[Federal Register Volume 86, Number 213 (Monday, November 8, 2021)]
[Rules and Regulations]
[Pages 61670-61673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-24348]
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SMALL BUSINESS ADMINISTRATION
13 CFR Parts 124, 125, 126, and 127
RIN 3245-AH27
National Defense Authorization Act of 2020, Definition of
Surviving Spouse for Service-Disabled Veteran-Owned Small Businesses
and Change to 8(a) Business Development Contracting Thresholds
AGENCY: U.S. Small Business Administration.
ACTION: Direct final rule.
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SUMMARY: This rule makes technical changes to regulations issued by the
U.S. Small Business Administration (SBA) to conform those regulations
to recent statutory changes. First, the rule incorporates a required
change to SBA's ownership requirements for small business concerns
owned and controlled by service-disabled veterans. The rule adopts
changes to the treatment of certain surviving spouses made by the
National Defense Authorization Act of 2020. In addition, the rule
incorporates changes to the dollar thresholds for certain contracting
actions authorized for the 8(a) Business Development (BD) program made
by the National Defense Authorization Act of 2020. Finally, the rule
adjusts the competitive threshold dollar levels authorized for SBA's
contracting programs to changes made to the Federal Acquisition
Regulation (FAR) due to inflation.
DATES: This rule is effective on February 7, 2022, without further
action, unless significant adverse comment is received by December 8,
2021. If significant adverse comment is received, SBA will publish a
timely withdrawal of the rule in the Federal Register.
ADDRESSES: You may submit comments, identified by RIN 3245-AH27, 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: Donna Fudge,
U.S. Small Business Administration, Office of Policy, Planning and
Liaison, 409 Third Street SW, 8th Floor, Washington, DC 20416.
Hand Delivery/Courier: Donna Fudge, 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 Donna
Fudge, 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: Donna Fudge, Procurement Analyst,
Office of Policy, Planning and Liaison, U.S. Small Business
Administration, 409 Third Street SW, Washington, DC 20416;
[email protected].
SUPPLEMENTARY INFORMATION: On December 20, 2019, the National Defense
Authorization Act for Fiscal Year 2020 (NDAA 2020), Public Law 116-92,
133 Stat. 1198, was signed into law. Section 876 of NDAA 2020 amended
section 3 of the Small Business Act, 15 U.S.C. 632. This provision made
changes to the treatment of surviving spouses with regard to the
program's ownership requirements. The changes require that SBA update
its regulations to reflect two new time periods. Specifically, the
statute creates a ten-year time period to remain eligible in the case
of a surviving spouse of a veteran with a service-connected disability
rated as 100 percent disabling or who dies as a result of a service-
connected disability, and a three-year time period in the case of a
surviving spouse of a veteran with a service-connected disability rated
as less than 100 percent disabling who does not die as a result of a
service-connected disability. This rule updates 13 CFR 125.12 to
reflect these changes. SBA is changing the language in Sec.
125.12(i)(1)(ii) to match the new statutory language. SBA is adding the
ten-year time frame in Sec. 125.12(i)(2)(iii). SBA is adding the
three-year time frame in Sec. 125.12(i)(2)(iv).
In addition, section 823 of NDAA 2020 changed the threshold for
which a justification and approval is needed for Department of Defense
(DoD) covered procurements. Section 811 of the NDAA for Fiscal Year
2010, Public Law 111-
[[Page 61671]]
84, 123 Stat. 2190, 2405, required the Federal Acquisition Regulations
(FAR) to be amended to include a new requirement for a written
justification of sole-source 8(a) awards over $20 million. The FAR
increased this threshold to $22 million due to inflation on July 2,
2015. 80 FR 38293, 38296. While the section 811 requirement for a
justification and approval applied to all civilian and defense
agencies, section 823 of NDAA 2020 increased the threshold to $100
million only for the DoD. As such, this rule amends SBA's regulations
to increase the justification and approval requirement to $100 million
only with respect to DoD 8(a) contracts. In addition, DoD, the General
Services Administration (GSA), and the National Aeronautics and Space
Administration (NASA) are charged with amending the FAR to adjust
statutory acquisition-related thresholds for inflation every five
years. On October 2, 2020, DoD, GSA, and NASA published a final rule in
the Federal Register amending the FAR to implement new inflationary
adjustments. 85 FR 62485. As part of that final rule, the $22 million
justification and approval threshold authorized by section 811 of NDAA
2010 was increased to $25 million. Thus, in addition to increasing the
threshold to $100 million for DoD-related 8(a) procurements, this rule
also increases the justification and approval threshold from $22
million to $25 million for all other agencies. This rule amends Sec.
