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Proposed Rule

Federal Acquisition Regulation; Small Business Credit for Alaskan Native Corporations and Indian Tribes

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Information about this document as published in the Federal Register.

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AGENCIES:

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

ACTION:

Proposed rule.

SUMMARY:

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) are proposing to amend the Federal Acquisition Regulation (FAR) to implement section 702 of Public Law 107-117, as amended by section 3003 of Public Law 107-206 (43 U.S.C. 1626). The law permits subcontracts awarded to certain Alaskan Native Corporations (ANCs) to be counted towards a contractor's goals for subcontracting with small business (SB) and small disadvantaged business (SDB) concerns. The law also permits Indian tribes to be counted towards a contractor's goal for subcontracting with SB.

DATES:

Interested parties should submit comments in writing on or before August 2, 2005 to be considered in the formulation of a final rule.

ADDRESSES:

Submit comments identified by FAR case 2004-017 by any of the following methods:

Instructions: Please submit comments only and cite FAR case 2004-017 in all correspondence related to this case. All comments received will be posted without change to http://www.acqnet.gov/​far/​ProposedRules/​proposed.htm, including any personal information provided.

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FOR FURTHER INFORMATION CONTACT:

The FAR Secretariat at (202) 501-4755 for information pertaining to status or publication schedules. For clarification of content, contact Ms. Rhonda Cundiff, Procurement Analyst, at (202) 501-0044. Please cite FAR case 2004-017.

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SUPPLEMENTARY INFORMATION:

A. Background

Section 702 of Public Law 107-117, as amended by section 3003 of Public Law 107-206, provides that subcontracts awarded to Alaskan Native Corporations (ANC) that are considered a minority and economically disadvantaged concern under the criteria at 43 U.S.C. 1626(e)(1), and any of its direct and indirect subsidiary corporations, joint ventures, and partnerships that meet the requirements of 43 U.S.C. 1626(e)(2), shall be counted towards the satisfaction of a contractor's goal for subcontracting with SB and SDB concerns. The law also provides that subcontracts awarded to Indian tribes may be counted towards the satisfaction of a contractor's goal for subcontracting with SB concerns. Such credit is taken even where the ANC or Indian tribe may be “other than small” under the Small Business Administration (SBA) regulations.

In addition, section 3003 provides that “where lower tier subcontracts exist, the ANC or Indian tribe shall designate the appropriate contractor or contractors to receive credit towards their small or small disadvantaged business subcontracting goals.” Accordingly, the rule requires that, where one or more subcontractors are in the subcontract tier between the prime contractor and the ANC or Indian tribe, the ANC or Indian tribe shall designate the appropriate contractor to count the subcontract towards its small business and/or small disadvantaged subcontracting goals. In most cases, the appropriate contractor is the contractor that awarded the subcontract to the ANC or Indian tribe. Therefore, the revision includes a requirement that the ANC or Indian tribe give a copy of the designation to the contracting officer, the prime contractor, and the subcontractors in between. The Councils invite industry to comment on the feasibility of this approach and any alternatives for complying with the law.

The law does not provide for such an ANC and any of its direct and indirect subsidiary corporations, joint ventures, and partnerships to be eligible for SDB or 8(a) certification unless the entity otherwise meets the requirements for certification under 15 U.S.C. 637. Similarly, the law does not provide for contractors to count subcontracts awarded to such an entity toward the evaluation of the extent of the participation of SDB concerns in the performance of certain North American Industry Classification System (NAICS) Industry codes unless the entity is certified as an SDB by SBA (FAR Subpart 19.12). The FAR is being amended to implement these changes to 43 U.S.C. 1626.

The specific changes are as follows:

  • FAR 19.701 and the clause at 52.219-9 are amended to add definitions for ANC and Indian tribes consistent with 43 U.S.C. 1601, et seq., and 25 U.S.C. 1452, respectively.
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  • FAR 19.703 is amended to add paragraph (c). Paragraph (1)(i) authorizes contractors to count awards to ANCs towards the satisfaction of the contractor's SB and SDB goals regardless of the size status of the ANC, and to provide for the ANC to designate which contractor is to receive the credit; and paragraph (c)(1)(ii) authorizes contractors to count awards to Indian tribes towards the satisfaction of the contractor's SB goals, regardless of the size status of the Indian tribe.

