[Federal Register Volume 69, Number 87 (Wednesday, May 5, 2004)]
[Rules and Regulations]
[Pages 25274-25280]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-9752]
[[Page 25273]]
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Part V
Department of Defense
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General Services Administration
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National Aeronautics and Space Administration
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48 CFR Parts 2, 5, 6, et al.
Federal Acquisition Regulation; Procurement Program for Service-
Disabled Veteran-Owned Small Business Concerns; Small Entity Compliance
Guide; Interim Rules
Federal Register / Vol. 69, No. 87 / Wednesday, May 5, 2004 / Rules
and Regulations
[[Page 25274]]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 5, 6, 13, 14, 15, 19, 33, 36, and 52
[FAC 2001-23; FAR Case 2004-002]
RIN 9000-AJ92
Federal Acquisition Regulation; Procurement Program for Service-
Disabled Veteran-Owned Small Business Concerns
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), 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 (Councils) have agreed on an interim
rule amending the Federal Acquisition Regulation (FAR) to implement
Section 308 of the Veterans Benefits Act of 2003, Procurement Program
for Small Business Concerns Owned and Controlled by Service-Disabled
Veterans (Pub. L. 108-183). The law provides for set-aside and sole
source procurement authority for service-disabled veteran-owned small
business (SDVOSB) concerns. This interim rule is published in
conjunction with the interim rule proposed by the Small Business
Administration.
DATES: Effective Date: May 5, 2004.
Comment Date: Interested parties should submit comments to the FAR
Secretariat at the address shown below on or before July 6, 2004, to be
considered in the formulation of a final rule.
ADDRESSES: Submit electronic comments via the Internet to--
[email protected] or http://www.regulations.gov. Submit written
comments to--General Services Administration, FAR Secretariat (MVA),
1800 F Street, NW., Room 4035, Attn: Ms. Laurie Duarte, Washington, DC
20405. Please submit comments only and cite FAC 2001-23, FAR case 2004-
002, in all correspondence related to this case.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (202) 501-4755,
for information pertaining to status or publication schedules. For
clarification of content, contact Ms. Rhonda Cundiff, Procurement
Analyst, at (202) 501-0044. Please cite FAC 2001-23, FAR case 2004-002.
SUPPLEMENTARY INFORMATION:
A. Background
Section 308 of the Veterans Benefits Act of 2003, Procurement
Program for Small Business Concerns Owned and Controlled by Service-
Disabled Veterans (Pub. L. 108-183) provides that the contracting
officer may--
Award contracts on the basis of competition restricted to
SDVOSB concerns if there is a reasonable expectation that two or more
SDVOSB concerns will submit offers for the contracting opportunity and
that the award can be made at a fair market price; or
Award a sole source contract to a responsible SDVOSB
concern if there is not a reasonable expectation that two or more
SDVOSB concerns will submit an offer, the anticipated contract price
(including options) will not exceed $5 million (for manufacturing) or
$3 million otherwise, and the contract award can be made at a fair and
reasonable price.
The law limits use of SDVOSB procurement authority to procurements
that would not otherwise be made from Federal Prison Industries
(section 4124 or 4125 of title 18, United States Code) or the Javits-
Wagner-O'Day (JWOD) Act (41 U.S.C. 46 et seq).
The interim rule amends the FAR to--
Establish the SDVOSB set-aside and sole source procurement
authority;
Correct an ambiguity in the definition of SDVOSB at FAR
2.101, 52.212-3, 52.219-1 and 52.219-8;
Correct appropriate references to all authorized small
business categories at FAR 5.206;
Require the use of a numbered note when setting aside for
SDVOSB at FAR 5.207(d). A new note to accomplish this task has been
provided to FedBizOpps;
Identify SDVOSB set-asides as another method of providing
for full and open competition after exclusion of sources, without the
need for a separate justification or determination and findings at FAR
Subpart 6.2;
Recognize that SDVOSB set-asides above the micro-purchase
threshold, but below the simplified acquisition threshold are at the
sole discretion of the contracting officer and are not subject to
review by the Small Business Administration (SBA) Procurement Center
Representatives, FAR 13.003 and 19.1405;
Add correct references in FAR 19.301 regarding penalties
for misrepresentations and false statements;
Add FAR 19.307 to address the procedures for protesting a
firm's status as an SDVOSB and cross-reference this subpart in FAR
33.102;
Add FAR Subpart 19.14 to incorporate policy and procedures
for the SDVOSB Procurement Program consistent with SBA regulations;
Revise FAR 36.501 to identify SDVOSB procurements (FAR
Subpart 19.14) and awards pursuant to FAR Subpart 19.11 or FAR Subpart
19.13. SBA requested this technical correction regarding FAR Subparts
19.11 and 19.13; and
Add FAR clause 52.219-27, Notice of Total Service-Disabled
Veteran-Owned Small Business Set-Aside, to cover both sole source and
competitive awards pursuant to this authority.
