Rule2023-21322
Federal Acquisition Regulation: 8(a) Program
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
October 5, 2023
Effective
November 6, 2023
Issuing agencies
Defense DepartmentGeneral Services AdministrationNational Aeronautics and Space Administration
Abstract
DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement regulatory changes made by the Small Business Administration to update and clarify requirements associated with the 8(a) program.
Full Text
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<title>Federal Register, Volume 88 Issue 192 (Thursday, October 5, 2023)</title>
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[Federal Register Volume 88, Number 192 (Thursday, October 5, 2023)]
[Rules and Regulations]
[Pages 69523-69525]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-21322]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 19
[FAC 2023-06, FAR Case 2021-012, Item III; Docket No. FAR-2021-0012;
Sequence No. 1]
RIN 9000-AO29
Federal Acquisition Regulation: 8(a) Program
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the
Federal Acquisition Regulation (FAR) to implement regulatory changes
made by the Small Business Administration to update and clarify
requirements associated with the 8(a) program.
DATES: Effective November 6, 2023.
FOR FURTHER INFORMATION CONTACT: Ms. Dana Bowman, Procurement Analyst,
at 202-803-3188 or by email at <a href="/cdn-cgi/l/email-protection#84e0e5eae5aae6ebf3e9e5eac4e3f7e5aae3ebf2"><span class="__cf_email__" data-cfemail="0b6f6a656a2569647c666a654b6c786a256c647d">[email protected]</span></a>, for clarification
of content. For information pertaining to status or publication
schedules, contact the Regulatory Secretariat Division at 202-501-4755
or <a href="/cdn-cgi/l/email-protection#a0e7f3e1f2c5c7f3c5c3e0c7d3c18ec7cfd6"><span class="__cf_email__" data-cfemail="7b3c283a291e1c281e183b1c081a551c140d">[email protected]</span></a>. Please cite FAC 2023-06, FAR Case 2021-012.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published a proposed rule at 87 FR 76598 on
December 15, 2022, to implement regulatory changes made by the Small
Business Administration (SBA), in its final rule published in the
Federal Register at 85 FR 66146 on October 16, 2020. SBA initiated a
review of its regulations in response to the prior administration's
Governmentwide regulatory reform initiative. As a result, SBA revised
the 8(a) program regulations to more clearly articulate SBA's intent
with regard to certain aspects of the 8(a) program to eliminate
confusion and decrease burdens on procuring activities and 8(a)
participants.
One respondent submitted comments in response to the proposed rule.
II. Discussion and Analysis
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council (the Councils) reviewed the public comments in the
development of the final rule; however, no changes were made as a
result of the public comments received. A discussion of the comments
received is provided as follows:
A. Summary of Significant Changes
There are no significant changes from the proposed rule.
B. Analysis of Public Comments
1. Support for the Rule
Comment: The respondent expressed support for the rule.
Response: The Councils acknowledge the respondent's support for the
rule.
2. Negative Impacts of the Rule
Comment: The respondent indicated that moving contracts from the
8(a) Program inflicts harm on small businesses that are dependent upon
those contracts for their growth and viability. The respondent
indicated that it has had its contracts moved out of the 8(a) program
into ``new'' contracts or limited competition contract vehicles, not
available to all 8(a) program participants. The respondent indicated
further that it is not always aware that a contract was to be moved to
a limited competition contract, and if it was not a contract holder on
that contract, then it could not pursue the opportunity. The respondent
indicated that this can cause serious harm to small businesses that are
counting on that revenue. The respondent stated that requiring
notification to the SBA that a contract is being removed from the 8(a)
Program is a positive step, but that it does not decrease the harm
being done to a small business that is losing the contract. The
respondent concluded that, overall, the proposed revisions are
positive, but removing contracts from the 8(a) Program is detrimental
to small businesses that are the backbone of the defense industrial
base.
