FAC 97-20

Federal Register: October 11, 2000 (Volume 65, Number 197)

Rules and Regulations Part III

Department of Defense General Services Administration National Aeronautics and Space Administration

48 CFR Chapter I, Parts 2, 4, et al.

Federal Acquisition Circular 97-20; Introduction and Federal Acquisition Regulations: Veterans Entrepreneurship and Small Business Development Act of 1999, Truth in Negotiations Act Threshold, and Small Entity Compliance Guide; Final Rules

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

Federal Acquisition Circular 97-20; Introduction

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

ACTION: Summary presentation of final and interim rules.

SUMMARY: This document summarizes the Federal Acquisition Regulation (FAR) rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) in this Federal Acquisition Circular (FAC) 97-20. The Councils drafted these FAR rulesusing plain language in accordance with the White House memorandum, Plain Language in Government Writing, dated June 1, 1998. The Councils wrote all new and revised text using plain language. A companion document, the Small Entity Compliance Guide (SECG), follows this FAC.

The FAC, including the SECG, is available via the Internet at http://www.arnet.gov/far.

DATES: For effective dates and comment dates, see separate documents which follow.

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 the analyst whose name appears in the table below in relation to each FAR case or subject area. Please cite FAC 97-20 and specific FAR case numbers. Interested parties may also visit our website at http://www.arnet.gov/far.

Item

Subject

FAR case

Analyst

I

Veterans. Entrepre-neurship and Small Business Development Act of 1999.

2000-302

Moss

II

Truth in Negotiations Act Threshold

2000-300

Olson

SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the actual revisions and/or amendments to these FAR cases, refer to the specific item number and subject set forth in the documents following these item summaries.

Federal Acquisition Circular 97-20 amends the FAR as specified below:

Item I--Veterans Entrepreneurship and Small Business Development Act of 1999 (FAR Case 2000-302)

This interim rule amends the FAR to implement sections 501(c), 502(a)(2), and 604(d) of the Veterans Entrepreneurship and Small Business Development Act of 1999 (Pub. L. 106-50). This Act established new assistance programs for veterans and service-disabled veterans who

own and operate small businesses. This interim rule--

Defines the terms ``veteran-owned small business concerns'' and ``service-disabled veteran-owned small business concerns;''

Establishes that veteran-owned and service-disabled veteran-owned small businesses be afforded maximum practical opportunity to participate in the performance of contracts and

subcontracts awarded by any Federal agency;

Establishes a requirement to include a goal for veteran-owned small businesses in subcontracting plans under FAR 52.219-9; and

Amends the SF 294 and SF 295 to add data collection requirements for subcontract awards to veteran-owned small businesses and service-disabled veteran-owned small business concerns.

Item II--Truth in Negotiations Act Threshold (FAR Case 2000-300)

This final rule amends FAR 15.403-4 to increase the threshold for obtaining cost or pricing data from $500,000 to $550,000. This implements the requirements of 10 U.S.C. 2306a(a)(7) and 41 U.S.C. 254b(a)(7). These statutes require review of the Truth in Negotiations Act threshold every 5 years, starting October 1, 1995.

Dated: October 3, 2000. Al Matera, Acting Director, Federal Acquisition Policy Division.

Federal Acquisition Circular

Federal Acquisition Circular (FAC) 97-20 is issued under the authority of the Secretary of Defense, the Administrator of General Services, and the Administrator for the National Aeronautics and Space Administration.

All Federal Acquisition Regulation (FAR) changes and other directive material contained in FAC 97-20 are effective October 11, 2000.

Dated: October 3, 2000. Col. R.D. Kerrins, Jr., USA Acting Director, Defense Procurement.

Dated: October 3, 2000. David A. Drabkin, Deputy Associate Administrator, Office of Acquisition Policy, General Services Administration.

Dated: October 2, 2000. Tom Luedtke, Associate Administrator for Procurement, National Aeronautics and Space Administration.

Federal Register: October 11, 2000 (Volume 65, Number 197) Rules and Regulations

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 4, 5, 7, 19, 52, and 53

FAC 97-20; FAR Case 2000-302; Item I

Federal Acquisition Regulation; Veterans Entrepreneurship and Small Business Development Act of 1999

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

ACTION: Interim rule with request for comments.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on an interim rule amending the Federal Acquisition Regulation (FAR) to implement portions of the Veterans Entrepreneurship and Small Business Development Act of 1999 (Pub. L. 106-50). The Act established new assistance programs for veterans and service-disabled veterans who own and operate small businesses.

