[Federal Register Volume 87, Number 164 (Thursday, August 25, 2022)]
[Rules and Regulations]
[Pages 52348-52351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18225]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Chapter 2
[Docket DARS-2022-0002]
RIN 0750-AK96
Defense Federal Acquisition Regulation Supplement:
Reauthorization and Improvement of Mentor-Prot[eacute]g[eacute] Program
(DFARS Case 2020-D009)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement a section of the
National Defense Authorization Act for Fiscal Year 2020 that
reauthorizes and modifies the DoD Mentor-Prot[eacute]g[eacute] Program.
DATES: Effective October 24, 2022.
FOR FURTHER INFORMATION CONTACT: Ms. Jeanette Snyder, 703-508-7524.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 87 FR
11009 on February 28, 2022, to revise the DFARS to implement section
872 of the National Defense Authorization Act (NDAA) for Fiscal Year
(FY) 2020 (Pub. L. 116-92). Section 872 modifies subsection (j) of
section 831 of the NDAA for FY 1991 (Pub. L. 101-510) to reauthorize
and improve the DoD Mentor-Prot[eacute]g[eacute] Program. Section 872
extends the date for entering into a mentor-prot[eacute]g[eacute]
agreement, extends the date for reimbursement of mentors, limits the
term for program participation, extends the date for a mentor to
receive credit toward the attainment of small business subcontracting
goals, and expands eligibility for prot[eacute]g[eacute] firms. One
respondent submitted a public comment in response to the proposed rule.
II. Discussion and Analysis
DoD reviewed the public comment in the development of the final
rule. A discussion of the comment follows:
A. Summary of Significant Changes From the Proposed Rule
No changes were made from the proposed rule as a result of the
public comment received.
B. Analysis of Public Comments
Comment: One respondent indicated a conditional individual
waiver(s) to the nonmanufacturing rule should be issued in conjunction
with the extended DoD Mentor-Prot[eacute]g[eacute] Program through
September 30, 2024.
Response: This is outside the scope of the rule. Individual waivers
to the nonmanufacturer rule are addressed at Federal Acquisition
Regulation (FAR) 19.505(c)(4)(B) and 13 CFR 121.1203.
C. Other Changes
A change was made at DFARS Appendix I, I-101, Definitions, to
delete the definitions for minority institution of higher education,
women-owned small business, and service-disabled veteran-owned small
business. These terms are already defined in FAR part 2, and the
definitions in FAR part 2 apply to the DFARS unless otherwise stated.
Minor editorial changes were made at DFARS 219.7101 and 219.7102. No
other changes were made from the proposed rule.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Services and Commercial Products,
Including Commercially Available Off-the-Shelf Items
This rule does not create any new solicitation provisions or
contract clauses. It does not impact any existing provisions or clauses
or their applicability to contracts at or below the simplified
acquisition threshold and acquisitions of commercial services and
commercial products, including commercially available off-the-shelf
items.
IV. Expected Impact of the Rule
This rule implements section 872 of the NDAA for FY 2020, which
reauthorizes and improves the DoD Mentor-Prot[eacute]g[eacute] program.
The purpose of the program is to provide incentives to major DoD
contractors to furnish eligible small business concerns with assistance
designed to--
(1) Enhance the capabilities of small business concerns to perform
as subcontractors and suppliers under DoD contracts and other contracts
and subcontracts; and
(2) Increase the participation of such business concerns as
subcontractors and suppliers under DoD contracts, other Federal
Government contracts, and commercial contracts.
Therefore, this rule will benefit small business concerns by
extending the opportunity to enter into DoD mentor-
prot[eacute]g[eacute] agreements. In addition, the eligibility of small
business concerns is expanded as this rule removes prior restrictions
for eligibility by aligning the size of the small business with the
size standard associated with its primary North American Industry
Classification System code. This rule is also expected to benefit large
entities and the Government by expanding the defense industrial base.
