[Federal Register Volume 80, Number 177 (Monday, September 14, 2015)]
[Rules and Regulations]
[Pages 55019-55022]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-22927]
=======================================================================
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Part 127
RIN 3245-AG72
Women-Owned Small Business Federal Contract Program
AGENCY: U.S. Small Business Administration.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule makes changes to the regulations governing the
Women-Owned Small Business (WOSB) program. The U.S. Small Business
Administration (SBA) is making changes to those regulations to
implement section 825 of the National Defense Authorization Act for
Fiscal Year 2015. Specifically, this rule implements the authority set
forth in section 825 of the 2015 NDAA allowing sole source awards to
Women-Owned Small Businesses (WOSBs) or Economically Disadvantaged
Women-Owned Small Businesses (EDWOSBs) in appropriate circumstances.
DATES: This rule is effective October 14, 2015.
FOR FURTHER INFORMATION CONTACT: Brenda Fernandez, U.S. Small Business
Administration, Office of Policy, Planning & Liaison, 409 Third Street
SW., Washington, DC 20416; (202) 205-7337; [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The WOSB Program, set forth in section 8(m) of the Small Business
Act, 15 U.S.C. 637(m), authorizes Federal contracting officers to
restrict competition to eligible Women-Owned Small Businesses (WOSBs)
or Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs)
for Federal contracts in certain industries. Section 8(m) establishes
criteria for the WOSB Program, including the eligibility and contract
requirements for the program. Congress recently amended the WOSB
Program in section 825 of the National Defense Authorization Act for
Fiscal Year 2015, Public Law 113-291, 128 Stat. 3292 (December 19,
2014) (2015 NDAA), which included language granting contracting
officers the authority to award sole source awards to WOSBs and EDWOSBs
and shortening the time period for SBA to conduct a required study to
determine the industries in which WOSBs are underrepresented in Federal
contracting. In addition, section 825 of the 2015 NDAA created a
requirement that a firm be certified as a WOSB or EDWOSB by a Federal
Agency, a State government, SBA, or a national certifying entity
approved by SBA.
On May 1, 2015, SBA published in the Federal Register a proposed
rule to implement the sole source authority for WOSBs and EDWOSBs and
the revised timeline for SBA to conduct a study to determine the
industries in which WOSBs are underrepresented. 80 FR 24846. The rule
proposed amendments to Sec. 127.101 to include sole source contracts as
a type of contracting assistance available under part 127. The rule
also proposed to revise Sec. 127.102 by adding the term ``sole source
contracts'' to the definitions of ``EDWOSB requirement'' and ``WOSB
requirement'' and establishing that the terms ``Substantial
underrepresentation'' and ``Underrepresentation'' would be determined
by the study to be conducted. The term ``sole source contracts'' was
also a proposed addition to Sec. 127.500, which concerns the industries
in which a contracting officer is authorized to restrict competition
under the WOSB program. This change to Sec. 127.500 proposed to
authorize contracting officers to award sole source contracts in those
industries as well. SBA also proposed amendments to Sec. 127.503 to
establish the conditions for awarding a sole source contract.
Essentially if, after conducting market research in an industry where a
WOSB or EDWOSB set-aside is authorized, a contracting officer cannot
identify two or more WOSBs or EDWOSBs that can perform at a fair and
reasonable price but identifies one WOSB or EDWOSB that can perform at
a fair and reasonable price, a contract may be awarded on a sole source
basis, provided the value of the contract, including options, does not
exceed $6.5 million for manufacturing contracts and $4 million for all
other contracts. SBA also proposed to amend Sec. 127.507 to authorize
contracting officers to award sole source contracts in the WOSB program
if the contract requirement is valued at or below the simplified
acquisition threshold. Finally, the rule proposed to amend the protest
regulations in Sec. 127.600 to make them consistent with the protest
procedures for sole source contracts involving service-disabled veteran
owned small business concerns (SDVO SBC) (Sec. 125.24(a) and HUBZone
small business concerns (Sec. 126.800(a).
