Rule2024-16282
Federal Acquisition Regulation: Protests of Orders Set Aside for Small Business
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
July 30, 2024
Effective
August 29, 2024
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 size and socioeconomic status protests in connection with multiple-award contract set-asides and reserves, and orders placed under multiple-award contracts.
Full Text
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<title>Federal Register, Volume 89 Issue 146 (Tuesday, July 30, 2024)</title>
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[Federal Register Volume 89, Number 146 (Tuesday, July 30, 2024)]
[Rules and Regulations]
[Pages 61333-61337]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-16282]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 19
[FAC 2024-06; FAR Case 2021-009, Item II; Docket No. FAR-2021-0010;
Sequence No. 1]
RIN 9000-AO26
Federal Acquisition Regulation: Protests of Orders Set Aside for
Small Business
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 size and socioeconomic status protests in
connection with multiple-award contract set-asides and reserves, and
orders placed under multiple-award contracts.
DATES: Effective August 29, 2024.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Ms. Dana Bowman, Procurement Analyst, at 202-803-3188 or by email at
<a href="/cdn-cgi/l/email-protection#a4c0c5cac58ac6cbd3c9c5cae4c3d7c58ac3cbd2"><span class="__cf_email__" data-cfemail="91f5f0fff0bff3fee6fcf0ffd1f6e2f0bff6fee7">[email protected]</span></a>. 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#e3a4b0a2b18684b08680a3849082cd848c95"><span class="__cf_email__" data-cfemail="22657163704745714741624551430c454d54">[email protected]</span></a>. Please cite FAC 2024-06, FAR Case
2021-009.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 88 FR 68067 on October 3, 2023, to implement regulatory
changes made by the Small Business Administration (SBA) in its final
rules published in the Federal Register on October 2, 2013 (78 FR
61113), October 16, 2020 (85 FR 66146), and on November 29, 2022 (87 FR
73400). For further details, please see the proposed rule. One
respondent submitted comments on 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
[[Page 61334]]
development of the final rule. A discussion of the comments and the
changes made to the rule as a result of those comments are provided as
follows:
A. Summary of Significant Changes
The following significant changes from the proposed rule are made
in the final rule: The final rule amends FAR 19.302(d)(1) to add a new
paragraph (ii)(C), which reflects language in SBA's October 16, 2020,
final rule at 13 CFR 121.1004(a)(2)(ii) and specifies when a protest is
due for orders placed under multiple-award contracts where the
contracting officer requested rerepresentation for the order. In
addition, the final rule FAR text at FAR 19.306(e)(1)(iii),
19.307(e)(1)(v), and 19.308(e)(1)(iii) is amended to clarify when a
protest is due when written notification is not required and other
communication means are used.
B. Analysis of Public Comments
Comment: The respondent recommended revising the proposed rule text
at FAR 19.302(a)(2) to add a reference to SBA's regulations at 13 CFR
121.1001(a)(1) to provide significant clarity to the acquisition
community, including small businesses.
Response: The final rule text at FAR 19.302(a)(2) includes a
reference to SBA's regulations at 13 CFR 121.1001(a), which specify the
parties that may protest the small business representation of an
offeror in a specific offer for a contract and the parties that can
protest competitive contracts. Therefore, to change the reference at
FAR 19.302(a)(2) to 13 CFR 121.1001(a)(1) would omit the inclusion of
the remaining paragraphs under paragraph (a), which are relevant to
this FAR section.
Comment: The respondent recommended revising the proposed rule FAR
text at 19.302(d)(1) to state each of the types of contracts and orders
that are subject to the SBA's five-day protest deadline. (See 13 CFR
121.1004(a)(2)).
Response: The final rule FAR text at 19.302(d)(1)(i) and (ii)
specifies the types of contracts and orders subject to the SBA five-day
protest deadline. In addition, the final rule FAR text at 19.302(d)
directs contracting officers to 13 CFR 121.1004 for SBA's regulations
on timeliness.
Comment: The respondent stated that the FAR text should capture the
language regarding certifications and recertifications that is stated
in the SBA rules at 13 CFR 121.1004(a)(2)(ii).
