00-9084. Defense Federal Acquisition Regulation Supplement; Utilization of Indian Organizations and Indian-Owned Economic Enterprises

AGENCY:

Department of Defense (DoD).

ACTION:

Final rule

SUMMARY:

The Acting Director of Defense Procurement has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to revise procedures pertaining to the Indian Incentive Program. The Program provides for incentive payments to Government contractors that use Indian organizations and Indian-owned economic enterprises as subcontractors. This rule reflects new statutory provisions that permit small business concerns to participate in the Indian Incentive Program.

EFFECTIVE DATE:

April 13, 2000.

FOR FURTHER INFORMATION CONTACT:

Ms. Susan Schneider, Defense Acquisition Regulations Council, PDUSD (AT&L) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone [phone]; telefax [phone]. Please cite DFARS Case 99-D300.

SUPPLEMENTARY INFORMATION:

A. Background

The rule revises DFARS Subpart 226.1 to update procedures pertaining to the Indian Incentive Program. Section 504 of the Indian Financing Act of 1974 (25 U.S.C. 1544) established the Indian Incentive Program, which provides for payment of incentives to Government contractors that use Indian organizations and Indian-owned economic enterprises as subcontractors. Prior to fiscal year 1999, annual appropriations acts restricted DoD payments under the Program to those contractors that submitted small business subcontracting plans pursuant to 15 U.S.C. 637(d) or Section 854 of Public Law 101-89 (15 U.S.C. 637 note). Since small business concerns are not required to submit subcontracting plans, small businesses were excluded from participation in the Indian Incentive Program under DoD contracts. Section 8024 of the DoD Appropriations Act for Fiscal Year 1999 (Public Law 105-262) and Section 8024 of the DoD Appropriations Act for Fiscal Year 2000 (Public Law 106-79) eliminated the requirements for a DoD contractor to submit a subcontracting plan before it may participate in the Indian Incentive Program.

DoD implements the Indian Incentive Program through use of the clause at Federal Acquisition Regulation (FAR) 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises. The FAR and DFARS previously prescribed use of the clause in only those DoD contracts that contain subcontracting plan requirements. On October 26, 1999, a proposed FAR rule was published at 64 FR 57964 to remove the FAR requirements for DoD use of the clause; these DFARS amendments replace the FAR requirements.

DoD published a proposed rule at 64 FR 63003 on November 18, 1999. Thirty-six sources submitted comments on the proposed rule. DoD considered all comments in the development of the final rule. The final rule differs from the proposed rule in that it lowers the dollar threshold for us of the clause at FAR 52.226-1, to provide increased opportunity or small business concerns to participate in the Indian Incentive Program.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD expects this final 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. A final regulatory flexibility analysis has been prepared and its summarized as follows:

The legal basis for the rule is Section 504 of the Indian Financing Act of 1974 (25 U.S.C. 1544); Section 8024 of the DoD Appropriations Act for Fiscal Year 1999 (Public Law 105-262); and Section 8024 of the DoD Appropriations Act for Fiscal Year 2000 (Public Law 106-79). This rule will apply to all DoD contractors that have the clause at FAR 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises, incorporated into their contracts. The proposed rule required use of the clause at FAR 52.226-1 in construction contracts valued at $1,000,000 or more, and in other than construction contracts valued at $500,000 or more, except those awarded using FAR Part 12 (Commercial Item) procedures. As a result of public comments received, and to provide increased opportunity for small business concerns to participate in the Indian Incentive Program, the final rule lowers the dollars threshold for use of the clause to the simplified acquisition threshold ($100,000), for all contracts except those awarded using FAR Part 12 procedures. The rule does not impose any new reporting, recordkeeping, or other compliance requirements, and does not duplicate, overlap, or conflict with any other Federal rules. The rule is expected to have a beneficial effect on small business concerns, because small businesses are now eligible to receive incentive payments for the use of Indian organizations and Indian-owned economic enterprises as subcontractors.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the rule does not impors any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 226

• Government procurement

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Therefore, 48 CFR part 226 is amended as follows:

1. The authority citation for 48 CFR part 226 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 226—OTHER SOCIOECONOMIC PROGRAMS

2. Sections 226.103 and 226.104 are revised to read as follows:

226.103

Procedures.

(f) The contracting officer must submit a request for funding of the Indian incentive to the Office of Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (OUSD (AT&L) SADBU, 1777 North Kent Street, Suite 9100, Arlington, VA 22209. Upon receipt of funding from OUSD (AT&L) SADBU, the contracting officer must issue a contract modification to add the Indian incentive funding for payment of the contractor's request for adjustment as described at FAR 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises.

226.104

Contract Clause.

Use the following prescription instead of the prescription at FAR 26.104(a):

(a) Use the clause at FAR 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises, in solicitations and contracts that—

(1) Do not use FAR part 12 procedures; and

(2) Are for supplies or services expected to exceed the simplified acquisition threshold.