[Federal Register Volume 88, Number 190 (Tuesday, October 3, 2023)]
[Proposed Rules]
[Pages 68067-68070]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21317]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 19

[FAR Case 2021-009; Docket No. FAR-2021-0010; Sequence No. 1]
RIN 9000-AO26


Federal Acquisition Regulation: Protests of Orders Set Aside for 
Small Business

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal

[[Page 68068]]

Acquisition Regulation (FAR) to implement regulatory changes made by 
the Small Business Administration to update and clarify requirements 
associated with size and/or socioeconomic status protests in connection 
with multiple-award contract set-asides and reserves and orders placed 
under multiple-award contracts.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat Division at the address shown below on or before 
December 4, 2023 to be considered in the formation of the final rule.

ADDRESSES: Submit comments in response to FAR Case 2021-009 to the 
Federal eRulemaking portal at https://www.regulations.gov by searching 
for ``FAR Case 2021-009''. Select the link ``Comment Now'' that 
corresponds with ``FAR Case 2021-009''. Follow the instructions 
provided on the ``Comment Now'' screen. Please include your name, 
company name (if any), and ``FAR Case 2021-009'' on your attached 
document. If your comment cannot be submitted using https://www.regulations.gov, call or email the points of contact in the FOR 
FURTHER INFORMATION CONTACT section of this document for alternate 
instructions.
    Instructions: Please submit comments only and cite ``FAR Case 2021-
009'' in all correspondence related to this case. Comments received 
generally will be posted without change to https://www.regulations.gov, 
including any personal and/or business confidential information 
provided. Public comments may be submitted as an individual, as an 
organization, or anonymously (see frequently asked questions at https://www.regulations.gov/faq). To confirm receipt of your comment(s), 
please check https://www.regulations.gov, approximately two to three 
days after submission to verify posting.

FOR FURTHER INFORMATION CONTACT: Ms. Dana Bowman, Procurement Analyst, 
at 202-803-3188 or by email at [email protected], for clarification 
of content. For information pertaining to status, publication 
schedules, or alternate instructions for submitting comments if https://www.regulations.gov cannot be used, contact the Regulatory Secretariat 
Division at 202-501-4755 or [email protected]. Please cite FAR Case 
2021-009.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA are proposing to amend the FAR to implement 
regulatory changes made by the Small Business Administration (SBA), in 
its final rules published in the Federal Register on October 2, 2013 
(78 FR 61113), October 16, 2020 (85 FR 66146), and on November 29, 2022 
(87 FR 73400). SBA added clarifying language at 13 CFR 121.1004 to 
specify when size protests must be submitted for the set aside or 
reserve of a multiple-award indefinite-delivery indefinite-quantity 
(IDIQ) contract and for orders that are set-aside for small business 
under an unrestricted multiple-award IDIQ contract, except for orders 
and blanket purchase agreements placed under a Federal Supply Schedule 
contract in accordance with FAR 8.405. In addition, in its final rule 
published on October 16, 2020, SBA amended 13 CFR 126.801, 13 CFR 
125.28 (now at 13 CFR 134.1004), and 13 CFR 127.603 to authorize 
socioeconomic protests for set-aside orders for HUBZone, SDVOSB, or 
EDWOSB/WOSB concerns placed under a multiple-award IDIQ contract this 
is not partially or totally set aside or reserved for that particular 
socioeconomic category. SBA's rule also clarified the SBA entities that 
may file a size protest in connection with a particular procurement. In 
addition, SBA's final rule published on November 29, 2022 (87 FR 73400) 
amended its regulations to remove references to the SDVOSB program at 
13 CFR part 125 and relocate them to 13 CFR part 128 and 13 CFR part 
134.

II. Discussion and Analysis

    This rule proposes to modify FAR subpart 19.3 to implement SBA's 
final rule as follows:

--Modify FAR 19.302(a)(2) to add a reference to SBA's regulations at 13 
CFR 121.1001(a)(1) to clarify the entities that may file a protest in 
connection with a particular procurement;
--Modify FAR 19.302(d)(1) to implement SBA's regulations at 13 CFR 
121.1004(a)(2) to specify when size protests are due for partial set 
asides and reserves of multiple-award contracts and orders that are set 
aside under an unrestricted multiple-award contract, with the exception 
of orders and blanket purchase agreements placed under Federal Supply 
Schedule contracts;
--Modify FAR 19.306, 19.307, and 19.308 to implement SBA's regulations 
at 13 CFR 126.801(d), 13 CFR 134.1004(a), and 127.603(c), respectively, 
to specify when protests are due for orders placed under multiple-award 
contracts where the contracting officer requested rerepresentation;
--Modify FAR 19.306, 19.307, and 19.308 to implement SBA's regulations 
at 13 CFR 126.801(d), 13 CFR 134.1004(a), and 13 CFR 127.603(c), 
respectively, to specify when protests are due for orders that are set 
aside for HUBZone small business concerns, service-disabled veteran-
owned small business concern (SDVOSB), and economically disadvantaged 
women-owned small business concerns and women-owned small business 
concerns under a multiple-award contract that is not itself partially 
or totally set-aside or reserved for the particular concern. This does 
not apply to orders and blanket purchase agreements placed under 
Federal Supply Schedule contracts.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT), for Commercial Products (Including Commercially 
Available Off-the-Shelf (COTS) Items), or for Commercial Services

    This rule does not create new solicitation provisions or contract 
clauses or impact any existing provisions or clauses.

IV. Expected Impact of the Rule

    This proposed rule implements SBA's final rules issued on October 
2, 2013, (78 FR 61113), October 16, 2020, (85 FR 66146) and November 
29, 2022 (87 FR 73400) to update and clarify regulations regarding size 
and socioeconomic status protests associated with orders placed under 
multiple-award contracts, with the exception of orders and blanket 
purchase agreements placed under Federal Supply Schedule contracts in 
accordance with FAR 8.405. This proposed rule will allow contracting 
officers, SBA, and interested parties to protest the size of a concern 
for partial set asides and reserves of multiple-award contracts and 
orders that are set aside under multiple-award contracts. The proposed 
rule will allow contracting officers, SBA, and interested parties to 
protest the socioeconomic status of a HUBZone small business concern, 
an economically disadvantaged women-owned small businesses and women-
owned small businesses, or a service-disabled veteran-owned small 
business concern for orders set aside for one of these socioeconomic 
categories when placed against a multiple-award contract that is not 
partially or totally set aside or reserved for that socioeconomic 
category. This proposed rule will also allow contracting officers, SBA, 
and interested parties to protest an order placed against a multiple-
award contract where the contracting officer requested rerepresentation 
for the order. This proposed rule is expected to help

[[Page 68069]]

contracting officers and interested parties to understand the 
requirements for filing size and socioeconomic status protests for 
orders placed under multiple-award contracts. Given that this proposed 
rule clarifies protest requirements and reduces ambiguities for small 
business entities and procuring activities, any impact is expected to 
be beneficial to both Government, contractors, and offerors. Any cost 
to the Government is not expected to be significant.

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. Regulatory Flexibility Act

    DoD, GSA, and NASA do not expect this rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612, because 
this proposed rule clarifies size and socioeconomic protest 
requirements associated with multiple-award contracts and is expected 
to assist both small entities and the Government in submitting a timely 
protest. However, an Initial Regulatory Flexibility Analysis (IRFA) has 
been performed and is summarized as follows:

    DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to implement regulatory changes made by 
the Small Business Administration (SBA) in its final rules dated 
October 2, 2013 (78 FR 61113), October 16, 2020(85 FR 66146), and 
November 29, 2022(87 FR 73400). This rule proposes to update and 
clarify requirements associated with size and socioeconomic status 
protests related to partial set asides and reserves of multiple-
award indefinite-delivery indefinite-quantity (IDIQ) contracts, and 
protests related to orders placed against multiple-award IDIQ 
contracts with the exception of blanket purchase agreements and 
orders placed under Federal Supply Schedule contracts.
    The objective of this proposed rule is to implement SBA's final 
rules published on October 2, 2013 (78 FR 61113), October 16, 2020 
(85 FR 66146), and November 29, 2022 (87 FR 73400) to clarify the 
requirements for size and/or socioeconomic status protests for 
orders placed against multiple-award IDIQ contracts. This proposed 
rule clarifies the timelines for an interested party to submit a 
size protest for a partial set aside or reserve of a multiple-award 
IDIQ contract and for an order placed under a multiple-award IDIQ 
contract. In addition, this rule clarifies when a socioeconomic 
status protest of a set-aside order placed under a multiple-award 
IDIQ contract where the socioeconomic status of the set-aside 
differs from that of the underlying contract, or the reserve or set 
aside portion of the underlying contract (e.g., small business set 
aside multiple-award IDIQ contract where an order is further set 
aside for SDVOSB concerns). This proposed rule does not apply to 
orders and blanket purchase agreements placed under Federal Supply 
Schedule contracts. Promulgation of FAR regulations is authorized by 
40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 
legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113. The 
legal basis for this rule is SBA's regulations at 13 CFR 126.801, 13 
CFR 127.603, 13 CFR 121.1001, and 13 CFR 134.1004 as amended by the 
three SBA final rules.
    This proposed rule will impact small businesses that are or may 
become multiple-award IDIQ contract holders and that may be awarded 
orders under multiple-award IDIQ contracts. According to the Federal 
Procurement Data System (FPDS), in the last three fiscal years 
(FYs), agencies set aside orders under unrestricted multiple-award 
IDIQ contracts as follows: 6,509 in FY 2019; 7,392 in FY 2020; and 
7,251 in FY 2021; for an average of 7051 per fiscal year. According 
to FPDS, in the last three fiscal years, agencies further set aside 
orders under set aside multiple-award IDIQ contracts as follows: 
8,403 in FY 2019; 9,470 in FY 2020; and 10,034 in FY 2021; for an 
average of 9,302 per fiscal year. According to FPDS, in the last 
three fiscal years contracting officers required rerepresentation 
for orders as follows: 363 in FY 2019; 470 in FY 2020; and 530 in FY 
2021; which averages out to 454 per fiscal year. According to FPDS, 
in the last three fiscal years, agencies further set aside orders 
for a socioeconomic category under the set aside portion of a 
multiple-award IDIQ contract, where the socioeconomic category 
differs from the underlying multiple-award IDIQ contract, as 
follows: 43 in FY 2019; 41 in FY 2020; and 37 in FY 2021; for an 
average of 40 per fiscal year. This averages out to approximately 
4,212 total orders to which this rule may apply per fiscal year. 
Although we can estimate the number of set aside orders that may be 
affected by this rule, it is not possible to estimate the number of 
small entities that may be affected by potential protests as a 
result of this rule.
    The proposed rule does not impose any new reporting, 
recordkeeping, or other compliance requirements for small entities.
    The proposed rule does not duplicate, overlap, or conflict with 
any other Federal rules.
    There are no known significant alternative approaches to the 
proposed rule.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA, and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by the rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAR Case 2021-009) in 
correspondence.

VII. Paperwork Reduction Act

    This 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. 3501-3521).

List of Subjects in 48 CFR Part 19

    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 propose amending 48 CFR part 19 as 
set forth below:

PART 19--SMALL BUSINESS PROGRAMS

0
1. The authority citation for 48 CFR part 19 continues to read as 
follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. 
chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 
20113.

0
2. Amend section 19.302 by--
0
a. Removing from the end of the second sentence of paragraph (a)(2) 
``or the SBA.'' and adding ``or SBA. (See 13 CFR 121.1001(a).'' in its 
place; and
0
b. Revising paragraph (d).
    The revision reads as follows:


19.302  Protesting a small business representation or rerepresentation.

* * * * *
    (d) In order to affect a specific solicitation, a protest must be 
timely. SBA's regulations on timeliness are contained in 13 CFR 
121.1004. SBA's regulations on timeliness related to protests of 
disadvantaged status are contained in 13 CFR 124, Subpart B.
    (1) To be timely, a protest by any concern or other interested 
party must be received by the contracting officer by the close of 
business of the fifth business day after-

[[Page 68070]]