Response: The final rule text has been revised to adopt this
recommendation at FAR 19.302(d)(1)(ii)(C).
Comment: The respondent recommended revising the proposed rule FAR
text at 19.302(d)(1) to remove the word ``special'' and the reference
to FAR 15.503(a)(2) because 13 CFR 121.1004(a)(2) does not mention
either. The respondent stated that this may confuse rather than clarify
the timeliness rules for small businesses. The respondent provided an
example of an instance when a contracting officer could provide notice
of the identity of the apparently successful offeror, but the notice
may not meet the requirements of FAR 15.503(a)(2), which could lead to
confusion as to whether the five-day clock began.
Response: The special notification at FAR 19.302(d)(1) aligns with
FAR 15.503(a)(2), which requires the contracting officer to provide
preaward notices to offerors for small business set-asides made
pursuant to FAR subpart 19.5, or the procedures in sections 19.1305,
19.1307, 19.1405, or 19.1505. This notification is referred to as a
``special notification''; therefore, it is not necessary to modify the
text to align with SBA's regulations. The rule did not amend this text
or the reference, rather the rule merely moved the reference to
immediately follow ``special notification from the contracting
officer'' for clarity. While 13 CFR 121.1004(a)(2) does not use the
term ``special'' or reference FAR 15.503(a)(2), the FAR provides
guidance to contracting officers using terminology specific to Federal
procurement.
Comment: The respondent stated it is unclear if the text at
19.302(d)(5) refers to protests challenging a firm's size at the time
the firm submitted its application for a Schedule contract, or if the
text is meant to challenge a firm's size at the time the firm submitted
its application for set-aside orders under Multiple Award Schedule
contracts. The respondent suggests revising the FAR text at
19.302(d)(5) to add the following language: ``A protest under a
Multiple Award Schedule will be timely if received by SBA at any time
prior to the expiration of the contract period, including renewals.''
(emphasis added).
Response: The suggested revision to add ``at any time'' is in the
existing FAR text at 19.302(d)(5).
Comment: The respondent recommended revising the FAR text at
19.306, 19.307, and 19.308 to implement SBA regulations at 13 CFR
126.801(d), 13 CFR 134.1004(a), and 13 CFR 127.603(c), respectively, to
specify when protests are due for orders placed under multiple-award
contracts where the contracting officer requested rerepresentation. The
respondent believes the proposed changes will provide significant
clarity to the acquisition community, including small businesses.
Response: The final rule implements SBA's regulations 13 CFR
126.801(d), 13 CFR 134.1004(a), and 127.603(c) at FAR
19.306(e)(1)(ii)(A), 19.307(e)(1)(ii)(A), and 19.308(e)(1)(ii)(A),
respectively.
Comment: The respondent recommended revising the proposed rule FAR
text at 19.306, 19.307, and 19.308 to make clear that for negotiated
procurements, the fifth business day deadline applies to contracts that
are set aside for HUBZone, small business firms, Service-Disabled
Veteran-Owned Small Business (SDVOSB) firms, Women-Owned Small Business
(WOSB) firms, and Economically-Disadvantaged Women-Owned Small Business
(EDWOSB) firms, not only for set-aside orders placed under multiple-
award contracts, in accordance with 13 CFR 121.1004(a)(2). The
respondent states that the FAR text should use similar language and
make clear that the five-business day deadline applies to HUBZone,
SDVOSB, WOSB, and EDWOSB set-aside contracts.
Response: FAR 19.306, 19.307, and 19.308 address the procedures for
protesting a firm's status as a HUBZone small business concern, an
SDVOSB concern, an EDWOSB concern or a WOSB concern, respectively. The
final rule FAR text at 19.306(e)(1)(ii), 19.307(e)(1)(ii), and
19.308(e)(1)(ii) specifies, for negotiated acquisitions, that an
interested party shall submit its written protest to the contracting
officer by the close of business on the fifth business day after
notification by the contracting officer of the apparently successful
offeror.
Comment: The respondent recommended changing the term
``rerepresentation'' in the FAR text at 19.306(e)(1)(ii)(A),
19.307(e)(1)(ii)(A), and 19.308(e)(1)(ii)(A) to ``recertification'' to
ensure consistency and to avoid confusion. The respondent indicated
that the SBA regulations refer to recertification, as opposed to
rerepresentation, and that the SBA has developed case law regarding
what constitutes a request for recertification.
