[Federal Register: March 27, 2000 (Volume 65, Number 59)]
[Rules and Regulations]               
[Page 16275-16276]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]





48 CFR Part 19

[FAC 97-16; FAR Case 1999-012; Item I]
RIN 9000-AI64

Federal Acquisition Regulation; Small Business Competitiveness 
Demonstration Program

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

ACTION: Interim rule with request for comments.


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 the 
Office of Federal Procurement Policy (OFPP) and Small Business 
Administration (SBA) final policy directive to provide updated guidance 
on the Small Business Competitiveness Demonstration Program.

DATES: Effective Date: March 27, 2000.
    Applicability Date: The FAR, as amended by this rule, is applicable 
to solicitations issued on or after March 27, 2000.
    Comment Date: Interested parties should submit comments to the FAR 
Secretariat at the address shown below on or before May 26, 2000 to be 
considered in the formulation of a final rule.

ADDRESSES: Submit written comments to: General Services Administration, 
FAR Secretariat (MVR), 1800 F Street, NW, Room 4035, Attn: Ms. Laurie 
Duarte, Washington, DC 20405.
    Submit electronic comments via the Internet to: farcase.1999-
012@gsa.gov. Please submit comments only and cite FAC 97-16, FAR case 
1999-012 in all correspondence related to this case.

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 97-16, FAR case 1999-012.


A. Background

    This interim rule amends FAR Subpart 19.10 to provide updated 
guidance regarding the Small Business Competitiveness Demonstration 
Program (Program). The Program was originally established in 1988 by 
Title VII of Public Law 100-656, as amended, and subsequently 
implemented in the FAR. As statutory amendments were made to the 
Program, OFPP issued conforming modifications to its policy directive. 
With the enactment of Public Law 105-135, the Small Business 
Reauthorization Act of 1997, the Program was made permanent. The OFPP 
and SBA published a joint final policy directive on the Program in the 
Federal Register at 64 FR 29693, June 2, 1999. Specific guidance 
published in the OFPP and SBA final policy directive requires that DoD, 
GSA, and NASA revise the FAR to provide this updated guidance.
    This rule was not subject to Office of Management and Budget 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

    This interim rule is not expected 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 makes ministerial changes to the existing language and does not 
change existing policy. Therefore, the Councils have not performed an 
Initial Regulatory Flexibility Analysis. Comments are invited from 
small businesses and other interested parties. The Councils will 
consider comments from small entities concerning the affected FAR 
subpart 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 1999-012), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 104-13) 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 rule implements a joint OFPP/SBA policy 
directive that became effective on October 1, 1999. 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 Part 19

    Government procurement.

    Dated: March 20, 2000.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA amend 48 CFR part 19 as set forth 


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

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

    2. Amend section 19.502-2 in paragraph (a) by revising the last 
sentence; and in paragraph (d) by removing ``(see 19.1006(b))'' and 
adding ``(see 19.1007(b))'' in its place. The revised text reads as 

19.502-2  Total small business set-asides.

    (a) * * * The small business reservation does not preclude the 

[[Page 16276]]

of a contract with a value not greater than $100,000 under Subpart 
19.8, Contracting with the Small Business Administration, under 
19.1007(c), Solicitations equal to or less than the ESB reserve amount, 
or under 19.1305, HUBZone set-aside procedures.
* * * * *
    3. Amend section 19.1001 by revising the introductory paragraph to 
read as follows:

19.1001  General.

    The Small Business Competitiveness Demonstration Program was 
established by the Small Business Competitiveness Demonstration Program 
Act of 1988, Public Law 100-656 (15 U.S.C. 644 note). The program is 
implemented by a joint OFPP and SBA Policy Directive and Implementation 
Plan, dated May 25, 1999. The program consists of two major 
* * * * *
    4. Amend section 19.1002 by revising the section heading and 
adding, in alphabetical order, the definition ``Emerging small business 
reserve amount'' to read as follows:

19.1002  Definitions.

* * * * *
    Emerging small business reserve amount, for the designated groups 
described in 19.1005, means a threshold established by the Office of 
Federal Procurement Policy of--
    (1) $25,000 for construction, refuse systems and related services, 
and nonnuclear ship repair; and
    (2) $50,000 for architectural and engineering services.