DATES: Effective Date: October 11, 2000.

Comment Date: Interested parties should submit comments to the FAR Secretariat at the address shown below on or before December 11, 2000 to be considered in the formulation of a final rule.ADDRESSES: Submit written comments to: General Services Administration, FAR Secretariat (MVR), 1800 F Street, NW, Room 4035, Attn: Ms. Laurie Duarte, Washington, DC 20405Submit electronic comments via the Internet to::farcase.2000-302@gsa.gov. Please submit comments only and cite FAC 97-20, FAR case 2000-302 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 97-20, FAR case 2000-302.

SUPPLEMENTARY INFORMATION:

A. Background

This interim rule amends the FAR to implement sections 501(c), 502(a)(2), and 604(d) of the Veterans Entrepreneurship and Small Business Development Act of 1999 (Pub. L. 106-50). This Act established new assistance programs for veterans and service-disabled veterans who own and operate small businesses. Specifically, the Act--

1. Defined the terms ``small business concern owned and controlled by veterans'' and ``small business concern owned and controlled by service-disabled veterans;''

2. Established that veteran-owned and service-disabled veteran-owned small businesses be afforded maximum practical opportunity to participate in the performance of contracts and subcontracts awarded by any Federal agency;

3. Established a requirement to include a goal for veteran-owned small businesses in subcontracting plans under FAR 52.219-9;

4. Established a 3 percent Governmentwide goal (based on the total value of all prime contract and subcontract awards) for participation by service-disabled veteran-owned small businesses; and

5. Added data collection requirements for prime and subcontract awards to veteran-owned small businesses and service-disabled veteran-owned small business concerns.

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 changes may 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 now expands the small business program by identifying new subgroups of small entities (i.e., veteran-owned small businesses and service-disabled veteran-owned small businesses) for prime contracting and subcontracting opportunities. An Initial Regulatory Flexibility Analysis (IRFA) has been prepared and is summarized as follows:

This interim rule amends the Federal Acquisition Regulation in order to comply with recently enacted legislation concerning small business concerns owned and controlled by veterans and service-disabled veterans. It implements section 501(c), section 502(a)(2), and section 604(d) of the Veterans Entrepreneurship and Small Business Development Act of 1999 (Pub. L. 106-50). It is estimated that there are 4 to 5.5 million small businesses owned and controlled by veterans and 100,000 to 300,000 small businesses owned and controlled by service-disabled veterans. Section 604(d) of Title VI of the Act adds data collection requirements to the Federal Procurement Data System for prime contracts and subcontracts awarded to small business concerns owned and controlled by veterans and small business concerns owned and controlled by service-disabled veterans. This rule does not duplicate, overlap, or conflict with other relevant Federal rules. There are no significant alternatives to the interim rule that would accomplish the stated beneficial objectives.

The FAR Secretariat has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. Interested parties may obtain a copy from the FAR Secretariat. The Councils will consider comments from small entities concerning the affected FAR Parts 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. (FAC 97-20, FAR case 2000-302), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act (Pub. L. 104-13) applies because the interim rule contains information collection requirements. Two existing OMB clearances are affected by this rule as follows:

Annual Reporting Burden for OMB Clearance 9000-0006

We estimate the public reporting burden for this collection of information to average 50.54 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. We estimate the annual reporting burden is as follows:

Respondents: 4,253.

Responses per respondent: 3.44.

Total annual responses: 14,631.

Preparation hours per response: 50.54.

Total response burden hours: 739,389.

Annual Reporting Burden for OMB Clearance 9000-0007

We estimate the public reporting burden for this collection of information to average 15.9 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. We estimate the annual reporting burden is as follows:

Respondents: 4,253.

Responses per respondent: 1.67.

Total annual responses: 7,098.

Preparation hours per response: 15.9.

Total response burden hours: 112,864.