The Federal Procurement Data System-Next Generation (FPDS-NG) will
be updated to reflect SDVOSB procurement authorities.
This is a significant regulatory action and, therefore, was subject
to review under section 6(b) of Executive Order 12866, Regulatory
Planning and Review, dated September 30, 1993. This rule is not a major
rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The changes may 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 law provides that
the contracting officer may use the set-aside and sole source
procurement authority when contracting with SDVOSB concerns. Therefore,
an Initial Regulatory Flexibility Analysis (IRFA) has been prepared and
submitted to the Chief Counsel for Advocacy of the Small Business
Administration. Interested parties may obtain a copy from the FAR
Secretariat. The Councils will consider comments from small entities
concerning the affected FAR parts 2, 5, 6, 13, 14, 15, 19, 33, 36, and
52 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. (FAC 2001-23,
FAR case 2004-002), in correspondence. The analysis is as follows:
This Initial Regulatory Flexibility Analysis has been prepared
in accordance with section 603, title 5, of the United States Code.
1. Description of the reasons why action by the agency is being
considered. This interim rule revises the Federal Acquisition
Regulation in order to comply with recently enacted Public Law 108-
183, Veterans Benefits Act of 2003 (Dec. 16, 2003), section 308,
Procurement Program for Small Business Concerns Owned and Controlled
by Service-Disabled Veterans. This legislation provides for
discretionary set-aside and sole source procurement authority for
service-
[[Page 25275]]
disabled veteran-owned small business (SDVOSB) concerns. It expands
upon existing legislation that provides assistance and support to
SDVOSBs to better equip them to form and expand small business
enterprises and to increase procurement opportunities, thereby
enabling them to realize the American dream that they fought to
protect, becoming disabled while serving our country.
2. Succinct statement of the objectives of, and legal basis for,
the interim rule. This interim rule implements section 308 of Public
Law 108-183 and provides for discretionary set-aside and sole source
procurement authority for SDVOSB concerns. The objective is to
provide Federal contracting officials a means to improve their
performance toward the statutorily mandated 3% government-wide goal
for procurement from service-disabled veteran-owned small business
concerns.
3. Description of, and, where feasible, estimate of the number
of small entities to which the interim rule will apply. The changes
may 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 law provides that the contracting
officer may use the set-aside and sole source procurement authority
when contracting with SDVOSB concerns. Specifically, a query of the
Central Contractor Registration system indicates there are 198,732
small businesses registered, but only 4,714 (or 2.3%) of these small
businesses are categorized as SDVOSBs. Further, a search of the web
site maintained by the Veterans Administration only resulted in the
identification of 775 SDVOSBs. However, these numbers may not be
accurate as terminology has not always been used consistently in all
databases and regulations. Although the percentage is less than 2.5%
it will undoubtedly impact the contracting dollars and opportunities
afforded small business entities in the various small business
categories as well as service-disabled veteran-owned small business
entities.
4. Description of projected reporting, recordkeeping, and other
compliance requirements of the interim rule, including an estimate
of the classes of small entities which will be subject to the
requirement and the type of professional skills necessary for
preparation of the report or record. The rule will impose no new
reporting or recordingkeeping requirements on large or small
entities.
5. Identification, to the extent practicable, of all relevant
Federal rules which may duplicate, overlap, or conflict with the
interim rule. The companion interim rule by SBA will be published at
the same time as the FAR interim rule.
6. Description of any significant alternatives to the interim
rule which accomplish the stated objectives of applicable statutes
and which minimize any significant economic impact of the interim
rule on small entities. There are not any alternatives to publishing
this interim rule that will accomplish the stated objectives of
Public Law 108-183, Veterans Benefits Act of 2003 (Dec. 16, 2003),
Section 308. The rule includes only FAR text revisions required to
implement the statute cited herein.
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 because this interim rule includes FAR text revisions
required to implement recently enacted Public Law 108-183, Veterans
Benefits Act of 2003 (December 16, 2003), Section 308, Procurement
Program for Small Business Concerns Owned and Controlled by Service-
Disabled Veterans.
However, pursuant to Public Law 98-577 and FAR 1.501, the Councils
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 2, 5, 6, 13, 14, 15, 19, 33, 36,
52
Government procurement.
Dated: April 26, 2004.
Laura Auletta,
Director, Acquisition Policy Division.