Paragraph (a) of Sec. 127.501 sets out that the agency will
designate ``the industries in which WOSBs are underrepresented and
substantially underrepresented'' by NAICS code. However, because
paragraph (b) uses the term ``disparity'' instead, SBA intended to
propose a technical amendment to this paragraph to replace that term
with ``underrepresentation''; such an amendment would make the
paragraph consistent with amendments to the definitions and other
sections of the WOSB regulations. This purely technical conforming
change to Sec. 127.501 is included in this final rule.
As explained in the proposed rule, SBA recognized that the new
certification requirement for WOSBs would require a more prolonged
rulemaking. Because SBA did not want to delay the implementation of the
WOSB sole source authority by combining it with the new certification
requirement, SBA did not propose any changes to implement the
certification requirement but rather indicated that it
[[Page 55020]]
would do so through a separate future rulemaking. SBA received 495
comments on the proposed rule. With the exception of comments which did
not set forth any rationale or make suggestions, SBA discusses and
responds fully to all the comments below.
II. Summary of Comments
Most of the comments supported the rule. Specifically, most of the
comments favored SBA's decision to quickly implement the sole source
authority granted by the 2015 NDAA. Many of the commenters noted that
they believe this authority and the quick implementation by SBA will
help WOSB and EDWOSB businesses, and will put the program on more equal
footing with SBA's other socio-economic contracting programs. In
addition, the comments supported incorporating the statutory authority
for sole source awards into the regulations and suggested no meaningful
changes to the proposed regulatory text. As such, this final rule
adopts the changes set forth in the proposed rule regarding sole source
awards to WOSBs and EDWOSBs.
The second most covered topic in the comments received pertained to
the language of the 2015 NDAA requiring the certification of WOSB and
EDWOSB firms. As noted above, SBA did not propose to address the
certification portion of the 2015 NDAA in the proposed rule because its
implementation is more complicated, could not be accomplished by merely
incorporating the statutory language into the regulations, and would
have delayed the implementation of the sole source authority
unnecessarily. In addition, SBA noted in the supplementary information
to the proposed rule that there is no evidence that Congress intended
to halt the existing WOSB Program until such time as SBA establishes
the infrastructure and issues regulations implementing the statutory
certification requirement. SBA continues to believe that the new WOSB
sole source authority can and should be implemented as quickly as
possible, using existing program rules and procedures, while SBA
proceeds with development of the certification requirement through a
separate rulemaking.
SBA believes that any certification process must be fair, efficient
and comprehensive, but should not be burdensome or prevent new WOSBs
and EDWOSBs from entering into the Federal marketplace. SBA wants to
balance the need to protect the Government and other participants from
fraud, with the goal of increasing WOSB and EDWOSB participation in the
program. SBA believes that this process should be implemented in a
systematic and thoughtful manner, and that increased public
participation in the process will help SBA develop the best possible
certification program.
The comments pertaining to certification of WOSBs and EDWOSBs were
varied and covered a wide range of topics. SBA is in the process of
developing its strategy for implementation of the certification
language in the 2015 NDAA. SBA will consider the comments relating to
certification received in response to this proposed rule when drafting
the rule implementing the certification requirement. The certification
rulemaking will give the public an opportunity to provide SBA with
comments relating to SBA's proposed approach to the certification
process and assist SBA in crafting the best possible certification
program.
SBA also received several comments on the definitional changes
related to the mandatory study to determine the industries in which
WOSBs are underrepresented. The comments were generally supportive of
SBA's proposed changes. As such, this final rule adopts the proposed
changes to the definitions of the terms ``Underrepresentation,''
``Substantial underrepresentation,'' ``EDWOSB requirement,'' and ``WOSB
requirement'' in Sec. 127.102.
Several comments recommended that all NAICS codes should be
available for WOSB and EDWOSB set-asides. Determining the industries in
which WOSB and/or EDWOSB contracts are available is outside the scope
of this rule. In addition, section 825 of the 2015 NDAA specifically
requires the Administrator to conduct a study to identify the
industries in which small business concerns owned and controlled by
women are underrepresented with respect to Federal procurement
contracting in order to determine the industries in which WOSB and/or
EDWOSB contracts can be awarded.
III. Compliance With Executive Orders 12866, 12988, 13132, 13563, the
Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory
Flexibility Act (5 U.S.C. 601-612)
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
rule does not constitute a significant regulatory action under
Executive Order 12866. This is not a major rule under the Congressional
Review Act (CRA), 5 U.S.C. 800.
