[Federal Register: June 3, 2005 (Volume 70, Number 106)]
[Proposed Rules]
[Page 32553-32563]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03jn05-24]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 19, 52, and 53
[FAR Case 2004-017]
RIN: 9000-AK18
Federal Acquisition Regulation; Small Business Credit for Alaskan
Native Corporations and Indian Tribes
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are proposing to amend the
Federal Acquisition Regulation (FAR) to implement section 702 of Public
Law 107-117, as amended by section 3003 of Public Law 107-206 (43
U.S.C. 1626). The law permits subcontracts awarded to certain Alaskan
Native Corporations (ANCs) to be counted towards a contractor's goals
for subcontracting with small business (SB) and small disadvantaged
business (SDB) concerns. The law also permits Indian tribes to be
counted towards a contractor's goal for subcontracting with SB.
DATES: Interested parties should submit comments in writing on or
before August 2, 2005 to be considered in the formulation of a final
rule.
ADDRESSES: Submit comments identified by FAR case 2004-017 by any of
the following methods:
Federal eRulemaking Portal: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov.
Follow the instructions for submitting comments.
Agency Web Site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.acqnet.gov/far/ProposedRules/proposed.htm.
Click on the FAR case number to submit comments. E-mail: farcase.2004-017@gsa.gov. Include FAR case 2004-
017 in the subject line of the message.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VIR), 1800 F Street, NW., Room 4035, ATTN: Laurieann
Duarte, Washington, DC 20405.
Instructions: Please submit comments only and cite FAR case 2004-
017 in all correspondence related to this case. All comments received
will be posted without change to http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.acqnet.gov/far/ProposedRules/proposed.htm
, including any personal information
provided.
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 FAR case 2004-017.
SUPPLEMENTARY INFORMATION:
A. Background
Section 702 of Public Law 107-117, as amended by section 3003 of
Public Law 107-206, provides that subcontracts awarded to Alaskan
Native Corporations (ANC) that are considered a minority and
economically disadvantaged concern under the criteria at 43 U.S.C.
1626(e)(1), and any of its direct and indirect subsidiary corporations,
joint ventures, and partnerships that meet the requirements of 43
U.S.C. 1626(e)(2), shall be counted towards the satisfaction of a
contractor's goal for subcontracting with SB and SDB concerns. The law
also provides that subcontracts awarded to Indian tribes may be counted
towards the satisfaction of a contractor's goal for subcontracting with
SB concerns. Such credit is taken even where the ANC or Indian tribe
may be ``other than small'' under the Small Business Administration
(SBA) regulations.
In addition, section 3003 provides that ``where lower tier
subcontracts exist, the ANC or Indian tribe shall designate the
appropriate contractor or contractors to receive credit towards their
small or small disadvantaged business subcontracting goals.''
Accordingly, the rule requires that, where one or more subcontractors
are in the subcontract tier between the prime contractor and the ANC or
Indian tribe, the ANC or Indian tribe shall designate the appropriate
contractor to count the subcontract towards its small business and/or
small disadvantaged subcontracting goals. In most cases, the
appropriate contractor is the contractor that awarded the subcontract
to the ANC or Indian tribe. Therefore, the revision includes a
requirement that the ANC or Indian tribe give a copy of the designation
to the contracting officer, the prime contractor, and the
subcontractors in between. The Councils invite industry to comment on
the feasibility of this approach and any alternatives for complying
with the law.
The law does not provide for such an ANC and any of its direct and
indirect subsidiary corporations, joint ventures, and partnerships to
be eligible for SDB or 8(a) certification unless the entity otherwise
meets the requirements for certification under 15 U.S.C. 637.
Similarly, the law does not provide for contractors to count
subcontracts awarded to such an entity toward the evaluation of the
extent of the participation of SDB concerns in the performance of
certain North American Industry Classification System (NAICS) Industry
codes unless the entity is certified as an SDB by SBA (FAR Subpart
19.12). The FAR is being amended to implement these changes to 43
U.S.C. 1626.