Response: The FAR does not automatically replicate terminology used
in SBA's regulations. In this case, the FAR has long used the terms
``representation'' and ``rerepresentation'' in lieu of the terms
``certification'' and ``recertification'' to describe how an entity
addresses its size status. This difference is consistent with a
longstanding policy, set forth at 41 U.S.C. 1304(b) and FAR 1.107, to
limit
[[Page 61335]]
the use of certification requirements in the FAR.
Comment: The respondent recommended deleting the FAR text at
19.306(e)(1)(iii), FAR 19.307(e)(1)(iii), and FAR 19.308(e)(1)(iii) and
adding a new subsection (e)(3) to each for clarity and accuracy.
Response: The final rule FAR text at 19.306(e)(1)(iii), FAR
19.307(e)(1)(v), and FAR 19.308(e)(1)(iii) align with the opening
paragraph at 19.306(e)(1) and that of the text at FAR
19.302(d)(1)(iii). Therefore, it is not necessary to add a new
subsection (e)(3).
Comment: The respondent recommended revising the proposed rule FAR
text at 19.306, 19.307, and 19.308 to implement SBA's regulations at 13
CFR 126.801(d), 13 CFR 134.1004(a), and 13 CFR 127.603(c),
respectively, to specify when protests are due for orders that are set
aside for HUBZone, SDVOSB, WOSB, and EDWOSB firms under a multiple-
award contract that is not itself partially or totally set-aside or
reserved for the particular concern. This does not apply to orders and
blanket purchase agreements placed under Federal Supply Schedule
contracts.
Response: The final rule FAR text at 19.306 (e)(1)(ii),
19.307(e)(1)(v), and 19.308(e)(1)(ii) implements SBA's regulations 13
CFR 126.801(d), 13 CFR 134.1004(a), and 13 CFR 127.603(c),
respectively.
C. Other Changes
The final rule FAR text at 19.306(e)(1)(ii), 19.307(e)(1)(ii), and
19.308(e)(1)(ii) has been revised to conform with the FAR text at
19.302(d)(1)(ii) regarding the receipt of the special notification from
the contracting officer for negotiated acquisitions. In addition, the
final rule FAR text at 19.302(d)(1)(ii)(A), (B), and (C),
19.306(e)(1)(ii)(A) and (B), 19.307(e)(1)(ii)(A) and (B), and
19.308(e)(1)(ii)(A) and (B) is revised to remove ``indefinite-delivery
indefinite-quantity (IDIQ)'' and ``IDIQ'' as it is unnecessary to
specify either since the definition of multiple-award contract at FAR
2.101 includes IDIQ contracts.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT), 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 is expected to impact the Government, offerors, and
contractors.
This final rule provides processes and procedures for filing size
and socioeconomic status protests associated with multiple-award
contracts that are partially set-aside for small businesses or that
include reserves for small businesses and orders placed under multiple-
award contracts, with the exception of orders and blanket purchase
agreements placed under Federal Supply Schedule contracts in accordance
with FAR 8.405. Prior to this rule, the FAR did not specify unique
procedures for protests associated with these types of contract
actions.
By clarifying the protest processes and procedures, this rule is
expected to help contracting officers and interested parties understand
the requirements for filing size and socioeconomic status protests for
certain multiple-award contracts and orders placed under multiple-award
contracts. Therefore, any impact is expected to be beneficial to the
Government, contractors, and offerors.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 (as amended by E.O. 14094) and 13563
direct agencies to assess the 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
Pursuant to the Congressional Review Act, 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 rule does not meet the definition in 5 U.S.C. 804(2).
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) in its final rules published
on October 2, 2013 (78 FR 61113), October 16, 2020, (85 FR 66146),
and on November 29, 2022 (87 FR 73400). This rule provides processes
and procedures associated with size and socioeconomic protests
related to partial set-asides and reserves of multiple-award
contracts, and protests related to orders placed against multiple-
award contracts, with the exception of blanket purchase agreements
and orders placed under Federal Supply Schedule contracts.