Executive Order 12988
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.
Executive Order 13132
For the purpose of Executive Order 13132, SBA has determined that
the rule will not have substantial direct effects 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 SBA has determined that this rule has no
federalism implications warranting the preparation of a federalism
assessment.
Executive Order 13563
A description of the need for this regulatory action, the benefits
and costs associated with this action, and any alternatives are
included in the Initial Regulatory Flexibility Analysis. In drafting
this rule, SBA considered input submitted by three coalitions of
women's groups representing women-owned small businesses that support
this rule and encourage its quick implementation.
Paperwork Reduction Act, 44 U.S.C., Ch. 35
For the purpose of the Paperwork Reduction Act, SBA has determined
that this proposed rule does not impose additional reporting or
recordkeeping requirements.
Regulatory Flexibility Act, 5 U.S.C., 601-612
According to the Regulatory Flexibility Act (RFA), when an agency
issues a rulemaking, it must prepare a regulatory flexibility analysis
to address the impact of the rule on small entities. In accordance with
this requirement, SBA has prepared a Final Regulatory Flexibility
Analysis addressing the impact of this rule.
1. What are the need for and objective of this final rule?
This final rule is necessary to implement section 825 of the
National Defense Authorization Act for Fiscal Year 2015, Public Law
113-291, December 19, 2014, 128 Stat. 3292 (2015 NDAA). Section 825 of
the 2015 NDAA included language granting contracting officers the
authority to award sole source contracts to Women-Owned Small
Businesses (WOSBs) and Economically Disadvantaged Women-
[[Page 55021]]
Owned Small Businesses (EDWOSBs). The purpose of this rule is to
establish the procedures whereby Federal agencies may award sole source
contracts to WOSBs and EDWOSBs and to provide a mechanism to protest
such awards. The rule provides an additional tool for Federal agencies
to ensure that WOSBs have an equal opportunity to participate in
Federal contracting and ensures consistency among SBA's socio-economic
small business contracting programs. The objectives of this final rule
are to put the WOSB Program on a level playing field with other SBA
government contracting programs with sole source authority, and to
provide an additional, needed tool for agencies to meet the statutorily
mandated 5% prime contracting goal for WOSBs.
Section 825 of the 2015 NDAA also revised the timeline for SBA to
conduct a study to determine the industries in which WOSBs are
underrepresented. This final rule is necessary to allow SBA to conduct
the most reliable and relevant study of WOSB participation in Federal
contracting and comply with the new statutorily mandated timeline.
2. What is the legal basis for this final rule?
The legal basis for this final rule is section 825 of the National
Defense Authorization Act for Fiscal Year 2015, Public Law 113-291,
December 19, 2014, 128 Stat. 3292, which amended section 8(m) of the
Small Business Act, 15 U.S.C. 637(m).
3. What is SBA's description and estimate of the number of small
entities to which the rule will apply?
The RFA directs agencies to provide a description, and where
feasible, an estimate of the number of small business concerns that may
be affected by the rule. This final rule establishes a new procurement
mechanism to benefit WOSBs. Therefore, WOSBs and EDWOSBs available to
compete for Federal contracts under the WOSB Program are the specific
group of small business concerns most directly affected by this rule.
SBA searched the Dynamic Small Business Search (DSBS) database and
determined that there were approximately 34,000 firms listed as either
WOSBs or EDWOSBs under the WOSB Program. In addition, according to the
fiscal year 2013 small business goaling report, there were a little
over 250,000 actions concerning women-owned small businesses and the
total dollar value of those actions was approximately $15 billion. An
analysis of the Federal Procurement Data System from April 1, 2011,
(the implementation date of the WOSB Program) through January 1, 2013,
revealed that there were approximately 26,712 women-owned small
business concerns, including 131 EDWOSBs and 388 WOSBs eligible under
the WOSB Program, that received Federal contract awards, task or
delivery orders, and modifications to existing contracts.