The specific changes are as follows:
FAR 19.701 and the clause at 52.219-9 are amended to add
definitions for ANC and Indian tribes consistent with 43 U.S.C. 1601,
et seq., and 25 U.S.C. 1452, respectively.
[[Page 32554]]
FAR 19.703 is amended to add paragraph (c). Paragraph
(1)(i) authorizes contractors to count awards to ANCs towards the
satisfaction of the contractor's SB and SDB goals regardless of the
size status of the ANC, and to provide for the ANC to designate which
contractor is to receive the credit; and paragraph (c)(1)(ii)
authorizes contractors to count awards to Indian tribes towards the
satisfaction of the contractor's SB goals, regardless of the size
status of the Indian tribe.
Paragraph (c)(1)(iii) is added to provide that where one or more
subcontractors are in the subcontract tier between the prime contractor
and the ANC or Indian tribe, the ANC or Indian tribe shall designate
the appropriate contractor to count the subcontract towards its small
business and/or small disadvantaged subcontracting goals. In most
cases, the appropriate contractor is the contractor that awarded the
subcontract to the ANC or Indian tribe. Paragraph (d)(2) is added to
provide that a contractor acting in good faith may rely on the written
representation of an ANC or Indian tribe as to eligibility and
incorporates the procedures at 26.103(b) through (e) in the event of a
challenge of such a representation.
FAR 19.704, the clause at 52.219-9, and the instructions
for the SF 294, ``Subcontracting Report for Individual Contracts,'' and
SF 295, ``Summary Subcontract Report,'' are amended to permit
subcontracts awarded to certain ANCs to be counted towards the
satisfaction of a contractor's goal for subcontracting with SB and SDB
concerns, and to permit subcontracts awarded to Indian tribes to be
counted towards the satisfaction of a contractor's goal for
subcontracting with SB concerns.
FAR 19.704 and the clause at 52.219-9 are amended to
provide where one or more subcontractors are in the subcontract tier
between the prime contractor and the ANC or Indian tribe, the ANC or
Indian tribe shall designate which subcontractor(s) or prime
contractor(s) will be able to count the subcontract towards its small
business and small disadvantaged subcontracting goals.
The clause at 52.219-9(j)(2) stipulates that awards to
ANCs that are not certified SDBs may not be counted towards the
evaluation of the extent of participation of SDB concerns in the
performance of contracts in the NAICS Industry Subsectors.
The instructions for the SF 294 and SF 295 are revised to
include a cross-reference to the FAR 19.703 eligibility requirements
for participation in the small business subcontracting program; to
incorporate administrative corrections to ensure consistency in
reporting of goals and actual performance; and for technical edits.
This is not a significant regulatory action and, therefore, was not
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 allows other
than small business Federal contractors to receive SDB and/or SB
subcontract credit for subcontracts awarded to Indian tribes and ANCs,
regardless of whether they are SB, SBA-certified SDBs, or certified
8(a) firms. SBs and certified SDBs may be adversely impacted to the
extent that there are Indian tribes or ANCs that are large businesses
and may now be more likely to be used as subcontractors or suppliers on
Federal contracts. It is estimated that there are 562 Indian tribes and
ANCs. Information was not available on the number of these entities
that were large business, SB, or SDB. An Initial Regulatory Flexibility
Analysis (IRFA) has been prepared and will be provided to the Chief
Counsel for Advocacy for the Small Business Administration. The
analysis is summarized as follows:
This proposed rule revises the Federal Acquisition Regulation in
order to comply with 43 U.S.C. 1626 which allows other than small
business Federal contractors to receive small business (SB)
subcontracting credit for subcontracts awarded to Indian tribes,
regardless of whether they are small business. Additionally, the law
allows other than small business Federal contractors to receive
small business and small disadvantaged business (SDB) subcontracting
credit for subcontracts awarded to Alaskan Native Corporations
(ANCs) which are considered a minority and economically
disadvantaged concern under the criteria at 43 U.S.C. 1626(e)(1) and
any of its direct and indirect subsidiary corporations, joint
ventures, and partnerships that meet the requirements of 43 U.S.C.
