[Federal Register Volume 72, Number 80 (Thursday, April 26, 2007)]
[Rules and Regulations]
[Pages 20761-20763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-7906]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 219 and 252
RIN 0750-AE93
Defense Federal Acquisition Regulation Supplement; Small Business
Programs (DFARS Case 2003-D047)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD has issued a final rule amending Defense Federal
Acquisition Regulation Supplement (DFARS) text pertaining to small
business programs. The rule updates and clarifies policy for
contracting with small business and small disadvantaged business
concerns and relocates text to the DFARS companion resource,
Procedures, Guidance, and Information.
EFFECTIVE DATE: April 26, 2007.
FOR FURTHER INFORMATION CONTACT: Ms. Deborah Tronic, Defense
Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062
Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0289;
facsimile (703) 602-0350. Please cite DFARS Case 2003-D047.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule amends DFARS Part 219 and corresponding contract
clauses. The DFARS changes--
Update and clarify requirements for contracting with small
business and small disadvantaged business concerns; and
Delete text containing procedures for referring matters to
the Small Business Administration; procedures for processing contract
awards under the 8(a) Program; and information on the DoD test program
for negotiation of comprehensive small business subcontracting plans.
Text on these subjects has been relocated to the DFARS companion
resource, Procedures, Guidance, and Information (PGI), available at
http://www.acq.osd.mil/dpap/dars/pgi.
DoD published a proposed rule at 71 FR 9303 on February 23, 2006.
Three respondents submitted comments on the proposed rule. A discussion
of the comments is provided below.
1. Comment: One respondent stated that the proposed changes to
subcontracting plan requirements at DFARS 219.704(2) and 252.219-
7003(g) would create an ambiguity. These changes proposed to amend text
requiring contractors to notify the administrative contracting officer
(ACO) of any substitutions of ``firms that are not small, small
disadvantaged, or women-owned small businesses for the firms listed in
the subcontracting plan,'' to instead indicate that the contractor must
notify the ACO of any substitutions of small businesses specifically
identified in the subcontracting plan. The respondent stated that ACOs
and contractors could interpret this change to mean that contractors
would be required to provide notification when substituting any firm,
even one that is a small business concern, for one that is listed in
the subcontracting plan. The respondent recommended that the rule
instead require contractors to notify the ACO of any substitutions of
``firms that are not small business concerns'' for the firms listed in
the subcontracting plan.
DoD Response: DoD agrees that the language in the proposed rule
could be ambiguous. Therefore, the final rule has been written to
clarify the existing policy, i.e., that the contractor must notify the
ACO of any substitutions of firms that are not small business firms,
for the small business firms specifically identified in the
subcontracting plan.
2. Comment: One respondent recommended deleting the proposed text
at 219.704(3), which contains a reference to the procedures in DFARS
215.304 regarding evaluation of offers that require a subcontracting
plan. The respondent recommended that the proposed 219.704(3) be
replaced with text stating that offerors with approved commercial or
comprehensive subcontracting plans are not required to submit contract-
specific goals, and that those offerors will be evaluated based on
Standard Form 295 information and Defense Contract Management Agency
evaluations of company-wide performance under their small business
programs. In addition, the respondent recommended that 219.704 state
that contracting officers may accept commercial subcontracting plans
for both commercial item and noncommercial item contracts, provided the
plan covers the entire production of both commercial and noncommercial
items as set forth at FAR 52.219-9(g).
DoD Response: The issues addressed in this comment go beyond the
scope of the changes being made under this DFARS case. DoD recognizes
the importance of the issues raised by the respondent and is currently
working independently of this case to resolve those issues. Any
proposed changes to the DFARS that might result would be published
under a separate case for public comment.
3. Comment: One respondent stated that deleting DFARS text and
putting it in PGI requires contracting officers to research multiple
locations to ensure they are complying with all the necessary
requirements. The respondent stated that deleting requirements would be
streamlining, not moving them to another area which may cause
uncertainty and ambiguity.
DoD Response: DoD has moved non-regulatory requirements and
guidance that do not significantly impact the public, from DFARS to PGI
to facilitate rapid dissemination of any future changes, thus
streamlining the process. Where there is related text in PGI, a link to
this text is imbedded in DFARS. Through these links, the user is able
to view the related PGI text side-by-side with the DFARS text. PGI also
contains information on training, deviations, policy memoranda, and
other information (e.g., guidebooks) that is not available in the
DFARS.