Therefore, this rule could affect a smaller number of EDWOSBs and
WOSBs than those eligible under the WOSB Program. We note that the sole
source authority can only be used where a contracting officer conducts
market research in an industry where a WOSB or EDWOSB set-aside is
authorized, and the contracting officer cannot identify two or more
WOSBs or EDWOSBs that can perform at a fair and reasonable price, but
identifies one WOSB or EDWOSB that can perform. In addition, the sole
source authority for WOSBs and EDWOSBs is limited to contracts valued
at $6.5 million or less for manufacturing contracts and $4 million or
less for all other contracts.
Nonetheless, we believe that this rule may have a significant
positive economic impact on EDWOSB concerns competing for Federal
contracting opportunities in industries determined by SBA to be
underrepresented by WOSB concerns and likewise may positively affect
WOSB concerns eligible under the WOSB Program competing in industries
determined by SBA to be substantially underrepresented by WOSB
concerns, since the sole source authority will still provide greater
access to Federal contracting opportunities.
4. What are the projected reporting, recordkeeping, Paperwork Reduction
Act, and other compliance requirements?
SBA has determined that this rule does not impose additional
reporting or recordkeeping requirements.
5. What relevant federal rules may duplicate, overlap, or conflict with
this rule?
SBA has not identified any relevant Federal rules currently in
effect that duplicate this rule. The sole source mechanism of the WOSB
program will be an addition to the procurement mechanisms available
under the existing small business contracting programs that agencies
currently administer, such as the HUBZone Program, the Service-Disabled
Veteran-Owned (SDVO) Small Business Program, and the 8(a) Business
Development Program. The sole source mechanism for WOSBs and EDWOSBs is
only authorized where a contracting officer conducts market research in
an industry where a WOSB or EDWOSB set aside is authorized, and the
contracting officer cannot identify two or more WOSBs or EDWOSBs that
can perform at a fair and reasonable price, but identifies one WOSB or
EDWOSB that can perform (and so long as the value of the contract,
including options, does not exceed $6.5 million for manufacturing
contracts and $4 million for all other contracts). Therefore, the
addition of the sole source mechanism for WOSBs and EDWOSBs should
complement rather than conflict with the goals of existing small
business procurement programs.
SBA believes that the Federal Acquisition Regulations (FAR) will
need to be amended to include this authority so that there is no
conflict between the SBA's rules and the FAR.
6. What significant alternatives did SBA consider that accomplish the
stated objectives and minimize and significant economic impact on small
entities?
The RFA requires agencies to identify alternatives to the rule in
an effort to minimize any significant economic impact of the rule on
small entities. The statutory authority for the sole source awards sets
forth specific criteria, including dollar value thresholds for the
awards. Therefore, the regulations must implement the statutory
provisions, and there are no alternatives for these regulations.
List of Subjects in 13 CFR Part 127
Government contracts, Reporting and recordkeeping requirements,
Small businesses.
Accordingly, for the reasons stated in the preamble, SBA amends 13
CFR part 127 as follows:
PART 127--WOMEN-OWNED SMALL BUSINESS FEDERAL CONTRACT PROGRAM
0
1. The authority for part 127 continues to read as follows:
Authority: 15 U.S.C. 632, 634(b)(6), 637(m), and 644.
0
2. Revise Sec. 127.101 to read as follows:
Sec. 127.101 What type of assistance is available under this part?
This part authorizes contracting officers to restrict competition
or award sole source contracts or orders to eligible Economically
Disadvantaged Women-Owned Small Businesses (EDWOSBs) for certain
Federal contracts or orders in industries in which the Small Business
Administration (SBA) determines that WOSBs are underrepresented in
Federal
[[Page 55022]]
procurement. It also authorizes contracting officers to restrict
competition or award sole source contracts or orders to eligible WOSBs
for certain Federal contracts or orders in industries in which SBA
determines that WOSBs are substantially underrepresented in Federal
procurement and has waived the economically disadvantaged requirement.
0
3. Amend Sec. 127.102 by revising the definitions of the terms
``EDWOSB requirement'', ``Substantial underrepresentation'',
``Underrepresentation'', and ``WOSB requirement'' to read as follows:
Sec. 127.102 What are the definitions of the terms used in this part?
