Rule2022-17828
Small Businesses in U.S. Territories; Eligibility of the Commonwealth of the Northern Mariana Islands
Primary source
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
August 19, 2022
Effective
October 18, 2022
Issuing agencies
Small Business Administration
Abstract
This direct final rule implements a provision of the National Defense Authorization Act (NDAA) Fiscal Year 2021 (FY 2021) by defining a covered territory business as a small business in the U.S. Virgin Islands, American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. Covered territory businesses would be newly qualified for surplus personal property distributions, and covered territory mentors would receive contracting incentives for mentoring prot[eacute]g[eacute] firms that are covered territory businesses.
Full Text
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<title>Federal Register, Volume 87 Issue 160 (Friday, August 19, 2022)</title>
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[Federal Register Volume 87, Number 160 (Friday, August 19, 2022)]
[Rules and Regulations]
[Pages 50925-50928]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-17828]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 87, No. 160 / Friday, August 19, 2022 / Rules
and Regulations
[[Page 50925]]
SMALL BUSINESS ADMINISTRATION
13 CFR Parts 125 and 129
RIN 3245-AH72
Small Businesses in U.S. Territories; Eligibility of the
Commonwealth of the Northern Mariana Islands
AGENCY: U.S. Small Business Administration.
ACTION: Direct final rule.
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SUMMARY: This direct final rule implements a provision of the National
Defense Authorization Act (NDAA) Fiscal Year 2021 (FY 2021) by defining
a covered territory business as a small business in the U.S. Virgin
Islands, American Samoa, Guam, and the Commonwealth of the Northern
Mariana Islands. Covered territory businesses would be newly qualified
for surplus personal property distributions, and covered territory
mentors would receive contracting incentives for mentoring
prot[eacute]g[eacute] firms that are covered territory businesses.
DATES: This rule is effective on October 18, 2022, without further
action, unless significant adverse comments are received by September
19, 2022. If significant adverse comment is received, SBA will publish
a timely withdrawal of the rule in the Federal Register.
ADDRESSES: You may submit comments, identified by RIN 3245-AH72, by any
of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments.
<bullet> Email: Donna Fudge, Procurement Analyst, Office of Policy
Planning and Liaison, Small Business Administration, at
<a href="/cdn-cgi/l/email-protection#43072c2d2d226d0536272426033021226d242c35"><span class="__cf_email__" data-cfemail="63270c0d0d024d2516070406231001024d040c15">[email protected]</span></a>.
SBA will post all comments on <a href="https://www.regulations.gov">https://www.regulations.gov</a>. If you
wish to submit confidential business information (CBI), as defined in
the User Notice at <a href="https://www.regulations.gov">https://www.regulations.gov</a>, please submit the
information to Donna Fudge, Small Business Administration at
<a href="/cdn-cgi/l/email-protection#fbbf9495959ad5bd8e9f9c9ebb88999ad59c948d"><span class="__cf_email__" data-cfemail="94d0fbfafaf5bad2e1f0f3f1d4e7f6f5baf3fbe2">[email protected]</span></a>. Highlight the information that you consider to be
CBI and explain why you believe SBA should hold this information as
confidential. SBA will review the information and make the final
determination on whether it will publish the information.
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#cc88a3a2a2ade28ab9a8aba98cbfaeade2aba3ba"><span class="__cf_email__" data-cfemail="1753787979763951627370725764757639707861">[email protected]</span></a>, (202) 205-6363. If you are deaf, hard of
hearing, or have a speech disability, please dial 7-1-1 to access
telecommunications relay services.
SUPPLEMENTARY INFORMATION:
I. Background Information
This direct final rule adds the U.S. Virgin Islands, American
Samoa, Guam, and the Commonwealth of the Northern Mariana Islands
(CNMI) to the list of territories from which small businesses are
eligible for preferential treatment under two government programs: the
surplus property program and the SBA mentor-prot[eacute]g[eacute]
program for government contracting. These changes are required by NDAA
FY21, Public Law 116-283.