This rule was not subject to Office of Management and Budget review
under Executive Order 12866, dated September 30, 1993.
B. Regulatory Flexibility Act
DoD certifies that this final rule will not 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 makes no significant change to DoD policy for
contracting with small business and small disadvantaged business
concerns.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply, because the rule does
not impose any information collection requirements that require the
approval of the Office of Management and Budget under 44 U.S.C. 3501,
et seq.
List of Subjects in 48 CFR Parts 219 and 252
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
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Therefore, 48 CFR parts 219 and 252 are amended as follows:
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1. The authority citation for 48 CFR parts 219 and 252 continues to
read as follows:
[[Page 20762]]
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 219--SMALL BUSINESS PROGRAMS
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2. Section 219.000 is revised to read as follows:
219.000 Scope of part.
This part also implements 10 U.S.C. 2323, which--
(1) Is applicable to DoD through fiscal year 2009; and
(2) Establishes goals for awards to small disadvantaged business
(SDB) concerns, historically black colleges and universities (HBCUs),
and minority institutions (MIs). See 226.370 for policy on contracting
with HBCU/MIs.
219.202-1 [Removed]
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3. Section 219.202-1 is removed.
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4. The heading of Subpart 219.6 is revised to read as follows:
Subpart 219.6--Certificates of Competency and Determinations of
Responsibility
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5. Section 219.602 is revised to read as follows:
219.602 Procedures.
When making a nonresponsibility determination for a small business
concern, follow the procedures at PGI 219.602.
219.602-1 and 219.602-3 [Removed]
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6. Sections 219.602-1 and 219.602-3 are removed.
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7. Section 219.702 is revised to read as follows:
219.702 Statutory requirements.
(1) Section 834 of Public Law 101-189, as amended (15 U.S.C. 637
note), requires DoD to establish a test program to determine whether
comprehensive subcontracting plans on a corporate, division, or plant-
wide basis will reduce administrative burdens while enhancing
subcontracting opportunities for small and small disadvantaged business
concerns. See PGI 219.702 for the requirements of the test program.
(2) Comprehensive subcontracting plans shall not be subject to
application of liquidated damages during the period of the test program
(Section 402, Pub. L. 101-574).
219.703 [Amended]
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8. Section 219.703 is amended in paragraph (a)(2)(B) by removing
``Small, Small Disadvantaged and Women-Owned''.
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9. Section 219.704 is revised to read as follows:
219.704 Subcontracting plan requirements.
(1) The goal for use of small disadvantaged business concerns shall
include subcontracts with historically black colleges and universities
and minority institutions (see Subpart 226.70), in addition to
subcontracts with small disadvantaged business concerns. Subcontracts
with historically black colleges and universities and minority
institutions do not have to be included in the small disadvantaged
business goal in commercial items subcontracting plans.
(2) In those subcontracting plans which specifically identify small
businesses, prime contractors shall notify the administrative
contracting officer of any substitutions of firms that are not small
business firms, for the small business firms specifically identified in
the subcontracting plan. Notifications shall be in writing and shall
occur within a reasonable period of time after award of the
subcontract. Contractor-specified formats shall be acceptable.
(3) See 215.304 for evaluation of offers in acquisitions that
require a subcontracting plan.
219.705-2 [Removed]
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10. Section 219.705-2 is removed.
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11. Section 219.708 is amended by revising the section heading and
paragraph (b)(1) to read as follows:
219.708 Contract clauses.
(b)(1)(A) Use the clause at 252.219-7003, Small Business
Subcontracting Plan (DoD Contracts), in solicitations and contracts
that contain the clause at FAR 52.219-9, Small Business Subcontracting
Plan.
(B) In contracts with contractors that have comprehensive
subcontracting plans approved under the test program described in
219.702, use the clause at 252.219-7004, Small Business Subcontracting
Plan (Test Program), instead of the clauses at 252.219-7003, Small
Business Subcontracting Plan (DoD Contracts), and FAR 52.219-9, Small
Business Subcontracting Plan.
* * * * *
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12. Section 219.800 is amended by revising paragraph (a) to read as
follows:
219.800 General.
(a) By Partnership Agreement (PA) between the Small Business
Administration (SBA) and the Department of Defense (DoD), the SBA has
delegated to the Under Secretary of Defense (Acquisition, Technology,
and Logistics) its authority under paragraph 8(a)(1)(A) of the Small
Business Act (15 U.S.C. 637(a)) to enter into 8(a) prime contracts, and
its authority under 8(a)(1)(B) of the Small Business Act to award the
performance of those contracts to eligible 8(a) Program participants.
