Rule2022-15622
Past Performance Ratings for Small Business Joint Venture Members and Small Business First-Tier Subcontractors
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Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 22, 2022
Effective
August 22, 2022
Issuing agencies
Small Business Administration
Abstract
The U.S. Small Business Administration (SBA) is amending its regulations to implement new provisions of the National Defense Authorization Act (NDAA) Fiscal Year (FY) 2021. The final rule provides new methods for small business government contractors to obtain past performance ratings to be used with offers on prime contracts with the Federal Government. A small business contractor may use a past performance rating for work performed as a member of a joint venture or for work performed as a first-tier subcontractor. This final rule updates the requirements for small business subcontracting plans to add a requirement for prime contractors to provide past performance to a first-tier, small business subcontractor when requested by the small business.
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[Federal Register Volume 87, Number 140 (Friday, July 22, 2022)]
[Rules and Regulations]
[Pages 43731-43740]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-15622]
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Rules and Regulations
Federal Register
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having general applicability and legal effect, most of which are keyed
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Federal Register / Vol. 87, No. 140 / Friday, July 22, 2022 / Rules
and Regulations
[[Page 43731]]
SMALL BUSINESS ADMINISTRATION
13 CFR Part 125
RIN 3245-AH71
Past Performance Ratings for Small Business Joint Venture Members
and Small Business First-Tier Subcontractors
AGENCY: U.S. Small Business Administration.
ACTION: Final rule.
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SUMMARY: The U.S. Small Business Administration (SBA) is amending its
regulations to implement new provisions of the National Defense
Authorization Act (NDAA) Fiscal Year (FY) 2021. The final rule provides
new methods for small business government contractors to obtain past
performance ratings to be used with offers on prime contracts with the
Federal Government. A small business contractor may use a past
performance rating for work performed as a member of a joint venture or
for work performed as a first-tier subcontractor. This final rule
updates the requirements for small business subcontracting plans to add
a requirement for prime contractors to provide past performance to a
first-tier, small business subcontractor when requested by the small
business.
DATES: This rule is effective on August 22, 2022.
FOR FURTHER INFORMATION CONTACT: Donna Fudge, Procurement Analyst,
Office of Policy Planning and Liaison, Small Business Administration,
at <a href="/cdn-cgi/l/email-protection#befad1d0d0df90f8cbdad9dbfecddcdf90d9d1c8"><span class="__cf_email__" data-cfemail="e3a78c8d8d82cda596878486a3908182cd848c95">[email protected]</span></a>, (202) 205-6363.
SUPPLEMENTARY INFORMATION:
I. Background Information
Section 868 of National Defense Authorization Act (NDAA) for Fiscal
Year (FY) 2021, Public Law 116-283, addressed a common obstacle that
small businesses may face when competing for prime Federal Government
contracts: possessing qualifying past performance. The final rule
implements section 868 by providing small businesses with two new
methods for obtaining qualifying past performance. First, a small
business may use the past performance of a joint venture of which it is
a member, provided that the small business worked on the joint
venture's contract or contracts. Second, a small business may use past
performance it obtained as a first-tier subcontractor on a prime
contract with a subcontracting plan. For this latter method, section
868 authorizes the small business to seek a past performance rating
from the prime contractor and submit the rating with the small
business' offer on a new prime contract. SBA published a proposed rule
on November 18, 2021, 86 FR 64410, to implement section 868. After
receiving comments from the public, SBA finalizes the rule with the
changes described below.
Section 868 added a new section 15(e)(5) to the Small Business Act,
15 U.S.C. 644(e)(5), to address past performance ratings of joint
ventures for small business concerns. A small business concern that
previously participated in a joint venture with another business
concern (whether or not the other concern was small) may use the past
performance of the joint venture with the small business' offer on a
prime contract. Section 15(e)(5) required SBA to establish regulations
to allow the small business to elect to use the joint venture's past
performance if the small business has no relevant past performance of
its own. The small business must: (i) identify to the contracting
officer the joint venture of which the small business was a member;
(ii) specify the contract(s) of the joint venture the small business
elects to use; and (iii) inform the contracting officer what duties and
responsibilities the small business carried out as part of the joint
venture. In turn, the contracting officer shall consider the past
performance of the joint venture when evaluating the past performance
of the small business concern, giving due consideration to the
information submitted about the duties and responsibilities that the
small business carried out.
To address first-tier small business subcontractors, section 868
amended section 8(d)(17) of the Small Business Act, 15 U.S.C.
637(d)(17), which previously discussed a pilot program, to provide past
performance ratings for small business subcontractors. Under section
868, small business concerns may obtain past performance ratings for
performance as a first-tier subcontractor on a prime contract that
included a subcontracting plan. The final rule requires the prime
contractor on the prime contract to provide a rating of the small
business' past performance with respect to that prime contract to the
small business within 15 calendar days of the request. If the small
business elects to use the past performance rating, the contracting
officer shall consider the past performance rating when evaluating the
small business' offer on a prime contract.
This final rule creates a separate mechanism for first-tier
subcontractors to obtain past performance ratings. A Federal
Acquisition Regulation (FAR) rule implementing this requirement will
account for the additional burden in its existing information
collection and clearance for the information collection will be
obtained by the General Services Administration (GSA) for the FAR
Council.
SBA received 15 comments in response to the proposed rule. The
following discusses and responds to the comments.
II. Summary of and Response to Comments
Support for the Rule
Comment: SBA received numerous comments expressing support for this
final rule.
Response: SBA appreciates the feedback and engagement from
stakeholders. SBA will implement the rule with the changes as noted
below.
Outside the Scope of the Rule
Comments: Comments were received pertaining to SBA's revised
regulations to facilitate agency use of affiliate past performance.
Both commenters suggested the Federal Acquisition Regulation (FAR)
section 15.305(a)(2)(iii) be amended to mandate past performance
acquired by entity-owned affiliated/sister companies be evaluated.
Response: SBA does not have authority to amend the FAR. Requiring
procuring activities to use affiliate/sister companies past performance
would require the FAR Council to open a FAR
[[Page 43732]]
Case. Therefore, the proposed change is outside the scope of this
rulemaking.
Comment: A commenter suggested continued use of Past Performance
Questionnaires and increasing use of small business invitation for bid
set-aside opportunities. This commenter also suggested promotion of
SBA's Mentor-Prot[eacute]g[eacute] program and consideration by the
government of past performance from commercial (non-Federal) projects.
Response: The FAR currently provides for consideration of Federal,
State, and local government, and private past performance. See FAR
15.305(a)(2)(ii). Additionally, SBA recently amended its Mentor-
Prot[eacute]g[eacute] regulation (85 FR 66146), effective November 16,
2020, and the amended regulation allows for consideration of past
performance of both members of a Mentor-Prot[eacute]g[eacute]
relationship. Therefore, no changes to this rule are necessary.
