Federal Acquisition Regulation; SBA's 8(a) Business Development Program

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 12, 19, and 52

[FAC 97-12; FAR Case 98-011; Item III]

RIN 9000-AI33

Federal Acquisition Regulation; SBA's 8(a) Business Development

Program

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA),

[[Page 32743]]

and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council (the Councils) have agreed on an

interim rule amending the Federal Acquisition Regulation (FAR) to

implement revisions made to Small Business Administration (SBA)

regulations pertaining to its 8(a) Business Development (8(a)BD)

Program.

DATES: Effective June 17, 1999.

Comment Date: Interested parties should submit comments to the FAR

Secretariat at the address shown below on or before August 16, 1999 to

be considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (MVR), 1800 F Street,

NW, Room 4035, Attn: Ms. Laurie Duarte, Washington, DC 20405. Address

e-mail comments submitted via the Internet to: [email protected].

Please cite FAC 97-12, FAR case 98-011 in all correspondence related to

this case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact Ms. Victoria Moss, Procurement Analyst, at (202) 501-

4764. Please cite FAC 97-12, FAR case 98-011.

SUPPLEMENTARY INFORMATION:

A. Background

This interim rule amends FAR parts 12, 19, and 52 to conform to

recent amendments made by the Small Business Administration (SBA) to

their regulations pertaining to the 8(a)BD Program. The SBA published a

final rule in the Federal Register on June 30, 1998 (63 FR 35726). The

SBA rule amended the eligibility procedures for admission to the 8(a)BD

and contractual assistance programs. These changes involve

administrative matters concerning requirement offerings, contract

execution, contract administration, and SBA appeals.

This regulatory action was not subject to Office of Management and

Budget review under Executive Order 12866, dated September 30, 1993,

and is not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

DoD, GSA, and NASA do not expect the interim 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, et

seq., because the rule merely addresses changes made by the Small

Business Administration (SBA) to 13 CFR parts 121, 124, and 134. The

SBA has certified that the changes set forth in its rule will not have

a significant economic impact on a substantial number of small entities

because the changes do not increase the net number of current 8(a)

certified small businesses or the net number of current 8(a)

participants by more than 500 to 800 businesses, or less than 1 percent

of all small businesses seeking Government contracts. Therefore, an

Initial Regulatory Flexibility Analysis has not been performed. The

Councils will consider comments from small entities concerning the

affected FAR subparts in accordance with 5 U.S.C. 610. Interested

parties must submit such comments separately and should cite 5 U.S.C

601, et seq. (FAR case 98-011), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose information collection requirements that require

the approval of the Office of Management and Budget under 44 U.S.C.

3501, et seq.

D. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary

of Defense (DoD), the Administrator of General Services (GSA), and the

Administrator of the National Aeronautics and Space Administration

(NASA) that urgent and compelling reasons exist to promulgate this

interim rule without prior opportunity for public comment. This action

is necessary to conform the Federal Acquisition Regulation to revisions

made in 13 CFR parts 121, 124, and 134 pertaining to the Small Business

Administration (SBA) 8(a)BD Program. The SBA final rule became

effective on June 30, 1998. However, pursuant to Pub. L. 98-577 and FAR

1.501, the Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council will consider public comments received

in response to this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 12, 19, and 52

Government procurement.

Dated: June 9, 1999.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 12, 19, and 52 as

set forth below:

1. The authority citation for 48 CFR parts 12, 19, and 52 continues

to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 12--ACQUISITION OF COMMERCIAL ITEMS

2. In section 12.102, amend paragraph (d)(3) by removing ``or''; in

(d)(4) by removing the period and adding ``; or''; and add (d)(5) to

read as follows:

12.102 Applicability.

* * * * *

(d) * * *

(5) Directly from another Federal agency.

PART 19--SMALL BUSINESS PROGRAMS

3. In section 19.101, amend paragraph (g)(2) by revising the

paragraph heading and the first sentence, and adding a sentence to the

end of the paragraph to read as follows:

19.101 Explanation of terms.

* * * * *

(g) * * *

(2) Joint venture--acquisition and property sale assistance.

