Federal Acquisition Regulation: Protests of Orders Set Aside for Small Business

<RULE> DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION <CFR>48 CFR Part 19</CFR> <DEPDOC>[FAC 2024-06; FAR Case 2021-009, Item II; Docket No. FAR-2021-0010; Sequence No. 1]</DEPDOC> <RIN>RIN 9000-AO26</RIN> <SUBJECT>Federal Acquisition Regulation: Protests of Orders Set Aside for Small Business</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> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement regulatory changes made by the Small Business Administration to update and clarify requirements associated with size and socioeconomic status protests in connection with multiple-award contract set-asides and reserves, and orders placed under multiple-award contracts. </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> Effective August 29, 2024. </DATES> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> For clarification of content, contact Ms. Dana Bowman, Procurement Analyst, at 202-803-3188 or by email at <E T="03">dana.bowman@gsa.gov.</E> For information pertaining to status or publication schedules contact the Regulatory Secretariat Division at 202-501-4755 or <E T="03">GSARegSec@gsa.gov.</E> Please cite FAC 2024-06, FAR Case 2021-009. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> DoD, GSA, and NASA published a proposed rule in the <E T="04">Federal Register</E> at 88 FR 68067 on October 3, 2023, to implement regulatory changes made by the Small Business Administration (SBA) in its final rules published in the <E T="04">Federal Register</E> on October 2, 2013 (78 FR 61113), October 16, 2020 (85 FR 66146), and on November 29, 2022 (87 FR 73400). For further details, please see the proposed rule. One respondent submitted comments on the proposed rule. <HD SOURCE="HD1">II. Discussion and Analysis</HD> The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows: <HD SOURCE="HD2">A. Summary of Significant Changes</HD> The following significant changes from the proposed rule are made in the final rule: The final rule amends FAR 19.302(d)(1) to add a new paragraph (ii)(C), which reflects language in SBA's October 16, 2020, final rule at 13 CFR 121.1004(a)(2)(ii) and specifies when a protest is due for orders placed under multiple-award contracts where the contracting officer requested rerepresentation for the order. In addition, the final rule FAR text at FAR 19.306(e)(1)(iii), 19.307(e)(1)(v), and 19.308(e)(1)(iii) is amended to clarify when a protest is due when written notification is not required and other communication means are used. <HD SOURCE="HD2">B. Analysis of Public Comments</HD> <E T="03">Comment:</E> The respondent recommended revising the proposed rule text at FAR 19.302(a)(2) to add a reference to SBA's regulations at 13 CFR 121.1001(a)(1) to provide significant clarity to the acquisition community, including small businesses. <E T="03">Response:</E> The final rule text at FAR 19.302(a)(2) includes a reference to SBA's regulations at 13 CFR 121.1001(a), which specify the parties that may protest the small business representation of an offeror in a specific offer for a contract and the parties that can protest competitive contracts. Therefore, to change the reference at FAR 19.302(a)(2) to 13 CFR 121.1001(a)(1) would omit the inclusion of the remaining paragraphs under paragraph (a), which are relevant to this FAR section. <E T="03">Comment:</E> The respondent recommended revising the proposed rule FAR text at 19.302(d)(1) to state each of the types of contracts and orders that are subject to the SBA's five-day protest deadline. (See 13 CFR 121.1004(a)(2)). <E T="03">Response:</E> The final rule FAR text at 19.302(d)(1)(i) and (ii) specifies the types of contracts and orders subject to the SBA five-day protest deadline. In addition, the final rule FAR text at 19.302(d) directs contracting officers to 13 CFR 121.1004 for SBA's regulations on timeliness. <E T="03">Comment:</E> The respondent stated that the FAR text should capture the language regarding certifications and recertifications that is stated in the SBA rules at 13 CFR 121.1004(a)(2)(ii). <E T="03">Response:</E> The final rule text has been revised to adopt this recommendation at FAR 19.302(d)(1)(ii)(C). <E T="03">Comment:</E> The respondent recommended revising the proposed rule FAR text at 19.302(d)(1) to remove the word “special” and the reference to FAR 15.503(a)(2) because 13 CFR 121.1004(a)(2) does not mention either. The respondent stated that this may confuse rather than clarify the timeliness rules for small businesses. The respondent provided an example of an instance when a contracting officer could provide notice of the identity of the apparently