Federal Acquisition Circular (FAC) 2001-23 is issued under the
authority of the Secretary of Defense, the Administrator of General
Services, and the Administrator for the National Aeronautics and Space
Administration.
Unless otherwise specified, all Federal Acquisition Regulation
(FAR) and other directive material contained in FAC 2001-23 are
effective May 5, 2004.
Dated: April 23, 2004.
Deidre A. Lee,
Director, Defense Procurement and Acquisition Policy.
Dated: April 23, 2004.
David A. Drabkin,
Deputy Associate Administrator, Office of Acquisition Policy, General
Services Administration.
Dated: April 21, 2004.
Tom Luedtke,
Assistant Administrator for Procurement, National Aeronautics and Space
Administration.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 5, 6, 13, 14, 15,
19, 33, 36, and 52 as set forth below:
0
1. The authority citation for 48 CFR parts 2, 5, 6, 13, 14, 15, 19, 33,
36, and 52 is revised to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
0
2. Amend section 2.101 in paragraph (b) in the definition ``Service-
disabled veteran-owned small business concern'' by revising paragraph
(1)(ii) to read as follows:
2.101 Definitions.
* * * * *
(b) * * *
Service-disabled veteran-owned small business concern--
(1) * * *
(ii) The management and daily business operations of which are
controlled by one or more service-disabled veterans or, in the case of
a service-disabled veteran with permanent and severe disability, the
spouse or permanent caregiver of such veteran.
* * * * *
PART 5--PUBLICIZING CONTRACT ACTIONS
0
3. Amend section 5.206 by revising the introductory text of paragraph
(a) to read as follows:
5.206 Notices of subcontracting opportunities.
(a) The following entities may transmit a notice to the GPE to seek
competition for subcontracts, to increase participation by qualified
HUBZone small business, small, small disadvantaged, women-owned small
business, veteran-owned small business and service-disabled veteran-
owned small business concerns, and to meet established subcontracting
plan goals:
* * * * *
[[Page 25276]]
0
4. Amend section 5.207 by revising paragraph (d) to read as follows:
5.207 Preparation and transmittal of synopses.
* * * * *
(d) Set-asides. When the proposed acquisition provides for a total
or partial small business set-aside, very small business set aside,
HUBZone small business set-aside, or a service-disabled veteran-owned
small business set-aside, the appropriate Numbered Note will be cited.
* * * * *
PART 6--COMPETITION REQUIREMENTS
0
5. Add section 6.206 to read as follows:
6.206 Set-asides for service-disabled veteran-owned small business
concerns.
(a) To fulfill the statutory requirements relating to the Veterans
Benefits Act of 2003 (15 U.S.C. 657f), contracting officers may set-
aside solicitations to allow only service-disabled veteran-owned small
business concerns to compete (see 19.1405).
(b) No separate justification or determination and findings are
required under this part to set aside a contract action for service-
disabled veteran-owned small business concerns.
0
6. Amend section 6.302-5 by adding paragraph (b)(7) to read as follows:
6.302-5 Authorized or required by statute.
* * * * *
(b) * * *
(7) Sole source awards under the Veterans Benefits Act of 2003 (15
U.S.C. 657f).
* * * * *
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
0
7. Amend section 13.003 by revising paragraph (b)(2) to read as
follows:
13.003 Policy.
* * * * *
(b) * * *
(2) The contracting officer may set aside for HUBZone small
business concerns (see 19.1305) or service-disabled veteran-owned small
business concerns (see 19.1405) an acquisition of supplies or services
that has an anticipated dollar value exceeding the micro-purchase
threshold and not exceeding the simplified acquisition threshold. The
contracting officer's decision not to set aside an acquisition for
HUBZone small business or service-disabled veteran-owned small business
concerns participation below the simplified acquisition threshold is
not subject to review under Subpart 19.4.
* * * * *
PART 14--SEALED BIDDING
0
8. Amend section 14.502 by redesignating paragraph (b)(6) as (b)(7) and
adding a new paragraph (b)(6) to read as follows:
14.502 Conditions for use.
* * * * *
(b) * * *
(6) The use of a set-aside for service-disabled veteran-owned small
business concerns (see Subpart 19.14).
* * * * *
PART 15--CONTRACTING BY NEGOTIATION
0
9. Amend section 15.503 in paragraph (a)(2) by--
0
a. Removing ``or'' from the end of paragraph (a)(2)(i)(B);
0
b. Removing the period from the end of paragraph (a)(2)(i)(C) and
adding ``; or'' in its place;
0
c. Adding a new paragraph (a)(2)(i)(D); and
0
d. Revising paragraph (a)(2)(ii)(C) to read as follows:
15.503 Notifications to unsuccessful offerors.
* * * * *
(a) * * *
(2) * * *
(i) * * *
(D) When using the service-disabled veteran-owned small business
procedures in 19.1405.
