Federal Acquisition Regulation: HUBZone Program

DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION <CFR>48 CFR Parts 19 and 52</CFR> <DEPDOC>[FAR Case 2023-013; Docket No. FAR-2023-0013; Sequence No. 1]</DEPDOC> <RIN>RIN 9000-AO36</RIN> <SUBJECT>Federal Acquisition Regulation: HUBZone Program</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA. <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to implement a final rule published by the Small Business Administration (SBA) to implement a section of the National Defense Authorization Act for Fiscal Year 2022. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Interested parties should submit written comments to the Regulatory Secretariat Division at the address shown below on or before August 6, 2024 to be considered in the formation of the final rule. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Submit comments in response to FAR Case 2023-013 to the Federal eRulemaking portal at <E T="03">https://www.regulations.gov</E> by searching for “FAR Case 2023-013”. Select the link “Comment Now” that corresponds with “FAR Case 2023-013”. Follow the instructions provided on the “Comment Now” screen. Please include your name, company name (if any), and “FAR Case 2023-013” on your attached document. If your comment cannot be submitted using <E T="03">https://www.regulations.gov,</E> call or email the point of contact in the <E T="02">FOR FURTHER INFORMATION CONTACT</E> section of this document for alternate instructions. <E T="03">Instructions:</E> Please submit comments only and cite “FAR Case 2023-013” in all correspondence related to this case. Comments received generally will be posted without change to <E T="03">https://www.regulations.gov,</E> including any personal and/or business confidential information provided. Public comments may be submitted as an individual, as an organization, or anonymously (see frequently asked questions at <E T="03">https://www.regulations.gov/faq</E> ). To confirm receipt of your comment(s), please check <E T="03">https://www.regulations.gov,</E> approximately two to three days after submission to verify posting. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> For clarification of content, contact Ms. Carrie Moore, Procurement Analyst, at 571-300-5917, or by email at <E T="03">carrie.moore@gsa.gov.</E> For information pertaining to status, publication schedules, or alternate instructions for submitting comments if <E T="03">https://www.regulations.gov</E> cannot be used, contact the Regulatory Secretariat Division at 202-501-4755 or <E T="03">GSARegSec@gsa.gov.</E> Please cite FAR Case 2023-013. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> DoD, GSA, and NASA are proposing to amend the FAR to implement regulatory changes made by the SBA in its final rule published on April 10, 2023 (88 FR 21086) to implement section 864 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022 (Pub. L. 117-81). Section 864 authorizes the SBA Office of Hearings and Appeals (OHA) to decide all appeals from formal status protest determinations in connection with the status of a Historically Underutilized Business Zone (HUBZone) concern. Prior to section 864 and SBA's final rule, appeals of HUBZone status determinations were decided by the SBA's Associate Administrator, Office of Government Contracting and Business Development (AA/GC&BD). This rulemaking proposes to implement SBA's final rule, dated April 10, 2023, to specify in the FAR that OHA is responsible for deciding all appeals of status protest determinations for a HUBZone concern, identify the information that must be included in an appeal of a HUBZone status protest determination, and remove the requirement for a HUBZone concern to represent its status in the System for Award Management (SAM), as it is no longer necessary since HUBZone concerns are certified by the SBA. <HD SOURCE="HD1">II. Discussion and Analysis</HD> The proposed changes to the FAR and the rationale are summarized as follows: <FP SOURCE="FP-1">—Update FAR 19.306 with the title of the office that decides HUBZone protests, and the procedures for appealing a HUBZone status protest decision to align with SBA's regulations at 13 CFR 126.800 through 126.805 and 13 CFR 134.1301 through 134.1316; and</FP> <FP SOURCE="FP-1">—Modify FAR provisions 52.212-3, Offeror Representations and Certifications—Commercial Products and Commercial Services, and 52.219-1, Small Business Program Representations, and FAR clause 52.219-28, Post Award Small Business Program Representation, to remove the existing HUBZone small business concern representation, since HUBZone small business concerns must be certified by the SBA in order to be eligible for HUBZone sole-source awards and awards set aside for HUBZone concerns. The