05-19512. The Very Small Business Program

AGENCY:

U.S. Small Business Administration.

ACTION:

Final rule.

SUMMARY:

The U.S. Small Business Administration (SBA or Agency) is amending its regulations to remove provisions relating to the Very Small Business Program (VSB). The Agency no longer has statutory authority to provide assistance under this program; therefore, the regulations are unnecessary. Without any authority to carry out the program, removal of the applicable regulations is a ministerial act that does not require a comment period.

DATES:

The rule is effective September 29, 2005.

FOR FURTHER INFORMATION CONTACT:

Dean Koppel, Assistant Administrator, Office of Procurement Policy and Liaison, [phone] or [e-mail].

SUPPLEMENTARY INFORMATION:

The VSB program was authorized as a pilot program by the Small Business Administration Reauthorization and Amendments Act of 1994 (Act). (See Pub. L. 103-403, Section 304). The purpose of the VSB program was to improve access to Federal contract opportunities for concerns that are substantially below SBA's size standards by reserving certain procurements for competition among very small business concerns. Specifically, under the VSB program, federal agencies with procurement needs valued at $2,500 to $50,000 were required to give small businesses with 15 or fewer employees, average annual revenues of less than $1 million, and that were located in certain designated areas, the first opportunity to meet those needs. The pilot was originally scheduled to expire in 1998 but was extended until December 8, 2004, through a series of legislative actions. On December 8, 2004, President Bush signed Public Law 108-447, Division K, which included the Small Business Administration Reauthorization and Manufacturing Assistance Act of 2004. This Act gave SBA authorization to continue several programs but did not re-authorize the VSB program. Because SBA no longer has statutory authority to conduct the VSB program, the regulations applicable to the program are no longer necessary and will be removed from the Code of Federal Regulations. Removal of these regulations is an entirely administrative action that will minimize confusion about the status of the VSB program and how agencies are to conduct procurements.

The expiration of the authority to give preference to very small businesses under the VSB program also impacts the Federal Acquisition Regulation (FAR). SBA has notified the Civilian Agency Acquisition Council (Council) as well as the Federal procurement agencies of the expiration of the VSB program and intends to work with the Council to implement the necessary amendments to the FAR.

Compliance With Executive Orders 12866, 12988, and 13132, the Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory Flexibility Act (5 U.S.C. 601-612)

OMB has determined that this final rule does not constitute a ”significant regulatory action” under Executive Order 12866.

For purposes of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, the SBA determines that this rule does not impose new reporting or recordkeeping requirements.

This action meets applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The action does not have retroactive or preemptive effect.

This regulation will not have substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, for the purposes of Executive Order 13132, SBA determines that this final rule has no federalism implications warranting preparation of a federalism assessment.

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires administrative agencies to consider the effect of their actions on small entities, small non-profit enterprises, and small local governments. Pursuant to the RFA, when an agency issues a rulemaking, the agency must prepare a regulatory flexibility analysis which describes the impact of the rule on small entities. However, section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the rulemaking is not expected to have a significant economic impact on a substantial number of small entities. Within the meaning of RFA, SBA certifies that this rule will not have a significant economic impact on a substantial number of small entities.

List of Subjects

13 CFR Part 121

• Administrative practice and procedures
• Government procurement
• Government property
• Reporting and recordkeeping requirements
• Small businesses

13 CFR Part 125

• Government contracts
• Government procurement
• Small businesses
• Reporting and recordkeeping requirements
• Small businesses
• Technical assistance

For the reasons stated in the preamble, the Small Business Administration amends 13 CFR parts 121 and 125 as follows:

PART 121—SMALL BUSINESS SIZE REGULATIONS

1. The authority citation for Part 121 is revised to read as follows:

Authority: 15 U.S.C. 632(a), (p), (q), 634(b)(6), 637(a), 644, and 662(5); Pub. L. 105-135 sec. 401 et seq.

2. Revise § 121.401 to read as follows:

§ 121.401

What procurement programs are subject to size determinations?

The rules set forth in §§ 121.401 through 121.413 apply to all Federal procurement programs for which status as a small business is required or advantageous, including the small business set-aside program, SBA's Certificate of Competency program, SBA's 8(a) Business Development program, SBA's HUBZone program, SBA's Service-Disabled Veteran-Owned Small Business program, the Small Business Subcontracting program, and the Federal Small Disadvantaged Business (SDB) program.

§ 121.413

[Removed and Reserved]

3. Remove and reserve § 121.413.

PART 125—GOVERNMENT CONTRACTING PROGRAMS

4. The authority citation for Part 125 is revised to read as follows:

Authority: 15 U.S.C. 632(p), (q); 634(b)(6); 637; 644 and 657(f).

§ 125.7

[Removed and Reserved]

5. Amend Part 125 by removing and reserving § 125.7.

6. Revise § 125.13 to read as follows:

§ 125.13

May 8(a) Program participants, HUBZone SBCs, Small and Disadvantaged Businesses, or Women-Owned Small Businesses qualify as SDVO SBCs?

Yes, 8(a) Program participants, HUBZone SBCs, Small and Disadvantaged Businesses, and Women-Owned SBCs, may also qualify as SDVO SBCs if they meet the requirements in this subject.

Dated: September 23, 2005.

Hector V. Barretto,

Administrator.