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.
VI. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, DoD will submit a copy of
the interim or final rule with the form, Submission of Federal Rules
under the Congressional Review Act, to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States. A
major rule under the Congressional Review Act cannot take
[[Page 52349]]
effect until 60 days after it is published in the Federal Register. The
Office of Information and Regulatory Affairs has determined that this
rule is not a major rule as defined by 5 U.S.C. 804.
VII. Regulatory Flexibility Act
A final regulatory flexibility analysis has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
The final regulatory flexibility analysis is summarized as follows:
This final rule is necessary to implement section 872 of the
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2020
(Pub. L. 116-92). The objective of this rule is to implement section
872, which reauthorizes and improves the DoD Mentor-
Prot[eacute]g[eacute] Program (Program). The authority for entering
into new agreements expired on September 30, 2018. This rule extends
the date for new mentor-prot[eacute]g[eacute] agreements to September
30, 2024. This rule also extends the date for reimbursement of incurred
costs under the Program to September 30, 2026, as well as the date for
costs to be applied to a mentor's subcontracting plan goals. The
eligibility of a small business concern, as related to the Program, is
also modified to align with the size standard associated with its
primary North American Industry Classification System code.
No comments were received in response to the initial regulatory
flexibility analysis.
The number of ongoing DoD mentor-prot[eacute]g[eacute] agreements
in FY 2018 and FY 2019 was 90, four of which expired in FY 2019. No new
agreements were entered into in FY 2019 since the authority to enter
into agreements expired on September 30, 2018. The number of ongoing
agreements in FY 2020 was 86, 29 of which expired. As of June 2021,
there were 57 ongoing agreements, 50 new agreements, and 12 expiring
agreements, with a total of 95. DoD estimates 66 new agreements will be
entered into in FY 2022, 82 in FY 2023, and 98 in FY 2024.
This rule does not impose any new reporting, recordkeeping, or
other compliance requirements for small entities.
DoD did not identify any significant alternatives that would
minimize or reduce the impact on small entities. Any impact is expected
to be beneficial.
VIII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply;
however, these changes to the DFARS do not impose additional
information collection requirements to the paperwork burden previously
approved under OMB Control Number 0704-0332.
List of Subjects in 48 CFR Part 219 and Appendix I to Chapter 2
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR part 219 and appendix I to chapter 2 are amended
as follows:
PART 219--SMALL BUSINESS PROGRAMS
0
1. The authority citation for 48 CFR part 219 is revised to read as
follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
0
2. Revise section 219.7100 to read as follows:
219.7100 Scope.
This subpart implements the Pilot Mentor-Prot[eacute]g[eacute]
Program (referred to as the Program) established under section 831 of
the National Defense Authorization Act for Fiscal Year 1991 (Pub. L.
101-510; 10 U.S.C. 2302 note). The purpose of the Program is to provide
incentives for DoD contractors to assist prot[eacute]g[eacute] firms in
enhancing their capabilities and to increase participation of such
firms in Government and commercial contracts.
219.7101 [Amended]
0
3. Amend section 219.7101 by removing ``Appendix I'' and adding
``appendix I'' in its place.
0
4. Amend section 219.7102 by--
0
a. In paragraph (a), removing ``Appendix I'' and adding ``appendix I''
in its place;
0
b. In paragraphs (a) and (b), removing the periods and adding
semicolons in their places;
0
c. Redesignating paragraph (c) as paragraph (d);
0
d. Adding a new paragraph (c); and
0
e. Revising newly redesignated paragraphs (d) introductory text and
(d)(1)(ii).