(ii) * * *
(C) That no response is required unless a basis exists to challenge
the small business size status, disadvantaged status, HUBZone status,
or service-disabled veteran-owned status of the apparently successful
offeror.
* * * * *
PART 19--SMALL BUSINESS PROGRAMS
0
10. Amend section 19.000 by revising paragraph (a)(3); removing ``and''
from the end of paragraph (a)(10); revising paragraph (a)(11); and
adding paragraph (a)(12) to read as follows:
19.000 Scope of part.
(a) * * *
(3) Setting acquisitions aside for exclusive competitive
participation by small business, HUBZone small business, and service-
disabled veteran-owned small business concerns;
* * * * *
(11) The use of veteran-owned small business concerns; and
(12) Sole source awards to HUBZone small business and service-
disabled veteran-owned small business concerns.
* * * * *
0
11. Amend section 19.201 by revising paragraph (d)(10) to read as
follows:
19.201 General policy.
* * * * *
(d) * * *
(10) Make recommendations in accordance with agency procedures as
to whether a particular acquisition should be awarded under Subpart
19.5 as a small business set-aside, under Subpart 19.8 as a Section
8(a) award, under Subpart 19.13 as a HUBZone set-aside, or under
Subpart 19.14 as a service-disabled veteran-owned small business set-
aside;
* * * * *
0
12. Amend section 19.202-6 by--
0
a. Removing ``and'' from the end of paragraph (a)(3);
0
b. Removing the period from the end of paragraph (a)(4) and adding ``;
and'' in its place; and
0
c. Adding paragraph (a)(5) to read as follows:
19.202-6 Determination of fair market price.
(a) * * *
(5) Service-disabled veteran-owned small business set-asides (see
Subpart 19.14).
* * * * *
0
13. Amend section 19.301 by revising paragraph (d) to read as follows:
19.301 Representation by the offeror.
* * * * *
(d) If the SBA determines that the status of a concern as a small
business, veteran-owned small business, service-disabled veteran-owned
small business, HUBZone small business, small disadvantaged business,
or women-owned small business has been misrepresented in order to
obtain a set-aside contract, an 8(a) subcontract, a subcontract that is
to be included as part or all of a goal contained in a subcontracting
plan, or a prime or subcontract to be awarded as a result, or in
furtherance of any other provision of Federal law that specifically
references Section 8(d) of the Small Business Act for a definition of
program eligibility, the SBA may take action as specified in Sections
16(a) or 16(d) of the Act. If the SBA declines to take action, the
agency may initiate the process. The SBA's regulations on penalties for
misrepresentations and false statements are contained in 13 CFR 121.108
for
[[Page 25277]]
small business, 13 CFR 124.501 for 8(a) small business, 13 CFR 124.1011
for small disadvantaged business, 13 CFR 125.29 for veteran or service-
disabled veteran-owned small business, and 13 CFR 126.900 for HUBZone
small business.
0
14. Redesignate section 19.307 as section 19.308 and add a new section
19.307 to read as follows:
19.307 Protesting a firm's status as a service-disabled veteran-owned
small business concern.
(a) For sole source acquisitions, the SBA or the contracting
officer may protest the apparently successful offeror's service-
disabled veteran-owned small business status. For service-disabled
veteran-owned small business set-asides, any interested party may
protest the apparently successful offeror's service-disabled veteran-
owned small business concern status.
(b) Protests relating to whether a service-disabled veteran-owned
small business concern is a small business for purposes of any Federal
program are subject to the procedures of Subpart 19.3. Protests
relating to small business size status for the acquisition and the
service-disabled veteran-owned small business status requirements will
be processed concurrently by SBA.
(c) All protests must be in writing and must state all specific
grounds for the protest. Assertions that a protested concern is not a
service-disabled veteran-owned small business concern, without setting
forth specific facts or allegations, are insufficient. An offeror must
submit its protest to the contracting officer. The contracting officer
and the SBA must submit protests to SBA's Associate Administrator for
Government Contracting. The SBA regulations are found at 13 CFR 125.24
through 125.28.
(d) An offeror's protest must be received by close of business on
the fifth business day after bid opening (in sealed bid acquisitions)
or by close of business on the fifth business day after notification by
the contracting officer of the apparently successful offeror (in
negotiated acquisitions). Any protest received after these time limits
is untimely. Any protest received prior to bid opening or notification
of intended award, whichever applies, is premature and shall be
returned to the protester.