Response: The Councils acknowledge the respondent's concerns
regarding the impact of moving contracts out of the 8(a) Program. This
rule implements SBA's regulatory changes made in its final rule
published at 85 FR 66146 on October 16, 2020, that clarified certain
aspects of the 8(a) Program. To ensure procurements are not removed
from the 8(a) Program without SBA consent, this rule adds a requirement
for contracting officers to notify SBA of follow-on, non-8(a)
procurements, and specifies that contracting officers should notify SBA
when a mandatory source will be utilized for a follow-on to an 8(a)
contract. This rule also clarifies that
[[Page 69524]]
SBA may appeal a contracting officer's decision that an acquisition
previously procured under the 8(a) Program is a new requirement not
subject to the release requirements. However, and as stated in SBA's
preamble, these changes do not modify existing 8(a) Program
requirements; instead, they emphasize the requirement for SBA to agree
to release a requirement from the 8(a) Program.
C. Other Changes
Minor editorial changes to the proposed rule were made at FAR
19.815(d), (e), and (f).
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Products, Including Commercially
Available Off-the-Shelf (COTS) Items or for Commercial Services
This rule does not create new solicitation provisions or contract
clauses or impact any existing provisions or clauses.
IV. Expected Impact of the Rule
This rule updates and clarifies requirements associated with the
8(a) program to eliminate confusion among 8(a) concerns and procuring
activities. Contracting officers are required to submit blanket
purchase agreements (BPAs) issued under FAR part 13 and FAR part 13 BPA
orders in the 8(a) Program to SBA for acceptance. Contracting officers
are also required to notify SBA of follow-on, non-8(a) procurements,
and should notify SBA when a mandatory source will be utilized for a
follow-on to an 8(a) contract. Additionally, the SBA certificate of
competency program does not apply to 8(a) sole-source awards;
therefore, contracting officers will no longer be required to submit
these actions to SBA. The impact of these changes is expected to be
beneficial to the Government, contractors, and offerors as 8(a) program
requirements are clarified, and ambiguities are reduced for small
business entities and procuring activities. Any cost to the Government
is not expected to be significant.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993.
VI. Congressional Review Act
The Congressional Review Act (5 U.S.C. 801-808) requires interim
and final rules to be submitted to Congress before the rule takes
effect. DoD, GSA, and NASA will send this rule to each House of the
Congress and to the Comptroller General of the United States. The
Office of Information and Regulatory Affairs (OIRA) in the Office of
Management and Budget has determined that this is not a major rule
under 5 U.S.C. 804.
VII. Regulatory Flexibility Act
DoD, GSA, and NASA have prepared a Final Regulatory Flexibility
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5
U.S.C. 601-612. The FRFA is summarized as follows:
DoD, GSA, and NASA are issuing a final rule to amend the Federal
Acquisition Regulation (FAR) to implement regulatory changes made by
the Small Business Administration (SBA) to the 8(a) Program in its
final rule dated October 16, 2020 (85 FR 66146). SBA revised its
8(a) program regulations to eliminate confusion among small
businesses and procuring activities. The final rule clarifies that
the certificate of competency program is not applicable to 8(a)
sole-source awards. Additionally, the final rule adds a requirement
for the contracting officer to submit an offering letter for blanket
purchase agreements (BPAs) and orders placed under BPAs under the
8(a) Program to SBA, and for SBA to accept such offers. The rule
also clarifies an 8(a) concern's eligibility for two-step design
build acquisitions and sole-source awards made under the 8(a)
program. The rule also requires the procuring activity to submit a
notification to SBA when a contracting officer determines that a
procurement, previously procured under the 8(a) program, is a new
requirement that is not subject to SBA release requirements. The
rule also requires a notification when the procuring activity
intends to procure a follow-on to an 8(a) procurement using an
existing limited competition contract vehicle, not available to all
8(a) program participants, when the current or previous 8(a)
contract was available to all 8(a) participants. This rule also
specifies that SBA reserves the right to appeal these decisions.
