[Federal Register Volume 62, Number 163 (Friday, August 22, 1997)]
[Rules and Regulations]
[Pages 44819-44821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21494]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 9 and 19
[FAC 97-01; FAR Case 96-002; Item IX]
RIN 9000-AH66
Federal Acquisition Regulation; Certificate of Competency
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council have agreed on an interim rule amending
the Federal Acquisition Regulation (FAR) to implement revisions made to
the Small Business Administration's regulations covering the
procurement assistance programs. This regulatory action was not subject
to Office of Management and Budget review under Executive Order 12866,
dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.
DATES: Effective date: August 22, 1997
.Comment Date: Comments should be submitted to the FAR Secretariat
at the address shown below on or before October 21, 1997 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (MVRS), 1800 F Street,
NW, Room 4035, Washington, DC 20405.
E-Mail comments submitted over the Internet should be addressed to:
farcase.96-002@gsa.gov.
Please cite FAC 97-01, FAR case 96-002 in all correspondence
related to this case.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC 20405 (202) 501-4755 for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Victoria Moss, Procurement Analyst, at (202) 501-
4764. Please cite FAC 97-01, FAR case 96-002.
SUPPLEMENTARY INFORMATION:
A. Background
This interim rule amends FAR Parts 9 and 19 to comply with
revisions made to the Small Business Administration's (SBA) procurement
assistance programs contained in 13 CFR Part 125 (61 FR 3310, January
31, 1996). This rule increases the threshold over which contracting
officers may appeal the award of a Certificate of Competency (COC) from
$25,000 to $100,000; updates the names of SBA offices involved in
processing COCs; and implements the requirement that compliance with
the limitations on subcontracting be considered an element of
responsibility. Also, this interim rule removes language implementing
Section 15(c) of the Small Business Act (15 U.S.C. 644(c)) as amended
by Section 305 of Public Law 103-403, Small Business Administration
Reauthorization and Amendments Act of 1994. Section 305, which
authorized public and private organizations for the handicapped to
participate in acquisitions set aside for small businesses, has
expired.
B. Regulatory Flexibility Act
This interim rule is not expected 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 the rule
does not impose any new requirements on contractors, large or small.
The Small Business Administration has certified that the revisions to
13 CFR 125 being implemented by this rule will not have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act. An initial regulatory
flexibility analysis has therefore not been performed. Comments are
invited from small businesses and other interested parties. Comments
from small entities concerning the affected FAR subparts also will be
considered in accordance with 5 U.S.C. 610. Such comments must be
submitted separately and cite 5 U.S.C. 601, et seq. (FAC 97-01, FAR
case 96-002) in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose recordkeeping or information collection
requirements, or collections of information from offerors, contractors,
or members of the public which require the approval of the Office of
Management and Budget under 44 U.S.C. 3501, et seq.
D. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary to conform the Federal Acquisition Regulation to revisions
made in 13 CFR Part 125, pertaining to the Small Business
Administration (SBA) procurement assistance programs. The SBA revisions
became effective on March 1, 1996. However, pursuant to Public Law 98-
577 and FAR 1.501, public comments received in response to this interim
rule will be considered in formulating the final rule.
List of Subjects in 48 CFR Parts 9 and 19
Government procurement.
Dated: August 7, 1997.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, 48 CFR Parts 9 and 19 are amended as set forth below:
1. The authority citation for 48 CFR Parts 9 and 19 continues to
read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 9--CONTRACTOR QUALIFICATIONS
2. Section 9.103 is amended in paragraph (b) by revising the third
sentence to read as follows:
9.103 Policy.
(b) * * * If the prospective contractor is a small business
concern, the contracting officer shall comply with subpart 19.6,
Certificates of Competency and Determinations of Responsibil-
* * *
* * * * *
3. Section 9.104-3 is amended in paragraph (a) by adding a sentence
at the end, and in paragraph (d) by redesignating the text as paragraph
[[Page 44820]]
(d)(1) and by adding (d)(2) to read as follows:
9.104-3 Application of standards.
(a) * * * Consideration of a prime contractor's compliance with
limitations on subcontracting shall take into account the time period
covered by the contract base period or quantities plus option periods
or quantities, if such options are considered when evaluating offers
for award.
* * * * *
(d) * * * (1) * * *
(2) A small business that is unable to comply with the limitations
on subcontracting at 52.219-14 may be considered nonresponsible.
PART 19--SMALL BUSINESS PROGRAMS
19.001 [Amended]
4. Section 19.001 is amended by removing definitions for
``Handicapped individual'' and ``Public or private organization for the
handicapped'', and in the definition of ``Nonmanufacturer rule'' by
removing ``121.906'' and inserting ``121.406'' in its place.