Concerns bidding on a particular acquisition or property sale as joint

ventures are considered as affiliated and controlling or having the

power to control each other with regard to performance of the contract.

* * * The rules governing 8(a) Program joint ventures are described in

13 CFR 124.513.

* * * * *

4. Revise section 19.302(a) to read as follows:

19.302 Protesting a small business representation.

(a) An offeror, the SBA, or another interested party may protest

the small business representation of an offeror in a specific offer.

However, for competitive 8(a) contracts, the filing of a protest is

limited to an offeror, the contracting officer, or the SBA.

* * * * *

5. In section 19.800, redesignate paragraph (d) as (e); and add new

paragraphs (d) and (f) to read as follows:

19.800 General.

* * * * *

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(d) The SBA refers to this program as the 8(a) Business Development

(BD) Program.

* * * * *

(f) When SBA has delegated its 8(a) Program contract execution

authority to an agency, the contracting officer must refer to its

agency supplement or other policy directives for appropriate guidance.

19.802 [Amended]

6. Amend section 19.802 by revising the citation ``13 CFR 124.101-

113'' to read ``13 CFR 124.101-112''.

7. In section 19.804-2, revise paragraphs (a)(5), (a)(8), (a)(9),

and (a)(12) through (a)(14); redesignate paragraph (a)(15) as (a)(16),

and add a new paragraph (a)(15) to read as follows:

19.804-2 Agency offering.

(a) * * *

(5) Any special restrictions or geographical limitations on the

requirement (for construction, include the location of the work to be

performed).

* * * * *

(8) The acquisition history, if any, of the requirement, including

the names and addresses of any small business contractors that have

performed this requirement during the previous 24 months.

(9) A statement that prior to the offering no solicitation for the

specific acquisition has been issued as a small business or HUBZone

set-aside and that no other public communication (such as a notice in

the Commerce Business Daily) has been made showing the contracting

agency's clear intention to set-aside the acquisition for small

business or HUBZone small business concerns.

* * * * *

(12) Identification of all known 8(a) concerns, including HUBZone

8(a) concerns, that have expressed an interest in being considered for

the specific requirement.

(13) Identification of all SBA field offices that have asked for

the acquisition for the 8(a) Program.

(14) A request, if appropriate, that a requirement with an

estimated contract value under the applicable competitive threshold be

awarded as an 8(a) competitive contract (see 19.805-1(d)).

(15) A request, if appropriate, that a requirement with a contract

value over the applicable competitive threshold be awarded as a sole

source contract (see 19.805-1(b)).

* * * * *

8. Amend section 19.804-3 by revising paragraph (a); and adding

paragraphs (c) and (d) to read as follows:

19.804-3 SBA acceptance.

(a) Upon receipt of the contracting agency's offer, the SBA will

determine whether to accept the requirement for the 8(a) Program. The

SBA's decision whether to accept the requirement will be transmitted to

the contracting agency in writing within 10 working days of receipt of

the offer if the contract is likely to exceed the simplified

acquisition threshold and within 2 days of receipt if the contract is

at or below the simplified acquisition threshold. The contracting

agency may grant an extension of these time periods. If SBA does not

respond to an offering letter within 10 days, the contracting activity

may seek SBA's acceptance through the Associate Administrator (AA)/

8(a)BD.

* * * * *

(c) For acquisitions not exceeding the simplified acquisition

threshold, when the contracting activity makes an offer to the 8(a)

Program on behalf of a specific 8(a) firm and does not receive a reply

to its offer within 2 days, the contracting activity may assume the

offer is accepted and proceed with award of an 8(a) contract.

(d) As part of the acceptance process, SBA will review the

appropriateness of the SIC code designation assigned to the requirement

by the contracting activity.

(1) SBA will not challenge the SIC code assigned to the requirement

by the contracting activity if it is reasonable, even though other SIC

codes may also be reasonable.

(2) If SBA and the contracting activity are unable to agree on a

SIC code designation for the requirement, SBA may refuse to accept the

requirement for the 8(a) Program, appeal the contracting officer's

determination to the head of the agency pursuant to 19.810, or appeal

the SIC code designation to the SBA Office of Hearings and Appeals

under subpart C of 13 CFR part 134.