Negative Impact on Small Business From No Past Performance
SBA requested comments on whether small business subcontractors
have been negatively impacted in competing for prime contracts due to
not having a past performance rating(s).
Comments: There were several responsive comments, and all the
respondents described some level of negative impact to small business
because of lack of past performance ratings. More specifically, most of
the commenters observed that solicitations require small businesses to
have prior past performance--and in some cases, as a prime contractor--
to win a prime contract. This treatment limits the ability of Black-
owned small businesses and Native-owned small businesses to compete for
contracts, in particular, two commenters stated. Additionally, four
commenters suggested that lack of past performance creates an obstacle
to small business participation, restrains competition, and restricts
the government's access to innovative products.
Response: SBA acknowledges the impediments that small businesses
have faced due to not having past performance ratings. As it now
stands, FAR 15.302(a)(2)(iv) provides small businesses the opportunity
to compete without a record of past performance. Section 868 of the
NDAA FY 2021, however, sought to address small businesses not being
able to compete for contracts because of lack of past performance. SBA
believes that, by implementing this rule, the government will be able
to attract new small business prime contractors. This will enhance
competition in government contracting and provide agencies with
increased access to innovative products and services.
Timeframe for Responding to a Small Business' Request for a Rating
Comments: The time period within which the prime contractor must
respond to the subcontractor's request was set at 15 calendar days in
the proposed rule. Three commenters supported the 15-calendar-day time
period. One commenter requested a 10-business-day period, and another
commenter requested a 15-business-day period. One commenter believed
that a longer period of 30 days would still allow subcontractors enough
time to prepare their proposal packages. Another commenter also
observed that subcontractors could negotiate a period shorter than 15
days, and prime contractors could require in the subcontract that
subcontractors reuse prior ratings from the same prime if one already
has been provided.
Response: SBA adopts the 15 calendar-day response period as
specified in the proposed rule. That period provides enough time for
the prime contractor to prepare a response while still permitting the
small business to respond to proposal deadlines. With respect to
reusing prior ratings, the rule permits the subcontractor to use the
same rating for multiple proposals. SBA does not anticipate that
subcontractors will request multiple ratings from a prime contractor
for the same work.
Timeframe for Using the Rating
Comments: Two commenters sought clarification on the period within
which a subcontractor could continue to use its past performance rating
for offers on prime contracts. The commenters suggested that a rating
completed by the prime at the end of the contract be valid for three
years to five years.
Response: The proposed rule had included a provision, similar to
FAR 42.1503(g), that past performance would need to be from within
three years (six for construction and architect-engineering) to be
considered relevant. However, FAR 42.1503(g) applies only to past-
performance information in CPARS, and, because the past-performance
ratings in this rule are not in CPARS, that limitation does not apply.
Instead, agencies have discretion to determine what is relevant with
regard to past performance and could accept past performance that is
older than the period in FAR 42.1503(g), as the comments suggest. The
timeliness restriction also is not provided for in statute. This final
rule therefore removes the timeliness restriction on using past
performance.
Timeframe for Small Business Subcontractor To Request Past Performance
Rating
SBA requested comments on whether to prescribe a time frame within
which the subcontractor must make a request to the prime contractor for
a rating under this final rule.
Comments: There were numerous comments suggesting a timeframe for
the small business subcontractor to request a past performance rating.
A few commenters suggested a 30-day time period after the period of
performance within which the subcontractor would be required to request
a rating. One suggested that the prime should review the small business
on an annual basis, in addition to a review upon request during or
within 90 days after the contractor's performance period. One commenter
preferred a process in which the prime contractor would submit a rating
within 14 days of the end of the contract and the subcontractor would
receive 14 days to respond.
A separate commenter indicated that the subcontractors should be
required to request a rating during the period of performance of the
contract. Outside of the performance, the commenter stated, it would be
difficult to accurately rate the subcontractor because of shifts in
personnel. Similarly, another commenter wrote that subcontractors
should not submit requests after the date of their final invoices. One
commenter stated that SBA should require that the time period be
specified in the subcontract agreement, but the commenter did not
suggest a default period. Conversely, two commenters did not support
negotiating the timelines and stated that the timelines should be
uniform. One commenter expressed that subcontractors should only
request ratings after the subcontractor's work is complete.
Response: SBA agrees with the commenters that the final rule should
include a specific default period within which the subcontractor must
submit its request to the prime contractor for a past performance
rating. Based on the comments, SBA sets the deadline as 30 calendar
days after completion of the period of performance for the prime
contractor's contract with the government. This time period balances
the prime's desire to avoid having an open-ended obligation, and the
subcontractor's need for flexibility in submitting its request. The
prime contractor and the subcontractor may choose to negotiate a later
deadline than 30 calendar days after the prime's
[[Page 43733]]
contract completion. But the prime contractor cannot set a deadline
earlier than the 30 calendar days after the prime's completion.
SBA disagrees that subcontractors should be limited to requesting
ratings after their work on a contract is complete. For prime
contracting, the government can provide ratings prior to contract
completion (i.e., at the end of base periods or option years). This
rule treats subcontractors similarly by allowing them to request
ratings midway through performance. Further, the intent of this change
is to provide subcontractors more access to past performance ratings.
Allowing Ratings for Contracts Without a Subcontracting Plan
Comments: A few commenters suggested the rule should allow for
ratings on subcontracts even where the prime is not required to have a
subcontracting plan. These commenters expressed that this limits the
ability to obtain a rating, particularly where the subcontractor is
performing on another small business' prime contract.
Response: This final rule adopts the language in the proposed rule,
which limited the requirement for subcontractors to request ratings to
those prime contractors with subcontracting plans. Section 868 of NDAA
FY 2021 included a precise definition of ``covered contract'' that
limits application to those contracts with subcontracting plans. SBA
observes, however, that a prime contractor could choose to provide a
past performance rating, even though the contract did not include a
subcontracting plan. An agency could then consider that rating at its
discretion.
Concern Regarding Enforcement if Primes Do Not Provide Performance to
Small Business Subcontractors
Comments: A few commenters expressed concern that there may be no
enforcement mechanisms to ensure that prime contractors provide
performance ratings for small business subcontractors. Three commenters
specifically mentioned the lack of penalty for prime contractors that
do not provide performance ratings.
