[Federal Register Volume 88, Number 211 (Thursday, November 2, 2023)]
[Notices]
[Pages 75362-75364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-24206]


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SMALL BUSINESS ADMINISTRATION


Procurement Scorecard Program; Exclusion for Certain Department 
of Veterans Affairs Contracts

AGENCY: U.S. Small Business Administration.

ACTION: Notice.

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SUMMARY: The U.S. Small Business Administration (SBA) publishes an 
annual procurement scorecard (Scorecard) that scores agencies on their 
performance in contracting with small businesses. This notice modifies 
the method that SBA uses to calculate contracting dollars for the 
Department

[[Page 75363]]

of Veterans Affairs (VA). Specifically, starting with fiscal year 2023 
(FY23), SBA will exclude VA expenditures for Community Care Network 
(CCN) contracts and any successor contracts.

FOR FURTHER INFORMATION CONTACT: Kevin Doss, Deputy Director, Office of 
Government Contracting and Business Development, [email protected], 
(202) 272-7700. This notice modifies the method that SBA uses to 
calculate contracting dollars for the Department of Veterans Affairs 
(VA). Specifically, starting with fiscal year 2023 (FY23), SBA will 
exclude VA expenditures for Community Care Network (CCN) contracts and 
any successor contracts. The phone number above may also be reached by 
individuals who are deaf or hard of hearing, or who have speech 
disabilities, through the Federal Communications Commission's TTY-Based 
Telecommunications Relay Service teletype service at 711.

SUPPLEMENTARY INFORMATION:

I. Background

    SBA issues an annual Scorecard to score Federal agencies on 
creating the maximum practicable opportunities for the award of prime 
contracts and subcontracts to small business concerns, small 
disadvantaged businesses (SDBs), women-owned small businesses (WOSBs), 
HUBZone small business concerns, and service-disabled veteran-owned 
small business concerns (SDVO SBCs). Sec. 868, Public Law 114-92, 129 
Stat. 933 (November 25, 2015). SBA bases an agency's score on several 
weighted factors, the most significant of which is the percentage of 
prime contracting dollars awarded to small businesses.
    SBA strives to account for all Federal contracting dollars on the 
annual Scorecard, but, in rare circumstances, SBA will exclude isolated 
categories of contracts from the Scorecard. As one example, SBA does 
not consider contracts that are not reported into the governmentwide 
contract reporting systems, namely the Federal Procurement Data System 
(FPDS) and the Electronic Subcontracting Reporting System (eSRS), 
because SBA cannot verify their existence. Some other categories are 
excluded from the Scorecard by operation of law. See 15 U.S.C. 
644(g)(2)(B).
    Additionally, SBA has excluded from the Scorecard certain contracts 
in which the agency has very little--if any--involvement in incurring 
the obligation. SBA believes that the Scorecard measures the agency's 
efforts to reach small-business and socioeconomic contractor goals, 
and, in the rare cases where the agency is not the primary 
decisionmaker in incurring the contract obligation, it is not 
unreasonable to consider whether those cases are skewing the agency's 
Scorecard achievement through no fault of the agency itself.
    On that basis, SBA excludes from the Scorecard certain contracts 
awarded under the Department of Defense's TRICARE program, which 
provides health care to Servicemembers, retirees and their families. 
Under the TRICARE exclusion, SBA disregards all contract obligations 
reported by the Defense Health Agency's TRICARE contracting offices 
codes H94002 and HT9402. in determining the Department of Defense's 
score for the Scorecard. As noted in SBA's Goaling Guidelines, the 
TRICARE exclusion recognizes patients' role as the primary 
decisionmaker when and where to seek health care under the program. 
DHA's contracting arrangements primarily give effect to that patient 
decision. Other exclusions operate in the same manner.
    All of the exclusions from the Scorecard, as well as other details 
on the Scorecard methodology, are listed in SBA's Goaling Guidelines, 
available at https://www.sba.gov/document/report-sba-goaling-guidelines.
    On May 22, 2023, the VA, through its director of the Office of 
Small Disadvantaged Business Utilization, requested that SBA grant an 
exclusion from the Scorecard for the VA's Community Care Network (CCN) 
contracts used to provide veterans with access to health care from non-
VA providers. SBA has considered the VA's request and the applicable 
statutory requirements for an exclusion, and SBA grants the exclusion 
beginning with the Scorecard for FY23.

II. The VA's CCN Contracts

    Under the CCN contracts, veterans have access to a nationwide 
system of healthcare providers that operate outside of the VA system. 
The VA states in its exclusion request that the veteran is the primary 
decisionmaker on whether to incur an obligation under a CCN contract. 
According to the VA, the veteran's choice as to whether to use a non-VA 
facilities largely determines whether healthcare will be provided under 
a CCN contract or through a VA provider.
    The VA's request explains that the CCN contracts are for the 
benefit of the veteran, not a procurement for Government use. The VA 
analogized the CCN contracts to the Department of Defense's TRICARE 
contracts, which SBA already excludes from the Scorecard.
    The VA's expenditures through CCN are substantial. In FY22, CCN 
obligations accounted for 38.9% of the VA's total procurement base. The 
growth in CCN obligations in FY22 caused a steep decline in the 
percentage of contracting dollars that the VA spent with small 
businesses, even as VA's actual dollars awarded to small business 
attained a record high.

III. Statutory Requirements

    Section 1631(c)(2) of the National Defense Authorization Act (NDAA) 
for Fiscal Year 2013, Public Law 112-239, constrains SBA's authority to 
consider and grant exclusions from the Scorecard. Under section 1631, 
SBA is not permitted to exclude categories of contracts on the basis of 
three criteria listed in the NDAA: (1) the type of goods or services 
for which the agency contracts; (2) whether or not funding for the 
contracts is made directly available to the agency by an Appropriations 
Act or is made available by reimbursement from another agency or 
account; and (3) whether or not the contract is subject to the Federal 
Acquisition Regulation.
    In its request, the VA explained that an exclusion for the CCN 
contracts would not be on the basis of any of those statutorily 
identified criteria. First, the CCN exclusion is based on specific 
contracts that provide access to non-VA care for veterans, not based on 
the type of good or service. The VA states that the exclusion would not 
affect other healthcare contracts, such as establishing Community Based 
Outpatient clinics, procuring medical supplies, or obtaining temporary 
services from health care providers.
    Second, the VA found that the CCN exclusion would not be based on 
whether the funding is appropriated. Congress appropriates funding for 
CCN contracts through a Medical Community Care appropriations account, 
but that is not the basis for the VA's request. Instead, the VA bases 
its request on the veteran being the primary decisionmaker on whether 
to incur an obligation under the CCN contracts.
    Third, the VA states that it does not base its request on the 
applicability of the Federal Acquisition Regulation. The VA reiterated 
that the contracts are for the benefit of the veteran, not the agency.
    Based on the foregoing, SBA believes that it is not constrained by 
section 1631 in considering and granting the VA's request for an 
exclusion.

IV. Exclusion for CCN Contracts

    Starting in the Scorecard for F23, SBA will exclude the CCN 
contracts and any successor contracts from the VA's prime

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contracting Scorecard and the governmentwide prime contracting 
scorecard by disregarding actions using Funding Office code 36135Y. 
This code refers to the Office of Integrated Veteran Care within the 
Veterans Health Administration, which reports the claims for payments 
under the CCN contracts for submission to FPDS.

Larry Stubblefield,
Acting Associate Administrator, Office of Government Contracting and 
Business Development.
[FR Doc. 2023-24206 Filed 11-1-23; 8:45 am]
BILLING CODE 8026-09-P