Paragraph (c)(1)(iii) is added to provide that where one or more subcontractors are in the subcontract tier between the prime contractor and the ANC or Indian tribe, the ANC or Indian tribe shall designate the appropriate contractor to count the subcontract towards its small business and/or small disadvantaged subcontracting goals. In most cases, the appropriate contractor is the contractor that awarded the subcontract to the ANC or Indian tribe. Paragraph (d)(2) is added to provide that a contractor acting in good faith may rely on the written representation of an ANC or Indian tribe as to eligibility and incorporates the procedures at 26.103(b) through (e) in the event of a challenge of such a representation.

  • FAR 19.704, the clause at 52.219-9, and the instructions for the SF 294, “Subcontracting Report for Individual Contracts,” and SF 295, “Summary Subcontract Report,” are amended to permit subcontracts awarded to certain ANCs to be counted towards the satisfaction of a contractor's goal for subcontracting with SB and SDB concerns, and to permit subcontracts awarded to Indian tribes to be counted towards the satisfaction of a contractor's goal for subcontracting with SB concerns.
  • FAR 19.704 and the clause at 52.219-9 are amended to provide where one or more subcontractors are in the subcontract tier between the prime contractor and the ANC or Indian tribe, the ANC or Indian tribe shall designate which subcontractor(s) or prime contractor(s) will be able to count the subcontract towards its small business and small disadvantaged subcontracting goals.
  • The clause at 52.219-9(j)(2) stipulates that awards to ANCs that are not certified SDBs may not be counted towards the evaluation of the extent of participation of SDB concerns in the performance of contracts in the NAICS Industry Subsectors.
  • The instructions for the SF 294 and SF 295 are revised to include a cross-reference to the FAR 19.703 eligibility requirements for participation in the small business subcontracting program; to incorporate administrative corrections to ensure consistency in reporting of goals and actual performance; and for technical edits.

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 law allows other than small business Federal contractors to receive SDB and/or SB subcontract credit for subcontracts awarded to Indian tribes and ANCs, regardless of whether they are SB, SBA-certified SDBs, or certified 8(a) firms. SBs and certified SDBs may be adversely impacted to the extent that there are Indian tribes or ANCs that are large businesses and may now be more likely to be used as subcontractors or suppliers on Federal contracts. It is estimated that there are 562 Indian tribes and ANCs. Information was not available on the number of these entities that were large business, SB, or SDB. An Initial Regulatory Flexibility Analysis (IRFA) has been prepared and will be provided to the Chief Counsel for Advocacy for the Small Business Administration. The analysis is summarized as follows:

This proposed rule revises the Federal Acquisition Regulation in order to comply with 43 U.S.C. 1626 which allows other than small business Federal contractors to receive small business (SB) subcontracting credit for subcontracts awarded to Indian tribes, regardless of whether they are small business. Additionally, the law allows other than small business Federal contractors to receive small business and small disadvantaged business (SDB) subcontracting credit for subcontracts awarded to Alaskan Native Corporations (ANCs) which are considered a minority and economically disadvantaged concern under the criteria at 43 U.S.C. 1626(e)(1) and any of its direct and indirect subsidiary corporations, joint ventures, and partnerships that meet the requirements of 43 U.S.C. 1626(e)(2), regardless of whether they are small businesses, SBA-certified SDBs, or certified 8(a) firms.

This proposed rule implements section 702 of the 2002 Department of Defense Supplemental Appropriation, as amended by section 3003 of the 2002 Supplemental Appropriations for Further Recovery From and Response To Terrorist Attacks on the United States. The objective of the statute is to encourage large business contractors to utilize ANCs and Indian tribes as subcontractors and suppliers on Federal contracts.

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 law allows other than small business Federal contractors to receive small disadvantaged business and/or small business subcontract credit for subcontracts awarded to Indian tribes and ANCs. The rule will impose no new reporting or recordkeeping requirements on small entities.

A copy of the IRFA may be obtained from the FAR Secretariat. The Councils will consider comments from small entities concerning the affected FAR parts 19, 52, and 53 in accordance with 5 U.S.C. 610. Comments must be submitted separately and should cite 5 U.S.C 601, et seq. (FAR case 2004-017), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act (Pub. L. 104-13) applies because the proposed rule contains information collection requirements. Accordingly, the FAR Secretariat has submitted a request for approval of a revision to the information collection requirements of OMB Control Numbers 9000-0006, Subcontracting Plans/Subcontracting Report for Individual Contracts (SF 294), and 9000-0007, Summary Subcontract Report (SF 295), to the Office of Management and Budget under 44 U.S.C. 3501, et seq. Public comments concerning these requests will be invited through subsequent Federal Register notices.