The addition and revisions read as follows:
219.7102 General.
* * * * *
(c) A preliminary assessment of the prot[eacute]g[eacute] firm's
cybersecurity readiness. The DoD Office of Small Business Programs
(OSBP), Office of the Under Secretary of Defense, Acquisition and
Sustainment (OUSD(A&S)), provides this preliminary assessment, which is
a benefit of program participation; and
(d) Incentives that DoD may provide to mentor firms, which
include--
(1) * * *
(ii) A separate contract, upon written determination by the
Director, OSBP, of the cognizant military department or defense agency
that unusual circumstances justify reimbursement using a separate
contract; or
* * * * *
0
4. Revise section 219.7103-1 to read as follows:
219.7103-1 General.
The procedures for application, acceptance, and participation in
the Program are in appendix I, Policy and Procedures for the DoD Pilot
Mentor-Prot[eacute]g[eacute] Program. The Mentor-Prot[eacute]g[eacute]
Program Director, OSBP, OUSD(A&S), has the authority to approve
contractors as mentor firms. The Director, OSBP, of each military
department or defense agency has the authority to approve mentor-
prot[eacute]g[eacute] agreements and forward approved mentor-
prot[eacute]g[eacute] agreements to the contracting officer when
funding is available.
0
5. Amend section 219.7103-2 by--
0
a. In the introductory text, removing ``must'' and adding ``shall'' in
its place;
0
b. Revising paragraphs (d)(1), (e)(3), and (f);
0
c. In paragraph (g), removing ``Appendix I'' and adding ``appendix I''
in its place; and
0
d. Revising paragraph (h).
The revisions read as follows:
219.7103-2 Contracting officer responsibilities.
* * * * *
(d) * * *
(1) A DoD program manager or the Director, OSBP, of the cognizant
military department or defense agency has made funds available for that
purpose; and
* * * * *
(e) * * *
(3) The Director, OSBP, of the military department or defense
agency has made a determination in accordance with 219.7102(d)(1)(ii).
(f) Not authorize reimbursement for costs of assistance furnished
to a prot[eacute]g[eacute] firm in excess of $1 million in a fiscal
year unless a written determination from the Director, OSBP, of the
military department or defense agency is obtained.
* * * * *
(h) Provide a copy of the approved mentor-prot[eacute]g[eacute]
agreement to the Defense Contract Management Agency (DCMA) small
business professional responsible for conducting the annual performance
review (see appendix I, section I-113).
[[Page 52350]]
219.7104 [Amended]
0
6. Amend section 219.7104 in paragraphs (b) and (d) by removing
``September 30, 2021'' and adding ``September 30, 2026'' in its place.
219.7106 [Amended]
0
7. Amend section 219.7106 by removing ``The Defense Contract Management
Agency'' and adding ``DCMA'' in its place.
0
8. Amend appendix I to chapter 2 by--
0
a. In section I-100--
0
i. Revising paragraph (a) introductory text;
0
ii. In paragraph (c)(1), removing ``2 years'' and adding ``5 years'' in
its place;
0
iii. Revising paragraph (c)(3); and
0
iv. Adding paragraph (c)(4).
0
b. Revising section I-101.
0
c. In section I-102--
0
i. In paragraph (a)(2)(ii), removing the word ``and'' at the end of the
paragraph;
0
ii. Adding paragraph (a)(2)(iv);
0
iii. Revising paragraph (a)(3);
0
iv. In paragraph (b)(3), removing ``Less than half'' and adding ``Not
more than'' in its place;
0
v. In paragraph (e), removing ``Office of Small Business Programs
(OSBP)'' and adding ``OSBP'' in its place;
0
vi. In paragraph (g)(1), removing ``pursuant to approved mentor-
prot[eacute]g[eacute] agreements'' and adding ``in accordance with the
approved mentor-prot[eacute]g[eacute] agreement'' in its place;
0
vii. In paragraph (g)(3), removing ``cognizant Component Director,
SBP'' and adding ``Director, OSBP, of the cognizant military department
or defense agency'' in its place; and
0
viii. Adding paragraph (h).
