Rule2024-06005
Defense Federal Acquisition Regulation Supplement: DoD Mentor-Protégé Program (DFARS Case 2023-D011)
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Published
March 26, 2024
Effective
March 26, 2024
Issuing agencies
Defense DepartmentDefense Acquisition Regulations System
Abstract
DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 that permanently authorizes and modifies the DoD Mentor- Prot[eacute]g[eacute] Program.
Full Text
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<title>Federal Register, Volume 89 Issue 59 (Tuesday, March 26, 2024)</title>
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[Federal Register Volume 89, Number 59 (Tuesday, March 26, 2024)]
[Rules and Regulations]
[Pages 20874-20877]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-06005]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Chapter 2
[Docket DARS-2023-0037]
RIN 0750-AL84
Defense Federal Acquisition Regulation Supplement: DoD Mentor-
Prot[eacute]g[eacute] Program (DFARS Case 2023-D011)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement a section of the
James M. Inhofe National Defense Authorization Act for Fiscal Year 2023
that permanently authorizes and modifies the DoD Mentor-
Prot[eacute]g[eacute] Program.
DATES: Effective March 26, 2024.
FOR FURTHER INFORMATION CONTACT: Ms. Jeanette Snyder, 703-508-7524.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 88 FR
73306 on October 25, 2023, to implement section 856 of the James M.
Inhofe National Defense Authorization Act (NDAA) for Fiscal Year (FY)
2023 (Pub. L. 117-263). Section 856 transferred section 831 of the NDAA
for FY 1991 (Pub. L. 101-510) to 10 U.S.C. 4902 and authorized the DoD
Mentor-Prot[eacute]g[eacute] Program on a permanent basis. Section 856
also extends the term for program
[[Page 20875]]
participation and removes the term limitation for mentors to incur
costs under mentor-prot[eacute]g[eacute] agreements entered into after
December 23, 2022. Section 856 does not apply to mentor-
prot[eacute]g[eacute] agreements entered into prior to December 23,
2022. One respondent submitted a public comment in response to the
proposed rule.
II. Discussion and Analysis
DoD reviewed the public comment in the development of the final
rule. A discussion of the comment is provided, as follows:
A. Summary of Significant Changes From the Proposed Rule
There are no significant changes from the proposed rule.
B. Analysis of Public Comment
Comment: One respondent recommended the rule be amended to allow a
prot[eacute]g[eacute] to have more than one mentor at a time, as long
as the mentors are not competitors and do not have any conflicts of
interest. The respondent indicated that this would align with the Small
Business Administration (SBA) Mentor-Prot[eacute]g[eacute] Program
(MPP), which allows a prot[eacute]g[eacute] to have two mentors at the
same time.
Response: This rule implements section 856 of the NDAA for FY 2023,
which is codified at 10 U.S.C. 4902. Paragraph (c)(2) of 10 U.S.C. 4902
indicates that a prot[eacute]g[eacute] firm may not be party to more
than one mentor-prot[eacute]g[eacute] agreement concurrently. This
means that a prot[eacute]g[eacute] may have only one mentor during the
term of an agreement. Therefore, the proposed change is inconsistent
with the statute. However, because the statute allows a
prot[eacute]g[eacute] firm to participate in the DoD MPP for a 5-year
period beginning on the date the prot[eacute]g[eacute] firm enters into
its first mentor-prot[eacute]g[eacute] agreement, a
prot[eacute]g[eacute] may have more than one mentor during the 5-year
period as long as the prot[eacute]g[eacute] is not a party to more than
one mentor-prot[eacute]g[eacute] agreement at a time. For example, if a
prot[eacute]g[eacute] firm enters into a 2-year mentor-
prot[eacute]g[eacute] agreement with a mentor, then the
prot[eacute]g[eacute] firm could enter into another mentor-
prot[eacute]g[eacute] agreement with a different mentor after the
conclusion of the first agreement, as long as it did so within the 5-
year period and the second agreement does not extend beyond the 5-year
period from date the prot[eacute]g[eacute] firm entered into its first
mentor-prot[eacute]g[eacute] agreement. As such, a
prot[eacute]g[eacute] firm under the DoD MPP may still benefit from
having more than one mentor during its participation in the program.
C. Other Changes
Minor editorial changes are made in appendix I, section I-106.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT), for Commercial Products (Including Commercially
Available Off-the-Shelf (COTS) Items), and for Commercial Services
This final rule amends the clause at DFARS 252.232-7005,
Reimbursement of Subcontractor Advance Payments--DoD Pilot Mentor-
Prot[eacute]g[eacute] Program, to remove the word ``Pilot'' from the
clause title. However, this final rule does not impose any new
requirements on contracts at or below the SAT, for commercial products
including COTS items, or for commercial services. The clause will
continue to not apply to acquisitions at or below the SAT, to
acquisitions of commercial products including COTS items, and to
acquisitions of commercial services.
IV. Expected Impact of the Rule
This final rule implements the permanent authorization of and
statutory amendments to the DoD Mentor-Prot[eacute]g[eacute] Program.