Response: There are several provisions in the current regulatory
framework that will help to enforce the duty of prime contractors to
provide performance ratings for small business first-tier
subcontractors when requested. The rule establishes that responding to
subcontractor requests will be included in the prime contractor's
subcontracting plans. See 13 CFR 125.3(c)(1)(xii)(A). There are
consequences for failing to comply with a subcontracting plan,
including: contract remedies such as termination for default or the
withholding of award fees; a lower past performance rating under the
subcontracting element (FAR 42.1502(g)(1) and 42.1503(b)(2)(v));
liquidated damages for failing to make a good faith effort to comply
with the subcontracting plan (FAR 19.705-7); and even debarment if the
failure is willful or repeated (FAR 9.406-2(b)(1)(i)).
Furthermore, subcontractors may notify the contracting officer of
the prime's failure to provide a required rating, similar to the
process provided for in FAR 52.242-5. SBA is therefore adding to this
final rule that subcontractors should notify the contracting officer in
the event that the prime contractor fails to submit the requested
rating within the rule's prescribed timeframe.
Use of Standard/Contractor Performance Assessment Reporting System
Format
Comments: SBA received several comments suggesting a standardized
format for prime contractors to use in evaluating the past performance
for subcontractors. Two commenters suggested using the Contractor
Performance Assessment Reporting System (CPARS) format as the
subcontractor past performance ratings format. Four commenters
suggested using a standardized format, based on objective measures such
as work scope and funded amount. One commenter suggested SBA should
provide a sample past performance template to be added as an appendix
to the subcontract. One commenter suggested clarification that a small
business subcontractor rating does not need to be established for each
subcontract.
Response: In response to these comments, SBA finds that the past
performance evaluation factors should be the same as the CPARS
evaluation factors. These evaluation factors are the minimum required
to use in rating a subcontractor's past performance. The rule does not
preclude the use of additional evaluation factors. In response to the
comments seeking a standardized rating format, SBA is adding to the
final rule that the prime contractor shall use the five-scale rating
system at FAR 42.1503(b)(4): Exceptional, Very Good, Satisfactory,
Marginal, and Unsatisfactory. SBA does not find it necessary to provide
a past performance template, as the evaluation factors and ratings
level mirror CPARS.
Concern About Subjective Performance Ratings and Inquiries on Disputing
the Performance Rating
Comments: Several commenters expressed concern about subjective
past performance ratings and whether subcontractors could dispute the
past performance rating. One commenter suggested that the prime
contractor's rating of its subcontractor(s) has the potential to be
subjective because of changes in the program managers. One commenter
stated there is the potential for conflicts with prime contractors
providing subcontractor past performance ratings. Two commenters
suggested the government should provide regulatory guidance and
procedures to ensure unbiased or consistent and fair assessments. Three
commenters suggested the subcontractors should be allowed to rebut the
past performance rating issued by the prime, similar to how a prime
rebuts its CPARS rating by the government.
Response: In response to these comments, SBA notes that the statute
provides the small business subcontractor with discretion in electing
to use or not use the past performance rating. As discussed in the
comments regarding a standard format, and in response to the comment
seeking additional guidance, the final rule includes a rating system by
reference to the definitions in FAR 42.1503. This final rule does not
adopt a rebuttal procedure as none is provided or required by the
statute. However, subcontractors may be able to negotiate a rebuttal
procedure as part of their subcontract.
Stakeholders Who Will Benefit From the Proposed Rule
Comments: Commenters expressed that the proposed rule would likely
benefit certain stakeholders and groups more than others. One commenter
believed that the proposed rule would tend to benefit small businesses
that had been more established and had been doing business for a number
of years. Another commenter believed that the proposed rule could
specifically benefit small, Black-owned businesses.
Response: SBA agrees that this rule will mostly benefit small
businesses that are prepared to bid on prime contracts but are
currently held back by a lack of prime contract performance. The rule
addresses this problem by allowing for past performance ratings for
first-tier subcontracting experience. That is the design of the statute
and the problem being addressed.
[[Page 43734]]
Retroactive Application of the Rule
Comment: A commenter suggested that the rule be made retroactive,
so that subcontractors could receive past performance ratings on
recently completed contracts.
Response: The final rule does not make the rule retroactive.
Generally, unless their language requires it, new legislative
enactments are not retroactive. Bowen v. Georgetown Univ. Hosp., 488
U.S. 204, 208 (1988). Nevertheless, a prime contractor could respond to
a first-tier subcontractor's request for a past performance rating,
even if not required by the prime contractor's subcontracting plan.
Such ratings still could be considered by the contracting agency if
submitted with the proposal for a prime contract.
Prime Contractor Should Automatically Provide Past Performance Rating
Comments: Commenters expressed support for making a past
performance rating of small business subcontractor(s) a requirement for
prime contractors even if no past performance rating is requested by
the small business subcontractor. In other words, the past performance
rating would be automatic after performance. Both commenters believed
that this should happen within 14 or 15 days of performance.
Response: Section 868 explicitly states that its requirements only
apply when a first-tier small business subcontractor requests a past
performance rating; therefore, it does not apply to all contracts, as
not all first-tier subcontractors will request a past performance
rating. The statute presumes this, perhaps because a small business
might not be interested in bidding on future prime contracts or because
it already has sufficient past performance to bid on a prime contract.
Given the statutory language, this rule does not expand the coverage of
past performance ratings, as doing so could potentially add unnecessary
burden on prime contractors to issue performance ratings to every small
business first-tier subcontractor.
Primes Should Rate Small Business Subcontractors as Part of the CPARS
Process
Comments: Several commenters suggested prime contractors fill out
small business subcontractor past performance ratings as part of CPARS.
Two commenters suggested a first-tier subcontractor past performance
rating be required to be filed annually by the prime as part of the
prime's CPARS rating. One commenter suggested primes be required to
file subcontractor past performance ratings as part of satisfactory
completion of the prime's contract. One commenter suggested requiring a
prime to complete a subcontractor past performance rating at the end of
a contract or order.
Response: CPARS is a website designed for federal contracting
officers to objectively evaluate the performance of prime contractors
and allows other source selection officials to review contractor past
performance ratings. The CPARS system is not designed to allow prime
contractors the ability to complete a subcontractor past performance
rating. Access to completed evaluations is restricted to individuals
working on source selections for federal solicitations. In response to
the comments, SBA notes that the statute, section 868, applies only
when the small business has requested a past performance rating, not to
every small business subcontract. Given the statutory language, this
rule does not expand the coverage of past performance ratings, as doing
so could potentially add unnecessary burden on prime contractors to
issue performance ratings to every small business first-tier
subcontractor.
Minimum Subcontract Value Threshold for Past Performance Rating
Comment: A commenter suggested the rule include a minimum threshold
of $750,000.00 or $2 million, below which it would not apply to a
subcontractor. The commenter suggested that the government conduct a
study of the administrative cost of responding within the 15-day
timeframe when the subcontract was of small value. Another commenter
suggested that, when the subcontract exceeded the recommended threshold
of 10% of the total contract value, the government be required to rate
the subcontractor in CPARS.