Section 866 of NDAA FY21 defined a ``covered territory business''
as a small business concern that has its principal office located in
one of the following: (1) the U.S. Virgin Islands; (2) American Samoa;
(3) Guam; or (4) the CNMI.
Under the law, a covered territory business receives priority for
surplus property transfers for four years after the enactment of NDAA
FY21, which occurred on January 1, 2021. This direct final rule extends
the changes that SBA made in a prior rulemaking about the surplus
property program (Use of Federal Surplus Property for Veteran-Owned
Small Businesses, and Small Businesses in Disaster Areas and Puerto
Rico, 85 FR 69120, effective December 2, 2020). SBA is amending part
129 of its regulations to add a covered territory business to the
eligibility list for the surplus property program, through January 1,
2025. SBA is treating covered territory businesses similarly to
businesses located in Puerto Rico: a covered territory business would
have its principal place of business located in its respective covered
territory. For example, in order for a small business to be considered
located in Guam, the small business should have a physical location in
Guam.
Additionally, section 866 created two new incentives for SBA's
small business mentor-prot[eacute]g[eacute] program for mentor-
prot[eacute]g[eacute] pairs in which the prot[eacute]g[eacute] is a
covered territory business. First, the mentor would receive positive
consideration in its past-performance evaluations. Second, if the
mentor incurs costs training the prot[eacute]g[eacute], the mentor is
able to apply those costs as subcontracting expenses and count them
toward subcontracting goals contained in the mentor's subcontracting
plans. These incentives already exist for mentors with
prot[eacute]g[eacute]s that are Puerto Rico businesses.
II. Section-by-Section Analysis
13 CFR 125.1
SBA adds a definition for ``covered territory business.'' A covered
territory business is a small business with its principal office
located in the U.S. Virgin Islands, American Samoa, Guam, or the CNMI.
13 CFR 125.9
SBA adds a covered territory business to paragraph (b)(3)(ii) so
that a mentor-prot[eacute]g[eacute] relationship with a covered
territory business does not count toward the mentor's limit on the
number of prot[eacute]g[eacute]s. Generally, a mentor is only allowed
three prot[eacute]g[eacute]s at a time. A prot[eacute]g[eacute] does
not count, however, if the prot[eacute]g[eacute] has its principal
office located in Puerto Rico or qualifies as a covered territory
business.
SBA adds a covered territory business to paragraph (d)(6), which
currently lists the special incentives for mentors with a
prot[eacute]g[eacute] that is located in Puerto Rico. Such a mentor is
able to receive positive consideration for the mentor's past
performance evaluation and applying costs of training the
prot[eacute]g[eacute] to the subcontracting goals in its subcontracting
plan.
13 CFR Part 129
This direct final rule revises the title of part 129 to incorporate
the term ``covered territory businesses'' to align the title with the
amendments being made to the part via this rule.
13 CFR 129, Subpart C
This direct final rule changes the title of subpart C, which
currently covers Puerto Rico businesses, to incorporate covered
territory businesses into the list
[[Page 50926]]
of small businesses eligible to receive Federal surplus property.
13 CFR 129.301
The direct final rule adds the definition of a covered territory
business. Additionally, the direct final rule revises the definition of
covered period to specify that, for a covered territory business, the
covered period ends on January 1, 2025.
A covered territory business will be able to obtain surplus
property from its territory's State Agency for Surplus Property, in
accordance with the same regulations that currently apply to Puerto
Rico businesses.
III. 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), the Regulatory Flexibility Act, (5
U.S.C. 601-612), and the Administrative Procedure Act (5 U.S.C. 553)
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
direct final rule is a not a significant regulatory action for the
purposes of Executive Order 12866.
Executive Order 12988
This direct 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
For the purposes of Executive Order 13132, Federalism, SBA has
determined that this direct final rule 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. Therefore, for
the purpose of Executive Order 13132, SBA has determined that this
direct final rule has no federalism implications warranting preparation
of a federalism assessment.