9. Revise section 19.804-4 to read as follows:

19.804-4 Repetitive acquisitions.

In order for repetitive acquisitions to be awarded through the 8(a)

Program, there must be separate offers and acceptances. This allows the

SBA to determine--

(a) Whether the requirement should be a competitive 8(a) award;

(b) A nominated firm's eligibility, whether or not it is the same

firm that performed the previous contract;

(c) The effect that contract award would have on the equitable

distribution of 8(a) contracts; and

(d) Whether the requirement should continue under the 8(a) Program.

10. Add sections 19.804-5 and 19.804-6 to read as follows:

19.804-5 Basic ordering agreements.

(a) The contracting activity must offer, and SBA must accept, each

order under a basic ordering agreement (BOA) in addition to offering

and accepting the BOA itself.

(b) SBA will not accept for award on a sole-source basis any order

that would cause the total dollar amount of orders issued under a

specific BOA to exceed the competitive threshold amount in 19.805-1.

(c) Once an 8(a) concern's program term expires, the concern

otherwise exits the 8(a) Program, or becomes other than small for the

SIC code assigned under the BOA, SBA will not accept new orders for the

concern.

19.804-6 Multiple award and Federal Supply Schedule contracts.

(a) Separate offers and acceptances must not be made for individual

orders under multiple award or Federal Supply Schedule (FSS) contracts.

SBA's acceptance of the original multiple award or FSS contract is

valid for the term of the contract.

(b) The requirements of 19.805-1 do not apply to individual orders

that exceed the competitive threshold as long as the original contract

was competed.

(c) An 8(a) concern may continue to accept new orders under a

multiple award or FSS contract even after a concern's program term

expires, the concern otherwise exits the 8(a) Program, or the concern

becomes other than small for the SIC code assigned under the contract.

11. Amend section 19.805-1 in paragraph (a)(2) by removing ``award

price'' and adding ``total value'' in its place; and revise paragraphs

(b)(2) and (d) to read as follows:

19.805-1 General.

* * * * *

(b) * * *

(2) SBA accepts the requirement on behalf of a concern owned by an

Indian tribe or an Alaska Native Corporation.

* * * * *

(d) The SBA Associate Administrator for 8(a) Business Development

(AA/8(a)BD) may approve an agency request for a competitive 8(a) award

below the competitive thresholds. Such requests will be approved only

on a limited basis and will be primarily granted where technical

competitions are appropriate or where a large number of responsible

8(a) firms are available for competition. In determining whether a

request to compete below the threshold will be approved, the AA/8(a)BD

will, in part, consider the extent to which the requesting agency is

supporting the 8(a)

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Program on a noncompetitive basis. The agency may include

recommendations for competition below the threshold in the offering

letter or by separate correspondence to the AA/8(a)BD.

19.805-2 [Amended]

12. Amend section 19.805-2 as follows:

a. Remove paragraph (a);

b. Redesignate paragraphs (b) through (e) as (a) through (d),

respectively;

c. In new redesignated paragraph (a), remove the words ``the SBA

instructions provided under''; and

d. In new redesignated paragraph (d), revise ``13 CFR 124.111(c)''

to read ``13 CFR 124.517''.

19.806 [Amended]

13. In section 19.806, amend paragraph (c) by adding ``within 10

working days'' after the word ``price.''

14. Revise section 19.808-2 to read as follows:

19.808-2 Competitive.

In competitive 8(a) acquisitions subject to part 15, the

contracting officer conducts negotiations directly with the competing

8(a) firms. Conducting competitive negotiations among 8(a) firms prior

to SBA's formal acceptance of the acquisition for the 8(a) Program may

be grounds for SBA's not accepting the acquisition for the 8(a)

Program.

15. Revise section 19.809 to read as follows:

19.809 Preaward considerations.

The contracting officer should request a preaward survey of the

8(a) contractor whenever considered useful. If the results of the

preaward survey or other information available to the contracting

officer raise substantial doubt as to the firm's ability to perform,

the contracting officer must refer the matter to SBA for Certificate of

Competency consideration under subpart 19.6.