Response: This rule implements section 868 of the NDAA for FY 2021,
which applies to all eligible first-tier small business subcontractors
performing on prime contracts with subcontracting plans. The statute
did not include a threshold for applicability; therefore, no threshold
is included in this final rule.
Reporting Mechanism for Subcontractor or Joint Venture Past Performance
Comments: Commenters suggested use of an explicit mechanism for
reporting first-tier subcontractor performance. One commenter merely
asked what systems would be utilized while the other commenter
suggested a reporting mechanism from the prime contractor to the
requesting agency.
Response: The statute that SBA is implementing does not create a
formal reporting mechanism for past performance as a first-tier
subcontractor. This is because it is up to the small business
submitting past performance as a first-tier subcontractor to provide
those ratings to the government. As the small business will be in
possession of the past performance ratings, there is no need to
formalize a reporting mechanism. Past performance ratings and/or
information will be submitted to the agency in accordance with the
solicitation.
Administrative Burden on Prime Contractors
Comment: A commenter expressed concern about the administrative
burden on prime contractors in preparing subcontract past performance
ratings. The commenter stated that its subcontractors have access to
the performance rating system through a subcontractor portal; however,
it is not unique to a specific contract.
Response: SBA notes the prime contractor is only required to
provide a rating at the request of the first-tier small business
subcontractor. Not every first-tier small business subcontractor will
request a rating.
Subcontracting Past Performance Rating Should Be Weighted Differently
Than Prime Contractor Performance
Comment: A commenter suggested that past performance as a
subcontractor should be weighted less than past performance as a prime
contractor. This commenter expressed concern that a small business
subcontractor could selectively choose to request past performance only
on projects where they expect a good rating. This is in contrast to
prime contractor performance, which is always rated good or bad.
Response: SBA does not agree that first-tier subcontractor past
performance should be weighted differently than prime contractor past
performance. Implementing the statute in this manner would be
inconsistent with its intent, which is to help small businesses to have
qualifying past performance. In addition, while it is true that
subcontractors may choose which contracts on which they request a
performance rating, a prime contractor can also choose what past
performance examples to submit with its proposal(s). In this way, a
subcontractor's past performance rating is equivalent to that of a
prime contractor. In addition, and in accordance with FAR 15.305(a)(2),
when past performance is an evaluation factor, the currency and
relevance of the
[[Page 43735]]
information, source of the information, context of the data, and
general trends in contractor's performance shall be considered;
therefore, there is no need to make explicit or require a contracting
officer to evaluate past performance as a first-tier subcontractor
differently than past performance as a prime contractor.
Evaluating Joint Venture Members Based on Ownership and Liability
Comment: A commenter opposed the restriction on evaluating joint
venture members only on the duties and responsibilities that the member
carried out as part of the joint venture. The commenter remarked that
any joint venture with significant ownership is held jointly and
severally liable for the work; as such, the member should enjoy the
benefit of past performance credit.
Response: SBA believes the joint venture member should establish
its participation in the joint venture's contract in order to receive
past performance evaluation. This is necessary regardless of the
member's level of participation because the agency needs to be able to
gauge the relevancy of the past performance. Even where a member's
involvement is limited to taking on risk and liability, that still
could be part of the duties and responsibilities that the small
business carried out for the joint venture.
Adding Language About the Subcontractor Past Performance Being Equal to
CPARS Rating
Comment: A commenter suggested language should be added to 13 CFR
125.11(c)(3) making a subcontractor past performance rating equal to a
CPARS rating for a prime contractor.
Response: SBA is not adopting this suggested language for the
following reasons. SBA believes that, in most cases, the subcontractor
past performance rating should be treated as equivalent to a prime's
past performance rating. While agencies are required to use CPARS as
one of the sources of past performance information in source selections
when past performance is an evaluation factor, the FAR does not
indicate that the information in CPARS is to be weighted more highly
than information obtained from other sources. Under FAR 15.305(a)(2),
when past performance is an evaluation factor, the currency and
relevance of the information, source of the information, context of the
data, and general trends in the contractor's performance shall be
considered. Additionally, past performance is evaluated in accordance
with the solicitation. The recency and relevancy of past-performance
information will differ from one source selection to the next;
therefore, it is not necessary to indicate that the past-performance
rating provided to a first-tier small subcontractor by its prime
contractor is equally weighted in importance to information obtained
from CPARS. In response to this comment and for the reasons state
above, SBA clarifies that the importance of past performance
information is dependent on the individual acquisition, not on the
source of the information.
III. Section-by-Section Analysis
13 CFR 125.3
This final rule adds a requirement to prime contractors'
subcontracting plans. The subcontracting plan requires the prime
contractor to provide a rating of a first-tier subcontractor's past
performance within 15 calendar days of the first-tier subcontractor's
request. The requested rating is prepared including, at a minimum, the
following evaluation factors in the requested rating: (a) Technical
(quality of product or service); (b) Cost control (not applicable for
firm-fixed-price or fixed-price with economic price adjustment
arrangements); (c) Schedule/timeliness; (d) Management or business
relations; and (e) Other (as applicable). The requested rating will use
the five-scale rating system from FAR 14.1503: Exceptional, Very Good,
Satisfactory, Marginal, and Unsatisfactory.
13 CFR 125.11
This final rule renumbers 13 CFR 125.11 and subsequent sections to
create a new section 125.11. New subsection 125.11(a) provides general
guidance to require agencies to consider the past performance of
certain small business offerors that have been members of joint
ventures or first-tier subcontractors. The remainder of this final rule
addresses the two scenarios from NDAA 2021.
First, a small business concern may receive past performance
consideration for the past performance of a joint venture of which the
small business was a member. To receive past performance consideration,
where the small business does not independently demonstrate past
performance necessary for award, the small business may elect to use
the joint venture's past performance and the contracting officer shall
consider the joint venture past performance that the small business has
elected to use. In its offer for a prime contract, the small business
must identify: (i) the joint venture; (ii) the contract(s) of the joint
venture that the small business elects to use; and (iii) describe to
the agency what duties or responsibilities the small business carried
out as a joint venture member. The small business cannot, however,
claim past performance credit for work performed exclusively by other
partners to the joint venture.
As required by NDAA 2021, the contracting officer shall consider
the information that the small business provided about its duties and
responsibilities carried out as part of the joint venture. Where the
small business does not independently demonstrate past performance
necessary for award, agencies shall consider a small business'
successful rating of past performance through a joint venture. For
example, a solicitation might require three past performance examples.
