Daily Rules, Proposed Rules, and Notices of the Federal Government
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* Mail: General Services Administration, Regulatory Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE., 7th Floor, Washington, DC 20417.
DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to revise paragraph (b)(2) of FAR 19.502-2, “Total small business set-asides,” to clarify that contracting officers shall set aside acquisitions for research and development (R&D) in excess of the simplified acquisition threshold when the market research conducted in accordance with FAR part 10 indicates there are small businesses capable of providing the best scientific and technological approaches. It is also proposed that FAR 35.004 be amended to include a reference to this FAR cite, because this area of the FAR addresses the steps Federal agencies may use to expand sources for R&D support.
This proposed rule responds to a request from the Small Business Administration (SBA) to review the last sentence in FAR 19.502(b)(2) which reads: “In making R&D small business set-asides, there must also be a reasonable expectation of obtaining from small businesses the best scientific and technological sources consistent with the demands of the proposed acquisition for the best mix of cost, performances, and schedules.” The SBA advises that this language has been interpreted as an additional and unique condition that must be met before a contracting officer can proceed with a small business set-aside for research and development.
FAR 19.502-2(b) establishes the general requirements for a total small business set-asides above the simplified acquisition threshold: (1) That offers will be obtained from at least two responsible small business concerns offering the products of different small business concerns; and (2) That the award from the set-aside will be made at fair market prices.
This rule proposes to further clarify that the basis for the contracting officer's decision to set-aside or not to set-aside an acquisition for R&D support above the simplified acquisition threshold lies in the objective evidence obtained from the market research conducted. This clarification is intended to remove the potential barrier for small business previously noted by the SBA, as the requirement to conduct market research in advance of a small business set-aside is not a new or additional requirement, and applies to all small business set-asides.
DoD, GSA, and NASA are proposing to amend FAR 19.502-2, “Setting aside acquisitions” by redesignating the last sentence in paragraph (b)(2) as a new paragraph (b)(3), to clarify that for R&D small business set-asides, there must be a reasonable expectation that, as a result of the market research performed, small businesses are capable of providing the best scientific and technological approaches. The additional statement “consistent with the demands of the proposed acquisition for the best mix of cost, performance, and schedules” has been removed.
FAR 35.004 is also amended to add a new reference at the end of paragraph (b) to 19.502(b)(3), for guidance on R&D set-asides.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. 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.
The Department of Defense (DoD), the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA) do not expect this proposed rule to 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,
DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by the rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C 610 (FAR Case 2015-015), in correspondence.
The proposed rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 19 and 35 as set forth below:
1. The authority citation for 48 CFR parts 19 and 35 is revised to read as follows:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
2. Amend section 19.502-2 by revising paragraph (b) to read as follows:
(b) Before setting aside an acquisition under this paragraph, refer to 19.203(c). The contracting officer shall set aside
(1) That offers will be obtained from at least two responsible small business concerns offering the products of different small business concerns (see paragraph (c) of this section);
(2) That award will be made at fair market prices. Total small business set-asides shall not be made unless such a reasonable expectation exists (see 19.502-3 as to partial set-asides). Although past acquisition history of an item or similar items is always important, it is not the only factor to be considered in determining whether a reasonable expectation exists; and
(3) When considering research and development small business set-asides, as a result of the market research performed in accordance with part 10, that there are small businesses capable of providing the best scientific and technological approaches.
3. Amend section 35.004 by adding paragraph (c) to read as follows:
(c) See 19.502(b)(3) for information regarding set-asides of R&D requirements.