16. Amend section 19.810 by revising paragraphs (a) and (b) to read

as follows:

19.810 SBA appeals.

(a) The SBA Administrator may submit the following matters for

determination to the agency head if the SBA and the contracting officer

fail to agree on them:

(1) The decision not to make a particular acquisition available for

award under the 8(a) Program.

(2) A contracting officer's decision to reject a specific 8(a) firm

for award of an 8(a) contract after SBA's acceptance of the requirement

for the 8(a) Program.

(3) The terms and conditions of a proposed 8(a) contract, including

the contracting activity's SIC code designation and estimate of the

fair market price.

(b) Notification of a proposed appeal to the agency head by the SBA

must be received by the contracting officer within 5 working days after

the SBA is formally notified of the contracting officer's decision. The

SBA will provide the agency Director for Small and Disadvantaged

Business Utilization a copy of this notification of the intent to

appeal. The SBA must send the written appeal to the head of the

contracting activity within 15 working days of SBA's notification of

intent to appeal or the contracting activity may consider the appeal

withdrawn. Pending issuance of a decision by the agency head, the

contracting officer must suspend action on the acquisition. The

contracting officer need not suspend action on the acquisition if the

contracting officer makes a written determination that urgent and

compelling circumstances that significantly affect the interests of the

United States will not permit waiting for a decision.

* * * * *

17. In section 19.811-1, revise the last sentence in the

introductory text of paragraph (c); and add paragraph (d) to read as

follows:

19.811-1 Sole source.

* * * * *

(c) * * * Appropriate blocks on the Standard Form (SF) 26 or 1442

will be asterisked and a continuation sheet appended as a tripartite

agreement which includes the following:

* * * * *

(d) For acquisitions not exceeding the simplified acquisition

threshold, the contracting officer may use the alternative procedures

in paragraph (c) of this subsection with the appropriate simplified

acquisition forms.

19.811-2 [Amended]

18. Amend the introductory text of section 19.811-2(a) by adding

``as a tripartite agreement'' after the word ``appended''.

19. Amend section 19.812 by revising paragraph (d) to read as

follows:

19.812 Contract administration.

* * * * *

(d) An 8(a) contract, whether in the base or an option year, must

be terminated for convenience if the 8(a) concern to which it was

awarded transfers ownership or control of the firm or if the contract

is transferred or novated for any reason to another firm, unless the

Administrator of the SBA waives the requirement for contract

termination (13 CFR 124.515). The Administrator may waive the

termination requirement only if certain conditions exist. Moreover, a

waiver of the requirement for termination is permitted only if the 8(a)

firm's request for waiver is made to the SBA prior to the actual

relinquishment of ownership or control, except in the case of death or

incapacity where the waiver must be submitted within 60 days after such

an occurrence. The clauses in the contract entitled ``Special 8(a)

Contract Conditions'' and ``Special 8(a) Subcontract Conditions''

require the SBA and the 8(a) subcontractor to notify the contracting

officer when ownership of the firm is being transferred. When the

contracting officer receives information that an 8(a) contractor is

planning to transfer ownership or control to another firm, the

contracting officer must take action immediately to preserve the option

of waiving the termination requirement. The contracting officer should

determine the timing of the proposed transfer and its effect on

contract performance and mission support. If the contracting officer

determines that the SBA does not intend to waive the termination

requirement, and termination of the contract would severely impair

attainment of the agency's program objectives or mission, the

contracting officer should immediately notify the SBA in writing that

the agency is requesting a waiver. Within 15 business days thereafter,

or such longer period as agreed to by the agency and the SBA, the

agency head must either confirm or withdraw the request for waiver.

Unless a waiver is approved by the SBA, the contracting officer must

terminate the contract for convenience upon receipt of a written

request by the SBA. This requirement for a convenience termination does

not affect the Government's right to terminate for default if the cause

for termination of an 8(a) contract is other than the transfer of

ownership or control.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

52.219-18 [Amended]

20. Amend section 52.219-18 by revising the date of the clause to

read ``(JUNE 1999)''; by removing paragraph (a)(1) of the clause; and

redesignating paragraphs (a)(2) and (a)(3) as (a)(1) and (a)(2),

respectively.

[FR Doc. 99-15148 Filed 6-16-99; 8:45 am]

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