[Federal Register Volume 85, Number 206 (Friday, October 23, 2020)]
[Rules and Regulations]
[Pages 67615-67617]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21696]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 9, 19, and 52
[FAC 2021-02; FAR Case 2020-002; Item II; Docket No. FAR-2020-0002;
Sequence No. 1]
RIN 9000-AO05
Federal Acquisition Regulation: Removal of Obsolete Definitions
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: DoD, GSA, and NASA are issuing a final rule to amend the
Federal Acquisition Regulation (FAR) to remove the definitions of the
terms ``annual receipts'' and ``number of employees'' in the
regulations regarding small business programs and to move the
definition of ``affiliates,'' as used with regard to small business
size determination, to appropriate locations in the FAR.
DATES: Effective: November 23, 2020.
FOR FURTHER INFORMATION CONTACT: Ms. Mahruba Uddowla, Procurement
Analyst, at 703-605-2868 or by email at [email protected] for
clarification of content. For information pertaining to status or
publication schedules, contact the Regulatory Secretariat Division at
202-501-4755. Please cite FAC 2021-02, FAR Case 2020-002.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are amending the FAR to remove the definitions
of ``annual receipts'' and ``number of employees'' at FAR 19.101. These
definitions unnecessarily duplicate the Small Business Administration
(SBA) regulation at 13 CFR part 121. In addition, these definitions in
the FAR are outdated, following the publication of SBA's final rule at
84 FR 66561 on December 5, 2019.
SBA's final rule amended 13 CFR part 121 to implement Public Law
115-324 (the ``Small Business Runway Extension Act of 2018''), which
amended section 3(a)(2)(C)(ii)(II) of the Small Business Act (15 U.S.C.
632(a)(2)(C)(ii)(II)) to modify the requirements for proposed small
business size standards. SBA's final rule modifies its method for
calculating average annual receipts used to prescribe size standards
for small businesses by changing the calculation of average annual
receipts for all of SBA's receipts-based size standards, and for other
agencies' proposed receipts-based size standards, from a 3-year
averaging period to a 5-year averaging period. SBA has independent
statutory authority to issue size standards.
While the definitions of ``annual receipts'' and ``number of
employees'' are listed in part 19 of the FAR, they are not necessary
for contracting officers, as SBA has sole responsibility for
prescribing how these terms are used to determine small business size.
The contracting officer's responsibility is to select the applicable
North American Industry Classification Standards (NAICS) code and size
standard for a given acquisition and to verify that a business concern
has represented its business size for the acquisition. Therefore, DoD,
GSA, and NASA are removing these redundant, obsolete definitions from
the FAR.
Currently, the term ``affiliates'' only appears in the definitions
of ``annual receipts'' and ``number of employees'' in FAR 19.101; it is
not used anywhere else in part 19. Upon the removal of those
definitions from FAR 19.101, ``affiliates'' will no longer be used in
FAR part 19. As such, the definition is no longer required in section
19.101. However, since the term is used in multiple other locations in
the FAR, the definition for ``affiliates,'' as used with regard to
small business size determination, will be moved to these locations.
II. Discussion and Analysis
Subpart 19.1, Size Standards, is amended to remove the definitions
of ``annual receipts'' and ``number of employees.'' As explained in
section I of this preamble, these definitions are not necessary for
contracting officers since SBA determines small business size
standards, as well as whether a specific business is small under those
standards. Subpart 19.1 is also amended to remove the definition of
``affiliates'' since the term will no longer be used in the subpart.
Instead, the definition of ``affiliates'' is being incorporated
into the definitions of ``small business concern'' at FAR part 2, FAR
provisions 52.212-3 and 52.219-1, and FAR clauses 52.219-6, 52.219-7,
and 52.219-28, which is where the term ``affiliates'' is used with
regard to small business size determination.
III. Publication of This Final Rule for Public Comment Is Not Required
by Statute
The statute that applies to the publication of the FAR is the
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.
While this final rule relates to the expenditure of appropriated funds,
it is not required to be published for public comment, because it does
not have a significant effect or impose any requirements on contractors
or offerors. The rule removes
[[Page 67616]]
two definitions that unnecessarily duplicate SBA's regulation and moves
another definition from one part of the FAR to other parts where the
term being defined is actually used.