Annual Reporting Burden:

Public reporting burden for this collection of information is estimated to average 11 hours per response for 9000-0006, and 16.2 hours per response for 9000-0007, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

The annual reporting burden is estimated as follows:

9000-0006 (Current Annual Reporting and Recordkeeping):

Respondents: 4,253.

Responses per respondent: 3.44.

Total annual responses: 14,622.

Average burden hours per response: 50.52.

Total response burden hours: 739,225.

9000-0006 (Proposed Annual Reporting and Recordkeeping):

Respondents: 4,253.

Responses per respondent: 3.44.

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Total annual responses: 14,631.

Average burden hours per response: 55.34.

Total response burden hours: 809,248.

Total program change is an additional 70,023 hours.

9000-0007 (Current Annual Reporting and Recordkeeping):

Respondents: 4,253.

Responses per respondent: 1.66.

Total annual responses: 7,098.

Average burden hours per response: 15.9.

Total response burden hours: 112,864.

9000-0007 (Proposed Annual Reporting and Recordkeeping):

Respondents: 4,253.

Responses per respondent: 1.75.

Total annual responses: 7,449.

Average burden hours per response: 16.2.

Total response burden hours: 120,674.

Total program change is an additional 7,810 hours.

D. Request for Comments Regarding Paperwork Burden

Submit comments, including suggestions for reducing this burden, not later than August 2, 2005 to: FAR Desk Officer, OMB, Room 10102, NEOB, Washington, DC 20503, and a copy to the General Services Administration, FAR Secretariat (VIR), 1800 F Street, NW., Room 4035, Washington, DC 20405.

Public comments are particularly invited 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 (VIR), Room 4035, Washington, DC 20405, telephone (202) 501-4755. Please cite OMB Control Numbers 9000-0006, Subcontracting Plans/Subcontracting Report for Individual Contracts (SF 294), and 9000-0007, Summary Subcontract Report (SF 295), in all correspondence.

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List of Subjects in 48 CFR Parts 19, 52, and 53

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Dated: May 24, 2005.

Julia B. Wise,

Director, Contract Policy Division.

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Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 19, 52, and 53 as set forth below:

1. The authority citation for 48 CFR parts 19, 52, and 53 is revised to read as follows:

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Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

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PART 19—SMALL BUSINESS PROGRAMS

2. Amend section 19.701 by adding, in alphabetical order, the definitions “Alaskan Native Corporation (ANC)” and “Indian tribe” to read as follows:

Definitions.
* * * * *

Alaskan Native Corporation (ANC) means any Regional Corporation, Village Corporation, Urban Corporation, or Group Corporation organized under the laws of the State of Alaska in accordance with the Alaska Native Claims Settlement Act, as amended (43 U.S.C. 1601, et seq.), and which is considered a minority and economically disadvantaged concern under the criteria at 43 U.S.C. 1626(e)(1). This definition also includes ANC direct and indirect subsidiary corporations, joint ventures, and partnerships that meet the requirements of 43 U.S.C. 1626(e)(2).

* * * * *

Indian tribe means any Indian tribe, band, group, pueblo, or community, including native villages and native groups (including corporations organized by Kenai, Juneau, Sitka, and Kodiak) as defined in the Alaska Native Claims Settlement Act (43 U.S.C.A. 1601, et seq.), that is recognized by the Federal Government as eligible for services from the Bureau of Indian Affairs in accordance with 25 U.S.C. 1452(c).

* * * * *

3. Amend section 19.703 in the introductory text of paragraph (a) by removing “To” and adding “Except as provided in paragraph (c) of this section, to”; and adding paragraph (c) to read as follows:

Eligibility requirements for participating in the program.
* * * * *

(c)(1) In accordance with 43 U.S.C. 1626, the following procedures apply:

(i) Subcontracts awarded to an ANC shall be counted towards the designated contractor's subcontracting goals for small business and small disadvantaged business (SDB) concerns, regardless of the size status of the ANC.

(ii) Subcontracts awarded to an Indian tribe shall be counted towards the designated contractor's subcontracting goal for small business, regardless of the size status of the Indian tribe.

(iii) Where one or more subcontractors are in the subcontract tier between the prime contractor and the ANC or Indian tribe, the ANC or Indian tribe shall designate the appropriate contractor to count the subcontract towards its small business and/or small disadvantaged subcontracting goals. In most cases, the appropriate contractor is the contractor that awarded the subcontract to the ANC or Indian tribe. The ANC or Indian tribe will give a copy of the designation to the contracting officer, the prime contractor, and the subcontractors in between.