There were no significant issues raised by the public comments
in response to the initial regulatory flexibility analysis.
This final rule will impact 8(a) Program participants and the
Government by clarifying the 8(a) Program regulations and ensuring
follow-on requirements to 8(a) procurements remain in the 8(a)
Program when appropriate. Based on data in the System for Award
Management, the estimated number of 8(a) small businesses is 5,217,
and the estimated number of 8(a) joint ventures is 384. Therefore,
the estimated number of total small entities to which the rule
applies is 5,601. According to the Federal Procurement Data System,
7,473 8(a) sole-source awards and 1,088 competitive 8(a) awards were
made in FY 2020, and 6,369 8(a) sole-source awards and 1,251
competitive 8(a) awards were made in FY 2021, and 5,752 8(a) sole-
source awards and 1,056 competitive 8(a) awards were made in FY
2022. This averages out to 6,531 8(a) sole-source awards and 1,132
competitive 8(a) awards made in the last three fiscal years.
This rule does not include any new reporting, recordkeeping, or
other compliance requirements for small entities.
There are no known significant alternative approaches that would
accomplish the stated objectives.
Interested parties may obtain a copy of the FRFA from the
Regulatory Secretariat Division. The Regulatory Secretariat Division
has submitted a copy of the FRFA to the Chief Counsel for Advocacy of
the Small Business Administration.
VIII. Paperwork Reduction Act
This rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. 3501-3521).
List of Subjects in 48 CFR Part 19
Government procurement.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR part 19 as set forth
below:
PART 19--SMALL BUSINESS PROGRAMS
0
1. The authority citation for 48 CFR part 19 continues to read as
follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C.
chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C.
20113.
19.601 [Amended]
0
2. Amend section 19.601 by--
0
a. Removing from paragraph (b) the phrase ``Small Business
Administration (SBA)'' and adding ``SBA'' in its place; and
0
b. Removing from the first sentence of paragraph (c) the phrase
``Government acquisitions'' and adding ``Government acquisitions except
for 8(a) sole-source awards'' in its place and removing from the second
sentence of paragraph (c) the word ``also''.
[[Page 69525]]
0
3. Revise section 19.804-5 to read as follows:
19.804-5 Basic ordering agreements and blanket purchase agreements.
(a) The contracting office shall submit an offering letter for, and
SBA must accept, each order under a basic ordering agreement (BOA) or a
blanket purchase agreement (BPA) issued under part 13 (see 13.303), in
addition to the agency offering and SBA accepting the BOA or BPA
itself.
(b) SBA will not accept for award on a sole-source basis any order
that would cause the total dollar amount of orders issued under a
specific BOA or BPA to exceed the competitive threshold amount in
19.805-1.
(c) Once an 8(a) participant's program term expires, the
participant otherwise exits the 8(a) program, or becomes other than
small for the NAICS code assigned under the BOA or the BPA, SBA will
not accept new orders under the BOA or BPA for the participant.
0
4. Amend section 19.805-2 by--
0
a. Revising the second sentence in paragraph (b) introductory text;
0
b. Redesignating paragraph (b)(2) as paragraph (b)(3); and
0
c. Adding a new paragraph (b)(2).
The revision and addition read as follows:
19.805-2 Procedures.
* * * * *
(b) * * * Eligibility is based on section 8(a) program criteria
(see 13 CFR 124.501(g) and 19.816(c)). * * *
(2) For a two-step design-build procurement, an 8(a) participant
must be eligible for award under the 8(a) program on the initial date
for receipt of phase one offers specified in the solicitation (see 13
CFR 124.507(d)(3)).
* * * * *
0
5. Amend section 19.808-1 by--
0
a. Redesignating paragraph (e) as paragraph (f);
0
b. Adding a new paragraph (e); and
0
c. Removing from the newly redesignated paragraph (f) the phrase ``sole
source award'' and adding ``sole-source award'' in its place.