There were no significant issues raised by the public comments
in response to the initial regulatory flexibility analysis.
This final rule will impact small businesses who are or may
become multiple-award contract holders and who may be awarded orders
under multiple-award contracts. According to data from the Federal
Procurement Data System, in the last three fiscal years (FYs),
agencies set aside orders for small businesses under unrestricted
multiple-award contracts as follows: 8,336 in FY 2021; 7,463 in FY
2022; and 7,271 in FY 2023; for an average of 7,690 per fiscal year.
In the last three fiscal years, agencies also further set aside
orders under set-aside multiple-award contracts as follows: 10,641
in FY 2021; 11,635 in FY 2022; and 15,260 in FY 2023; for an average
of 12,512 per fiscal year. In addition, in the last three fiscal
years, agencies further set-aside orders for small businesses under
a socioeconomic category under the set-aside portion of a multiple-
award contract, where the socioeconomic category differs from the
underlying multiple-award contract, as follows: 2,060 in FY 2021;
1,977 in FY 2022; and 2,213 in FY 2023; for an approximate average
of 2,083 per fiscal year. In the last three fiscal years contracting
officers required rerepresentation for orders as follows: 453 in FY
2021; 975 in FY 2022; and 938 in FY 2023, which averages out to
approximately 789 per fiscal year.
Although we can estimate the number of set-aside orders that may
be affected by this rule, it is not possible to estimate the number
of protests; therefore, it is not possible to estimate the number of
small entities that may be affected by this rule.
This rule clarifies the requirements for filing size and
socioeconomic status protests for orders placed under multiple-award
contracts resulting in reduced ambiguities of the process and
increased efficiencies for small entities.
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.
[[Page 61336]]
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 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.
0
2. Amend section 19.302 by--
0
a. Removing from the end of paragraph (a)(2) the text ``or the SBA.''
and adding the text ``or SBA. See 13 CFR 121.1001(a).'' in its place;
and
0
b. Revising paragraph (d).
The revision reads as follows:
19.302 Protesting a small business representation or
rerepresentation.
* * * * *
(d) In order to affect a specific solicitation, a protest must be
timely. SBA's regulations on timeliness are contained in 13 CFR
121.1004. SBA's regulations on timeliness related to protests of
disadvantaged status are contained in 13 CFR part 124, subpart B.
(1) To be timely, a protest by any concern or other interested
party must be received by the contracting officer by the close of
business of the fifth business day after--
(i) Bid opening for sealed bid acquisitions; or
(ii) Receipt of the special notification from the contracting
officer (see 15.503(a)(2)) that identifies the apparently successful
offeror for negotiated acquisitions, including--
(A) Partial set-asides and reserves of multiple-award contracts;
(B) Orders that are set-aside under an unrestricted multiple-award
contract (except for orders and blanket purchase agreements placed
under a Federal Supply Schedule contract (see 8.405 and paragraph
(d)(5) of this section)); and
(C) Orders placed under multiple-award contracts where the
contracting officer requested rerepresentation for the order; or
(iii) Receipt of notification using other communication means when
written notification is not required.
(2) A protest may be made orally if it is confirmed in writing and
received by the contracting officer within the 5-day period or by
letter postmarked no later than 1 business day after the oral protest.
(3) A protest may be made in writing if it is delivered to the
contracting officer by hand, mail, facsimile, email, express or
overnight delivery service.
(4) Except as provided in paragraph (d)(6) of this section, a
protest filed by the contracting officer or SBA is always considered
timely whether filed before or after award.
(5) A protest under a Multiple Award Schedule will be timely if
received by SBA at any time prior to the expiration of the contract
period, including renewals.
(6) A protest filed before bid opening, or notification to offerors
of the selection of the apparent successful offeror, will be dismissed
as premature by SBA.
* * * * *
0
3. Amend section 19.306 by--
0
a. Removing from the end of paragraph (e)(1)(i)(B) the word ``or''; and
0
b. Revising paragraph (e)(1)(ii) and adding paragraph (e)(1)(iii).
The revision and addition read as follows:
19.306 Protesting a firm's status as a HUBZone small business
concern.