* * * * *
EDWOSB requirement means a Federal requirement for services or
supplies for which a contracting officer has restricted competition or
awarded a sole source contract or order to eligible EDWOSBs, including
Multiple Award Contracts, partial set-asides, reserves, sole source
awards, and orders set aside for EDWOSBs issued against a Multiple
Award Contract.
* * * * *
Substantial underrepresentation is determined by a study using a
reliable and relevant methodology.
* * * * *
Underrepresentation is determined by a study using a reliable and
relevant methodology.
* * * * *
WOSB requirement means a Federal requirement for services or
supplies for which a contracting officer has restricted competition or
awarded a sole source contract or order to eligible WOSBs, including
Multiple Award Contracts, partial set-asides, reserves, sole source
awards, and orders set aside for WOSBs issued against a Multiple Award
Contract.
0
4. Revise Sec. 127.500 to read as follows:
Sec. 127.500 In what industries is a contracting officer authorized
to restrict competition or make a sole source award under this part?
A contracting officer may restrict competition or make a sole
source award under this part only in those industries in which SBA has
determined that WOSBs are underrepresented or substantially
underrepresented in Federal procurement, as specified in Sec. 127.501.
Sec. 127.501 [Amended]
0
5. Amend Sec. 127.501 by removing the word ``disparity'' in the two
places where it appears in paragraph (b) and adding the word
``underrepresentation'' in its place.
0
6. Amend Sec. 127.503 as follows:
0
a. Revise the section heading;
0
b. Revise paragraph (a) subject heading and paragraph (b) subject
heading;
0
c. Redesignate paragraphs (c), (d), (e) and (f) as paragraphs (e), (f),
(g) and (h); and
0
d. Add new paragraphs (c) and (d).
The revisions and additions read as follows:
Sec. 127.503 When is a contracting officer authorized to restrict
competition or award a sole source contract or order under this part?
(a) Competition restricted to EDWOSBs. * * *
(b) Competition restricted to WOSBs. * * *
(c) Sole source awards to EDWOSBs. For requirements in industries
designated by SBA as underrepresented pursuant to Sec. 127.501, a
contracting officer may issue a sole source award to an EDWOSB when the
contacting officer determines that:
(1) The EDWOSB is a responsible contractor with respect to
performance of the requirement and the contracting officer does not
have a reasonable expectation that 2 or more EDWOSBs will submit
offers;
(2) The anticipated award price of the contract (including options)
will not exceed $6,500,000 in the case of a contract assigned a North
American Industry Classification System (NAICS) code for manufacturing,
or $4,000,000 in the case of any other contract opportunity; and
(3) In the estimation of the contracting officer, the award can be
made at a fair and reasonable price.
(d) Sole source awards to WOSBs. For requirements in industries
designated by SBA as substantially underrepresented pursuant to Sec.
127.501, a contracting officer may issue a sole source award to a WOSB
when the contacting officer determines that:
(1) The WOSB is a responsible contractor with respect to
performance of the requirement and the contracting officer does not
have a reasonable expectation that 2 or more WOSBs will submit offers;
(2) The anticipated award price of the contract (including options)
will not exceed $6,500,000 in the case of a contract assigned a NAICS
code for manufacturing, or $4,000,000 in the case of any other contract
opportunity; and
(3) In the estimation of the contracting officer, the award can be
made at a fair and reasonable price.
* * * * *
0
7. Revise Sec. 127.507 to read as follows:
Sec. 127.507 Are there EDWOSB and WOSB contracting opportunities at
or below the simplified acquisition threshold?
If the requirement is valued at or below the simplified acquisition
threshold, the contracting officer may set aside the requirement or
award the requirement on a sole source basis as set forth in Sec.
127.503.
0
8. Revise Sec. 127.600 to read as follows:
Sec. 127.600 Who may protest the status of a concern as an EDWOSB or
WOSB?
(a) For sole source procurements. SBA or the contracting officer
may protest the proposed awardee's EDWOSB or WOSB status.
(b) For all other EDWOSB or WOSB requirements. An interested party
may protest the apparent successful offeror's EDWOSB or WOSB status.
Maria Contreras-Sweet,
Administrator.
[FR Doc. 2015-22927 Filed 9-11-15; 8:45 am]
BILLING CODE 8025-01-P