D. Request for Comments Regarding Paperwork Burden

Submit comments, including suggestions for reducing this burden, not later than December 11, 2000 to: FAR Desk Officer, OMB, Room 10102, NEOB, Washington, DC 20503, and a copy to the General Services Administration, FAR Secretariat (MVR), 1800 F Street, NW, Room 4035,

Washington, DC 20405.

We particularly invite public comments on: whether this collection of information is necessary for the proper performance of functions of the FAR, and will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology. Requester may obtain a copy of the justifications from the General Services Administration, FAR Secretariat (MVR), Room 4035, Washington, DC 20405, telephone (202) 208-7312. Please cite OMB Control Numbers 9000-0006 or 9000-0007 in all correspondence.

E. 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 in order to implement portions of the Veterans Entrepreneurship and Small Business Development Act of 1999 (Pub. L. 106-50). However, pursuant to Public Law 98-577 and FAR 1.501, the Councils will consider public comments received in response to this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 2, 4, 5, 7, 19, 52, and 53

Government procurement. Dated: October 3, 2000.Al Matera, Acting Director, Federal Acquisition Policy Division.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 5, 7, 19, 52, and 53 as set forth below:

1. The authority citation for 48 CFR parts 2, 4, 5, 7, 19, 52, and 53 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 2--DEFINITIONS OF WORDS AND TERMS

2. Amend section 2.101 by adding, in alphabetical order, the definitions ``Service-disabled veteran-owned small business concern'' and ``Veteran-owned small business concern'' to read as follows:

2.101 Definitions.

* * * * *

Service-disabled veteran-owned small business concern--

(1) Means a small business concern--

(i) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and

(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran.

(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined in 38 U.S.C. 101(16).

* * * * *

Veteran-owned small business concern means a small business concern--

(1) Not less than 51 percent of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and

(2) The management and daily business operations of which are controlled by one or more veterans.

* * * * *

PART 4--ADMINISTRATIVE MATTERS

3. Amend section 4.602 by revising paragraph (a)(2); and in paragraph (d) by removing ``shall'' each time it is used (three times) and adding ``must'' in its place. The revised text reads as follows:

4.602 Federal Procurement Data System.

(a) * * *

(2) A means of measuring and assessing the impact of Federal contracting on the Nation's economy and the extent to which small, veteran-owned small, service-disabled veteran-owned small, HUBZone small, small disadvantaged, and women-owned small business concerns are sharing in Federal contracts; and

* * * * *

PART 5--PUBLICIZING CONTRACT ACTIONS

4. Amend section 5.002 in the introductory paragraph by removing ``shall'' and adding ``must'' in its place; and by revising paragraph (c) to read as follows:

5.002 Policy.

* * * * *

(c) Assist small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns in obtaining contracts and

subcontracts.

PART 7--ACQUISITION PLANNING

5. Amend section 7.105 in the introductory paragraph by removing ``shall'' each time it is used (four times) and adding ``must'' in its place; and by revising the third sentence of paragraph (b)(1) to read as follows:

7.105 Contents of written acquisition plans.

* * * * *

(b) Plan of action--(1) Sources. * * * Include consideration of small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns (see part 19), and the impact of any bundling that might affect their participation in the acquisition (see 7.107) (15 U.S.C. 644(e)). * * *

* * * * *

PART 19--SMALL BUSINESS PROGRAMS

6. Amend section 19.000 in paragraph (a)(9) by removing ``and''; in paragraph (a)(10) by removing the period and adding ``; and'' in its place; and by adding paragraph (a)(11) to read as follows:

19.000 Scope of part.

(a) * * *

(11) The use of veteran-owned small business concerns and service-disabled veteran-owned small business concerns.

* * * * *

19.001 Amended

7. Amend section 19.001 in the definition ``Small disadvantaged business concern'' by removing ``52.212-3(c)(2)'' and adding ``52.212-3(c)(4)'' in its place; and by removing ``52.212-3(c)(7)(ii)'' and adding ``52.212-3(c)(9)(ii)'' in its place.

19.201 Amended

8. Amend section 19.201 in the first sentence of paragraph (a) by adding ``veteran-owned small business, service-disabled veteran-owned small business,'' before the word ``HUBZone''; and in the second sentence by removing ``shall'' and adding ``must'' in its place.