(2) A contractor acting in good faith may rely on the written representation of an ANC or an Indian tribe as to eligibility unless an interested party challenges its status or the contracting officer has independent reason to question its status. In the event of a challenge of a representation of an ANC or Indian tribe, the interested parties shall follow the procedures at 26.103(b) through (e).

4. Amend section 19.704 by revising paragraphs (a)(1), (a)(2), (a)(3), and (a)(6) to read as follows:

Subcontracting plan requirements.

(a) * * *

(1) Separate percentage goals for using small business (including ANC and Indian tribes), veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business (including ANCs), and women-owned small business concerns as subcontractors;

(2) A statement of the total dollars planned to be subcontracted and a statement of the total dollars planned to be subcontracted to small business (including ANC and Indian tribes), veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business (including ANCs), and women-owned small business concerns;

(3) A description of the principal types of supplies and services to be subcontracted and an identification of types planned for subcontracting to small business (including ANC and Indian tribes), veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business Start Printed Page 32556(including ANCs), and women-owned small business concerns;

* * * * *

(6) A statement as to whether or not the offeror included indirect costs in establishing subcontracting goals, and a description of the method used to determine the proportionate share of indirect costs to be incurred with small business (including ANC and Indian tribes), veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business (including ANCs), and women-owned small business concerns;

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PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

5. Amend section 52.219-9 by—

a. Revising the date of the clause;

b. In paragraph (b), by adding, in alphabetical order, the definitions “Alaskan Native Corporation (ANC)” and “Indian tribe” and

c. Adding text to the end of paragraph (d)(1); and revising paragraphs (d)(2)(ii), (d)(2)(vi), and (d)(6)(i) to read as follows:

Small Business Subcontracting Plan.
* * * * *

SMALL BUSINESS SUBCONTRACTING PLAN (DATE)

* * * * *

(b) * * *

Alaskan Native Corporation (ANC) means any Regional Corporation, Village Corporation, Urban Corporation, or Group Corporation organized under the laws of the State of Alaska in accordance with the Alaska Native Claims Settlement Act, as amended (43 U.S.C. 1601, et seq.), and which is considered a minority and economically disadvantaged concern under the criteria at 43 U.S.C. 1626(e)(1). This definition also includes ANC direct and indirect subsidiary corporations, joint ventures, and partnerships that meet the requirements of 43 U.S.C. 1626(e)(2).

* * * * *

Indian tribe means any Indian tribe, band, group, pueblo, or community, including native villages and native groups (including corporations organized by Kenai, Juneau, Sitka, and Kodiak) as defined in the Alaska Native Claims Settlement Act (43 U.S.C.A. 1601, et seq.), that is recognized by the Federal Government as eligible for services from the Bureau of Indian Affairs in accordance with 25 U.S.C. 1452(c).

* * * * *

(d) * * *

(1) * * * In accordance with 43 U.S.C. 1626, subcontracts awarded to an ANC shall be counted towards the designated Contractor's subcontracting goals for small business and small disadvantaged business (SDB) concerns, regardless of the size status of the ANC, and subcontracts awarded to an Indian tribe shall be counted towards the designated Contractor's subcontracting goal for small business, regardless of the size status of the Indian tribe. Where one or more subcontractors are in the subcontract tier between the prime Contractor and the ANC or Indian tribe, the ANC or Indian tribe shall designate the appropriate Contractor to count the subcontract towards its small business and/or small disadvantaged subcontracting goals. In most cases, the appropriate Contractor is the Contractor that awarded the subcontract to the ANC or Indian tribe. The ANC or Indian tribe shall give a copy of the designation to the Contracting Officer, the prime Contractor, and the subcontractors in between.

(2) * * *

(ii) Total dollars planned to be subcontracted to small business concerns (including ANC and Indian tribes);

* * * * *

(vi) Total dollars planned to be subcontracted to small disadvantaged business concerns (including ANCs); and

* * * * *

(6) * * *

(i) Small business concerns (including ANC and Indian tribes);

* * * * *
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PART 53—FORMS

[Amended]

6. Amend section 53.219 in paragraphs (a) and (b) by removing “(Rev. 10/01)” and adding “(Rev. Date)” in their place.

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

Subcontracting Report for Individual Contracts.
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Summary Subcontract Report.
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BILLING CODE 6820-EP-S

[FR Doc. 05-10935 Filed 6-2-05; 8:45 am]

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