IV. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Items, Including Commercially
Available Off-The-Shelf (COTS) Items
This rule amends the FAR to remove the definitions of ``annual
receipts'' and ``number of employees'' at section 19.101, as well as
moving the definition of ``affiliates,'' as used with regard to small
business size determination, from 19.101 to other locations in the FAR
where the term is actually used. This rule does not change the
applicability or the text of any FAR solicitation provisions or
contract clauses.
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 not subject to E.O. 13771, Reducing Regulation
and Controlling Regulatory Costs, because this rule is not a
significant regulatory action under E.O. 12866.
VII. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) does not
apply to this rule, 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 III. of this preamble).
Accordingly, no regulatory flexibility analysis is required and none
has been prepared.
VIII. 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 Parts 2, 9, 19, and 52
Government procurement.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 9, 19, and 52
as set forth below:
0
1. The authority citation for 48 CFR parts 2, 9, 19, and 52 continues
to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 2--DEFINITIONS OF WORDS AND TERMS
0
2. Amend section 2.101 in paragraph (b)(2) by--
0
a. In the definition ``Affiliates'':
0
i. Removing from paragraph (1) ``For the use in subpart 9.4'' and
adding ``For use in subpart 9.4'' in its place; and
0
ii. Revising paragraph (2); and
0
b. Revising the definition ``Small business concern''.
The revisions read as follows:
2.101 Definitions.
* * * * *
Affiliates * * *
(2) For use of affiliates in size determinations, see the
definition of ``small business concern'' in this section.
* * * * *
Small business concern--
(1) Means a concern, including its affiliates, that is
independently owned and operated, not dominant in the field of
operation in which it is bidding on Government contracts, and qualified
as a small business under the criteria and size standards in 13 CFR
part 121 (see 19.102). Such a concern is ``not dominant in its field of
operation'' when it does not exercise a controlling or major influence
on a national basis in a kind of business activity in which a number of
business concerns are primarily engaged. In determining whether
dominance exists, consideration must be given to all appropriate
factors, including volume of business, number of employees, financial
resources, competitive status or position, ownership or control of
materials, processes, patents, license agreements, facilities, sales
territory, and nature of business activity. (See 15 U.S.C. 632.)
(2) Affiliates, as used in this definition, means business
concerns, one of whom directly or indirectly controls or has the power
to control the others, or a third party or parties control or have the
power to control the others. In determining whether affiliation exists,
consideration is given to all appropriate factors including common
ownership, common management, and contractual relationships. SBA
determines affiliation based on the factors set forth at 13 CFR
121.103.
* * * * *
PART 9--CONTRACTOR QUALIFICATIONS
9.104-3 [Amended]
0
3. Amend section 9.104-3 by removing from the first sentence of
paragraph (c) ``Affiliates in 19.101'' and adding ``Small business
concern in 2.101'' in its place.
PART 19--SMALL BUSINESS PROGRAMS
19.101 [Removed and Reserved]
0
4. Remove and reserve section 19.101.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
5. Amend section 52.212-3 by--
0
a. Revising the date of the provision; and
0
b. In paragraph (a), revising the definition ``Small business
concern''.
The revisions read as follows:
52.212-3 Offeror Representations and Certifications--Commercial Items.
* * * * *
Offeror Representations and Certifications--Commercial Items (Nov 2020)
* * * * *
(a) * * *
Small business concern--
(1) Means a concern, including its affiliates, that is
independently owned and operated, not dominant in the field of
operation in which it is bidding on Government contracts, and
qualified as a small business under the criteria in 13 CFR part 121
and size standards in this solicitation.
(2) Affiliates, as used in this definition, means business
concerns, one of whom directly or indirectly controls or has the
power to control the others, or a third party or parties control or
have the power to control the others. In determining whether
affiliation exists, consideration is given to all appropriate
factors including common ownership, common management, and
contractual relationships. SBA determines affiliation based on the
factors set forth at 13 CFR 121.103.
* * * * *
0
6. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
[[Page 67617]]
0
b. Removing from paragraph (b)(14)(i) ``(MAR 2020)'' and adding ``(NOV
2020)'' in its place;
0
c. Removing from paragraph (b)(15)(i) ``(MAR 2020)'' and adding ``(NOV
2020)'' in its place; and
0
d. Removing from paragraph (b)(22)(i) ``(MAY 2020)'' and adding ``(NOV
2020)'' in its place.