124.502(c)(17) and Sec. 124.506(b)(5) to adjust the justification and
approval thresholds accordingly.
In addition to the justification and approval and 8(a) sole source
thresholds identified above that were raised in response to the
inflationary adjustments made to the FAR, that same FAR rule also
adjusted other SBA-related contacting dollar thresholds for inflation.
85 FR 62485. Section 864 of the National Defense Authorization Act of
2021, Public Law 116-283, subsequently amended the Small Business Act
to set the 8(a), HUBZone, and WOSB sole source thresholds for
manufacturing contracts to $7,000,000. As such, this rule incorporates
the FAR changes into SBA's regulations except where section 864
retained a $7 million sole source threshold amount for manufacturing
contracts. Specifically, this rule adopts the inflationary adjustments
made to the sole source thresholds in the FAR for the 8(a) BD Program
(by amending Sec. 124.506(a)(2)(ii) of SBA's regulations), the
Service-Disabled Veteran-Owned Small Business Concern Program (by
amending Sec. 125.23(b)(1) of SBA's regulations), the Historically
Underutilized Business Zone Program (by amending Sec. 126.612(b)(1)
and (2) of SBA's regulations), and the Women-Owned Small Business
Program (by amending Sec. 127.503(c)(2) and Sec. 127.503(d)(2) of
SBA's regulations). SBA is also updating a threshold for its Small
Business Subcontracting Program, which is contained in Sec. 125.3(c).
SBA is also making corrections to Sec. 126.200(f) and Sec.
126.700(b)(1). Currently both sections contain an incorrect reference
to Sec. 126.5. The correct cross reference should be to Sec. 125.6,
and this rule corrects the typographical errors.
Compliance With Executive Orders 12866, 13563, 12988, 13132, 13175, the
Congressional Review Act (5 U.S.C. 801-808), the Paperwork Reduction
Act (44 U.S.C. Ch. 35), the Regulatory Flexibility Act (5 U.S.C. 601-
612), and the Administrative Procedure Act
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
direct final rule does not constitute a significant regulatory action
under Executive Order 12866.
Executive Order 13563
Executive Order 13563 reaffirms the principles of Executive Order
12866 while calling for improvements in the nation's regulatory system
to promote predictability, to reduce uncertainty, and to use the best,
most innovative, and least burdensome tools for achieving regulatory
ends. The executive order directs agencies to consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public where these approaches are relevant, feasible,
and consistent with regulatory objectives. Executive Order 13563 also
requires that regulations be based on the open exchange of information
and perspectives among state and local officials, affected stakeholders
in the private sector, and the public as a whole. SBA has developed
this rule in a manner consistent with these requirements. While
developing this rule, SBA responded to specific inquiries from
government officials and the public regarding the implementation of the
statutory required changes.
Executive Order 12988
This action meets applicable standards set forth in sections 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.
Executive Order 13132
A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial 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 direct final rule will not have substantial direct
effects on the States, on the relationship between the National
Government and the States, or the distribution of power and
responsibilities among the various levels of government.
SBA has analyzed this direct final rule and has determined that it
is consistent with the fundamental federalism principles and preemption
requirements described in Executive Order 13132.