This final rule authorizes the small business offeror to submit two
examples from performance in its own name and one example from
performance of a joint venture of which it was a member if the small
business cannot independently provide the third example of past
performance on its own. This final rule provides that the joint
venture's past performance may supplement the relevant past performance
of the small business when the small business cannot independently
demonstrate the past performance on its own.
Second, a small business concern may receive past performance
consideration for performance as a first-tier subcontractor. NDAA FY21
directs that this mechanism is limited to small businesses that
performed as first-tier subcontractors on contracts that include
subcontracting plans. The small business may request a rating of its
subcontractor past performance from the prime contractor. Under the
final rule, the prime contractor must provide a rating to the
requesting small business within 15 calendar days of the request.
Under this final rule, the requested rating is prepared including,
at a minimum, the following evaluation factors in the requested rating:
(a) Technical (quality of product or service); (b) Cost control (not
applicable for firm-fixed-price or fixed-price with economic price
adjustment arrangements); (c) Schedule/timeliness; (d) Management or
business relations; and (e) Other (as applicable). The requested rating
will use the five-scale rating system from FAR 42.1503: Exceptional,
Very Good, Satisfactory, Marginal, and Unsatisfactory. The final rule
does not contain a limit on how recent the evaluated contract must be.
The final rule clarifies that one scenario where this applies is where
the small business lacks a rating in the Contractor Performance
Assessment Reporting System (CPARS).
[[Page 43736]]
This final rule clarifies that a joint venture composed of small
businesses may receive past performance consideration for work that the
joint venture performed as a first-tier subcontractor. A small business
member of the joint venture subcontractor may request a past
performance rating from the prime contractor for a contract that
included a subcontracting plan. The prime contractor must provide the
requested rating to the joint venture member within 15 calendar days of
the request. The requested rating would be prepared to include, at a
minimum, the following evaluation factors in the requested record: (a)
Technical (quality of product or service); (b) Cost control (not
applicable for firm-fixed-price or fixed-price with economic price
adjustment arrangements); (c) Schedule/timeliness; (d) Management or
business relations; (e) Other (as applicable). The small business could
then use that rating to establish its past performance in accordance
with the prior provision on submitting joint venture past performance.
13 CFR 125.28
SBA is changing the reference from 125.15(a) to 125.18(a)
everywhere it appears in this section due to renumbering of sections.
Section 125.18(a) provides the requirements for representation of
service-disabled veteran-owned (SDVO) small business status.
13 CFR 125.29
SBA is changing the reference from 125.8 to 125.12 everywhere it
appears in this section due to renumbering of sections. Section 125.12
provides the definitions that are important in the Service-Disabled
Veteran-Owned (SDVO) Small Business Concern (SBC) program.
13 CFR 125.30
SBA is changing the reference from 125.8 to 125.12 everywhere it
appears in this section due to renumbering of sections. Section 125.12
provides the definitions that are important in the SDVO SBC program.
IV. Compliance With Executive Orders 12866, 12988, 13132, 13175, 13563,
the Congressional Review Act (5 U.S.C. 801-808), the Paperwork
Reduction Act (44 U.S.C., Ch. 35), and the Regulatory Flexibility Act,
(5 U.S.C. 601-612)
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
rule is a significant regulatory action for the purposes of Executive
Order 12866. Accordingly, the next section contains SBA's Regulatory
Impact Analysis.
Regulatory Impact Analysis:
1. Is there a need for the regulatory action?
This rule is necessary to satisfy statutory requirements to
implement section 868 of National Defense Authorization Act of Fiscal
Year 2021 (NDAA FY 2021). Section 868 (e) requires the Administrator to
issue rules to carry out the section.
Absence of past performance has been a limitation for small
businesses when pursuing procurement opportunities that evaluate past
performance. Small businesses often have past performance through work
performed as a joint venture partner or as a subcontractor, but this
experience and past performance is often not acknowledged or credited
to the relevant small business in the evaluation process. This final
rule is necessary to address that shortcoming in the evaluation of past
performance and experience.
The Federal Acquisition Regulation (FAR) states that ``past
performance, except as set forth in paragraph (c)(3)(iii) of this
section, shall be evaluated in all source selections for negotiated
competitive acquisitions expected to exceed the simplified acquisition
threshold.'' See FAR 15.304(c)(3)(i). Past performance is ``one
indicator of an offeror's ability to perform the contract
successfully.'' See FAR 15.305(a)(2). FAR 15.305(a)(2)(iv) provides
that, ``[i]n the case of an offeror without a record of relevant past
performance or for whom information on past performance is not
available, the offeror may not be evaluated favorably or unfavorably on
past performance.'' Because past performance may be considered a
responsibility factor or because past performance affects an offeror's
evaluation as compared to other offerors, the ability of small
businesses that have been first-tier subcontractors or participated in
joint ventures to demonstrate past performance increases their
competitiveness in Federal contracting.
2. What is the baseline, and the incremental benefits and costs of
this regulatory action?
OMB directs agencies to establish an appropriate baseline to
evaluate any benefits, costs, or transfer impacts of regulatory actions
and alternative approaches considered. The baseline should represent
the agency's best assessment of what the world would look like absent
the regulatory action. For a regulatory action that modifies or
replaces an existing regulation, a baseline assuming no change to the
regulation generally provides an appropriate benchmark for evaluating
benefits, costs, or transfer impacts of proposed regulatory changes and
their alternatives. This final rule implements the changes, by
modifying and expanding the rating procedures of the unimplemented
pilot program in 8(d)(17) of the Small Business Act (15 U.S.C.
637(d)(17)), which was added by section 1822 of the National Defense
Authorization Act of 2017.
NDAA FY 2021 amends Section 8(d)(17) of the Act to allow small
businesses that performed as first tier subcontractors to request a
past performance rating from the prime contractor. The prime contractor
must provide a rating of the small business past performance with
respect to that prime contract to the small business within 15 calendar
days of the request. The requested rating would be prepared to include,
at a minimum, the following evaluation factors in the requested rating:
(a) Technical (quality of product or service); (b) Cost control (not
applicable for firm-fixed price or fixed-price with economic price
adjustment arrangements); (c) Schedule/timeliness; (d) Management or
business relations; (e) Other (as applicable). The requested rating
will use the five-scale rating system from FAR 42.1503: Exceptional,
Very Good, Satisfactory, Marginal, and Unsatisfactory. This final rule
modifies the pilot program, in which a small business that had not
performed as a prime contractor could request a past performance rating
in the Contractor Performance Assessment Reporting System (CPARS), if
the small business is a first-tier subcontractor under a covered
Federal Government contract requiring a subcontracting plan. Section
868(a) amends Section 15(e) of the Small Business Act to direct the
establishment of regulations that allow the use of past performance in
joint ventures in Federal contracting offers. This amendment expands
the opportunities for past performance consideration by including
consideration of the past performance of a joint venture of which the
small business was a member.