The revision reads as follows:
52.212-5 Contract Terms and Conditions Required To Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required To Implement Statutes or
Executive Orders--Commercial Items (Nov 2020)
* * * * *
0
7. Amend section 52.219-1 by--
0
a. Revising the date of the provision; and
0
b. In paragraph (a), revising the definition ``Small business
concern''.
The revisions read as follows:
52.219-1 Small Business Program Representations.
* * * * *
Small Business Program Representations (Nov 2020)
(a) * * *
Small business concern--
(1) Means a concern, including its affiliates, that is
independently owned and operated, not dominant in the field of
operation in which it is bidding on Government contracts, and
qualified as a small business under the criteria in 13 CFR part 121
and the size standard in paragraph (b) of this provision.
(2) Affiliates, as used in this definition, means business
concerns, one of whom directly or indirectly controls or has the
power to control the others, or a third party or parties control or
have the power to control the others. In determining whether
affiliation exists, consideration is given to all appropriate
factors including common ownership, common management, and
contractual relationships. SBA determines affiliation based on the
factors set forth at 13 CFR 121.103.
* * * * *
0
8. Amend section 52.219-6 by revising the date of the clause and
paragraph (a) to read as follows:
52.219-6 Notice of Total Small Business Set-Aside.
* * * * *
Notice of Total Small Business Set-Aside (Nov 2020)
(a) Definition. Small business concern, as used in this clause--
(1) Means a concern, including its affiliates, that is
independently owned and operated, not dominant in the field of
operation in which it is bidding on Government contracts, and
qualified as a small business under the size standards in this
solicitation.
(2) Affiliates, as used in paragraph (a)(1) of this clause,
means business concerns, one of whom directly or indirectly controls
or has the power to control the others, or a third party or parties
control or have the power to control the others. In determining
whether affiliation exists, consideration is given to all
appropriate factors including common ownership, common management,
and contractual relationships. SBA determines affiliation based on
the factors set forth at 13 CFR 121.103.
* * * * *
0
9. Amend section 52.219-7 by revising the date of the clause and
paragraph (a) to read as follows:
52.219-7 Notice of Partial Small Business Set-Aside.
* * * * *
Notice of Partial Small Business Set-Aside (Nov 2020)
(a) Definition. Small business concern, as used in this clause--
(1) Means a concern, including its affiliates, that is
independently owned and operated, not dominant in the field of
operation in which it is bidding on Government contracts, and
qualified as a small business under the size standards in this
solicitation.
(2) Affiliates, as used in paragraph (a)(1) of this clause,
means business concerns, one of whom directly or indirectly controls
or has the power to control the others, or a third party or parties
control or have the power to control the others. In determining
whether affiliation exists, consideration is given to all
appropriate factors including common ownership, common management,
and contractual relationships. SBA determines affiliation based on
the factors set forth at 13 CFR 121.103.
* * * * *
0
10. Amend section 52.219-28 by--
0
a. Revising the date of the clause; and
0
b. In paragraph (a), revising the definition ``Small business
concern''.
The revisions read as follow:
52.219-28 Post-Award Small Business Program Rerepresentation.
* * * * *
Post-Award Small Business Program Rerepresentation (Nov 2020)
(a) * * *
Small business concern--
(1) Means a concern, including its affiliates, that is
independently owned and operated, not dominant in the field of
operation in which it is bidding on Government contracts, and
qualified as a small business under the criteria in 13 CFR part 121
and the size standard in paragraph (d) of this clause. Such a
concern is ``not dominant in its field of operation'' when it does
not exercise a controlling or major influence on a national basis in
a kind of business activity in which a number of business concerns
are primarily engaged. In determining whether dominance exists,
consideration shall be given to all appropriate factors, including
volume of business, number of employees, financial resources,
competitive status or position, ownership or control of materials,
processes, patents, license agreements, facilities, sales territory,
and nature of business activity.
(2) Affiliates, as used in this definition, means business
concerns, one of whom directly or indirectly controls or has the
power to control the others, or a third party or parties control or
have the power to control the others. In determining whether
affiliation exists, consideration is given to all appropriate
factors including common ownership, common management, and
contractual relationships. SBA determines affiliation based on the
factors set forth at 13 CFR 121.103.
* * * * *
[FR Doc. 2020-21696 Filed 10-22-20; 8:45 am]
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