Executive Order 13175
This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it would not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
Congressional Review Act, 5 U.S.C. 801-808
OMB's Office of Information and Regulatory Affairs has determined
that this rule is not a major rule under subtitle E of the Small
Business Regulatory Enforcement Fairness Act of 1996 (also known as the
Congressional Review Act), 5 U.S.C. 804(2).
Paperwork Reduction Act, 44 U.S.C. Ch. 35
SBA has determined that this direct final rule does not impose
additional reporting or recordkeeping requirements under the Paperwork
Reduction Act, 44 U.S.C., chapter 35.
Regulatory Flexibility Act, 5 U.S.C. 601-612
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires
administrative agencies to consider the effect of their actions on
small entities, small non-profit enterprises, and small local
governments. Pursuant to the RFA, when an agency issues a rulemaking,
the agency must prepare a regulatory flexibility analysis, which
describes the impact of the rule on small entities.
[[Page 61672]]
However, section 605 of the RFA allows an agency to certify a rule, in
lieu of preparing an analysis, if the rulemaking is not expected to
have a significant economic impact on a substantial number of small
entities. Within the meaning of RFA, SBA certifies that this direct
final rule will not have a significant economic impact on a substantial
number of small entities. It does not add any new requirements to SBA's
regulations, but merely adjusts specified thresholds to conform to
statutory changes and changes made by the FAR.
Administrative Procedure Act--Justification for Direct Final Rule
In general, SBA publishes a rule for public comment before issuing
a final rule, in accordance with the Administrative Procedure Act. 5
U.S.C. 553. The Administrative Procedure Act provides an exception to
this standard rulemaking process, however, where an agency finds good
cause to adopt a rule without prior public participation. 5 U.S.C.
553(b)(3)(B). The good cause requirement is satisfied when prior public
participation is impracticable, unnecessary, or contrary to the public
interest.
SBA is publishing this rule as a direct final rule because public
participation is unnecessary. SBA views this as a non-controversial
administrative action because it merely implements a change required by
the Small Business Act, as amended by section 876 of NDAA 2020. This
rule will be effective on the date shown in the DATES section unless
SBA receives significant adverse comment on or before the deadline for
comments. Significant adverse comments are comments that provide strong
justifications why the rule should not be adopted or for changing the
rule. SBA does not expect to receive any significant adverse comments
because the rule simply mirrors the statutory language contained in
section 876 of NDAA 2020, with no extraneous interpretation or other
expanded text. The remaining technical changes merely conform SBA
regulations with the updated thresholds in the FAR.
If SBA receives significant adverse comment, SBA will publish a
notice in the Federal Register withdrawing this rule before the
effective date. If SBA receives no significant adverse comments, the
rule will be effective 90 days after publication without further
notice.
List of Subjects
13 CFR Part 124
Administrative practice and procedure, Government procurement,
Government property, Small businesses.
13 CFR Part 125
Government contracts, Government procurement, Reporting and
recordkeeping requirements, Small businesses, Technical assistance.
13 CFR Part 126
Administrative practice and procedure, Government procurement,
Penalties, Reporting and recordkeeping requirements, Small businesses.
13 CFR Part 127
Government contracts, Reporting and recordkeeping requirements,
Small businesses.
Accordingly, for the reasons stated in the preamble, SBA amends 13
CFR parts 124, 125, 126, and 127 as follows:
PART 124--8(a) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS
STATUS DETERMINATIONS
0
1. The authority citation for part 124 is revised to read as follows:
Authority: 15 U.S.C. 634(b)(6), 636(j), 637(a), 637(d), 644, 42
U.S.C. 9815; and Pub. L. 99-661, 100 Stat. 3816; Sec. 1207, Pub. L.
100-656, 102 Stat. 3853; Pub. L. 101-37, 103 Stat. 70; Pub. L. 101-
574, 104 Stat. 2814; Sec. 8021, Pub. L. 108-87, 117 Stat. 1054; and
Sec. 330, Pub. L. 116-260.
0
2. Amend Sec. 124.502 by revising paragraph (c)(17) to read as
follows:
Sec. 124.502 How does an agency offer a procurement to SBA for award
through the 8(a) BD program?