The baseline is that which exists without implementation of the
pilot program in section 8(d)(17) of the Small Business Act. In this
environment, when a Federal agency creates a procurement opportunity
requiring an offeror to provide examples of past performance, a newer
small business concern may forego the opportunity because it
individually lacks the required number of examples and then opt to join
an established prime contractor's team as a subcontractor.
[[Page 43737]]
The most significant benefit of this final rule to small businesses
is that it enhances the small businesses' ability to compete for
Federal contracting opportunities. The Federal Acquisition Regulation
(FAR) states that ``past performance, except as set forth in paragraph
(c)(3)(iii) of this section, shall be evaluated in all source
selections for negotiated competitive acquisitions expected to exceed
the simplified acquisition threshold.'' See FAR 15.304(c)(3)(i). FAR
15.305(a)(2)(iv) provides that, ``[i]n the case of an offeror without a
record of relevant past performance or for whom information on past
performance is not available, the offeror may not be evaluated
favorably or unfavorably on past performance.'' Nevertheless, small
businesses without past experience as prime contractors may forego
seeking some Federal contracting opportunities. This enhancement of
Federal contracting opportunities is consistent with the amendment of
the Small Business Act, which states that ``procurement strategies used
by a Federal department or agency having contract authority shall
facilitate the maximum participation of small business concerns as
prime contractors, subcontractors, and suppliers.'' 15 U.S.C.
644(e)(1).
With more small businesses able to demonstrate past performance,
agencies will have a larger pool of small businesses competing for
contracting opportunities. This added competition may result in lower
prices to the Government. SBA cannot quantify this impact prior to
proposal of applicable FAR rules.
Costs of this final rule to the private sector include the prime
contractor's provision, upon request to provide a past performance
rating. The time burden of this requirement to the prime contractor is
similar to that of the pilot program's past performance rating
requirement. SBA estimates the fulfillment of a past performance
request to require about 30 minutes of time. Assuming that a
compilation of a rating of past performance involves 30 minutes of work
by an employee of the prime contractor and valuing the time at $93.44
per hour,\1\ SBA estimates that each rating request costs a prime
contractor $46.72 in labor plus de minimis costs of transmission of the
rating. There were approximately 34,000 individual subcontracting plans
with 24,000 at the prime contract level in fiscal year 2015 (81 FR
94249), but it is not known how many small businesses were involved in
these subcontracting plans or how many small businesses were involved
in multiple subcontracting plans. SBA notes that 1,800 small businesses
have active SBA-approved Mentor-Prot[eacute]g[eacute] agreements.\2\
SBA also notes that in FY 2019, the Electronic Subcontracting Reporting
System (eSRS) listed 2,082 commercial plans with small businesses.
---------------------------------------------------------------------------
\1\ The median hourly wage for construction managers is $46.72,
according to 2020 Bureau of Labor Statistics (BLS) data, and the
hourly rate of $93.44 includes 100 percent more for benefits and
overhead. Source for hourly rate: <a href="https://www.bls.gov/ooh/management/construction-managers.htm">https://www.bls.gov/ooh/management/construction-managers.htm</a>. Retrieved June 8, 2021.
\2\ One of the goals of the SBA's Mentor-Prot[eacute]g[eacute]
program is to promote the ability of small prot[eacute]g[eacute]
businesses to successfully compete for government contracting
opportunities. Prot[eacute]g[eacute] small businesses often form
joint ventures with their mentors to pursue specific procurement
requirements in order to gain experience and be able independently
perform similar requirements in the future.
---------------------------------------------------------------------------
Assuming half, or 900, of the small businesses with active
agreements in the Mentor-Prot[eacute]g[eacute] program request a rating
of past performance each year, the annual cost to the private sector of
fulfilling these requests for past performance ratings would be $42,048
plus de minimis costs. Assuming small businesses with 10 percent of
24,000 subcontracting plans at the prime contract level, in addition to
those in the Mentor-Prot[eacute]g[eacute] program, request a rating of
past performance each year, the annual cost to the private sector of
fulfilling these requests is $112,128. Assuming each of the 2,082
commercial plans has two to four subcontracts, and half of the total
subcontracts represents small business that would request a past
performance rating each year, then the annual cost to the private
sector of fulfilling these requests would be $145,907 plus de minimis
costs. With these assumptions, total annual costs to the private sector
of fulfilling requests is $300,083 plus de minimis costs.
The requirement of small business offerors that have been members
of joint ventures to identify the joint venture, identify the
contract(s) of the joint venture, and describe duties or
responsibilities as a joint venture member in order to receive
consideration of past performance involves a resource cost to the small
business offerors that compile the specified information. SBA notes
that this cost would be voluntarily incurred by small businesses that
assess the enhancement of Federal contracting opportunities from
consideration of past performance to be of greater value than the
incremental costs incurred.
If more small businesses meet past performance standards and then
submit proposals to contracting agencies, administrative costs to the
Government may increase when a contracting agency reviews an increased
number of proposals and past performance ratings. SBA cannot quantify
these costs and notes that increased competition may offset these costs
to the Government.
The ability of more small businesses to demonstrate past
performance may redistribute some Federal contracts from businesses
that can demonstrate past performance in the baseline scenario that
exists with no implementation of the pilot program. This redistribution
would not affect overall economic activity. This final rule and its
effects do not change the amount of dollars in all available Federal
contracts. SBA cannot quantify the actual outcome of the gains and
losses from the redistribution of contracts among different groups of
small businesses that would result from an increased number of small
businesses with the ability to demonstrate their experience and past
performance, but it expects that competition from small businesses with
newly established past performance ratings may displace some small
businesses that had established ratings in Federal contracting
opportunities. A partial offset of this transfer impact among small
businesses may occur with increased numbers of contracts set aside for
small businesses through the Rule of Two, which states there is a
reasonable expectation that the contracting officer will obtain offers
from at least two small businesses and award will be made at fair
market price.
3. What are the alternatives to this rule?
This final rule implements specific statutory provisions in Section
868 of the NDAA FY 2021. There are no alternatives that would meet the
statutory requirements.
Executive Order 12988
This final rule meets applicable standards set forth in sections
3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to
minimize litigation, eliminate ambiguity, and reduce burden. The action
does not have retroactive or preemptive effect.
Executive Order 13132
This final rule does not have federalism implications as defined in
Executive Order 13132. It will not have substantial direct effects on
the States, on the relationship between the National Government and the
States, or on the distribution of power and responsibilities among the
various levels of government, as specified in the Executive Order. As
such it does not warrant the preparation of a Federalism Assessment.
[[Page 43738]]
Executive Order 13175
This final rule does not have tribal implications under Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it would not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes.