19.1003  [Amended]

    5. Amend section 19.1003 by redesignating paragraphs (b) and (c) as 
(c) and (b), respectively.
    6. Amend section 19.1005 by redesignating paragraphs (a)(3) and 
(a)(4) as (a)(4) and (a)(3), respectively, and revising newly 
designated (a)(4); and in paragraph (b) by removing ``shall designate'' 
and adding ``designates'' in its place. The revised text reads as 

19.1005  Applicability.

    (a) * * *
    (4) Architectural and engineering services (including surveying and 
mapping) under SIC code 7389, 8711, 8712, or 8713 (limited to FPDS 
service codes C111 through C216, C219, T002, T004, T008, T009, T014, 
and R404), which are awarded under the qualification-based selection 
procedures required by 40 U.S.C. 541, et seq. (the ``Brooks A-E Act'') 
(see Subpart 36.6).
* * * * *

19.1006 and 19.1007    [Redesignated as 19.1007 and 19.1008, 
respectively] [New 19.1006 added]

    7a. Redesignate sections 19.1006 and 19.1007 as 19.1007 and 
19.1008, respectively; and add a new section 19.1006 to read as 

19.1006  Exclusions.

    This subpart does not apply to--
    (a) Orders placed against Federal Supply Schedules;
    (b) Contract awards to educational and nonprofit organizations; or
    (c) Contract awards to governmental entities.
    7b. Revise the newly designated 19.1007 to read as follows:

19.1007  Procedures.

    (a) General. (1) All solicitations must include the applicable SIC 
code and size standards.
    (2) The face of each award made pursuant to the program must 
contain a statement that the award is being issued pursuant to the 
Small Business Competitiveness Demonstration Program.
    (b) Solicitations greater than the ESB reserve amount. (1) 
Solicitations for acquisitions in any of the four designated industry 
groups that have an anticipated dollar value greater than the emerging 
small business reserve amount must not be considered for small business 
set-asides under subpart 19.5. However, agencies may reinstate the use 
of small business set-asides as necessary to meet their assigned goals, 
but only within organizational units that failed to meet the small 
business participation goal.
    (2) Acquisitions in the designated industry groups must continue to 
be considered for placement under the 8(a) Program (see subpart 19.8) 
and the HUBZone Program (see subpart 19.13).
    (c) Solicitations equal to or less than the ESB reserve amount. (1) 
Solicitations for acquisitions in the four designated industry groups 
with an estimated value equal to or less than the emerging small 
business reserve amount must be set aside for ESBs, provided that the 
contracting officer determines that there is a reasonable expectation 
of obtaining offers from two or more responsible ESBs that will be 
competitive in terms of market price, quality, and delivery. If no such 
reasonable expectation exists, the contracting officer must--
    (i) For acquisitions $25,000 or less, proceed in accordance with 
subpart 19.5, 19.8, or 19.13; or
    (ii) For acquisitions greater than $25,000 and less than or equal 
to the ESB reserve amount, proceed in accordance with paragraph (b) of 
this section.
    (2) If the contracting officer proceeds with the ESB set-aside and 
receives a quotation from only one ESB at a reasonable price, the 
contracting officer must make the award. If there is no quote from an 
ESB, or the quote is not at a reasonable price, then the contracting 
officer must cancel the ESB set-aside and proceed in accordance with 
paragraph (c)(1)(i) or (ii) of this section.
    (d) Expanding small business participation in targeted industry 
categories. Each participating agency must develop and implement a 
time-phased strategy with incremental goals, including reporting on 
goal attainment. To the extent practicable, provisions that encourage 
and promote teaming and joint ventures must be considered. These 
provisions should permit small business firms to effectively compete 
for contracts that individual small businesses would be ineligible to 
compete for because of lack of production capacity or capability.

19.1008  [Amended]

    7c. Amend the newly designated 19.1008 in paragraphs (a), (b), and 
(c) by removing ``The contracting officer shall insert'' and adding 
``Insert'' in their place; and in paragraph (b) by removing 
``19.1006(c)'' and adding ``19.1007(c)'' in its place.

[FR Doc. 00-7308 Filed 3-24-00; 8:45 am]