19.202-2 Amended

9. Amend section 19.202-2 in the introductory paragraph by removing ``shall'' and adding ``must'' in its place; and by adding ``veteran-owned small business, service-disabled veteran-owned small business,'' before the word ``HUBZone''.

19.202-4 Amended

10. Amend section 19.202-4 in the introductory paragraph by removing ``shall'' and adding ``must'' in its place; and by adding ``veteran-owned small business, service-disabled veteran-owned small business,'' before the word ``HUBZone''.

19.202-5 Amended

11. Amend section 19.202-5 in the introductory paragraph by removing ``shall'' and adding ``must'' in its place; and in paragraphs (a) and (b) by adding ``veteran-owned small business, service-disabled veteran-owned small business,'' before the word ``HUBZone''.

Subpart 19.3--Determination of Small Business Status for Small Business Programs

12. The heading of subpart 19.3 is revised to read as set forth above.

19.301 Amended

13. Amend section 19.301 in the first sentence of paragraph (d) by adding ``veteran-owned small business,'' before the word ``HUBZone''.

19.304 Amended

14. Amend section 19.304 in paragraph (b) by removing ``52.212-3(c)(2)'' and adding ``52.212-3(c)(4)'' in its place; and in paragraph (c) by removing ``52.212-3(c)(7)'' and adding ``52.212-3(c)(9)'' in its place.

19.402 Amended

15. Amend section 19.402 in paragraph (c)(1)(ii) by adding ``veteran-owned small, service-disabled veteran-owned small,'' before the word ``HUBZone''.

16. Amend section 19.702 by revising the introductory paragraph to read as follows:

19.702 Statutory requirements.

Any contractor receiving a contract for more than the simplified acquisition threshold must agree in the contract that small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns will have the maximum practicable opportunity to participate in contract performance consistent with its efficient performance. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns.

* * * * *

17. Amend section 19.703 by revising the introductory text of paragraph (a), paragraph (a)(1) and the first sentence of paragraph (b); in the fifth sentence of paragraph (b) by removing ``shall'' and adding ``must'' in its place; and adding a sixth sentence to paragraph

(b). The revised and added text reads as follows:

19.703 Eligibility requirements for participating in the program.

(a) To be eligible as a subcontractor under the program, a concern must represent itself as a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, or woman-owned small business concern.

(1) To represent itself as a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, or woman-owned small business concern, a concern must meet the appropriate definition in 2.101 or 19.001.

* * * * *

(b) A contractor acting in good faith may rely on the written representation of its subcontractor regarding the subcontractor's status as a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, or a woman-owned small business concern. * * * Protests challenging HUBZone small business concerns status must be filed in accordance with 13 CFR 126.800.

18. Amend section 19.704 by revising paragraph (a)(1); and in paragraphs (a)(2), (a)(3), (a)(6), (a)(8), and (a)(11) by adding ``veteran-owned small business,'' before the word ``HUBZone''. The revised text reads as follows:

19.704 Subcontracting plan requirements.

(a) * * *

(1) Separate percentage goals for using small business, veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns as subcontractors. Service-disabled veteran-owned small business concerns meet the definition of veteran-owned small business concerns, and offerors may include them within the subcontracting plan goal for veteran-owned small business concerns. A separate goal for service-disabled veteran-owned small business concerns is not required;.

* * * * *

19.705-2 Amended

19. Amend section 19.705-2 in the introductory paragraph by removing ``shall'' and adding ``must'' in its place; and in the last sentence of paragraph (d) by removing ``shall'' and adding ``must'' in its place, and adding ``veteran-owned small business (including service-disabled veteran-owned small business),'' before the word ``HUBZone''.

20. Amend section 19.705-4 by--

a. Removing from the introductory paragraph ``shall'' and adding ``must'' in its place;

b. Adding in the second and last sentences of paragraph (c), and paragraphs (d)(1) and (d)(5) ``veteran-owned small business,'' before the word ``HUBZone''; and

c. Revising paragraph (d)(6) to read as follows:

19.705-4 Reviewing the subcontracting plan.

* * * * *

(d) * * *

(6) Advise the offeror of available sources of information on potential small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business subcontractors, as well as any specific concerns known to be potential subcontractors. If the offerors proposed goals are questionable, the contracting officer must emphasize that the information should be used to develop realistic and acceptable goals. The contracting officer should ensure that the contractor has considered the use of service-disabled veteran-owned small businesses in developing its veteran-owned small business goal (see 19.704(a)(1) and 52.219-9(d)(1)).