* * * * *
(c) * * *
(17) A statement that the necessary justification and approval
under the Federal Acquisition Regulation has occurred where a
requirement whose estimated contract value exceeds $25,000,000, or
$100,000,000 in the case of Department of Defense contracts, is offered
to SBA as a sole source requirement on behalf of a specific
Participant; and
* * * * *
0
3. Amend Sec. 124.506 in paragraph (a)(2)(ii) by removing the figure
``$4,000,000'' and adding in its place the figure ``$4,500,000'' and by
revising paragraph (b)(5) to read as follows:
Sec. 124.506 At what dollar threshold must an 8(a) procurement be
competed among eligible Participants?
* * * * *
(b) * * *
(5) An agency may not award an 8(a) sole source contract for an
amount exceeding $25,000,000, or $100,000,000 for an agency of the
Department of Defense, unless the contracting officer justifies the use
of a sole source contract in writing and has obtained the necessary
approval under the Federal Acquisition Regulation.
* * * * *
PART 125--GOVERNMENT CONTRACTING PROGRAMS
0
4. 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, 657b,
657(f), and 657r.
Sec. 125.3 [Amended]
0
5. Amend Sec. 125.3 in paragraphs (c)(1) introductory text and
(c)(1)(x) by removing the figure ``$700,000'' and adding in its place
the figure ``$750,000''.
0
6. Amend Sec. 125.12 by revising paragraphs (i)(1)(ii) and (i)(2)(iii)
and adding paragraph (i)(2)(iv) to read as follows:
Sec. 125.12 Who does SBA consider to own an SDVO SBC?
* * * * *
(i) * * *
(1) * * *
(ii) Such veteran had a service-connected disability (as defined in
section 101(16) of title 38, United States Code); and
* * * * *
(2) * * *
(iii) In the case of a surviving spouse of a veteran with a
service-connected disability rated as 100 percent disabling or who dies
as a result of a service-connected disability, is 10 years after the
date of the death of the veteran; or
(iv) In the case of a surviving spouse of a veteran with a service-
connected disability rated as less than 100 percent disabling who does
not die as a result of a service-connected disability, is 3 years after
the date of the death of the veteran.
Sec. 125.23 [Amended]
0
7. Amend Sec. 125.23 in paragraph (b)(1) by removing the figure
``$6,500,000'' and adding in its place the figure ``$7,000,000''.
PART 126--HUBZONE PROGRAM
0
8. The authority citation for part 126 is revised to read as follows:
Authority: 15 U.S.C. 632(a), 632(j), 632(p), 644 and 657a; Pub.
L. 111-240, 124 Stat. 2504.
[[Page 61673]]
Sec. 126.200 [Amended]
0
9. Amend Sec. 126.200 in paragraph (f) by removing the reference
``Sec. Sec. 126.5'' and adding in its place the reference ``Sec. Sec.
125.6''.
Sec. 126.612 [Amended]
0
10. Amend Sec. 126.612 in paragraph (b)(2) by removing the figure
``4,000,000'' and adding in its place the figure ``$4,500,000''.
Sec. 126.700 [Amended]
0
11. Amend Sec. 126.700 in paragraph (b)(1) by removing the reference
``Sec. 126.5'' and adding in its place the reference ``Sec. 125.6''.
PART 127--WOMEN-OWNED SMALL BUSINESS FEDERAL CONTRACT PROGRAM
0
12. The authority citation for part 127 continues to read as follows:
Authority: 15 U.S.C. 632, 634(b)(6), 637(m), 644 and 657r.
Sec. 127.503 [Amended]
0
13. Amend Sec. 127.503 in paragraphs (c)(2) and (d)(2) by removing the
figures ``$6,500,000'' and ``$4,000,000'' and adding in their place the
figures ``$7,000,000'' and ``$4,500,000'', respectively.
Isabella Casillas Guzman,
Administrator.
[FR Doc. 2021-24348 Filed 11-5-21; 8:45 am]
BILLING CODE 8026-03-P