(e) Except for premature protests, the contracting officer must
forward to SBA by mail or facsimile transmission (202-205-6390) any
protest received, notwithstanding whether the contracting officer
believes that the protest is insufficiently specific or untimely. The
protest must be accompanied by a referral letter, with the notation on
the envelope or facsimile cover sheet: ``Attn: Service-Disabled Veteran
Status Protest,'' and be sent to Associate Administrator for Government
Contracting, U.S. Small Business Administration, 409 3rd Street, SW.,
Washington, DC 20416.
(f) The referral letter must include information pertaining to the
solicitation that may be necessary for SBA to determine timeliness and
standing, including the solicitation number; the name, address,
telephone number and facsimile number of the contracting officer;
whether the contract was sole-source or set-aside; whether the
protestor submitted an offer; whether the protested concern was the
apparent successful offeror; whether the procurement was conducted
using sealed bid or negotiated procedures; the bid opening date, if
applicable; when the protest was submitted; and whether a contract has
been awarded.
(g) The Associate Administrator for Government Contracting will
notify the protester and the contracting officer of the date the
protest was received and whether the protest will be processed or
dismissed for lack of timeliness or specificity.
(h) All questions about service-disabled veteran-owned small
business size or status must be referred to the SBA for resolution.
When making its determinations of veteran or service-disabled veteran's
status, the SBA will rely upon existing Department of Veteran's Affairs
or Department of Defense determinations. SBA will determine the
service-disabled veteran-owned small business status of the protested
concern within 15 business days after receipt of a protest. If SBA does
not contact the contracting officer within 15 business days, the
contracting officer may award the contract to the apparently successful
offeror, unless the contracting officer has granted SBA an extension.
The contracting officer may award the contract after receipt of a
protest if the contracting officer determines in writing that an award
must be made to protect the public interest.
(i) SBA will notify the contracting officer, the protester, and the
protested concern of its determination. The determination is effective
immediately and is final unless overturned on appeal by SBA's Associate
Deputy Administrator for Government Contracting and Office of Hearings
and Appeals (OHA) pursuant to 13 CFR part 134.
(j) The protested service-disabled veteran-owned small business
concern, the protester, or the contracting officer may file appeals of
protest determinations with SBA's OHA. The OHA must receive the appeal
no later than 5 business days after the date of receipt of the protest
determination. SBA will dismiss any appeal received after the 5-day
period.
(k) The appeal must be in writing. The appeal must identify the
protest determination being appealed and must set forth a full and
specific statement as to why the decision is erroneous or what
significant fact the Office of Government Contracting (OGC) failed to
consider.
(l) The party appealing the decision must provide notice of the
appeal to the contracting officer and either the protested service-
disabled veteran-owned small business concern or the original
protester, as appropriate. SBA will not consider additional information
or changed circumstances that were not disclosed at the time of the
OGC's decision or that are based on disagreement with the findings and
conclusions contained in the determination.
(m) The OHA will make its decision within 5 business days of the
receipt of the appeal, if practicable, and will base its decision only
on the information and documentation in the protest record as
supplemented by the appeal. SBA will provide a copy of the decision to
the contracting officer, the protester, and the protested service-
disabled veteran-owned small business concern. The SBA decision, if
received before award, will apply to the pending acquisition. SBA
rulings received after award will not apply to that acquisition. The
OHA's decision is the final decision.
0
15. Amend section 19.501 by redesignating paragraphs (d) thru (h) as
paragraphs (e) thru (i), respectively; adding a new paragraph (d); and
revising the second sentence of newly designated paragraph (e) to read
as follows:
19.501 General.
* * * * *
(d) The small business reservation and set-asides requirements at
19.502-2 do not preclude award of a contract to a service-disabled
veteran-owned small business concern under Subpart 19.14.
(e) * * * The contracting officer shall document why a small
business set-aside is inappropriate when an acquisition is not set
aside for small business, unless a HUBZone or service-disabled veteran-
owned small business set-aside or HUBZone or service-disabled veteran-
owned small business sole source award is anticipated. * * *
* * * * *
[[Page 25278]]
19.800 General.
0
16. Amend section 19.800 in the first sentence of paragraph (e) by
removing ``19.5 or 19.13,'' and adding ``19.5, 19.13, or 19.14,'' in
its place.
0
17. Amend section 19.804-2 by revising paragraph (a)(9) to read as
follows:
19.804-2 Agency offering.
(a) * * *
(9) A statement that prior to the offering no solicitation for the
specific acquisition has been issued as a small business, HUBZone, or
service-disabled veteran-owned small business set-aside and that no
other public communication (such as a notice through the Governmentwide
point of entry (GPE)) has been made showing the contracting agency's
clear intention to set-aside the acquisition for small business,
HUBZone small business, or service-disabled veteran-owned small
business concerns.