Executive Order 13563
This Executive Order directs agencies to, among other things: (a)
afford the public a meaningful opportunity to comment through the
internet on proposed regulations, with a comment period that should
generally consist of not less than 60 days; (b) provide for an ``open
exchange'' of information among government officials, experts,
stakeholders, and the public; and (c) seek the views of those who are
likely to be affected by the rulemaking, even before issuing a notice
of proposed rulemaking. As far as practicable or relevant, SBA
considers these requirements in developing this rule, as discussed
below.
1. Did the agency use the best available techniques to quantify
anticipated present and future costs when responding to E.O. 12866
(e.g., identifying changing future compliance costs that might result
from technological innovation or anticipated behavioral changes)?
To the extent possible the Agency utilized the most recent data
available in the Federal Procurement Data System-Next Generation,
System for Award Management, and Electronic Subcontracting Reporting
System.
2. Public participation: Did the agency: (a) Afford the public a
meaningful opportunity to comment through the internet on any proposed
regulation, with a comment period that should generally consist of not
less than 60 days; (b) provide for an ``open exchange'' of information
among Government officials, experts, stakeholders, and the public; (c)
provide timely online access to the rulemaking docket on
<a href="http://Regulations.gov">Regulations.gov</a>; and (d) seek the views of those who are likely to be
affected by rulemaking, even before issuing a notice of proposed
rulemaking?
The proposed rule had a 60-day comment period and was posted on
<a href="http://www.regulations.gov">www.regulations.gov</a> to allow the public to comment meaningfully on its
provisions. SBA received comments from 15 commenters in response to the
Proposed Rule. SBA has reviewed all the comments while drafting this
final rule. SBA submitted the final rule to OMB for interagency review.
3. Flexibility: Did the agency identify and consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public?
Yes, the final rule implements statutory provisions that provide
new methods for small business government contractors to obtain past
performance ratings to be used with offers on prime contracts with the
Federal Government. The final rule updates the requirements for small
business subcontracting plans to add a requirement for prime
contractors to provide past performance to a small business, first-tier
subcontractor when requested by the small business first-tier
subcontractor. The final rule enhances the small business' ability to
compete for Federal Government prime contracting opportunities.
Congressional Review Act
Subtitle E of the Small Business Regulatory Enforcement Fairness
Act of 1996 (codified at 5 U.S.C. 801-808), also known as the
Congressional Review Act or CRA, generally provides that before a rule
may take effect, the agency promulgating the rule must submit a rule
report, which includes a copy of the rule, to each House of the
Congress and to the Comptroller General of the United States. SBA will
submit a report containing this rule and other required information to
the U.S. Senate, the U.S. House of Representatives, and the Comptroller
General of the United States. A major rule under the CRA cannot take
effect until 60 days after it is published in the Federal Register.
OMB's Office of Information and Regulatory Affairs has determined that
this rule is not a ``major rule'' as defined by 5 U.S.C. 804(2).
Paperwork Reduction Act
This rule updates the requirements for small business
subcontracting plans to add a requirement for prime contractors to
provide past performance ratings to a first-tier small business
subcontractor when requested. A FAR rule implementing this requirement
will account for the additional burden in its existing information
collection and clearance for the information collection will be
obtained by the GSA for the FAR Council.
In this final rule, SBA provides for a small business concern to
receive past performance consideration for the past performance of a
joint venture of which the small business was a member. This does not
require a new information collection because the burden is already
accounted for when the Government contracting officer rates the joint
venture entity serving as a prime contractor.
Regulatory Flexibility Act, 5 U.S.C. 601-612
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires
administrative agencies to consider the effect of their actions on
small entities, small nonprofit enterprises, and small local
governments. Pursuant to the RFA, when an agency issues a rulemaking,
the agency must prepare a regulatory flexibility analysis which
describes the impact of the rule on small entities. However, section
605 of the RFA allows an agency to certify a rule, in lieu of preparing
an analysis if the rulemaking is not expected to have a significant
economic impact on a substantial number of small entities. The RFA
defines ``small entity'' to include ``small businesses,'' ``small
organization,'' and ``small governmental jurisdictions.''
This final rule provides new methods for small business contractors
to obtain past performance ratings to be used with offers on prime
contracts. As such, the rule relates to small business concerns but
would not affect ``small organizations'' or ``small governmental
jurisdictions'' because those programs generally apply only to
``business concerns'' as defined by SBA regulations; in other words, to
small businesses organized for profit. ``Small organizations'' or
``small governmental jurisdictions'' are non-profits or governmental
entities and do not generally qualify as ``business concerns'' within
the meaning of SBA's regulations.
There are approximately 1,800 active SBA-approved Mentor-
Prot[eacute]g[eacute] agreements and SBA estimates that half, or 900,
small businesses with active agreements would request a past
performance rating from its prime contractor in a year. Of the 24,000
subcontracting plans at the prime contract level in fiscal year 2015,
SBA assumes for this analysis that up to 2,400 that are not in the
Mentor-Prot[eacute]g[eacute] program may request a past performance
rating each year. Additionally, in FY 2019 there were 2,082 commercial
plans with small businesses. Assuming two to four subcontracts for each
commercial plan, and half of them request a past performance rating,
SBA estimates that up to 3,123 small businesses involved in commercial
plans may request a past performance rating each year. The changes
allow small business contractors to request a past performance rating
from a prime contractor for whom they performed
[[Page 43739]]
work as a first-tier subcontractor or as a member of a joint venture.
In addition, the final rule updates the requirements for small business
subcontracting plans to add a responsibility for prime contractors to
provide past performance of the first-tier when requested by that
first-tier subcontractor.
As a result, SBA does not believe the final rule would have a
disparate impact on small businesses or would impose any additional
significant costs. For the reasons discussed, SBA certifies that this
final rule does not have a significant economic impact on a substantial
number of small business concerns.
List of Subjects in 13 CFR Part 125
Government contracts, Government procurement, Reporting and
recordkeeping requirements, Small business subcontracting, Small
businesses.
For the reasons stated in the preamble, SBA amends 13 CFR part 125
as follows:
PART 125--GOVERNMENT CONTRACTING PROGRAMS
0
1. The authority citation for part 125 continues to read as follows:
Authority: 15 U.S.C. 632(p), (q), 634(b)(6), 637, 644, 657b,
657(f), and 657r.
0
2. Amend Sec. 125.3 by:
0
a. Removing the word ``and'' at the end of paragraphs (c)(1)(ix) and
(x);
0
b. Removing the period at the end of paragraph (c)(1)(xi) and adding
``; and'' in its place; and
0
c. Adding paragraph (c)(1)(xii).
The addition reads as follows:
Sec. 125.3 What types of subcontracting assistance are available to
small businesses?