19.201 [Amended]
5. Section 19.201(c) is amended in the introductory text by
removing ``and 13 CFR 125.4(g)(7)''.
19.302 [Amended]
6. Section 19.302 is amended:
(a) In paragraph (c)(1) by removing the word ``Regional'' and
inserting ``Area'' in its place;
(b) In the introductory text of paragraph (d) by removing ``13 CFR
121.9'' and inserting ``13 CFR 121.10'' in its place;
(c) In paragraphs (g)(2) and (i)(1) by removing ``Regional
Administrator'' and inserting ``Area Director'' in its place;
(d) In (i)(2) by removing ``a Regional Administrator's'' and
inserting ``an Area Director's'' in its place;
(e) In (i)(3) by removing ``121.11'' and inserting ``121.1001'' in
its place; and
(f) In (j), in the first and third sentences, by removing the word
``regional'' and inserting ``area'' in its place; and in the first
sentence parenthetical by removing ``above'' and inserting ``of this
section'' in its place.
7. Section 19.508(e) is revised to read as follows:
19.508 Solicitation provisions and contract clauses.
* * * * *
(e) The contracting officer shall insert the clause at 52.219-14,
Limitations on Subcontracting, in solicitations and contracts for
supplies, services, and construction, if any portion of the requirement
is to be set aside for small business and the contract amount is
expected to exceed $100,000.
Subpart 19.6--Certificates of Competency and Determinations of
Responsibility
8. The heading of Subpart 19.6 is revised to read as set forth
above.
9. Section 19.601 is amended by revising paragraph (a); by
redesignating (c) as (e); and by adding new paragraphs (c) and (d) to
read as follows:
19.601 General.
(a) A Certificate of Competency (COC) is the certificate issued by
the Small Business Administration (SBA) stating that the holder is
responsible (with respect to all elements of responsibility, including,
but not limited to, capability, competency, capacity, credit,
integrity, perseverance, tenacity, and limitations on subcontracting)
for the purpose of receiving and performing a specific Government
contract.
* * * * *
(c) The COC program is applicable to all Government acquisitions. A
contracting officer shall, upon determining an apparent successful
small business offeror to be nonresponsible, refer that small business
to the SBA for a possible COC, even if the next acceptable offer is
also from a small business.
(d) When a solicitation requires a small business to adhere to the
limitations on subcontracting, a contracting officer's finding that a
small business cannot comply with the limitation shall be treated as an
element of responsibility and shall be subject to the COC process. When
a solicitation requires a small business to adhere to the definition of
a nonmanufacturer, a contracting officer's determination that the small
business does not comply shall be processed in accordance with subpart
19.3.
* * * * *
10. Section 19.602-1 is amended by revising the introductory text
of paragraphs (a) and (a)(2), (c) introductory text, and (c)(2); and by
adding (e) to read as follows:
19.602-1 Referral.
(a) Upon determining and documenting that an apparent successful
small business offeror lacks certain elements of responsibility
(including, but not limited to, capability, competency, capacity,
credit, integrity, perseverance, tenacity, and limitations on
subcontracting), the contracting officer shall--
* * * * *
(2) Refer the matter to the cognizant SBA Government Contracting
Area Office (Area Office) serving the area in which the headquarters of
the offeror is located, in accordance with agency procedures, except
that referral is not necessary if the small business concern--
* * * * *
(c) The referral shall include--
* * * * *
(2) If applicable, a copy of the following:
(i) Solicitation.
(ii) Final offer submitted by the concern whose responsibility is
at issue for the procurement.
(iii) Abstract of bids or the contracting officer's price
negotiation memorandum.
(iv) Preaward survey.
(v) Technical data package (including drawings, specifications and
statement of work).
(vi) Any other justification and documentation used to arrive at
the nonresponsibility determination.
* * * * *
(e) Contract award shall be withheld by the contracting officer for
a period of 15 business days (or longer if agreed to by the SBA and the
contracting officer) following receipt by the appropriate SBA Area
Office of a referral that includes all required documentation.
11. Section 19.602-2 is revised to read as follows:
19.602-2 Issuing or denying a Certificate of Competency (COC).
Within 15 business days (or a longer period agreed to by the SBA
and the contracting agency) after receiving a notice that a small
business concern lacks certain elements of responsibility, the SBA Area
Office will take the following actions:
(a) Inform the small business concern of the contracting officer's
determination and offer it an opportunity to apply to the SBA for a
COC. (A concern wishing to apply for a COC should notify the SBA Area
Office serving the geographical area in which the headquarters of the
offeror is located.)