* * * * *
0
18. Amend section 19.1007 by revising paragraphs (b)(2) and (c)(1)(i)
to read as follows:
19.1007 Procedures.
* * * * *
(b) * * *
(2) Acquisitions in the designated industry groups must continue to
be considered for placement under the 8(a) Program (see Subpart 19.8),
the HUBZone Program (see Subpart 19.13), and the Service-Disabled
Veteran-Owned Small Business Procurement Program (see Subpart 19.14).
(c) * * *
(1) * * *
(i) For acquisitions $25,000 or less, proceed in accordance with
Subpart 19.5, 19.8, 19.13, or 19.14; or
* * * * *
0
19. Amend section 19.1102 by redesignating paragraphs (b)(5) and (b)(6)
as (b)(6) and (b)(7), respectively; and adding a new paragraph (b)(5)
to read as follows:
19.1102 Applicability.
* * * * *
(b) * * *
(5) That are set-aside for service-disabled veteran-owned small
business concerns;
* * * * *
0
20. Amend section 19.1202-2 by revising paragraph (b)(1) to read as
follows:
19.1202-2 Applicability.
* * * * *
(b) * * *
(1) Small business set-asides (see Subpart 19.5), HUBZone set-
asides (see Subpart 19.13), and service-disabled veteran-owned small
business set-asides (see Subpart 19.14);
* * * * *
0
21. Add Subpart 19.14, consisting of sections 19.1401 through 19.1407,
to read as follows:
Subpart 19.14--Service-Disabled Veteran-Owned Small Business
Procurement Program
Sec.
19.1401 General.
19.1402 Applicability.
19.1403 Status as a service-disabled veteran-owned small business
concern.
19.1404 Exclusions.
19.1405 Service-disabled veteran-owned small business set-aside
procedures.
19.1406 Sole source awards to service-disabled veteran-owned small
business concerns.
19.1407 Contract clauses.
19.1401 General.
(a) The Veterans Benefit Act of 2003 (15 U.S.C. 657f) created the
procurement program for small business concerns owned and controlled by
service-disabled veterans (commonly referred to as the ``Service-
Disabled Veteran-owned Small Business (SDVOSB) Procurement Program'').
(b) The purpose of the Service-Disabled Veteran-Owned Small
Business Program is to provide Federal contracting assistance to
service-disabled veteran-owned small business concerns.
19.1402 Applicability.
The procedures in this subpart apply to all Federal agencies that
employ one or more contracting officers.
19.1403 Status as a service-disabled veteran-owned small business
concern.
(a) Status as a service-disabled veteran-owned small business
concern is determined in accordance with 13 CFR parts 125.8 through
125.13; also see 19.307.
(b) At the time that a service-disabled veteran-owned small
business concern submits its offer, it must represent to the
contracting officer that it is a--
(1) Service-disabled veteran-owned small business concern; and
(2) Small business concern under the North American Industry
Classification System (NAICS) code assigned to the procurement.
(c) A joint venture may be considered a service-disabled veteran
owned small business concern if--
(1) At least one member of the joint venture is a service-disabled
veteran-owned small business concern, and makes the representations in
paragraph (b) of this section;
(2) Each other concern is small under the size standard
corresponding to the NAICS code assigned to the procurement;
(3) The joint venture meets the requirements of paragraph 7 of the
explanation of Affiliates in 19.101; and
(4) The joint venture meets the requirements of 13 CFR 125.15(b).
(d) Any service-disabled veteran-owned small business concern
(nonmanufacturer) must meet the requirements in 19.102(f) to receive a
benefit under this program.
19.1404 Exclusions.
This subpart does not apply to--
(a) Requirements that can be satisfied through award to--
(1) Federal Prison Industries, Inc. (see Subpart 8.6);
(2) Javits-Wagner-O'Day Act participating non-profit agencies for
the blind or severely disabled (see Subpart 8.7);
(b) Orders under indefinite delivery contracts (see Subpart 16.5);
(c) Orders against Federal Supply Schedules (see Subpart 8.4);
(d) Requirements currently being performed by an 8(a) participant
or requirements SBA has accepted for performance under the authority of
the 8(a) Program, unless SBA has consented to release the requirements
from the 8(a) Program; or
(e) Requirements for commissary or exchange resale items.
19.1405 Service-disabled veteran-owned small business set-aside
procedures.
(a) The contracting officer may set-aside acquisitions exceeding
the micro-purchase threshold for competition restricted to service-
disabled veteran-owned small business concerns when the requirements of
paragraph (b) of this section can be satisfied. The contracting officer
shall consider service-disabled veteran-owned small business set-asides
before considering service-disabled veteran-owned small business sole
source awards (see 19.1406).