0
d. In section I-103--
0
i. In paragraph (a), removing ``September 30, 2018'' and adding
``September 30, 2024'' in its place;
0
ii. In paragraph (b) introductory text, removing ``prior to September
30, 2021'' and adding ``through September 30, 2026'' in its place; and
0
iii. In paragraph (b)(3), removing ``cognizant Component Director,
SBP,'' and adding ``Director, OSBP, of the cognizant military
department or defense agency'' in its place.
0
e. In section I-104, revising paragraph (c).
0
f. In section I-105, revising paragraphs (a) and (c).
0
g. In section I-106--
0
i. In paragraph (d)(1)(i), removing ``marketing'' and adding
``marketing and technology commercialization, compliance systems'' in
its place;
0
ii. In paragraph (d)(1)(ii), removing ``quality assurance'' and adding
``quality assurance; acquisition or transfer of hardware, tooling, or
software; and technology transfer and transition'' in its place;
0
iii. In paragraph (d)(2), removing ``firmunder'' and adding ``firm
under'' in its place;
0
iv. In paragraph (d)(4), removing ``Subpart'' and adding ``subpart'' in
its place; and
0
v. Adding paragraph (g).
0
h. In section I-107--
0
i. In paragraph (a), removing ``email'' and adding ``email'' in its
place;
0
ii. In paragraph (j), removing ``2 years'' and adding ``5 years'' in
its place; and
0
iii. Revising paragraph (k).
0
i. In section I-108--
0
i. In paragraph (a) introductory text, removing ``DoD component'' and
adding ``military department or defense agency'' in its place;
0
ii. In paragraph (a)(5), removing ``3 years (Term of agreements may not
exceed 5 years)'' and adding ``2 years (agreements may not exceed 5
years) (see I-107(k))'' in its place;
0
iii. In paragraph (a)(6), removing ``$1,000,000'' and adding ``$1
million'' in its place;
0
iv. In paragraph (b), removing ``cognizant DoD components'' and adding
``the military department or defense agency'' in its place;
0
v. In paragraph (c), removing ``cognizant Component Director, SBP,
prior'' and adding ``Director, OSBP, of the military department or
defense agency prior'' in its place;
0
vi. In paragraph (d), removing ``cognizant DoD component'' and adding
``military department or defense agency'' in its place;
0
vii. In paragraph (e), removing ``component'' and ``Director, SBP'' and
adding ``military department or defense agency'' and ``the Director,
OSBP'' in their places, respectively; and
0
viii. In paragraph (f), removing ``cognizant Component Director, SBP,''
and adding ``Director, OSBP, of the military department or defense
agency'' in its place.
0
j. In section I-109--
0
i. In the introductory text, removing ``agreements'' and adding
``agreements including agreements that provide for both reimbursement
and subcontracting credit'' in its place;
0
ii. In paragraph (c), removing ``Component Directors, SBP'' and adding
``Directors, OSBP, of the military departments or defense agencies'' in
its place; and
0
iii. In paragraph (d), removing ``$1,000,000'' and ``cognizant
Component Director, SBP'' wherever they appear and adding ``$1
million'' and ``Director, OSBP, of the military department or defense
agency'' in their places, respectively.
0
k. In section I-110, adding introductory text.
0
l. In section I-110.1, at the end of the first sentence in paragraph
(a), removing ``Plans .'' and adding ``Plans.'' in its place.
0
m. In section I-110.2, paragraphs (a) introductory text, (b)
introductory text, and (c), removing ``SBP'' and adding ``OSBP'' in its
place.
0
n. In section I-111--
0
i. In paragraph (a), removing ``cognizant Component Director, SBP,''
and ``administrative contracting officer'' and adding ``Director, OSBP,
of the cognizant military department or defense agency'' and ``small
business professional'' in their places, respectively; and
0
ii. Adding paragraph (f).