Executive Order 13175
This direct 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
Executive Order 13563 reaffirms the principles of Executive Order
12866 while calling for improvements in the nation's regulatory system
to promote predictability, to reduce uncertainty, and to use the best,
most innovative, and least burdensome tools for achieving regulatory
ends. The executive order directs agencies to consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public where these approaches are relevant, feasible,
and consistent with regulatory objectives. Executive Order 13563 also
requires that regulations be based on the open exchange of information
and perspectives among state and local officials, affected stakeholders
in the private sector, and the public as a whole. SBA has developed
this rule in a manner consistent with these requirements. While
developing this rule, SBA responded to specific inquiries from
government officials and the public regarding the implementation of the
statutory required changes.
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
SBA has determined that this direct final rule does not impose
additional reporting or recordkeeping requirements under the Paperwork
Reduction Act, 44 U.S.C., Chapter 35.
Regulatory Flexibility Act
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 Direct Final Rule adds the U.S. Virgin Islands, American
Samoa, Guam, and the Commonwealth of the Northern Mariana Islands
(CNMI) to the list of territories from which small businesses are
eligible for preferential treatment under two government programs: the
surplus property program and the SBA mentor-prot[eacute]g[eacute]
program for government contracting. This rule relates to small business
concerns but would not affect ``small organizations'' or ``small
governmental jurisdictions'' because the programs affected 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.
SBA identified 219 small business vendors across the covered
territories for FY2021 that had sold to the Federal government and
therefore would benefit from the changes to SBA's mentor-
prot[eacute]g[eacute] program. Based on the number of small business
vendors across the covered territories affected, SBA believes that the
rule will not have an impact on a substantial number of entities nor a
significant economic impact.
Accordingly, the Administrator of the SBA hereby certifies that
this rule will not have a significant economic impact on a substantial
number of small entities. SBA invites comments from members of the
public who believe there will be a significant impact on any small
entities, including small businesses.
Administrative Procedure Act--Justification for Direct Final Rule
In general, SBA publishes a rule for public comment before issuing
a final rule, in accordance with the Administrative Procedure Act. 5
U.S.C. 553. The Administrative Procedure Act provides an exception to
this standard rulemaking process, however, where an agency finds good
cause to adopt a rule
[[Page 50927]]
without prior public participation. 5 U.S.C. 553(b)(3)(B). The good
cause requirement is satisfied when prior public participation is
impracticable, unnecessary, or contrary to the public interest.
SBA is publishing this rule as a direct final rule because public
participation is unnecessary. SBA views this as a non-controversial
administrative action because it merely implements a change required by
the Small Business Act, as amended by section 866 of NDAA FY21. This
rule will be effective on the date shown in the DATES section unless
SBA receives significant adverse comment on or before the deadline for
comments. Significant adverse comments are comments that provide strong
justifications why the rule should not be adopted or for changing the
rule. SBA does not expect to receive any significant adverse comments
because the rule simply mirrors the statutory language contained in
section 866 of NDAA FY21, with no extraneous interpretation or other
expanded text.
If SBA receives significant adverse comment, SBA will publish a
notice in the Federal Register withdrawing this rule before the
effective date. If SBA receives no significant adverse comments, the
rule will be effective 60 days after publication without further
notice.
List of Subjects
13 CFR Part 125
Government contracts, Government procurement, Reporting and
recordkeeping requirements, Small businesses, Technical assistance.
13 CFR Part 129
Administrative practice and procedure, Government contracts,
Government procurement, Government property, Reporting and
recordkeeping requirements, Small businesses.
For the reasons stated in the preamble, SBA amends 13 CFR parts 125
and 129 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. 125.1 by adding a definition for ``Covered territory
business'' in alphabetical order to read as follows:
Sec. 125.1 What definitions are important to SBA's Government
Contracting Programs?
* * * * *
Covered territory business means a small business concern that has
its principal office located in one of the following:
(1) The United States Virgin Islands;
(2) American Samoa;
(3) Guam; or
(4) The Commonwealth of the Northern Mariana Islands.