* * * * *

19.705-7 Amended

21. Amend section 19.705-7 in paragraph (a) by adding in the first sentence ``veteran-owned small business (including service-disabled veteran-owned small business),'' before the word ``HUBZone''; and in the third and fourth sentences of paragraph (d) by adding ``veteran-owned small business (including service-disabled veteran-owned small business),'' before the word ``HUBZone''.

19.706 Amended

22. Amend section 19.706 in paragraphs (b) and (c) by adding ``veteran-owned small business (including service-disabled veteran-owned small business),'' before the word ``HUBZone''.

19.708 Amended

23. Amend section 19.708 in paragraphs (c)(1), (c)(2), and (c)(3) by adding ``veteran-owned small business (including service-disabled veteran-owned small business),'' before the word ``HUBZone''.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

24. Amend section 52.212-3 by--

a. Revising the date of the provision;

b. Adding in paragraph (a), in alphabetical order, the definitions ``Service-disabled veteran-owned small business concern'' and ``Veteran-owned small business concern'';

c. Redesignating paragraphs (c)(2) through (c)(7) as (c)(4) through (c)(9), respectively, and adding new paragraphs (c)(2) and (c)(3);

d. Removing from the ``Note'' paragraph in newly designated paragraph (c)(5), ``(c)(4) and (c)(5)'' and adding ``(c)(6) and (c)(7)'' in its place;

e. Removing from Alternate I ``(Oct 1998)'' and adding ``(Oct 2000)'' in its place, and removing ``(c)(8)'' and adding ``(c)(10)'' in its place; redesignating paragraph ``(8)'' as ``(10)'' and removing

``(c)(7)'' and adding ``(c)(9)'' in its place;

f. Removing from Alternate II ``(Oct 1998)'' and adding ``(Oct 2000)'' in its place, and removing ``(c)(7)(iii)'' and adding ``(c)(9)(iii)'' in its place; and

g. Removing from Alternate III ``(Jan 1999)'' and adding ``(Oct 2000)'' in its place, and removing ``(c)(9)'' and adding ``(c)(11)'' in its place; designating the second paragraph of Alternate III as paragraph (c)(11); and removing from newly designated paragraph (c)(11)(ii) ``(c)(9)(i)'' and adding ``(c)(11)(i)'' in its place.

The revised text reads as follows:

52.212-3 Offeror Representations and Certifications--Commercial Items.

* * * * *

Offeror Representations and Certifications--Commercial Items (Oct. 2000)

(a) * * *

* * * * *

Service-disabled veteran-owned small business concern--

(1) Means a small business concern--

(i) Not less than 51 percent of which is owned by one or more service--disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and

(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran.

(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined in 38 U.S.C. 101(16).

* * * * *

Veteran-owned small business concern means a small business concern--

(1) Not less than 51 percent of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and

(2) The management and daily business operations of which are controlled by one or more veterans.

* * * * *

(c) * * *

(2) Veteran-owned small business concern. Complete only if the offeror represented itself as a small business concern in paragraph (c)(1) of this provision. The offeror represents as part of its offer that it is, is not a veteran-owned small business concern.

(3) Service-disabled veteran-owned small business concern. Complete only if the offeror represented itself as a veteran-owned small business concern in paragraph (c)(2) of this provision. The offeror represents as part of its offer that it is, is not a service-disabled veteran-owned small business concern.

* * * * *

25. Amend section 52.219-1 by--

a. Revising the date of the provision;

b. Adding paragraphs (b)(4) and (b)(5);

c. Revising the heading of paragraph (c) and adding, in alphabetical order, the definitions ``Service-disabled veteran-owned small business concern'' and ``Veteran-owned small business concern'';

d. Removing ``, as used in this provision,'' from the definitions ``Small business concern'' and ``Women-owned small business concern'';

e. Adding in the introductory text of paragraph (d)(2) ``HUBZone small,'' after the word ``small,'' the first time it appears;

f. Removing from Alternate I ``(Nov 1999)'' and adding ``(Oct 2000)'' in its place, removing ``(b)(4)'' and adding ``(b)(6)'' in its place; redesignating paragraph (4) as paragraph (b)(6); removing from newly designated paragraph (b)(6)(ii) ``(b)(4)(i)'' and adding ``(b)(6)(i)'' in its place; and

g. Removing from Alternate II ``(Nov 1999)'' and adding ``(Oct 2000)'' in its place, and removing ``(b)(5)'' and adding ``(b)(7)'' in its place; and redesignating paragraph (5) of Alternate II as paragraph (b)(7). The revised text reads as follows:

52.219-1 Small Business Program Representations.