(b) To set aside an acquisition for competition restricted to
service-disabled veteran-owned small business concerns, the contracting
officer must have a reasonable expectation that--
(1) Offers will be received from two or more service-disabled
veteran-owned small business concerns; and
(2) Award will be made at a fair market price.
(c) If the contracting officer receives only one acceptable offer
from a service-disabled veteran-owned small business concern in
response to a set-aside, the contracting officer should make an award
to that concern. If the contracting
[[Page 25279]]
officer receives no acceptable offers from service-disabled veteran-
owned small business concerns, the service-disabled veteran-owned set-
aside shall be withdrawn and the requirement, if still valid, set aside
for small business concerns, as appropriate (see Subpart 19.5).
(d) The procedures at 19.202-1 and, except for acquisitions not
exceeding the simplified acquisition threshold, at 19.402 apply to this
section. When the SBA intends to appeal a contracting officer's
decision to reject a recommendation of the SBA procurement center
representative to set aside an acquisition for competition restricted
to service-disabled veteran-owned small business concerns, the SBA
procurement center representative shall notify the contracting officer,
in writing, of its intent within 5 working days of receiving the
contracting officer's notice of rejection. Upon receipt of notice of
SBA's intent to appeal, the contracting officer shall suspend action on
the acquisition unless the head of the contracting activity makes a
written determination that urgent and compelling circumstances, which
significantly affect the interests of the Government, exist. Within 15
working days of SBA's notification to the contracting officer, SBA
shall file its formal appeal with the head of the contracting activity,
or that agency may consider the appeal withdrawn. The head of the
contracting activity shall reply to SBA within 15 working days of
receiving the appeal. The decision of the head of the contracting
activity shall be final.
19.1406 Sole source awards to service-disabled veteran-owned small
business concerns.
(a) A contracting officer may award contracts to service-disabled
veteran-owned small business concerns on a sole source basis (see
19.501(d) and 6.302-5), provided--
(1) Only one service-disabled veteran-owned small business concern
can satisfy the requirement;
(2) The anticipated award price of the contract (including options)
will not exceed--
(i) $5 million for a requirement within the NAICS codes for
manufacturing; or
(ii) $3 million for a requirement within any other NAICS code;
(3) The service-disabled veteran-owned small business concern has
been determined to be a responsible contractor with respect to
performance; and
(4) Award can be made at a fair and reasonable price.
(b) The SBA has the right to appeal the contracting officer's
decision not to make a service-disabled veteran-owned small business
sole source award.
19.1407 Contract clauses.
The contracting officer shall insert the clause 52.219-27, Notice
of Total Service-Disabled Veteran-Owned Small Business Set-Aside, in
solicitations and contracts for acquisitions under 19.1405 and 19.1406.
PART 33--PROTESTS, DISPUTES, AND APPEALS
0
22. Amend section 33.102 by revising the last sentence of paragraph (a)
to read as follows:
33.102 General.
(a) * * * (See 19.302 for protests of small business status, 19.305
for protests of disadvantaged business status, and 19.307 for protests
of service-disabled veteran-owned small business status.)
* * * * *
PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
36.501 [Amended]
0
23. Amend section 36.501 in the first sentence of paragraph (b) by
removing ``19.5 or 19.8,'' and adding ``19.5, 19.8, 19.11, 19.13, or
19.14'' in its place.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.212-3 Offeror Representations and Certifications--Commercial Items.
0
24. Amend section 52.212-3 by revising the date of the provision to
read ``(May 2004)''; and in paragraph (a) of the provision in the
definition ``Service-disabled veteran-owned small business concern'',
paragraph (1)(ii), by removing ``case of a'' and adding ``case of a
service-disabled'' in its place.
0
25. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Removing ``(Oct 2000)'' from paragraph (b)(7) and adding ``(May
2004)'' in its place;
0
c. Redesignating paragraphs (b)(13) through (b)(33) as (b)(14) through
(b)(34), respectively;
0
d. Adding a new paragraph (b)(13); and
0
e. Removing ``(Oct 2000)'' from paragraph (e)(1)(i) and adding ``(May
2004)'' in its place. The revised and added text reads as follows:
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required To Implement Statutes or
Executive Orders--Commercial Items (May 2004)
* * * * *
(b) * * *
(13) 52.219-27, Notice of Total Service-Disabled Veteran-Owned
Small Business Set-Aside (May 2004).