The purpose of the program is to provide incentives to DoD contractors
to furnish eligible small business concerns with assistance designed
to--
(1) Enhance the capabilities of small business concerns to perform
as subcontractors and suppliers under DoD contracts and other Federal
Government contracts and subcontracts; and
(2) Increase the participation of small business concerns as
subcontractors and suppliers under DoD contracts, other Federal
Government contracts, and contracts with commercial entities.
Therefore, this final rule will benefit small business concerns
that participate in the program by extending the opportunity to enter
into DoD Mentor-Prot[eacute]g[eacute] agreements and extending the term
of the agreements. This final rule is also expected to benefit large
entities and DoD by expanding the defense industrial base.
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, as amended.
VI. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, DoD will submit a copy of
the interim or final rule with the form, Submission of Federal Rules
under the Congressional Review Act, to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States. A
major rule under the Congressional Review Act cannot take effect until
60 days after it is published in the Federal Register. The Office of
Information and Regulatory Affairs has determined that this rule is not
a major rule as defined by 5 U.S.C. 804.
VII. Regulatory Flexibility Act
A final regulatory flexibility analysis has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
and is summarized as follows:
This final rule is necessary to implement section 856 of the James
M. Inhofe National Defense Authorization Act (NDAA) for Fiscal Year
(FY) 2023 (Pub. L. 117-263). Section 856 transferred section 831 of the
NDAA for FY 1991 (Pub. L. 101-510) to 10 U.S.C. 4902 and authorized the
DoD Mentor-Prot[eacute]g[eacute] Program on a permanent basis. Section
856 also extends the term for program participation and removes the
term limitation for mentors to incur costs under agreements entered
into after December 23, 2022. The objective of this rule is to
implement the permanent authorization of the DoD Mentor-
Prot[eacute]g[eacute] Program and to make other Program changes.
No significant issues were raised by the public comment in response
to the initial regulatory flexibility analysis.
The number of new DoD Mentor-Prot[eacute]g[eacute] agreements
entered into in FY 2021 was 50, with a total of 104 active agreements;
in FY 2022, 29 new agreements were entered into, with a total of 62
active agreements; and in FY 2023, 19 new agreements were entered into,
with a total of 69 active agreements. The average number of new
agreements entered into during the last three fiscal years was
approximately 33, with an average of 78 total active agreements per
fiscal year. DoD estimates 44 new agreements will be entered into in FY
2024, with a total of 76 active agreements in place. As of January 5,
2024, there are 62 unique small entities with active agreements. Since
the number of small entities that
[[Page 20876]]
will enter into new agreements is unknown, DoD cannot provide a more
precise estimate of the number of small entities to which this rule
will apply.
This final rule does not impose any new reporting, recordkeeping,
or other compliance requirements for small entities.
DoD did not identify any significant alternatives to the rule that
would accomplish the stated objectives of the statute and that would
minimize the significant economic impact of the rule on small entities.
DoD does not expect this rule to have a significant economic impact on
small entities. Any impact is expected to be beneficial.
VIII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this
final rule. However, these changes to the DFARS do not impose
additional information collection requirements to the paperwork burden
previously approved by the Office of Management and Budget (OMB) under
OMB Control Number 0704-0332, DoD Pilot Mentor-Prot[eacute]g[eacute]
Program.
List of Subjects in 48 CFR Parts 219, 232, and 252 and Appendix I
to Chapter 2
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 219, 232, and 252 and appendix I to chapter
2 are amended as follows:
0
1. The authority citation for 48 CFR parts 219, 232, and 252 and
appendix I to chapter 2 continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 219--SMALL BUSINESS PROGRAMS
0
2. Revise the heading for subpart 219.71 to read as follows:
Subpart 219.71--DoD Mentor Prot[eacute]g[eacute] Program
0
3. Revise and republish section 219.7100 to read as follows:
219.7100 Scope.
This subpart implements the DoD Mentor-Prot[eacute]g[eacute]
Program (referred to as the Program) authorized under 10 U.S.C. 4902.
The purpose of the Program is to provide incentives for DoD contractors
to assist prot[eacute]g[eacute] firms in enhancing their capabilities
and to increase participation of such firms in Government and
commercial contracts.
219.7101 [Amended]
0
4. Amend section 219.7101 by removing ``Pilot''.
219.7103-1 [Amended]
0
5. Amend section 219.7103-1 by removing ``Pilot''.
219.7103-2 [Amended]
0
6. Amend 219.7103-2 in paragraph (b) by removing ``Pilot''.
0
7. Amend section 219.7104 by revising paragraphs (b) and (d) to read as
follows:
219.7104 Developmental assistance costs eligible for reimbursement or
credit.
* * * * *
(b) Before incurring any costs under the Program, mentor firms must
establish the accounting treatment of developmental assistance costs
eligible for reimbursement or credit. For mentor-prot[eacute]g[eacute]
agreements entered into prior to December 23, 2022, to be eligible for
reimbursement under the Program, the mentor firm must incur the costs
not later than September 30, 2026.