* * * * *

Small Business Program Representations (Oct. 2000)

* * * * *

(b) * * *

(4) Complete only if the offeror represented itself as a small business concern in paragraph (b)(1) of this provision. The offeror represents as part of its offer that it is, is not a veteran-owned small business concern.

(5) Complete only if the offeror represented itself as a veteran-owned small business concern in paragraph (b)(4) of this provision. The offeror represents as part of its offer that it is, is not a service-disabled veteran-owned small business concern.

(c) Definitions. As used in this provision--

Service-disabled veteran-owned small business concern--

(1) Means a small business concern--

(i) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and

(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran.

(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined in 38 U.S.C. 101(16).

* * * * *

Veteran-owned small business concern means a small business concern--

(1) Not less than 51 percent of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and

(2) The management and daily business operations of which are controlled by one or more veterans.

* * * * *

26. Amend section 52.219-8 by revising the date of the clause and paragraphs (a), (c), and (d) to read as follows:

52.219-8 Utilization of Small Business Concerns.

* * * * *

Utilization of Small Business Concerns (Oct. 2000)

(a) It is the policy of the United States that small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns shall have the maximum practicable opportunity to participate in performing contracts let by any Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns.

* * * * *

(c) Definitions. As used in this contract--

HUBZone small business concern means a small business concern that appears on the List of Qualified HUBZone Small Business Concerns maintained by the Small Business Administration.

Service-disabled veteran-owned small business concern--

(1) Means a small business concern--

(i) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and

(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran.

(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined in 38 U.S.C. 101(16).

Small business concern means a small business as defined pursuant to Section 3 of the Small Business Act and relevant regulations promulgated pursuant thereto.

Small disadvantaged business concern means a small business concern that represents, as part of its offer that--

(1) It has received certification as a small disadvantaged business concern consistent with 13 CFR part 124, subpart B;

(2) No material change in disadvantaged ownership and control has occurred since its certification;

(3) Where the concern is owned by one or more individuals, the net worth of each individual upon whom the certification is based does not exceed $750,000 after taking into account the applicable exclusions set forth at 13 CFR 124.104(c)(2); and

(4) It is identified, on the date of its representation, as a certified small disadvantaged business in the database maintained by the Small Business Administration (PRO-Net).

Veteran-owned small business concern means a small business concern--

(1) Not less than 51 percent of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and

(2) The management and daily business operations of which are controlled by one or more veterans.

Women-owned small business concern means a small business concern--

(1) That is at least 51 percent owned by one or more women, or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and

(2) Whose management and daily business operations are controlled by one or more women.

(d) Contractors acting in good faith may rely on written representations by their subcontractors regarding their status as a small business concern, a veteran-owned small business concern, a service-disabled veteran-owned small business concern, a HUBZone small business concern, a small disadvantaged business concern, or a women-owned small business concern.

(End of clause)

27. Amend section 52.219-9 by--

a. Revising the date of the clause;

b. Adding to the first and second sentences of paragraph (c) ``veteran-owned small business,'' before the word ``HUBZone'';

c. Revising paragraph (d)(1);

d. Redesignating paragraphs (d)(2)(iii) through (d)(2)(v) as (d)(2)(iv) through (d)(2)(vi), and adding a new (d)(2)(iii);

e. Redesignating paragraphs (d)(3)(ii) through (d)(3)(iv) as (d)(3)(iii) through (d)(3)(v), and adding a new paragraph (d)(3)(ii);

f. Revising paragraph (d)(5);

g. Redesignating paragraphs (d)(6)(ii) through (d)(6)(iv) as (d)(6)(iii) through (d)(6)(v), and adding a new paragraph (d)(6)(ii);