* * * * *
52.213-4 [Amended]
0
26. Amend section 52.213-4 by revising the date of the clause to read
``(May 2004)''; and by removing ``(Apr 2003)'' from paragraph
(a)(2)(vi) of the clause and adding ``(May 2004)'' in its place.
52.219-1 [Amended]
0
27. Amend section 52.219-1 by--
0
a. Revising the date of the provision to read ``(May 2004)'';
0
b. Removing ``case of a'' from paragraph (c), in the definition
``Service-disabled veteran-owned small business concern'', paragraph
(1)(ii), and adding ``case of a service-disabled'' in its place; and
0
c. Removing ``19.307(a)(2)'' from Alternate I and adding
``19.308(a)(2)'' in its place.
52.219-2 [Amended]
0
28. In the introductory text of section 52.219-2, remove ``19.307(c)''
and add ``19.308(c)'' in its place.
52.219-8 [Amended]
0
29. Amend section 52.219-8 by revising the date of the clause to read
``(May 2004)''; and in paragraph (c) in the definition ``Service-
disabled veteran-owned small business concern'', remove ``case of a''
from paragraph (1)(ii) and add ``case of a service-disabled'' in its
place.
52.219-22 [Amended]
0
30. Amend section 52.219-22 by removing ``19.307(b)'' from the
introductory paragraph and the introductory paragraph of Alternate I
and adding ``19.308(b)'' in their place.
0
31. Add section 52.219-27 to read as follows:
52.219-27 Notice of Total Service-Disabled Veteran-Owned Small
Business Set-Aside.
As prescribed in 19.1407, insert the following clause:
Notice of Total Service-Disabled Veteran-Owned Small Business Set-Aside
(May 2004)
(a) Definition. Service-disabled veteran-owned small business
concern--
(1) Means a small business concern--
(i) Not less than 51 percent of which is owned by one or more
service-disabled
[[Page 25280]]
veterans or, in the case of any publicly owned business, not less
than 51 percent of the stock of which is owned by one or more
service-disabled veterans; and
(ii) The management and daily business operations of which are
controlled by one or more service-disabled veterans or, in the case
of a service-disabled veteran with permanent and severe disability,
the spouse or permanent caregiver of such veteran.
(2) Service-disabled veteran means a veteran, as defined in 38
U.S.C. 101(2), with a disability that is service-connected, as
defined in 38 U.S.C. 101(16).
(b) General. (1) Offers are solicited only from service-disabled
veteran-owned small business concerns. Offers received from concerns
that are not service-disabled veteran-owned small business concerns
shall not be considered.
(2) Any award resulting from this solicitation will be made to a
service-disabled veteran-owned small business concern.
(c) Agreement. A service-disabled veteran-owned small business
concern agrees that in the performance of the contract, in the case
of a contract for--
(1) Services (except construction), at least 50 percent of the
cost of personnel for contract performance will be spent for
employees of the concern or employees of other service-disabled
veteran-owned small business concerns;
(2) Supplies (other than acquisition from a nonmanufacturer of
the supplies), at least 50 percent of the cost of manufacturing,
excluding the cost of materials, will be performed by the concern or
other service-disabled veteran-owned small business concerns;
(3) General construction, at least 15 percent of the cost of the
contract performance incurred for personnel will be spent on the
concern's employees or the employees of other service-disabled
veteran-owned small business concerns; or
(4) Construction by special trade contractors, at least 25
percent of the cost of the contract performance incurred for
personnel will be spent on the concern's employees or the employees
of other service-disabled veteran-owned small business concerns.
(d) A joint venture may be considered a service-disabled veteran
owned small business concern if--
(1) At least one member of the joint venture is a service-
disabled veteran-owned small business concern, and makes the
following representations: That it is a service-disabled veteran-
owned small business concern, and that it is a small business
concern under the North American Industry Classification Systems
(NAICS) code assigned to the procurement;
(2) Each other concern is small under the size standard
corresponding to the NAICS code assigned to the procurement; and
(3) The joint venture meets the requirements of paragraph 7 of
the explanation of Affiliates in 19.101 of the Federal Acquisition
Regulation.
(4) The joint venture meets the requirements of 13 CFR 125.15(b)
(e) Any service-disabled veteran-owned small business concern
(nonmanufacturer) must meet the requirements in 19.102(f) of the
Federal Acquisition Regulation to receive a benefit under this
program.
(End of Clause)
52.244-6 [Amended]
0
32. Amend section 52.244-6 by revising the date of the clause to read
``(May 2004)''; and by removing ``(Oct 2000)'' from paragraph (c)(1)(i)
of the clause and adding ``(May 2004)'' in its place.
[FR Doc. 04-9752 Filed 5-4-04; 8:45 am]
BILLING CODE 6820-EP-P