[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