0
o. In section I-112.2--
0
i. In paragraph (a)(2)(xii)(A), removing ``success assistance'' and
adding ``success developmental assistance'' in its place;
0
ii. In paragraph (a)(2)(xii)(B), removing ``contracts'' and adding
``contracts, including but not limited to the transition of innovative
technology into a program of record'' in its place;
0
iii. In paragraph (a)(4), removing ``at: http://www.acq.osd.mil/osbp/
sb/programs/mpp/resources.shtml'' and adding ``at https://business.defense.gov/Programs/Mentor-Prot[eacute]g[eacute]-Program/MPP-
Resources/'' in its place;
0
iv. In paragraph (b)(2), removing ``2 fiscal years'' and adding ``5
fiscal years'' in its place;
0
v. In paragraph (d)(1), removing ``cognizant Component Director, SBP,''
and adding ``Director, OSBP, of the military department or defense
agency'' in its place;
0
vi. In paragraph (d)(2), removing ``cognizant Component Director,
SBP,'' and adding ``Director, OSBP, of the military department or
defense agency,'' in its place; and
0
p. Revising section I-113.
0
q. Adding an authority citation at the end of the appendix.
The revisions and additions read as follows:
Appendix I to Chapter 2--Policy and Procedures for the DoD Pilot
Mentor-Prot[eacute]g[eacute] Program
I-100 Purpose
(a) This appendix implements the Pilot Mentor-
Prot[eacute]g[eacute] Program (the Program) established under
section 831 of the National Defense Authorization Act for Fiscal
Year 1991 (Pub. L. 101-510; 10 U.S.C. 2302 note). The purpose of the
Program is to provide incentives to major DoD contractors to furnish
eligible small business concerns with assistance designed to--
* * * * *
[[Page 52351]]
(c) * * *
(3) An increase in prot[eacute]g[eacute] participation in DoD
science and technology programs; and
(4) An increase in job creation of prot[eacute]g[eacute] firms
from the date of execution of the mentor-prot[eacute]g[eacute]
agreement until 5 years after completion of the mentor-
prot[eacute]g[eacute] agreement.
* * * * *
I-101 Definitions
As used in this appendix--
Affiliation means, with respect to a relationship between a
mentor firm and a prot[eacute]g[eacute] firm, a relationship
described under 13 CFR 121.103.
Eligible entity employing the severely disabled means a business
entity operated on a for-profit or nonprofit basis that--
(1) Uses rehabilitative engineering to provide employment
opportunities for severely disabled individuals and integrates
severely disabled individuals into its workforce;
(2) Employs severely disabled individuals at a rate that
averages not less than 20 percent of its total workforce;
(3) Employs each severely disabled individual in its workforce
generally on the basis of 40 hours per week; and
(4) Pays not less than the minimum wage prescribed pursuant to
section 6 of the Fair Labor Standards Act (29 U.S.C. 206) to those
employees who are severely disabled individuals.
Severely disabled individual means an individual who is blind or
severely disabled as defined in 41 U.S.C. 8501.
I-102 Participant Eligibility
(a) * * *
(2) * * *
(iv) Is an other than small business concern, unless approved by
the Director of the Office of Small Business Programs (OSBP), Office
of the Under Secretary of Defense, Acquisition and Sustainment
(OUSD(A&S)), in accordance with 13 CFR 121.103 regarding
``affiliation and relationship''; and
(3) Be capable of imparting value to a prot[eacute]g[eacute]
firm because of experience gained as a DoD contractor or through
knowledge of general business operations and Government contracting,
as demonstrated by evidence that such entity--
(i) Received DoD contracts and subcontracts equal to or greater
than $100 million during the previous fiscal year;
(ii) Is a prime contractor to DoD with an active subcontracting
plan; or
(iii) Has graduated from the 8(a) Business Development Program
and provides documentation of its ability to serve as a mentor.
* * * * *
(h) Within 30 days of any change in status affecting
eligibility, mentors and prot[eacute]g[eacute]s must give notice and
explanation of pertinent facts to each other, the Director of OSBP,
OUSD(A&S), and the Director, OSBP, of the military department or
defense agency.