(b) Upon timely receipt of a complete and acceptable application,
elect to visit the applicant's facility to review its responsibility.
(1) The COC review process is not limited to the areas of
nonresponsibility cited by the contracting officer.
(2) The SBA may, at its discretion, independently evaluate the COC
applicant for all elements of responsibility, but may presume
responsibility exists as to elements other than those cited as
deficient.
[[Page 44821]]
(c) Consider denying a COC for reasons of nonresponsibility not
originally cited by the contracting officer.
(d) When the Area Director determines that a COC is warranted (for
contracts valued at $25,000,000 or less), notify the contracting
officer and provide the following options:
(1) Accept the Area Director's decision to issue a COC and award
the contract to the concern. The COC issuance letter will then be sent,
including as an attachment a detailed rationale for the decision; or
(2) Ask the Area Director to suspend the case for one or more of
the following purposes:
(i) To permit the SBA to forward a detailed rationale for the
decision to the contracting officer for review within a specified
period of time.
(ii) To afford the contracting officer the opportunity to meet with
the Area Office to review all documentation contained in the case file
and to attempt to resolve any issues.
(iii) To submit any information to the SBA Area Office that the
contracting officer believes the SBA did not consider (at which time
the SBA Area Office will establish a new suspense date mutually
agreeable to the contracting officer and the SBA).
(iv) To permit resolution of an appeal by the contracting agency to
SBA Headquarters under 19.602-3. However, there is no contracting
officer's appeal when the Area Office proposes to issue a COC valued at
$100,000 or less.
(e) At the completion of the process, notify the concern and the
contracting officer that the COC is denied or is being issued.
(f) Refer recommendations for issuing a COC on contracts greater
than $25,000,000 to SBA Headquarters.
12. Section 19.602-3 is revised to read as follows:
19.602-3 Resolving differences between the agency and the Small
Business Administration.
(a) COCs valued between $100,000 and $25,000,000. (1) When
disagreements arise about a concern's ability to perform, the
contracting officer and the SBA shall make every effort to reach a
resolution before the SBA takes final action on a COC. This shall be
done through the complete exchange of information and in accordance
with agency procedures. If agreement cannot be reached between the
contracting officer and the SBA Area Office, the contracting officer
shall request that the Area Office suspend action and refer the matter
to SBA Headquarters for review. The SBA Area Office shall honor the
request for a review if the contracting officer agrees to withhold
award until the review process is concluded. Without an agreement to
withhold award, the SBA Area Office will issue the COC in accordance
with applicable SBA regulations.
(2) SBA Headquarters will furnish written notice to the procuring
agency's Director, Office of Small and Disadvantaged Business
Utilization (OSDBU) or other designated official (with a copy to the
contracting officer) that the case file has been received and that an
appeal decision may be requested by an authorized official.
(3) If the contracting agency decides to file an appeal, it must
notify SBA Headquarters through its procuring agency's Director, OSDBU,
or other designated official, within 10 business days (or a time period
agreed upon by both agencies) that it intends to appeal the issuance of
the COC.
(4) The appeal and any supporting documentation shall be filed by
the procuring agency's Director, OSDBU, or other designated official,
within 10 business days (or a period agreed upon by both agencies)
after SBA Headquarters receives the agency's notification in accordance
with paragraph (a)(3) of this subsection.
(5) The SBA Associate Administrator for Government Contracting will
make a final determination, in writing, to issue or to deny the COC.
(b) SBA Headquarters' decisions on COCs valued over $25,000,000.
(1) Prior to taking final action, SBA Headquarters will contact the
contracting agency and offer it the following options:
(i) To request that the SBA suspend case processing to allow the
agency to meet with SBA Headquarters personnel and review all
documentation contained in the case file; or
(ii) To submit to SBA Headquarters for evaluation any information
that the contracting agency believes has not been considered.
(2) After reviewing all available information, the SBA will make a
final decision to either issue or deny the COC.
(c) Reconsideration of a COC after issuance. (1) The SBA reserves
the right to reconsider its issuance of a COC, prior to contract award,
if--
(i) The COC applicant submitted false information or omitted
materially adverse information; or
(ii) The COC has been issued for more than 60 days (in which case
the SBA may investigate the firm's current circumstances).
(2) When the SBA reconsiders and reaffirms the COC, the procedures
in subsection 19.602-2 do not apply.
(3) Denial of a COC by the SBA does not preclude a contracting
officer from awarding a contract to the referred concern, nor does it
prevent the concern from making an offer on any other procurement.
[FR Doc. 97-21494 Filed 8-21-97; 8:45 am]
BILLING CODE 6820-EP-P