* * * * *
(e) * * *
(1) * * *
(ii) For negotiated acquisitions, by the close of business on the
fifth business day after receipt of the special notification from the
contracting officer (see 15.503(a)(2)) of the apparently successful
offeror, including--
(A) Orders placed under multiple-award contracts where the
contracting officer requested rerepresentation for the order (see 13
CFR 126.801(d)(1)); and
(B) Orders set aside for HUBZone small businesses under multiple-
award contracts that are not partially or totally set-aside or reserved
for HUBZone small business concerns (see 13 CFR 126.801(d)(1)), except
for orders and blanket purchase agreements placed under a Federal
Supply Schedule contract (see 8.405 and 19.302(d)(5)); or
(iii) By the close of business on the fifth business day after
receipt of notification using other communication means when written
notification is not required.
* * * * *
0
4. Amend section 19.307 by revising paragraph (e)(1) to read as
follows:
19.307 Protesting a firm's status as a service-disabled veteran-owned
small business concern.
* * * * *
(e) Protest by an interested party. (1) An interested party (except
contracting officers should see paragraph (f)(1) of this section) shall
submit its protest to the contracting officer--
(i) To be received by close of business on the fifth business day
after bid opening for sealed bid acquisitions;
(ii) To be received by close of business on the fifth business day
after receipt of the special notification from the contracting officer
(see 15.503(a)(2)) that identifies the apparently successful offeror
for negotiated acquisitions, including--
(A) Orders placed under multiple-award contracts where the
contracting officer requested rerepresentation for the order (see 13
CFR 134.1004(a)(3)(ii)); and
(B) Orders set aside for service-disabled veteran-owned small
businesses under multiple-award contracts that are not partially or
totally set aside or reserved for service-disabled veteran-owned small
business concerns (see 13 CFR 134.1004(a)(3)(i)), except for orders and
blanket purchase agreements placed under a Federal Supply Schedule
contract (see 8.405 and 19.302(d)(5));
(iii) To be received by close of business on the fifth business day
after notification by the contracting officer of the intended awardee
for an order that is set aside for SDVOSBs under a multiple-award
contract that was not totally or partially set aside or reserved for
SDVOSB concerns. This paragraph (e)(1)(iii) does not apply to an order
issued under a Federal Supply Schedule (FSS) contract;
(iv) To be received by the close of the fifth business day after
notification by the contracting officer of the intended awardee for a
blanket purchase agreement that is set aside for SDVOSBs under a
multiple-award contract that was not totally or partially set aside or
reserved for SDVOSB concerns. This paragraph (e)(1)(iv) does not apply
to a blanket purchase agreement issued under a FSS contract; or
(v) To be received by the close of business on the fifth business
day after receipt of notification using other communication means when
written notification is not required.
* * * * *
[[Page 61337]]
0
5. Amend section 19.308 by revising paragraph (e)(1) to read as
follows:
19.308 Protesting a firm's status as an economically disadvantaged
women-owned small business concern or women-owned small business
concern eligible under the Women-Owned Small Business Program.
* * * * *
(e) Protest by an interested party.(1) An offeror shall submit its
protest to the contracting officer--
(i) To be received by the close of business by the fifth business
day after bid opening for sealed bid acquisitions;
(ii) To be received by the close of business by the fifth business
day after receipt of the special notification from the contracting
officer (see 15.503(a)(2)) that identifies the apparently successful
offeror for negotiated acquisitions including--
(A) Orders placed under multiple-award contracts where the
contracting officer requested rerepresentation for the order (see 13
CFR 127.603(c)(1)); and
(B) Orders set aside for EDWOSB or WOSB concerns under multiple-
award contracts that are not partially or totally set aside or reserved
for EDWOSB or WOSB concerns (see 13 CFR 127.603(c)(1)), except for
orders and blanket purchase agreements placed under a Federal Supply
Schedule contract (see 8.405 and 19.302(d)(5)); or
(iii) To be received by the close of business on the fifth business
day after receipt of notification using other communication means when
written notification is not required.
* * * * *
[FR Doc. 2024-16282 Filed 7-29-24; 8:45 am]
BILLING CODE 6820-EP-P
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