* * * * *
0
3. Amend Sec. 125.9 by revising the second sentence in paragraph
(b)(3)(ii) and revising paragraph (d)(6) introductory text to read as
follows:
Sec. 125.9 What are the rules governing SBA's small business mentor-
prot[eacute]g[eacute] program?
* * * * *
(b) * * *
(3) * * *
(ii) * * * However, the first two mentor-prot[eacute]g[eacute]
relationships approved by SBA between a specific mentor and a covered
territory business, or a specific mentor and a small business that has
its principal office located in the Commonwealth of Puerto Rico, do not
count against the limit of three proteges that a mentor can have at one
time.
* * * * *
(d) * * *
(6) A mentor that provides a subcontract to its
prot[eacute]g[eacute] that is a covered territory business, or that has
its principal office located in the Commonwealth of Puerto Rico, may:
* * * * *
PART 129--CONTRACTS FOR SMALL BUSINESSES LOCATED IN DISASTER AREAS,
AND SURPLUS PERSONAL PROPERTY FOR SMALL BUSINESSES LOCATED IN
DISASTER AREAS, PUERTO RICO, AND COVERED TERRITORY BUSINESSES.
0
4. The authority citation for part 129 continues to read as follows:
Authority: 15 U.S.C. 636(j)(13)(F)(ii), (iii), and 644(f).
0
5. Revise the heading for part 129 to read as set forth above.
0
6. Revise the heading for subpart C to read as follows:
Subpart C--Surplus Personal Property for Small Businesses Located
in Puerto Rico and for Covered Territory Businesses
0
7. Amend Sec. 129.300 by revising the definition of ``Covered period''
and by adding a definition for ``Covered territory business'' in
alphabetical order to read as follows:
Sec. 129.300 What definitions are important in this subpart?
Covered period means:
(1) In the case of a Puerto Rico business, the period beginning on
August 13, 2018 and ending on the date which the Oversight Board
established under section 101 of the Puerto Rico Oversight, Management,
and Economic Stability Act (48 U.S.C. 2121) terminates. 15 U.S.C.
636(j)(13)(F)(iii); or
(2) In the case of a Covered territory business, the period
beginning on January 1, 2021, the period ending on January 1, 2025. 15
U.S.C. 636(j)(13)(f)(iii).
Covered territory business means a small business concern that has
its principal office located in one of the following:
(1) The United States Virgin Islands;
(2) American Samoa;
(3) Guam; or
(4) The Commonwealth of the Northern Mariana Islands.
* * * * *
0
8. Amend Sec. 129.301 by revising the section heading and paragraphs
(a), (b)(1), and (c)(1) introductory text and by redesignating
paragraph (f) as paragraph (e).
The revisions read as follows:
Sec. 129.301 How does a covered territory business or small business
concern located in Puerto Rico obtain Federal surplus personal
property?
(a) General. Pursuant to 15 U.S.C. 636(j)(13)(F)(iii), eligible
covered territory businesses may receive surplus Federal Government
property from their territory State Agency for Surplus Property (SASP),
and eligible small business concerns located in Puerto Rico may receive
such property from the Puerto Rico SASP. The procedures set forth in 41
CFR part 102-37 and this section will be used to transfer surplus
personal property to eligible small business concerns. The property
which may be transferred to the territory SASP or the Puerto Rico SASP
for further transfer to eligible small business concerns includes all
personal property which has become available for donation pursuant to
41 CFR 102-37.30.
(b) * * *
(1) Be a covered territory business or be located in Puerto Rico;
* * * * *
(c) * * *
(1) Eligible concerns may acquire surplus Federal personal property
from their territory SASP or, for a Puerto Rico concern, the Puerto
Rico SASP,
[[Page 50928]]
provided the concern represents and agrees in writing:
* * * * *
Isabella Casillas Guzman,
Administrator.
[FR Doc. 2022-17828 Filed 8-18-22; 8:45 am]
BILLING CODE 8026-09-P
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