[Federal Register Volume 85, Number 214 (Wednesday, November 4, 2020)]
[Rules and Regulations]
[Pages 70050-70051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23121]



13 CFR Part 125

RIN 3245-AH14

Regulatory Reform Initiative: Government Contracting Programs

AGENCY: U.S. Small Business Administration.

ACTION: Final rule.


SUMMARY: With this deregulatory action, the U.S. Small Business 
Administration (SBA) is removing from the Code of Federal Regulations 
(CFR) four regulations in the Service-Disabled Veteran-Owned (SDVO) 
Small Business Concern (SBC) Program that are no longer necessary 
because they are unnecessary or redundant. The removal of these 
regulations assists the public by simplifying SBA's regulations in the 

DATES: This rule is effective December 4, 2020.

FOR FURTHER INFORMATION CONTACT: Khem Sharma, Chief, Office of Size 
Standards, (202) 205-7189 or [email protected].


I. Background Information

    On February 4, 2020, SBA published a proposed rule with request for 
comments in the Federal Register to remove four regulations from the 
SDVO SBC program. 85 FR 6106. This program allows agencies to set aside 
contracts for SDVO SBCs. Under this program, Federal Agencies may also 
award sole source contracts to SDVO SBCs so long as the award can be 
made at a fair and reasonable price and the anticipated total value of 
the contract, including any options, is below $4 million ($6.5 million 
for manufacturing contracts). For purposes of this program, veterans 
and service-related disabilities are defined as they are under the 
statutes governing veterans' affairs, 38 U.S.C. 101.
    SBA received no comments to the proposed rule. As such, SBA is 
finalizing the rule by removing four regulations that are unnecessary 
or covered elsewhere in the CFR.

II. Section-by-Section Analysis

Sec.  125.15 May an SDVO SBC have affiliates?

    Section 125.15 provides that an SDVO SBC may have affiliates. This 
rule is redundant because whether an SDVO SBC can have an affiliate is 
addressed in 13 CFR 121.103, the general rules of affiliation.

Sec.  125.16 May 8(a) program participants, HUBZone SBCs, small and 
disadvantaged businesses, or women-owned small businesses qualify as 

    Section 125.16 states that an SDVO SBC may qualify for other SBA 
contracting programs. This regulation is unnecessary because the 
requirements for an SDVO SBC to qualify for other programs are 
addressed in the rules on eligibility for those specific programs.

Sec.  125.19 Does SDVO SBC status guarantee receipt of a contract?

    Section 125.19 states that an SDVO SBC is not guaranteed receipt of 
a contract. This provision is unnecessary because nothing in SBA's 
regulations indicates that qualifying as an SDVO SBC entitles a firm to 
a contract.

Sec.  125.20 Who decides if a contract opportunity for SDVO competition 

    Section 125.20 is redundant because 13 CFR 125.22 and 125.23 
already provide that contracting officers make SDVO SBC competition 

III. Compliance With Executive Orders 12866, 13771, 12988, and 13132, 
the Paperwork Reduction Act (44 U.S.C., Ch. 35), and the Regulatory 
Flexibility Act (5 U.S.C. 601-612)

A. Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
rule does not constitute a significant regulatory action for purposes 
of Executive Order 12866 and is not a major rule under the 
Congressional Review Act, 5 U.S.C. 801, et seq.

B. Executive Order 13771

    This rule is expected to be an Executive Order 13771 deregulatory 
action with an annualized net savings of $33,669 and a net present 
value of $480,986, both in 2016 dollars.
    The four regulations in the SDVO program are either unnecessary or 
redundant. Their removal will assist the public by simplifying the 
SBA's regulations in the CFR and reduce the time spent reviewing them. 
The cost saving calculation assumes 2 percent of the 21,750 SDVO small 
businesses per

[[Page 70051]]

year (or about 435) will save 30 minutes from not reading this removed 
information. This time is valued at a rate of $118.22 per hour--the 
median hourly wage of $59.11 for an attorney according to 2019 Bureau 
of Labor Statistics (BLS) data \1\ plus 100 percent more for benefits 
and overhead. This produces savings to SDVO small businesses per year 
of $25,713 in current dollars.

    \1\ https://www.bls.gov/ooh/legal/lawyers.htm, retrieved July 
31, 2020.