representation is currently in these provisions and clauses as a mechanism for a HUBZone concern to indicate that it will attempt to maintain an employment rate of HUBZone residents of 35 percent of its employees during performance of a HUBZone contract. This rulemaking proposes to add this statement to FAR clause 52.219-3, Notice of HUBZone Set-Aside or Sole-Source Award, to include the requirement for HUBZone concerns to attempt to maintain the required employment rate of HUBZone employees during performance of the contract as a term and condition of the contract. HUBZone joint ventures will continue to be required to represent their status as the SBA does not certify HUBZone joint ventures. The definition of HUBZone small business concern in FAR clause 52.219-3 is also updated to conform with the definition of that same term at FAR 2.101.</FP> <HD SOURCE="HD1">III. Applicability to Contracts at or Below the Simplified Acquisition Threshold (SAT) and for Commercial Products (Including Commercially Available Off-the-Shelf (COTS) Items) or for Commercial Services</HD> This rulemaking proposes to amend the following provisions and clauses at FAR: 52.212-3, Offeror Representations and Certifications—Commercial Products and Commercial Services; 52.212-5, Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Products and Commercial Services; 52.219-1, Small Business Program Representations; 52.219-3, Notice of HUBZone Set-Aside or Sole-Source Award, and 52.219-28, Post-Award Small Business Program Rerepresentation. However, this rulemaking does not change the applicability of these provisions and clauses, which continue to apply to contracts valued at or below the SAT, and contracts for commercial products, including COTS items, or commercial services. This rulemaking proposes to apply section 864 of the National Defense Authorization Act for Fiscal Year 2022 (Pub. L. 117-81) to acquisitions at or below the SAT and to acquisitions for commercial products, including COTS items, and commercial services, as OHA has the authority, and is the only entity, to decide all HUBZone status protest appeals. As a result, the section must be applied to acquisitions of these types to ensure that all concerns that can appeal a HUBZone status protest decision, regardless of the subject contract's dollar value or commerciality, have a process for doing so. <HD SOURCE="HD2">A. Applicability to Contracts at or Below the Simplified Acquisition Threshold</HD> 41 U.S.C. 1905 governs the applicability of laws to acquisitions at or below the SAT. Section 1905 generally limits the applicability of new laws when agencies are making acquisitions at or below the SAT, but provides that such acquisitions will not be exempt from a provision of law under certain circumstances, including when the Federal Acquisition Regulatory Council (FAR Council) makes a written determination and finding that it would not be in the best interest of the Federal Government to exempt contracts and subcontracts in amounts not greater than the SAT from the provision of law. The FAR Council intends to make a determination to apply this statute to acquisitions at or below the SAT. <HD SOURCE="HD2">B. Applicability to Contracts for the Acquisition of Commercial Products and Commercial Services, Including Commercially Available Off-the-Shelf (COTS) Items</HD> 41 U.S.C. 1906 governs the applicability of laws to contracts for the acquisition of commercial products and commercial services and is intended to limit the applicability of laws to contracts for the acquisition of commercial products and commercial services. Section 1906 provides that if the FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt commercial products and commercial services contracts, the provision of law will apply to contracts for the acquisition of commercial products and commercial services. 41 U.S.C. 1907 states that acquisitions of COTS items will be exempt from certain provisions of law unless the Administrator for Federal Procurement Policy makes a written determination and finds that it would not be in the best interest of the Federal Government to exempt contracts for the procurement of COTS items. The FAR Council intends to make a determination to apply this statute to acquisitions for commercial products and commercial services. The Administrator for Federal Procurement Policy intends to make a determination to apply this statute to acquisitions for COTS items. <HD SOURCE="HD1">IV. Expected Impact of the Rule</HD> This proposed rule is expected to impact Government and contractor operations. As a result of this proposed rule, interested parties seeking to appeal a HUBZone status pr ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 31k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━