    (i) Bid opening for sealed bid acquisitions; or
    (ii) Receipt of the special notification from the contracting 
officer (see 15.503(a)(2)) that identifies the apparently successful 
offeror for negotiated acquisitions, including-
    (A) Partial set-asides and reserves of multiple-award IDIQ 
contracts; and
    (B) Orders that are set-aside under an unrestricted multiple-award 
IDIQ contract (except for orders and blanket purchase agreements placed 
under a Federal Supply Schedule contract (see 8.405 and paragraph 
(d)(5) of this section)); or
    (iii) Receipt of notification using other communication means when 
written notification is not required.
    (2) A protest may be made orally if it is confirmed in writing and 
received by the contracting officer within the 5-day period or by 
letter postmarked no later than 1 business day after the oral protest.
    (3) A protest may be made in writing if it is delivered to the 
contracting officer by hand, mail, facsimile, email, express or 
overnight delivery service.
    (4) Except as provided in paragraph (d)(6) of this section, a 
protest filed by the contracting officer or SBA is always considered 
timely whether filed before or after award.
    (5) A protest under a Multiple Award Schedule will be timely if 
received by SBA at any time prior to the expiration of the contract 
period, including renewals.
    (6) A protest filed before bid opening, or notification to offerors 
of the selection of the apparent successful offeror, will be dismissed 
as premature by SBA.
* * * * *
0
3. Amend section 19.306 by revising paragraph (e)(1)(ii) and adding 
paragraph (e)(1)(iii) to read as follows:


19.306  Protesting a firm's status as a HUBZone small business concern.

* * * * *
    (e) * * *
    (1) * * *
    (ii) For negotiated acquisitions, by the close of business on the 
fifth business day after notification by the contracting officer of the 
apparently successful offeror, including--
    (A) Orders placed under multiple-award indefinite-delivery 
indefinite-quantity (IDIQ) contracts where the contracting officer 
requested rerepresentation for the order (see 13 CFR 126.801(d)(1)); 
and
    (B) Orders set aside for HUBZone small businesses under multiple-
award IDIQ contracts that are not partially or totally set aside or 
reserved for HUBZone small business concerns (see 13 CFR 
126.801(d)(1)), except for orders and blanket purchase agreements 
placed under a Federal Supply Schedule contract (see 8.405 and 
19.302(d)(5)); or
    (iii) Receipt of notification using other communication means when 
written notification is not required.
* * * * *
0
4. Amend section 19.307 by--
0
a. Removing from paragraph (e)(1)(i) ``(in sealed bid acquisitions); 
or'' and adding ``for sealed bid acquisitions; or'' in its place;
0
b. Revising paragraph (e)(1)(ii); and
0
c. Adding paragraph (e)(1)(iii).
    The revision reads as follows:


19.307  Protesting a firm's status as a service-disabled veteran-owned 
small business concern.

* * * * *
    (e) * * *
    (1) * * *
    (ii) To be received by close of business on the fifth business day 
after notification by the contracting officer of the apparently 
successful offeror for negotiated acquisitions, including--
    (A) Orders placed under multiple-award IDIQ contracts where the 
contracting officer requested rerepresentation for the order (see 13 
CFR 134.1004(a)(3)(ii)); and
    (B) Orders set aside for service-disabled veteran-owned small 
businesses under multiple-award IDIQ contracts that are not partially 
or totally set aside or reserved for service-disabled veteran-owned 
small business concerns (see 13 CFR 134.1004(a)(3)(i)), except for 
orders and blanket purchase agreements placed under a Federal Supply 
Schedule contract (see 8.405 and 19.302(d)(5)); or
    (iii) Receipt of notification using other communication means when 
written notification is not required.
* * * * *
0
5. Amend section 19.308 by--
0
a. Removing from paragraph (e)(1)(i) ``(in sealed bid acquisitions); 
or'' and adding ``for sealed bid acquisitions; or'' in its place;
0
b. Revising paragraph (e)(1)(ii); and
0
c. Adding paragraph (e)(1)(iii).
    The revision reads as follows:


19.308  Protesting a firm's status as an economically disadvantaged 
women-owned small business concern or women-owned small business 
concern eligible under the Women-Owned Small Business Program.

* * * * *
    (e) * * *
    (1) * * *
    (ii) To be received by the close of business by the fifth business 
day after notification by the contracting officer of the apparent 
successful offeror for negotiated acquisitions including--
    (A) Orders placed under multiple-award IDIQ contracts where the 
contracting officer requested rerepresentation for the order (see 13 
CFR 127.603(c)(1)); and
    (B) Orders set aside for EDWOSB or WOSB concerns under multiple-
award IDIQ contracts that are not partially or totally set aside or 
reserved for EDWOSB or WOSB concerns (see 13 CFR 127.603(c)(1)), except 
for orders and blanket purchase agreements placed under a Federal 
Supply Schedule contract (see 8.405 and 19.302(d)(5)); or
    (iii) Receipt of notification using other communication means when 
written notification is not required.
* * * * *
[FR Doc. 2023-21317 Filed 10-2-23; 8:45 am]
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