1626(e)(2), regardless of whether they are small businesses, SBA-
certified SDBs, or certified 8(a) firms.
This proposed rule implements section 702 of the 2002 Department
of Defense Supplemental Appropriation, as amended by section 3003 of
the 2002 Supplemental Appropriations for Further Recovery From and
Response To Terrorist Attacks on the United States. The objective of
the statute is to encourage large business contractors to utilize
ANCs and Indian tribes as subcontractors and suppliers on Federal
contracts.
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
allows other than small business Federal contractors to receive
small disadvantaged business and/or small business subcontract
credit for subcontracts awarded to Indian tribes and ANCs. The rule
will impose no new reporting or recordkeeping requirements on small
entities.
A copy of the IRFA may be obtained from the FAR Secretariat. The
Councils will consider comments from small entities concerning the
affected FAR parts 19, 52, and 53 in accordance with 5 U.S.C. 610.
Comments must be submitted separately and should cite 5 U.S.C 601, et
seq. (FAR case 2004-017), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 104-13) applies because the
proposed rule contains information collection requirements.
Accordingly, the FAR Secretariat has submitted a request for approval
of a revision to the information collection requirements of OMB Control
Numbers 9000-0006, Subcontracting Plans/Subcontracting Report for
Individual Contracts (SF 294), and 9000-0007, Summary Subcontract
Report (SF 295), to the Office of Management and Budget under 44 U.S.C.
3501, et seq. Public comments concerning these requests will be invited
through subsequent Federal Register notices.
Annual Reporting Burden:
Public reporting burden for this collection of information is
estimated to average 11 hours per response for 9000-0006, and 16.2
hours per response for 9000-0007, including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
The annual reporting burden is estimated as follows:
9000-0006 (Current Annual Reporting and Recordkeeping):
Respondents: 4,253.
Responses per respondent: 3.44.
Total annual responses: 14,622.
Average burden hours per response: 50.52.
Total response burden hours: 739,225.
9000-0006 (Proposed Annual Reporting and Recordkeeping):
Respondents: 4,253.
Responses per respondent: 3.44.
[[Page 32555]]
Total annual responses: 14,631.
Average burden hours per response: 55.34.
Total response burden hours: 809,248.
Total program change is an additional 70,023 hours.
9000-0007 (Current Annual Reporting and Recordkeeping):
Respondents: 4,253.
Responses per respondent: 1.66.
Total annual responses: 7,098.
Average burden hours per response: 15.9.
Total response burden hours: 112,864.
9000-0007 (Proposed Annual Reporting and Recordkeeping):
Respondents: 4,253.
Responses per respondent: 1.75.
Total annual responses: 7,449.
Average burden hours per response: 16.2.
Total response burden hours: 120,674.
Total program change is an additional 7,810 hours.
D. Request for Comments Regarding Paperwork Burden
Submit comments, including suggestions for reducing this burden,
not later than August 2, 2005 to: FAR Desk Officer, OMB, Room 10102,
NEOB, Washington, DC 20503, and a copy to the General Services
Administration, FAR Secretariat (VIR), 1800 F Street, NW., Room 4035,
Washington, DC 20405.
Public comments are particularly invited on: whether this
collection of information is necessary for the proper performance of
functions of the FAR, and will have practical utility; whether our
estimate of the public burden of this collection of information is
accurate, and based on valid assumptions and methodology; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways in which we can minimize the burden of the
collection of information on those who are to respond, through the use
of appropriate technological collection techniques or other forms of
information technology.
Requester may obtain a copy of the justifications from the General
Services Administration, FAR Secretariat (VIR), Room 4035, Washington,
DC 20405, telephone (202) 501-4755. Please cite OMB Control Numbers
9000-0006, Subcontracting Plans/Subcontracting Report for Individual
Contracts (SF 294), and 9000-0007, Summary Subcontract Report (SF 295),
in all correspondence.