* * * * *
I-104 Selection of Prot[eacute]g[eacute] Firms
* * * * *
(c) Any interested party may file a protest of the selection of
a prot[eacute]g[eacute] firm directly with the Director, OSBP,
OUSD(A&S) or the Director, OSBP, of the cognizant military
department or defense agency. In the event of a protest regarding
the size or status of an entity selected to be a
prot[eacute]g[eacute] firm, the Director, OSBP, OUSD(A&S), or the
Director, OSBP, of the military department or defense agency must
refer the protest to the SBA to resolve in accordance with 13 CFR
part 121 (with respect to size) or other parts of title 13 of the
CFR or this appendix (with respect to the prot[eacute]g[eacute]'s
socioeconomic status). The Director, OSBP, OUSD(A&S), or the
Director, OSBP, of the military department or defense agency shall
decide protests concerning all other aspects of a
prot[eacute]g[eacute]'s eligibility for the Program (e.g.,
nontraditional defense contractor or entity employing the severely
disabled).
* * * * *
I-105 Mentor Approval Process
(a) An entity seeking to participate as a mentor must apply to
the Mentor-Prot[eacute]g[eacute] Program Director, OSBP, OUSD(A&S),
to establish its initial eligibility as a mentor.
* * * * *
(c) A template of the mentor application is available at https://business.defense.gov/Programs/Mentor-Prot[eacute]g[eacute]-Program/
MPP-Resources/.
* * * * *
I-106 Development of Mentor-Prot[eacute]g[eacute] Agreements
* * * * *
(g) The agreement shall demonstrate, through its execution, how
it will contribute to the overall mission of DoD and/or fill or
address an identified critical gap or vulnerability. Focus areas
include, but are not limited to, manufacturing, research and
development, and knowledge-based services.
I-107 Elements of a Mentor-Prot[eacute]g[eacute] Agreement
* * * * *
(k) A program participation term for the agreement that does not
exceed 2 years. Requests for an extension of the agreement for a
period not to exceed an additional 3 years are subject to the
approval of the Director, OSBP, of the cognizant military department
or defense agency. The justification must detail the unusual
circumstances that warrant a term in excess of 2 years;
* * * * *
I-110 Credit Agreements
Sections I-110.1 and I-110.2 apply to all credit agreements,
including agreements that provide for both credit and reimbursement.
* * * * *
I-111 Agreement Terminations
* * * * *
(f) The Director, OSBP, OUSD(A&S) or the Director, OSBP, of the
military department or defense agency is authorized to terminate the
mentor-prot[eacute]g[eacute] agreement for the convenience of the
Government (to include national security grounds, funding limits,
statutory requirements, or other considerations), as well as for
cause upon written findings (e.g., either of the participants'
failure to perform or provide adequate assurance of performance;
failure to comply with laws, regulations, and policies; conflicts of
interest; or default under any provisions of a DoD contract or
agreement).
* * * * *
I-113 Performance Reviews
DCMA will conduct annual performance reviews of the progress and
accomplishments realized under approved mentor-prot[eacute]g[eacute]
agreements. These reviews must verify data provided on the
semiannual reports and must provide information as to--
(a) Whether all costs reimbursed to the mentor firm under the
agreement were reasonably incurred to furnish assistance to the
prot[eacute]g[eacute] in accordance with the mentor-
prot[eacute]g[eacute] agreement and applicable regulations and
procedures; and
(b) Whether the mentor and prot[eacute]g[eacute] accurately
reported progress made by the prot[eacute]g[eacute] in employment,
revenues, and participation in DoD contracts during the Program
participation term and for 5 fiscal years following the expiration
of the Program participation term.
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
[FR Doc. 2022-18225 Filed 8-24-22; 8:45 am]
BILLING CODE 5001-06-P