However, the SBA remains the prime contractor on all 8(a) contracts,
continues to determine eligibility of concerns for contract award, and
retains appeal rights under FAR 19.810. The SBA delegates only the
authority to sign contracts on its behalf. Consistent with the
provisions of the PA, this authority is hereby redelegated to DoD
contracting officers. A copy of the PA, which includes the PA's
expiration date, is available at PGI 219.800.
* * * * *
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13. Section 219.803 is revised to read as follows:
219.803 Selecting acquisitions for the 8(a) Program.
When selecting acquisitions for the 8(a) Program, follow the
procedures at PGI 219.803.
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14. Section 219.804 is revised to read as follows:
219.804 Evaluation, offering, and acceptance.
When processing requirements under the PA, follow the procedures at
PGI 219.804.
219.804-2 and 219.804-3 [Removed]
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15. Sections 219.804-2 and 219.804-3 are removed.
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16. Section 219.805-2 is revised to read as follows:
219.805-2 Procedures.
When processing requirements under the PA, follow the procedures at
PGI 219.805-2 for requesting eligibility determinations.
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17. Sections 219.808-1 and 219.811 are revised to read as follows:
219.808-1 Sole source.
For sole source requirements processed under the PA, follow the
procedures at PGI 219.808-1.
219.811 Preparing the contracts.
When preparing awards under the PA, follow the procedures at PGI
219.811.
219.811-1 and 219.811-2 [Removed]
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18. Sections 219.811-1 and 219.811-2 are removed.
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19. Section 219.811-3 is amended by revising paragraph (3) to read as
follows:
219.811-3 Contract clauses.
* * * * *
(3) Use the clause at 252.219-7011, Notification to Delay
Performance, in
[[Page 20763]]
solicitations and purchase orders issued under the PA cited in 219.800.
219.812 [Removed]
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20. Section 219.812 is removed.
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21. Section 219.1101 is added to read as follows:
219.1101 General.
The determination to use or suspend the price evaluation adjustment
for DoD acquisitions can be found at http://www.acq.osd.mil/dpap/dars/classdev/index.htm.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
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22. Section 252.212-7001 is amended by revising the clause date and
paragraphs (b)(2) and (3) to read as follows:
252.212-7001 Contract terms and conditions required to implement
Statutes or Executive orders applicable to Defense acquisitions of
commercial items.
* * * * *
CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR
EXECUTIVE ORDERS APPLICABLE TO DEFENSE ACQUISITIONS OF COMMERCIAL ITEMS
(APR 2007)
* * * * *
(b) * * *
(2) ---- 252.219-7003, Small Business Subcontracting Plan (DoD
Contracts) (APR 2007) (15 U.S.C. 637).
(3) ---- 252.219-7004, Small Business Subcontracting Plan (Test
Program) (APR 2007) (15 U.S.C. 637 note).
* * * * *
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23. Section 252.219-7003 is amended by revising the section heading,
the clause title and date, the introductory text preceding paragraph
(a), and paragraph (g) to read as follows:
252.219-7003 Small business subcontracting plan (DoD contracts).
* * * * *
SMALL BUSINESS SUBCONTRACTING PLAN (DOD CONTRACTS) (APR 2007)
This clause supplements the Federal Acquisition Regulation
52.219-9, Small Business Subcontracting Plan, clause of this
contract.
* * * * *
(g) In those subcontracting plans which specifically identify
small businesses, the Contractor shall notify the Administrative
Contracting Officer of any substitutions of firms that are not small
business firms, for the small business firms specifically identified
in the subcontracting plan. Notifications shall be in writing and
shall occur within a reasonable period of time after award of the
subcontract. Contractor-specified formats shall be acceptable.
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24. Section 252.219-7004 is amended by revising the section heading,
the clause title and date, and paragraph (d) to read as follows:
252.219-7004 Small business subcontracting plan (test program).
* * * * *
SMALL BUSINESS SUBCONTRACTING PLAN (TEST PROGRAM) (APR 2007)
* * * * *
(d) The failure of the Contractor or subcontractor to comply in
good faith with (1) the clause of this contract entitled
``Utilization of Small Business Concerns,'' or (2) an approved plan
required by this clause, shall be a material breach of the contract.
[FR Doc. E7-7906 Filed 4-25-07; 8:45 am]
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