disaster areas may receive surplus Federal
Government property from State Agencies for Surplus Property (SASPs).
The procedures set forth in 41 CFR part 102-37 and this section will be
used to transfer surplus personal property to eligible small business
concerns.
(2) The property which may be transferred to SASPs for further
transfer to eligible small business concerns includes all personal
property which has become available for donation pursuant to 41 CFR
102-37.30.
(b) Eligibility to receive Federal surplus personal property. To be
eligible to receive Federal surplus personal property, on the date of
transfer a concern must:
(1) Be located in a disaster area and certify that it qualifies as
a small business under its primary NAICS code;
(2) Not be debarred, suspended, or declared ineligible under Title
2 or Title 48 of the Code of Federal Regulations; and
(3) Be engaged or expect to be engaged in business activities
making the item useful to it; and
(4) Not have received a transfer of property under Sec. 124.405 of
this chapter during the covered period. The 2-year period of the
presidentially declared disaster does not affect eligibility for
additional technology transfers or surplus personal property to a small
business concern located in a disaster area for a subsequent
presidentially declared disaster occurring within the original 2-year
period of a prior presidentially declared disaster.
(c) Use of acquired surplus personal property. (1) Eligible
concerns may acquire surplus Federal personal property from the SASP in
the State(s) where the concern is located and
[[Page 3279]]
operates, provided the concern represents and agrees in writing:
(i) As to what the intended use of the surplus personal property is
to be;
(ii) That it will use the property to be acquired in the normal
conduct of its business activities or be liable for the fair rental
value from the date of its receipt;
(iii) That it will not sell or transfer the property to be acquired
to any party other than the Federal Government as required by GSA and
SASP requirements and guidelines;
(iv) That, at its own expense, it will return the property to a
SASP if directed to do so by SBA, including where the concern has not
used the property as intended within one year of receipt;
(v) That, should it breach its agreement not to sell or transfer
the property, it will be liable to the Federal Government for the
established fair market value or the sale price, whichever is greater,
of the property sold or transferred; and
(vi) That it will give GSA and SASP access to inspect the property
and all records pertaining to it.
(2) A concern receiving surplus personal property pursuant to this
section assumes all liability associated with or stemming from the use
of the property.
(d) Costs. Concerns acquiring surplus personal property from a SASP
must pay a service fee to the SASP in accordance with 41 CFR 102-
37.280. In no instance will any SASP charge a concern more for any
service than their established fees charged to other transferees.
(e) Title. Upon execution of the SASP distribution document, the
firm receiving the surplus personal property has only conditional title
only to the surplus personal property during the applicable period of
restriction. Full title to the property will vest in the donee only
after the donee has met all of the requirements of this part and the
requirements of GSA and the SASP that it received the property from.
Subpart C--Surplus Personal Property for Small Businesses Located
in Puerto Rico
Sec. 129.300 What definitions are important in this subpart?
Covered period means the period beginning on August 13, 2018 and
ending on the date which the Oversight Board established under section
101 of the Puerto Rico Oversight, Management, and Economic Stability
Act (48 U.S.C. 2121) terminates.
Located in Puerto Rico means a concern with a physical location in
Puerto Rico and organized under the laws of Puerto Rico.
Sec. 129.301 How does a small business concern located in a Puerto
Rico obtain Federal surplus personal property?
(a) General. Pursuant to 15 U.S.C. 636(j)(13)(F)(iii) eligible
small business concerns located in Puerto Rico may receive surplus
Federal Government property from the Puerto Rico State Agency for
Surplus Property (SASPs). The procedures set forth in 41 CFR part 102-
37 and this section will be used to transfer surplus personal property
to eligible small business concerns.
(2) The property which may be transferred to SASPs for further
transfer to eligible small business concerns includes all personal
property which has become available for donation pursuant to 41 CFR
102-37.30.
(b) Eligibility to receive Federal surplus personal property. To be
eligible to receive Federal surplus personal property, on the date of
transfer a concern must:
(1) Be located in Puerto Rico and certify that it qualifies as a
small business under its primary NAICS code;
(2) Not be debarred, suspended, or declared ineligible under Title
2 or Title 48 of the Code of Federal Regulations; and
(3) Be engaged or expect to be engaged in business activities
making the item useful to it; and
(c) Use of acquired surplus personal property. (1) Eligible
concerns may acquire surplus Federal personal property from the Puerto
Rico SASP, provided the concern represents and agrees in writing:
(i) As to what the intended use of the surplus personal property is
to be;
(ii) That it will use the property to be acquired in the normal
conduct of its business activities or be liable for the fair rental
value from the date of its receipt;
(iii) That it will not sell or transfer the property to be acquired
to any party other than the Federal Government as required by GSA and
SASP requirements and guidelines;
(iv) That, at its own expense, it will return the property to a
SASP if directed to do so by SBA, including where the concern has not
used the property as intended within one year of receipt;
(v) That, should it breach its agreement not to sell or transfer
the property, it will be liable to the Federal Government for the
established fair market value or the sale price, whichever is greater,
of the property sold or transferred; and
(vi) That it will give GSA, and SASPS access to inspect the
property and all records pertaining to it.
(2) A concern receiving surplus personal property pursuant to this
section assumes all liability associated with or stemming from the use
of the property.
(d) Costs. Concerns acquiring surplus personal property from a SASP
must pay a service fee to the SASP in accordance with 41 CFR 102-
37.280. In no instance will any SASP charge a concern more for any
service than their established fees charged to other transferees.
(f) Title. Upon execution of the SASP distribution document, the
firm receiving the surplus personal property has only conditional title
to the surplus personal property during the applicable period of
restriction. Full title to the surplus personal property will vest in
the donee only after the donee has met all of the requirements of this
part.
Dated: January 7, 2020.
Christopher M. Pilkerton,
Acting Administrator.
[FR Doc. 2020-00442 Filed 1-17-20; 8:45 am]
BILLING CODE 8026-03-P