successful offeror, but the notice may not meet the requirements of FAR 15.503(a)(2), which could lead to confusion as to whether the five-day clock began. <E T="03">Response:</E> The special notification at FAR 19.302(d)(1) aligns with FAR 15.503(a)(2), which requires the contracting officer to provide preaward notices to offerors for small business set-asides made pursuant to FAR subpart 19.5, or the procedures in sections 19.1305, 19.1307, 19.1405, or 19.1505. This notification is referred to as a “special notification”; therefore, it is not necessary to modify the text to align with SBA's regulations. The rule did not amend this text or the reference, rather the rule merely moved the reference to immediately follow “special notification from the contracting officer” for clarity. While 13 CFR 121.1004(a)(2) does not use the term “special” or reference FAR 15.503(a)(2), the FAR provides guidance to contracting officers using terminology specific to Federal procurement. <E T="03">Comment:</E> The respondent stated it is unclear if the text at 19.302(d)(5) refers to protests challenging a firm's size at the time the firm submitted its application for a Schedule contract, or if the text is meant to challenge a firm's size at the time the firm submitted its application for set-aside orders under Multiple Award Schedule contracts. The respondent suggests revising the FAR text at 19.302(d)(5) to add the following language: “A protest under a Multiple Award Schedule will be timely if received by SBA <E T="03">at any time</E> prior to the expiration of the contract period, including renewals.” (emphasis added). <E T="03">Response:</E> The suggested revision to add “at any time” is in the existing FAR text at 19.302(d)(5). <E T="03">Comment:</E> The respondent recommended revising the FAR text at 19.306, 19.307, and 19.308 to implement SBA regulations at 13 CFR 126.801(d), 13 CFR 134.1004(a), and 13 CFR 127.603(c), respectively, to specify when protests are due for orders placed under multiple-award contracts where the contracting officer requested rerepresentation. The respondent believes the proposed changes will provide significant clarity to the acquisition community, including small businesses. <E T="03">Response:</E> The final rule implements SBA's regulations 13 CFR 126.801(d), 13 CFR 134.1004(a), and 127.603(c) at FAR 19.306(e)(1)(ii)(A), 19.307(e)(1)(ii)(A), and 19.308(e)(1)(ii)(A), respectively. <E T="03">Comment:</E> The respondent recommended revising the proposed rule FAR text at 19.306, 19.307, and 19.308 to make clear that for negotiated procurements, the fifth business day deadline applies to contracts that are set aside for HUBZone, small business firms, Service-Disabled Veteran-Owned Small Business (SDVOSB) firms, Women-Owned Small Business (WOSB) firms, and Economically-Disadvantaged Women-Owned Small Business (EDWOSB) firms, not only for set-aside orders placed under multiple-award contracts, in accordance with 13 CFR 121.1004(a)(2). The respondent states that the FAR text should use similar language and make clear that the five-business day deadline applies to HUBZone, SDVOSB, WOSB, and EDWOSB set-aside contracts. <E T="03">Response:</E> FAR 19.306, 19.307, and 19.308 address the procedures for protesting a firm's status as a HUBZone small business concern, an SDVOSB concern, an EDWOSB concern or a WOSB concern, respectively. The final rule FAR text at 19.306(e)(1)(ii), 19.307(e)(1)(ii), and 19.308(e)(1)(ii) specifies, for negotiated acquisitions, that an interested party shall submit its written protest to the contracting officer by the close of business on the fifth business day after notification by the contracting officer of the apparently successful offeror. <E T="03">Comment:</E> The respondent recommended changing the term “rerepresentation” in the FAR text at 19.306(e)(1)(ii)(A), 19.307(e)(1)(ii)(A), and 19.308(e)(1)(ii)(A) to “recertification” to ensure consistency and to avoid confusion. The respondent indicated that the SBA regulations refer to recertification, as opposed to rerepresentation, and that the SBA has developed case law regarding what constitutes a request for recertification. <E T="03">Response:</E> The FAR does not automatically replicate terminology used in SBA's regulations. In this case, the FAR has long used the terms “representation” and “rerepresentation” in lieu of the terms “certification” and “recertification” to describe how an entity addresses its size status. This difference is consistent with a longstanding policy, set forth at 41 U.S.C. 1304(b) and FAR 1.107, to limit the use of cer ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 27k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━