* * * * *
(d) For mentor-prot[eacute]g[eacute] agreements entered into prior
to December 23, 2022, developmental assistance costs incurred by a
mentor firm not later than September 30, 2026, that are eligible for
crediting under the Program, may be credited toward subcontracting plan
goals as set forth in appendix I. For mentor-prot[eacute]g[eacute]
agreements entered into on or after December 23, 2022, developmental
assistance costs that are eligible for crediting under the Program may
be credited toward subcontracting plan goals as set forth in appendix
I.
PART 232--CONTRACT FINANCING
232.412-70 [Amended]
0
8. Amend section 232.412-70 by removing ``Pilot''.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
9. Amend section 252.232-7005 by revising the section heading and
clause heading and date to read as follows:
252.232-7005 Reimbursement of Subcontractor Advance Payments--DoD
Mentor-Prot[eacute]g[eacute] Program.
* * * * *
Reimbursement of Subcontractor Advance Payments--DoD Mentor-
Prot[eacute]g[eacute] Program (Mar 2024)
* * * * *
0
10. Amend appendix I to chapter 2 by--
0
a. Revising the appendix heading.
0
b. In section I-100, revising paragraph (a) introductory text.
0
c. In section I-102--
0
i. In paragraph (a)(3)(i), removing ``$100 million'' and adding ``$25
million'' in its place;
0
ii. In paragraph (a)(3)(ii), removing ``or'';
0
iii. In paragraph (a)(3)(iii), removing the period and adding ``; or''
in its place; and
0
iv. Adding paragraph (a)(3)(iv).
0
d. Revising and republishing section I-103.
0
e. In section I-106--
0
i. Revising paragraph (d)(1)(ii); and
0
ii. Adding paragraph (d)(6)(vi).
0
f. In section I-107, revising paragraph (k).
0
g. In section I-108, in paragraph (a)(5), removing ``2 years'' and
adding ``3 years'' in its place.
0
h. In section I-109, in paragraph (b), removing ``Pilot''.
0
i. In section I-111, in paragraph (a), removing ``Director, OSBP'' and
adding ``Director, OSBP, OUSD(A&S) or the Director, OSBP'' in its
place.
0
j. In section I-112.2--
0
i. Revising the section heading;
0
ii. Removing paragraph (a)(3); and
0
iii. Redesignating paragraph (a)(4) as paragraph (a)(3).
The revisions and additions read as follows:
Appendix I to Chapter 2--Policy and Procedures for the DoD Mentor-
Prot[eacute]g[eacute] Program
I-100 Purpose
(a) This appendix implements the DoD Mentor-
Prot[eacute]g[eacute] Program (referred to as the Program)
authorized under 10 U.S.C. 4902. The purpose of the Program is to
provide incentives to DoD contractors to furnish eligible small
business concerns with assistance designed to--
* * * * *
I-102 Participant Eligibility
(a) * * *
(3) * * *
(iv) Is otherwise capable to assist in the development of
prot[eacute]g[eacute] firms and is approved by the Director OSBP,
OUSD(A&S).
* * * * *
I-103 Incentives for Mentors
Mentors incurring costs through September 30, 2026, pursuant to
a mentor-prot[eacute]g[eacute] agreement approved prior to December
23, 2022, and mentors incurring costs pursuant to a mentor-
prot[eacute]g[eacute] agreement approved on or after December 23,
2023, may be eligible for--
(a) Credit toward the attainment of its applicable
subcontracting goals for unreimbursed costs incurred in providing
developmental assistance to its prot[eacute]g[eacute] firm(s);
[[Page 20877]]
(b) Reimbursement pursuant to the execution of a separately
priced contract line item added to a DoD contract; or
(c) Reimbursement pursuant to entering into a separate DoD
contract upon determination by the Director, OSBP, of the cognizant
military department or defense agency that unusual circumstances
justify using a separate contract.
* * * * *
I-106 Development of Mentor-Prot[eacute]g[eacute] Agreements
* * * * *
(d) * * *
(1) * * *
(ii) Engineering and technical matters such as production,
inventory control, manufacturing, test and evaluation, quality
assurance; acquisition or transfer of hardware, tooling, or
software; and technology transfer and transition; and
* * * * *
(6) * * *
(vi) Manufacturing innovation institutes.
* * * * *
I-107 Elements of a Mentor-Prot[eacute]g[eacute] Agreement
* * * * *
(k) A program participation term for the agreement that does not
exceed 3 years. The agreement may be extended for a period not to
exceed 2 years if approved by the Director, OSBP, OUSD(A&S). The
Director, OSBP, of the cognizant military department or defense
agency will submit requests for an extension of the agreement to the
Director, OSBP, OUSD(A&S) for approval. The request will include a
justification describing the unusual circumstances that warrant a
term in excess of 3 years;
* * * * *
I-112.2 Program Specific Reporting Requirements
* * * * *
[FR Doc. 2024-06005 Filed 3-25-24; 8:45 am]
BILLING CODE 6001-FR-P
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</html>Indexed from Federal Register on March 26, 2024.
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