List of Subjects in 48 CFR Parts 19, 52, and 53
Government procurement.
Dated: May 24, 2005.
Julia B. Wise,
Director, Contract Policy Division.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 19, 52,
and 53 as set forth below:
1. The authority citation for 48 CFR parts 19, 52, and 53 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 19--SMALL BUSINESS PROGRAMS
2. Amend section 19.701 by adding, in alphabetical order, the
definitions ``Alaskan Native Corporation (ANC)'' and ``Indian tribe''
to read as follows:
19.701 Definitions.
* * * * *
Alaskan Native Corporation (ANC) means any Regional Corporation,
Village Corporation, Urban Corporation, or Group Corporation organized
under the laws of the State of Alaska in accordance with the Alaska
Native Claims Settlement Act, as amended (43 U.S.C. 1601, et seq.), and
which is considered a minority and economically disadvantaged concern
under the criteria at 43 U.S.C. 1626(e)(1). This definition also
includes ANC direct and indirect subsidiary corporations, joint
ventures, and partnerships that meet the requirements of 43 U.S.C.
1626(e)(2).
* * * * *
Indian tribe means any Indian tribe, band, group, pueblo, or
community, including native villages and native groups (including
corporations organized by Kenai, Juneau, Sitka, and Kodiak) as defined
in the Alaska Native Claims Settlement Act (43 U.S.C.A. 1601, et seq.),
that is recognized by the Federal Government as eligible for services
from the Bureau of Indian Affairs in accordance with 25 U.S.C. 1452(c).
* * * * *
3. Amend section 19.703 in the introductory text of paragraph (a)
by removing ``To'' and adding ``Except as provided in paragraph (c) of
this section, to''; and adding paragraph (c) to read as follows:
19.703 Eligibility requirements for participating in the program.
* * * * *
(c)(1) In accordance with 43 U.S.C. 1626, the following procedures
apply:
(i) Subcontracts awarded to an ANC shall be counted towards the
designated contractor's subcontracting goals for small business and
small disadvantaged business (SDB) concerns, regardless of the size
status of the ANC.
(ii) Subcontracts awarded to an Indian tribe shall be counted
towards the designated contractor's subcontracting goal for small
business, regardless of the size status of the Indian tribe.
(iii) Where one or more subcontractors are in the subcontract tier
between the prime contractor and the ANC or Indian tribe, the ANC or
Indian tribe shall designate the appropriate contractor to count the
subcontract towards its small business and/or small disadvantaged
subcontracting goals. In most cases, the appropriate contractor is the
contractor that awarded the subcontract to the ANC or Indian tribe. The
ANC or Indian tribe will give a copy of the designation to the
contracting officer, the prime contractor, and the subcontractors in
between.
(2) A contractor acting in good faith may rely on the written
representation of an ANC or an Indian tribe as to eligibility unless an
interested party challenges its status or the contracting officer has
independent reason to question its status. In the event of a challenge
of a representation of an ANC or Indian tribe, the interested parties
shall follow the procedures at 26.103(b) through (e).
4. Amend section 19.704 by revising paragraphs (a)(1), (a)(2),
(a)(3), and (a)(6) to read as follows:
19.704 Subcontracting plan requirements.
(a) * * *
(1) Separate percentage goals for using small business (including
ANC and Indian tribes), veteran-owned small business, service-disabled
veteran-owned small business, HUBZone small business, small
disadvantaged business (including ANCs), and women-owned small business
concerns as subcontractors;
(2) A statement of the total dollars planned to be subcontracted
and a statement of the total dollars planned to be subcontracted to
small business (including ANC and Indian tribes), veteran-owned small
business, service-disabled veteran-owned small business, HUBZone small
business, small disadvantaged business (including ANCs), and women-
owned small business concerns;
(3) A description of the principal types of supplies and services
to be subcontracted and an identification of types planned for
subcontracting to small business (including ANC and Indian tribes),
veteran-owned small business, service-disabled veteran-owned small
business, HUBZone small business, small disadvantaged business
[[Page 32556]]
(including ANCs), and women-owned small business concerns;
* * * * *
(6) A statement as to whether or not the offeror included indirect
costs in establishing subcontracting goals, and a description of the
method used to determine the proportionate share of indirect costs to
be incurred with small business (including ANC and Indian tribes),
veteran-owned small business, service-disabled veteran-owned small
business, HUBZone small business, small disadvantaged business
(including ANCs), and women-owned small business concerns;
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
5. Amend section 52.219-9 by--
a. Revising the date of the clause;
b. In paragraph (b), by adding, in alphabetical order, the
definitions ``Alaskan Native Corporation (ANC)'' and ``Indian tribe''
and
c. Adding text to the end of paragraph (d)(1); and revising
paragraphs (d)(2)(ii), (d)(2)(vi), and (d)(6)(i) to read as follows:
52.219-9 Small Business Subcontracting Plan.
* * * * *
SMALL BUSINESS SUBCONTRACTING PLAN (DATE)
* * * * *
(b) * * *
Alaskan Native Corporation (ANC) means any Regional Corporation,
Village Corporation, Urban Corporation, or Group Corporation
organized under the laws of the State of Alaska in accordance with
the Alaska Native Claims Settlement Act, as amended (43 U.S.C. 1601,
et seq.), and which is considered a minority and economically
disadvantaged concern under the criteria at 43 U.S.C. 1626(e)(1).
This definition also includes ANC direct and indirect subsidiary
corporations, joint ventures, and partnerships that meet the
requirements of 43 U.S.C. 1626(e)(2).
* * * * *
Indian tribe means any Indian tribe, band, group, pueblo, or
community, including native villages and native groups (including
corporations organized by Kenai, Juneau, Sitka, and Kodiak) as
defined in the Alaska Native Claims Settlement Act (43 U.S.C.A.
1601, et seq.), that is recognized by the Federal Government as
eligible for services from the Bureau of Indian Affairs in
accordance with 25 U.S.C. 1452(c).
* * * * *
(d) * * *
(1) * * * In accordance with 43 U.S.C. 1626, subcontracts
awarded to an ANC shall be counted towards the designated
Contractor's subcontracting goals for small business and small
disadvantaged business (SDB) concerns, regardless of the size status
of the ANC, and subcontracts awarded to an Indian tribe shall be
counted towards the designated Contractor's subcontracting goal for
small business, regardless of the size status of the Indian tribe.
Where one or more subcontractors are in the subcontract tier between
the prime Contractor and the ANC or Indian tribe, the ANC or Indian
tribe shall designate the appropriate Contractor to count the
subcontract towards its small business and/or small disadvantaged
subcontracting goals. In most cases, the appropriate Contractor is
the Contractor that awarded the subcontract to the ANC or Indian
tribe. The ANC or Indian tribe shall give a copy of the designation
to the Contracting Officer, the prime Contractor, and the
subcontractors in between.
(2) * * *
(ii) Total dollars planned to be subcontracted to small business
concerns (including ANC and Indian tribes);
* * * * *
(vi) Total dollars planned to be subcontracted to small
disadvantaged business concerns (including ANCs); and
* * * * *
(6) * * *
(i) Small business concerns (including ANC and Indian tribes);
* * * * *
PART 53--FORMS
53.219 [Amended]
6. Amend section 53.219 in paragraphs (a) and (b) by removing
``(Rev. 10/01)'' and adding ``(Rev. Date)'' in their place.
7. Revise sections 53.301-294 and 53.301-295 to read as follows:
53.301-294 Subcontracting Report for Individual Contracts.
BILLING CODE 6820-EP-S
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[FR Doc. 05-10935 Filed 6-2-05; 8:45 am]