The addition reads as follows:
19.808-1 Sole source.
* * * * *
(e) A concern must be a current participant in the 8(a) program at
the time of an 8(a) sole-source award.
* * * * *
0
6. Revise section 19.808-2 to read as follows:
19.808-2 Competitive.
In competitive 8(a) acquisitions, including follow-on 8(a)
acquisitions, subject to part 15, the contracting officer conducts
negotiations directly with the competing 8(a) participants. Conducting
competitive negotiations among eligible 8(a) participants prior to
SBA's formal acceptance of the acquisition for the 8(a) program may be
grounds for the SBA's not accepting the acquisition for the 8(a)
program.
0
7. Amend section 19.810 by adding paragraph (a)(4) to read as follows:
19.810 SBA appeals.
(a) * * *
(4) A contracting officer's decision that an acquisition previously
procured under the 8(a) program is a new requirement not subject to the
release requirements at 13 CFR 124.504(d)(1) (see 19.815(a) and
(d)(1)).
* * * * *
0
8. Amend section 19.815 by--
0
a. Revising the section heading and paragraph (a);
0
b. Removing from paragraph (b) the phrase ``a non-8(a) procurement''
and adding ``a follow-on, non-8(a) procurement,'' in its place; and
0
c. Adding paragraphs (d) through (f).
The revisions and additions read as follows:
19.815 Release and notification requirements for non-8(a) procurement.
(a) Once a requirement has been accepted by SBA into the 8(a)
program, any follow-on requirements (see definition at 13 CFR 124.3)
shall remain in the 8(a) program unless--
(1) SBA agrees to release the requirement from the 8(a) program for
a follow-on, non-8(a) procurement in accordance with 13 CFR 124.504(d)
(see paragraph (b) of this section); or
(2) There is a mandatory source (see 8.002 or 8.003; also see
paragraph (f) of this section).
* * * * *
(d)(1) When a contracting officer decides that a requirement
previously procured under the 8(a) program is a new requirement and not
a follow-on requirement to an 8(a) contract(s), the contracting officer
shall coordinate with and submit a written notice to the SBA District
Office servicing the 8(a) incumbent firm and to the SBA procurement
center representative (or, if a procurement center representative is
not assigned, see 19.402(a)) indicating that the agency intends to
procure the requirement outside the 8(a) program (see 19.810(a)(4)).
(2) The written notice shall include a copy of the acquisition
plan, if available; the performance work statement (PWS), statement of
work (SOW), or statement of objectives (SOO) for the new contract
requirement; and the values of the existing 8(a) contract(s) and the
new contract requirement.
(e)(1) When a contracting officer decides to procure a follow-on
requirement to an 8(a) contract using an existing, limited competition
contracting vehicle that is not available to all 8(a) participants, and
the current or previous 8(a) contract was available to all 8(a)
participants, the contracting officer shall coordinate with and submit
a written notice to the SBA District Office servicing the 8(a)
incumbent firm and to the SBA procurement center representative (or, if
a procurement center representative is not assigned, see 19.402(a))
indicating the intent to do so.
(2) The written notice shall include a copy of the acquisition
plan, if available; the PWS, SOW, or SOO for the new contract
requirement; and the values of both contracts.
(f)(1) When a mandatory source will be used for a follow-on
requirement to an 8(a) contract, the contracting officer should submit
a written notice to the SBA Associate Administrator for Business
Development of the intent to do so at least 30 days prior to the end of
the contract or order in accordance with 13 CFR 124.504(d)(4)(ii).
(2) The written notice should include a written determination that
a mandatory source will be used to fulfill the requirement.
19.816 [Amended]
0
9. Amend section 19.816 by removing from paragraph (c) the word
``criteria'' and adding ``criteria (see 13 CFR 124.507(d))'' in its
place.
[FR Doc. 2023-21322 Filed 10-4-23; 8:45 am]
BILLING CODE 6820-EP-P
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