h. Adding to paragraph (d)(8) ``veteran-owned small business,'' before the word ``HUBZone'';

i. Revising paragraph (d)(10)(iii);

j. Adding to the introductory text of paragraph (d)(11), (d)(11)(i), and (d)(11)(ii) ``veteran-owned small business,'' before the word ``HUBZone'';

k. Redesignating paragraphs (d)(11)(iii)(B) through (d)(11)(iii)(E) as (d)(11)(iii)(C) through (d)(11)(iii)(F), and adding a new paragraph (d)(11)(iii)(B);

l. Removing from paragraph (d)(11)(iv)(B) the word ``and''; removing the period at the end of (d)(11)(iv)(C) and adding ``; and'' in its place; and adding new paragraph (d)(11)(iv)(D);

m. Adding in paragraphs (e)(1) (twice), (e)(2), (e)(3), and (e)(4) ``veteran-owned small business,'' before the word ``HUBZone'';

n. Removing from Alternate I ``(Jan 1999)'' and adding ``(Oct 2000)'' in its place; and by adding ``veteran-owned small business,''

before the word ``HUBZone'' (twice) in paragraph (c) of the Alternate; and

o. Removing from Alternate II ``(Jan 1999)'' and adding ``(Oct 2000)'' in its place; and by adding ``veteran-owned small business,'' before the word ``HUBZone'' (twice) in paragraph (c) of the Alternate.

The revised text reads as follows:

52.219-9 Small Business Subcontracting Plan.

* * * * *

Small Business Subcontracting Plan (Oct. 2000)

(d) * * *

(1) Goals, expressed in terms of percentages of total planned subcontracting dollars, for the use of small business, veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns as subcontractors. Service-disabled veteran-owned small business concerns meet the definition of veteran-owned small business concerns, and offerors may include them within the subcontracting plan goal for veteran-owned small business concerns. A separate goal for service-disabled veteran-owned small business concerns is not required. The offeror shall include all subcontracts that contribute to contract performance, and may include a proportionate share of products and services that are normally allocated as indirect costs.

(2) * * *

(iii) Total dollars planned to be subcontracted to veteran-owned small business concerns;

* * * * *

(3) * * *

(ii) Veteran-owned small business concerns;

* * * * *

(5) A description of the method used to identify potential sources for solicitation purposes (e.g., existing company source lists, the Procurement Marketing and Access Network (PRO-Net) of the Small Business Administration (SBA), veterans service organizations, the National Minority Purchasing Council Vendor Information Service, the Research and Information Division of the Minority Business Development Agency in the Department of Commerce, or small, HUBZone, small disadvantaged, and women-owned small business trade associations). A firm may rely on the information contained in PRO-Net as an accurate representation of a concern's size and ownership characteristics for the purposes of maintaining a small, veteran-owned small, HUBZone small, small disadvantaged, and women-owned small business source list. Use of PRO-Net as its source list does not relieve a firm of its responsibilities (e.g., outreach, assistance, counseling, or publicizing subcontracting opportunities) in this clause.

(6) * * *

(ii) Veteran-owned small business concerns;

* * * * *

(10) * * *

(iii) Submit Standard Form (SF) 294, Subcontracting Report for Individual Contracts, and/or SF 295, Summary Subcontract Report, in accordance with paragraph (j) of this clause. The reports shall provide information on subcontract awards to small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, small disadvantaged business concerns, women-owned small business concerns, and Historically Black Colleges and Universities and Minority Institutions. Reporting shall be in accordance with the instructions on the forms or as provided in agency regulations.

* * * * *

(11) * * *

(iii) * * *

(B) Whether veteran-owned small business concerns were solicited and, if not, why not;

* * * * *

(iv) * * *

(D) Veterans service organizations.

* * * * *

(End of clause)

52.219-10 Amended

28. Amend section 52.219-10 by revising the date of the clause to read ``(Oct 2000)''; by adding in paragraph (a) ``veteran-owned small business (including service-disabled veteran-owned small business),'' before the word ``HUBZone''; and by adding in paragraph (b) ``veteran-owned small business (including service-disabled veteran-owned small business),'' before the word ``HUBZone'', and adding a comma following ``goals for small business''.

