Federal Acquisition Regulation: Certification of Service-Disabled Veteran-Owned Small Businesses

<RULE> DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION <CFR>48 CFR Parts 2, 6, 9, 18, 19, and 52</CFR> <DEPDOC>[FAC 2025-02; FAR Case 2022-009, Item II; Docket No. FAR-2022-0009; Sequence No. 1]</DEPDOC> <RIN>RIN 9000-AO46</RIN> <SUBJECT>Federal Acquisition Regulation: Certification of Service-Disabled Veteran-Owned Small Businesses</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 have adopted as final, without change, an interim rule amending the Federal Acquisition Regulation (FAR) to implement the final rules published by the Small Business Administration to implement sections of the National Defense Authorization Acts for Fiscal Years 2021 and 2022. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Effective December 16, 2024. </EFFDATE> <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 or publication schedules contact the Regulatory Secretariat Division at 202-501-4755 or <E T="03">GSARegSec@gsa.gov</E> . Please cite FAC 2025-02, FAR Case 2022-009. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> DoD, GSA, and NASA published an interim rule at 89 FR 13950 on February 23, 2024, to implement regulatory changes made by the Small Business Administration (SBA) in its final rules published on November 29, 2022, at 87 FR 73400 and at 88 FR 42592 on July 3, 2023, to implement section 862 of the William M. (Mac) Thornberry National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021 (Pub. L. 116-283; 15 U.S.C. 657f). This final rule also partially implements section 863 of the NDAA for FY 2022 (Pub. L. 117-81; 15 U.S.C. 634(i)), as implemented by SBA in its final rule published on April 27, 2023, at 88 FR 26164. For further details please see the interim rule. Three respondents submitted comments on the interim 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> There are no significant changes from the interim rule. <HD SOURCE="HD2">B. Analysis of Public Comments</HD> <HD SOURCE="HD3">1. Exceptions to Implementation</HD> <E T="03">Comment:</E> One respondent recommended the grace period for certification be extended to allow businesses additional time to comply with the new requirements. <E T="03">Response:</E> This rule implements section 862 of the NDAA for FY 2021. Section 862 provides for a one-year grace period after the transfer date of January 1, 2023, for service-disabled veteran-owned small businesses (SDVOSBs) to submit an application for certification to SBA. Therefore, since the grace period is statutory, it cannot be extended by the Councils. <E T="03">Comment:</E> One respondent recommended that SBA expand its outreach and support services to ensure that all interested businesses are able to successfully navigate the certification process. <E T="03">Response:</E> To implement SDVOSB certification, SBA established a website at <E T="03">https://veterans.certify.sba.gov.</E> This website streamlines and facilitates the SDVOSB certification process and provides links for SDVOSBs to obtain assistance, including both online and telephonic support. <HD SOURCE="HD3">2. Outside the Scope of the Rule.</HD> <E T="03">Comment:</E> One respondent submitted a comment that is unrelated to this case. <E T="03">Response:</E> This comment is outside of the scope of this rule. <E T="03">Comment:</E> One respondent took exception to the certification requirements for SDVOSBs and took exception to the three-year certification period for SDVOSBs, indicating that it is too long and may result in fraud. <E T="03">Response:</E> This rule implements regulatory changes made by the SBA in its final rules published on November 29, 2022, at 87 FR 73400 and at 88 FR 42592 on July 3, 2023. SBA regulations regarding the Veteran Small Business Certification Program, including SDVOSB certification requirements, are addressed at 13 CFR part 128. SBA's regulations regarding recertification requirements are implemented at 13 CFR 128.306. This rule simply implements SBA's regulations; therefore, this comment is outside the scope of this rule. <HD SOURCE="HD1">III. Applicability to Contracts at or Below the Simplified Acquisition Threshold (SAT), for Commercial Products (Including Commercially Available Off-the-Shelf (COTS) Items), or for Commercial Services</HD> This rule amends 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; 52.213-4, Terms and Conditions- Simplified Acquisitions (Other Than Commercial Products and Commercial Services); 52.219-1, Small Business Program Representations; 52.219-8, Utilization of Small Business Concerns; 52.219-27, Notice of Set-Aside for, or Sole-Source Award to, Service-Disabled Veteran-Owned Small Business (SDVOSB) Concerns Eligible Under the SDVOSB Program; 52.219-28, Post-Award Small Business Program Rerepresentation; and 52.244-6, Subcontracts for Commercial Products and Commercial Services. These provisions and clauses continue to apply to acquisitions at or below the SAT and to acquisitions for commercial products, including COTS items, and commercial services. This rule applies section 862 of the NDAA for FY 2021 and section 863 of the NDAA for FY 2022, as implemented by this rule, to contracts at or below the SAT and to commercial services and commercial products, including COTS items. <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 has made 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 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 has made a determination to apply this statute to acquisitions for commercial products and commercial services. The Administrator for Federal Procurement Policy has made a determination to apply this statute to acquisitions for COTS items. <HD SOURCE="HD1">IV. Expected Impact of the Rule</HD> This rule is expected to impact Government and contractor operations. As of January 1, 2024, contracting officers are required to check the System for Award Management (SAM) to verify that a concern is designated as an SDVOSB certified by SBA for sole-source or set-aside awards under the SDVOSB Program. If the concern is not designated in SAM as a certified SDVOSB, the contracting officer will be required to check SBA's Veteran Small Business Certification Program database to determine if the concern submitted an application for certification to SBA on or before December 31, 2023. If a concern submitted an application for certification to SBA on or before December 31, 2023, and represented its status as an SDVOSB concern in SAM, contracting officers may rely on a concern's representation in SAM. As of January 1, 2024, a small business concern that pursues a sole-source or set-aside award under the SDVOSB Program is required to be certified by SBA, or the concern must have both submitted a complete application for certification to SBA on or before December 31, 2023, and represented its status as an SDVOSB concern in SAM. A small business concern that submitted a complete application for certification to SBA on or before December 31, 2023, may continue to represent its status as an SDVOSB in SAM until SBA makes its final eligibility determination. This rule will not impact previous ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 21k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━