E9-11648. Federal Acquisition Regulation; FAR Case 2008-023, Clarification of Criteria for Sole Source Awards to Service-disabled Veteran-owned Small Business Concerns

AGENCIES:

Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION:

Proposed rule with request for comments.

SUMMARY:

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) are proposing to amend the Federal Acquisition Regulation (FAR) to clarify the criteria that need to be met in order to conduct a sole source Service-disabled Veteran-owned Small Business (SDVOSB) concern acquisition.

DATES:

Interested parties should submit written comments to the Regulatory Secretariat on or before July 20, 2009 to be considered in the formulation of a final rule.

ADDRESSES:

Submit comments identified by FAR case 2008-023 by any of the following methods:

• Regulations.gov: http://www.regulations.gov.

Submit comments via the Federal eRulemaking portal by inputting “FAR Case 2008-023” under the heading “Comment or Submission”. Select the link “Send a Comment or Submission” that corresponds with FAR Case 2008-023. Follow the instructions provided to complete the “Public Comment and Submission Form”. Please include your name, company name (if any), and “FAR Case 2008-023” on your attached document.

• Fax: [phone].
• Mail: General Services Administration, Regulatory Secretariat (VPR), 1800 F Street NW, Room 4041, ATTN: Hada Flowers, Washington, DC 20405.

Instructions: Please submit comments only and cite FAR case 2008-23 in all correspondence related to this case. All comments received will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT:

Ms. Rhonda Cundiff, Procurement Analyst, at [phone] for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at [phone]. Please cite FAR case 2008-023 in all correspondence.

SUPPLEMENTARY INFORMATION:

A. Background

The United States Government Accountability Office's (GAO) decision in the matter of MCS Portable Restroom Service, B-299291, March 28, 2007, deals in part with the issue of when a sole source SDVOSB acquisition may be conducted. In this decision, GAO notes that the plain wording of FAR 19.1406 may be unintentionally inconsistent with the Veterans Benefit Act of 2003 and the Small Business Administration regulations that implement that Act. GAO concludes the intent of the FAR language is that one criterion for a sole source award is that the contracting officer does not have a reasonable expectation that two or more SDVOSBs will submit offers. The intent of the FAR language is not that a sole source acquisition is prohibited if more than one SDVOSB that could conceivably perform the work exists.

The Councils have reviewed the language in question, FAR 19.1406(a)(1). The Councils have determined that in order to lessen the possibility of misinterpretation, the language should be revised to more closely mirror the Veterans Benefit Act of 2003 (15 U.S.C. 657f). The proposed rule contains language that was revised accordingly.

The language in FAR 19.1306(a)(1), which deals with sole source awards to HUBZone small business concerns based on 15 U.S.C. 657a(b), is currently the same as the language in FAR 19.1406(a)(1). The Councils have determined that the language in 19.1306(a)(1) should be revised in the same manner as the language in 19.1406(a)(1). The intent in both cases is that one of the criterion for making a sole source award is that the contracting officer does not reasonably expect to receive offers from two or more concerns. Not revising the language in FAR 19.1306(a)(1) to match FAR 19.1406(a)(1) will lead to confusion. There could be a presumption that the intent is to convey different meanings, when that is not the intent. Therefore, the proposed rule contains language that has been revised accordingly.

This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

The Councils do not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because this revision is being done to clarify the intent of the existing language and is not a change in policy. An Initial Regulatory Flexibility Analysis has, therefore, not been performed. We invite comments from small businesses and other interested parties. The Councils will consider comments from small entities concerning the affected FAR Part 19 in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 601, et seq. (FAR case 2008-023), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the proposed changes to the FAR do not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. Chapter 35, et seq.

List of Subjects in 48 CFR Part 19.

• Government procurement

Dated: May 12, 2009.

Al Matera,

Director, Office of Acquisition Policy.

Therefore, DoD, GSA, and NASA propose amending 48 CFR part 19 as set forth below:

PART 19—SMALL BUSINESS PROGRAMS

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 137; and 42 U.S.C. 2473(c). 2. Amend section 19.1306 by revising paragraphs (a) and (a)(1) to read as follows:

19.1306

HUBZone sole source awards.

(a) A contracting officer may award contracts to HUBZone small business concerns on a sole source basis (see 19.501(c) and 6.302-5) without considering small business set-asides (see Subpart 19.5), provided—

(1) The contracting officer does not have a reasonable expectation that offers would be received from two or more HUBZone small business concerns;

* * * * *

3. Amend section 19.1406 by revising paragraphs (a)(1) and (a)(2) to read as follows:

19.1406

Sole source awards to service-disabled veteran owned small business concerns.

(a) * * *

(1) The contracting officer does not have a reasonable expectation that offers would be received from two or more service-disabled veteran-owned small business concerns;

(2) The anticipated award price of the contract, including options, will not exceed—

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