PART 53--FORMS

53.219 Amended

29. Amend section 53.219 in paragraphs (a) and (b) by removing ``(Rev. 12/98)'' and adding ``(Rev. 10/00)'' in their place.

30. Revise sections 53.301-294 and 53.301-295 to read as follows:

53.301-294 Subcontracting Report for Individual Contracts.

GRAPHIC TIFF OMITTED

GRAPHIC TIFF OMITTED

53.301-295 Summary Subcontract Report.

GRAPHIC TIFF OMITTED

GRAPHIC TIFF OMITTED

Federal Register: October 11, 2000 (Volume 65, Number 197) Rules and Regulations

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 15

FAC 97-20; FAR Case 2000-300; Item II

Federal Acquisition Regulation; Truth in Negotiations Act Threshold

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on a final rule amending the Federal Acquisition Regulation (FAR) to implement the requirements of 10 U.S.C. 2306a(a)(7) and 41 U.S.C. 254b(a)(7). These statutes require review of the Truth in Negotiations Act threshold every 5 years, starting October 1, 1995.

DATES: Effective Date: October 11, 2000.

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 Mr. Jeremy Olson at (202) 501-3221. Please cite FAC 97-20, FAR case 2000-300.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule amends FAR 15.403-4 to implement the requirements of 10 U.S.C. 2306a(a)(7) and 41 U.S.C. 254b(a)(7). These statutes require review of the Truth in Negotiations Act threshold every 5 years, starting October 1, 1995. The increase of $50,000 is based on escalation of 10.22 percent from 1994 to 2000, calculated using the gross domestic product deflators from the fiscal year 2001 budget. DoD, GSA, and NASA published a proposed rule in the Federal Register at 65 FR 41267, July 3, 2000. Two respondents submitted public comments. The Councils considered all public comments in formulation of the final rule. This final rule is the same as the proposed rule.

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 Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not 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 most contracts and subcontracts with small entities do not require the submission of cost or pricing data.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes do not significantly change the existing information collection requirements that have been approved by the Office of Management and Budget under 44 U.S.C. 3501, et seq., under OMB Clearance Number 9000-

0045.

List of Subjects in 48 CFR Part 15

Government procurement. Dated: October 3, 2000.Al Matera, Acting Director, Federal Acquisition Policy Division.

Therefore, DoD, GSA, and NASA amend 48 CFR part 15 as set forth below:

PART 15--CONTRACTING BY NEGOTIATION

1. The authority citation for 48 CFR part 15 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).

2. Amend section 15.403-4 by revising paragraph (a)(1) to read as follows:

15.403-4 Requiring cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. 254b).

(a)(1) The contracting officer must obtain cost or pricing data only if the contracting officer concludes that none of the exceptions in 15.403-1(b) applies. However, if the contracting officer has sufficient information available to determine price reasonableness, then the contracting officer should consider requesting a waiver under the exception at 15.403-1(b)(4). The threshold for obtaining cost or pricing data is $550,000. Unless an exception applies, cost or pricing data are required before accomplishing any of the following actions expected to exceed the current threshold or, for existing contracts, the threshold specified in the contract:

(i) The award of any negotiated contract (except for undefinitized actions such as letter contracts).

(ii) The award of a subcontract at any tier, if the contractor and each higher-tier subcontractor were required to submit cost or pricing data (but see waivers at 15.403-1(c)(4)).

(iii) The modification of any sealed bid or negotiated contract (whether or not cost or pricing data were initially required) or any subcontract covered by paragraph (a)(1)(ii) of this subsection. Price adjustment amounts must consider both increases and decreases (e.g., a $200,000 modification resulting from a reduction of $400,000 and an increase of $200,000 is a pricing adjustment exceeding $550,000). This requirement does not apply when unrelated and separately priced changes for which cost or pricing data would not otherwise be required are included for administrative convenience in the same modification. Negotiated final pricing actions (such as termination settlements and total final price agreements for fixed-price incentive and redeterminable contracts) are contract modifications requiring cost or pricing data if--

(A) The total final price agreement for such settlements or agreements exceeds the pertinent threshold set forth at paragraph (a)(1) of this subsection; or (B) The partial termination settlement plus the estimate to complete the continued portion of the contract exceeds the pertinent threshold set forth at paragraph (a)(1) of this subsection (see 49.105(c)(15)).

* * * * *