    The cost savings also includes a savings to the government, 
assuming that 2 percent of the 38,000 Federal contracting officers per 
year (or about 760) will save 30 minutes from not reading this removed 
information. This time is valued at a rate of $82.74--assuming the 
average Federal contracting officer is a GS-12 step 1 (DC locality in 
2020 of $41.37) \2\ and adding 100 percent more for benefits and 
overhead, for annual savings of $31,441. This produces total savings 
per year of $57,287 in current dollars.

    \2\ https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2020/DCB_h.pdf, retrieved July 31, 

    The annual savings to SDVO small businesses and to the government 
totals to $57,154 in current dollars.
    In the first year, it is assumed that 5 percent of SDVO small 
businesses (about 1,088) and 5 percent of Federal contracting officers 
(about 1,900) would read this Federal Register notice which is 
estimated to take 30 minutes per SDVO small business at $118.22 per 
hour and $82.74 per hour per Federal contracting officer, producing 
cost in the first year of $142,915 ($64,312 for SDVO small businesses 
and $78,603 for the Federal Government). This cost is not expected to 
continue in subsequent years.
    Table 1 displays the costs and savings of this rule over the first 
2 years it is published, with the savings and costs in the second year 
expected to continue into perpetuity. Table 2 presents the annualized 
net savings in 2016 dollars.

    Table 1--Schedule of Costs/(Savings) Over 2 Year Horizon, Current
                                Savings                   Costs
Year 1................  598 hours, ($57,154)...  1,494 hours, $142,915.
Year 2................  598 hours, ($57,154)...  0 hours, $0.

  Table 2--Annualized Savings in Perpetuity With 7% Discount Rate, 2016
Annualized Savings..........................................   ($40,254)
Annualized Costs............................................      $6,585
    Annualized Net Savings..................................   ($33,669)

C. Executive Order 12988

    This action meets applicable standards set forth in Sec. 3(a) and 
3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden. The action does not 
have retroactive or preemptive effect.

D. Executive Order 13132

    This rule does not have federalism implications as defined in 
Executive Order 13132. It will not have substantial direct effects 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, as specified in the Executive Order. As 
such, it does not warrant the preparation of a Federalism Assessment.

E. Paperwork Reduction Act, (5 U.S.C. 601-612)

    SBA has determined that this final rule will not impose new, or 
modify existing, recordkeeping or reporting requirements under the 
Paperwork Reduction Act.

F. Regulatory Flexibility Act, 5 U.S.C. 601-612

    The Regulatory Flexibility Act (RFA) requires administrative 
agencies to consider the effect of their actions on small entities, 
small non-profit businesses, and small local governments. Pursuant to 
the RFA, when an agency issues a rule, the agency must prepare an 
analysis that describes whether the impact of the rule will have a 
significant economic impact on a substantial number of small entities. 
If not, the RFA permits agencies to certify to that effect.
    There are approximately 21,750 SDVO small businesses and all can be 
affected by this rule. However, this rule removes regulations that are 
unnecessary or redundant, saving these entities time in reading the 
regulations. The annualized net savings to SDVO small businesses \3\ is 
$15,147 in current dollars, or less than a dollar per SDVO small 
business, as detailed in the Executive Order 13771 discussion above.

    \3\ From annualized savings of $18,110 per SDVO small businesses 
minus the one-time cost to SDVO small businesses annualized to 
$2,963, both in 2016 dollars.

    SBA certified this rule at the proposed rule stage and received no 
comments on the certification. Accordingly, SBA therefore certifies 
that this rule has ``no significant impact upon a substantial number of 
small entities'' within the meaning of the RFA.

List of Subjects in 13 CFR Part 125

    Government contracts, Government procurement, Reporting and 
recordkeeping requirements, Small businesses, Technical assistance, 

    Accordingly, for the reasons stated in the preamble, SBA is 
amending 13 CFR part 125 as follows:


1. The authority citation for part 125 is revised to read as follows:

    Authority: 15 U.S.C. 632(p), (q), 634(b)(6), 637, 644, 657f, 
657q, 657r, and 657s; 38 U.S.C. 501 and 8127.

Sec. Sec.  125.15, 125.16, 125.19, and 125.20  [Removed and Reserved]

2. Remove and reserve Sec. Sec.  125.15, 125.16, 125.19, and 125.20.

Jovita Carranza,
[FR Doc. 2020-23121 Filed 11-3-20; 8:45 am]