* * * * *
(c) * * *
(1) * * *
(xii)(A) The prime contractor, upon request from a first-tier small
business subcontractor, shall provide the subcontractor with a rating
of the subcontractor's past performance. The prime contractor must
provide the small business subcontractor the requested rating within 15
calendar days of the request. The rating provided by the prime
contractor to the first-tier small business subcontractor shall utilize
the five-scale ratings system found in FAR 42.1503 (48 CFR 42.1503):
Exceptional, Very Good, Satisfactory, Marginal, and Unsatisfactory. If
the subcontractor will use the rating for an offer on a prime contract,
it must include, at a minimum, the following evaluation factors in the
requested rating:
(1) Technical (quality of product or service);
(2) Cost control (not applicable for firm-fixed-price or fixed-
price with economic price adjustment arrangements);
(3) Schedule/timeliness;
(4) Management or business relations; and
(5) Other (as applicable).
(B) The requirement in paragraph (c)(1)(xii)(A) of this section is
not subject to the flow-down in paragraph (c)(1)(x) of this section.
(C) A first-tier small business subcontractor must make the request
for a performance rating from the prime contractor within 30 calendar
days after the completion of the period of performance for the prime
contractor's contract with the Government. The prime contractor and the
first-tier small business subcontractor may negotiate a later deadline
for the request for a performance rating, but in no case can the prime
contractor impose a deadline earlier than 30 calendar days after the
completion of the period of performance for the prime contractor's
contract with the Government.
(D) The rating provided by the prime contractor to the first-tier
small business subcontractor shall utilize the five-scale ratings
system found in FAR 42.1503 (48 CFR 42.1503): Exceptional, Very Good,
Satisfactory, Marginal, and Unsatisfactory.
* * * * *
Sec. Sec. 125.11 through 125.14 [Redesignated as Sec. Sec. 125.12
through 125.15]
0
3. Redesignate Sec. Sec. 125.11 through 125.14 as Sec. Sec. 125.12
through 125.15.
0
4. Add new Sec. 125.11 before subpart A to read as follows:
Sec. 125.11 Past performance ratings for certain small business
concerns.
(a) General. In accordance with sections 15(e)(5) and 8(d)(17) of
the Small Business Act, agencies are required to consider the past
performance of certain small business offerors that have been members
of joint ventures or have been first-tier subcontractors. The agencies
shall consider the small business' past performance for the evaluated
contract or order similarly to a prime-contract past performance.
(b) Small business concerns that have been members of joint
ventures--(1) Joint venture past performance. (i) When submitting an
offer for a prime contract, a small business concern that has been a
member of a joint venture may elect to use the experience and past
performance of the joint venture (whether or not the other joint
venture partners were small business concerns) where the small business
does not independently demonstrate past performance necessary for
award. The small business concern, when making such an election, shall:
(A) Identify to the contracting officer the joint venture of which
the small business concern is or was a member;
(B) Identify the contract or contracts of the joint venture that
the small business elects to use for its experience and past
performance for the prime contract offer; and
(C) Inform the contracting officer what duties and responsibilities
the concern carried out or is carrying out as part of the joint
venture.
(ii) A small business cannot identify and use as its own experience
and past performance work that was performed exclusively by other
partners to the joint venture.
(2) Evaluation. When evaluating the past performance of a small
business concern that has submitted an offer on a prime contract, the
contracting officer shall consider the joint venture past performance
that the concern elected to use under paragraph (b)(1) of this section,
giving due consideration to the information provided under paragraph
(b)(1)(i)(C) of this section for the performance of the evaluated
contract or order. This includes where the small business concern lacks
a past performance rating as a prime contractor in the Contractor
Performance Assessment Reporting System, or successor system used by
the Federal Government to monitor or rate contractor past performance.
(c) Small business concerns that have performed as first-tier
subcontractors--(1) Responsibility of prime contractors. A small
business concern may request a rating of its subcontractor past
performance from the prime contractor for a contract on which the
concern was a first-tier subcontractor and which included a
subcontracting plan. The prime contractor shall provide the rating to
the small business concern within 15 calendar days of the request. The
rating provided by the prime contractor to the first-tier small
business subcontractor shall utilize the five-scale ratings system
found in FAR 42.1503 (48 CFR 42.1503): Exceptional, Very Good,
Satisfactory, Marginal, and Unsatisfactory. The prime contractor must
include, at a minimum, the following evaluation factors in the
requested rating:
(i) Technical (quality of product or service);
(ii) Cost control (not applicable for firm-fixed-price or fixed-
price with economic price adjustment arrangements);
[[Page 43740]]
(iii) Schedule/timeliness;
(iv) Management or business relations; and
(v) Other (as applicable).
(2) Responsibility of first-tier small business subcontractors. A
first-tier small business subcontractor must make the request for a
performance rating from the prime contractor within 30 days after the
completion of the period of performance for the prime contractor's
contract with the Government. However, the prime contractor and the
first-tier small business subcontractor may negotiate a later deadline
for the request for a performance rating, but in no case can the prime
contractor impose a deadline earlier than 30 days after the completion
of the period of performance for the prime contractor's contract with
the Government. The subcontractor may notify the contracting officer in
the event that the prime contractor does not comply with its
responsibility to submit a timely rating.
(3) Joint ventures that performed as first-tier subcontractors. A
small business member of a joint venture may request a past performance
rating under paragraph (c)(1) of this section, where a joint venture
performed as a first-tier subcontractor. The joint venture member may
then submit the subcontractor past performance rating to a procuring
agency in accordance with paragraph (b) of this section.
(4) Evaluation. When evaluating the past performance of a small
business concern that elected to use a rating for its offer on a prime
contract, a contracting officer shall consider the concern's experience
and rating of past performance as a first-tier subcontractor. This
includes where the small business concern lacks a past performance
rating as a prime contractor in the Contractor Performance Assessment
Reporting System (CPARS), or successor system used by the Federal
Government to monitor or rate contractor past performance.
Sec. 125.28 [Amended]
0
5. Amend Sec. 125.28 in paragraph (a) by removing ``Sec. 125.15(a)''
and adding ``Sec. 125.18(a)'' in its place.
Sec. 125.29 [Amended]
0
6. Amend Sec. 125.29 in paragraph (a) by removing ``Sec. 125.8'' and
adding ``Sec. 125.12'' in its place.
Sec. 125.30 [Amended]
0
7. Amend Sec. 125.30 in paragraph (g)(4) by removing ``Sec. 125.8''
and adding ``Sec. 125.12'' in its place.
Isabella Casillas Guzman,
Administrator.
[FR Doc. 2022-15622 Filed 7-21-22; 8:45 am]
BILLING CODE 8026-09-P
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