89 FR 96 pgs. 42816-42820 - Women-Owned Small Business Federal Contract Program Updates and Clarifications
Type: PRORULEVolume: 89Number: 96Pages: 42816 - 42820
Pages: 42816, 42817, 42818, 42819, 42820Docket number: [Docket ID SBA-2024-0004]
FR document: [FR Doc. 2024-10518 Filed 5-15-24; 8:45 am]
Agency: Small Business Administration
Official PDF Version: PDF Version
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SMALL BUSINESS ADMINISTRATION
13 CFR Parts 124, 127, and 128
[Docket ID SBA-2024-0004]
RIN 3245-AI04
Women-Owned Small Business Federal Contract Program Updates and Clarifications
AGENCY:
U.S. Small Business Administration.
ACTION:
Notice of proposed rulemaking.
SUMMARY:
This proposed rule would make several changes to the Small Business Administration's (SBA or Agency) Women-Owned Small Business Federal Contract (WOSB) Program regulations, including adding definitions that are not currently included in the regulations and conforming the regulations to current statutes that have not yet been integrated. The rule would also adopt similar language to that used in SBA's other government contracting program regulations regarding the length of time that a firm that has been declined three times must wait before reapplying to the WOSB Program, and limits on outside employment. The Agency requests comment on all aspects of this proposed rule.
DATES:
Comments must be received on or before July 15, 2024.
ADDRESSES:
You may submit comments, identified by RIN 3245-AI04 or Docket No. 2024-0004, by any of the following methods:
• Federal eRulemaking Portal: https://www.regulations.gov and follow the instructions for submitting comments.
• Mail (for paper, disk, or CD-ROM submissions): Harry T. Alexander Jr., Business Opportunity Specialist, Office of Contracting Assistance, U.S. Small Business Administration, 409 Third Street SW, Washington, DC 20416.
Instructions: All submissions received must include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. All comments received will be posted on https://www.regulations.gov. If you wish to submit confidential business information (CBI) as defined in the User Notice at https://www.regulations.gov, please submit the comments to Harry T. Alexander Jr. and highlight the information that you consider to be CBI and explain why you believe this information should be held confidential.
FOR FURTHER INFORMATION CONTACT:
Harry T. Alexander Jr., U.S. Small Business Administration, Office of Contracting Assistance, 409 Third Street SW, Washington, DC 20416; (202) 619-0314, harry.alexanderjr@sba.gov.
SUPPLEMENTARY INFORMATION:
SBA proposes to make changes to the process by which an application for certification is reviewed by SBA in order to implement a statutory amendment from the National Defense Authorization Act for Fiscal Year 2022 regarding the effects of a status determination on a small business concern. SBA also proposes to remove outdated references to the U.S. Department of Veterans Affairs Center for Verification and Evaluation, instead referring to SBA's Veteran Small Business Certification Program. The rule would also provide additional definitions of terms used in the regulations, attempt to provide consistency across the regulations used in SBA's other government contracting programs, and define who is authorized to represent a firm when validating or signing certification pages during the certification process.
Section-by-Section Analysis
Sections 124.106(a), 127.202(c), and 128.203(i)
Sections 124.106(a) (for the 8(a) Business Development (BD) program), 127.202(c) (for the women-owned small business (WOSB program), and 128.203(i) (for the veteran small business certification (VetCert) program) address limitations on outside employment that can affect a business concern's eligibility for participation in the 8(a) BD, WOSB, and VetCert programs based on a qualifying individual's lack of control. Basically, each of these provisions generally requires the qualifying individual to devote fulltime or the number of hours of normal operation to the business. Each also requires the business concern to demonstrate how a qualifying individual does in fact control the day-to-day operations of the business concern if the qualifying individual does devotes fewer hours to the business than its normal hours of operation. The language of the three provisions, however, is not identical. This has led to questions as to whether SBA intended different application of the control requirements for different programs. In order to clear up any confusion, this rule proposes to change the wording of the three provisions to make them identical to ensure that the control requirement is consistently applied. Basically, the rule would align the language of the restrictions in 8(a) BD and WOSB programs to the current restriction in the VetCert Program.
Section 127.102
Section 127.102 sets out the definitions for the Women-Owned Small Business (WOSB) Federal Contract Program. This rule first proposes to add a definition for the term "Applicant" as a definition was not included in the previous version of the regulations and appears in the regulations of SBA's other government contracting programs. SBA believes that including this definition will provide consistency in the rules that apply to its various certification programs and make clear that a concern applying for certification in the WOSB Program is an "Applicant."
The proposed rule would amend the current definition of the term "System for Award Management (SAM) (or any successor system)." SBA believes that the definition is outdated and should match the definition that is used in the FAR for consistency purposes.
The proposed rule would also remove the definition for "WOSB Program Repository" as this definition refers to the old repository system that is no longer in use. SBA believes that removing this definition, which is not used elsewhere in 13 CFR part 127, will alleviate any confusion.
[top] Lastly, the proposed rule would amend the current definition of "Interested party," limiting it to certified WOSB concerns or concerns that have a pending application for WOSB certification, either at SBA or a third-party certifier, that submit an offer for a specific Economically Disadvantaged Women-Owned Small Business (EDWOSB) or WOSB requirement, rather than any concern
Section 127.202
Current §?127.202 generally requires that a woman devote sufficient time to the business with a rebuttable presumption that the business is not a WOSB if a woman devotes fewer hours to the business than its normal hours of operation. Where the presumption applies, the woman must provide evidence to SBA that she has ultimate managerial and supervisory control over both the long-term decision making and day-to-day management and administration of the business. This rule proposes to align this language to the current restriction in the Veteran Small Business Certification Program. The business still will be generally required to have the qualified woman that controls the concern devote the woman's full time to the business during the business's normal hours of operation. The business may, however, demonstrate to SBA that the woman has ultimate managerial and supervisory control over both the long-term decision making and day-to-day management of the business.
Section 127.300
The proposed rule would amend the outdated references in §?127.300(a)(2) and (b)(3) to certifications made by the U.S. Department of Veterans Affairs (VA) Center for Verification and Evaluation. Instead, the regulation would refer to SBA's Veteran Small Business Certification Program. SBA believes this change would resolve any confusion caused by reference to the VA's Verification Program, which no longer certifies veteran-owned or service-disabled veteran-owned small business concerns following its transfer to SBA pursuant to section 862 of the National Defense Authorization Act for Fiscal Year 2021.
The proposed rule would also amend §?127.300(c) by referring to SAM, in addition to the Dynamic Small Business Search (DSBS) system. This change would recognize that a concern that is a qualified WOSB or EDWOSB will be designated as such in both SAM and the DSBS system.
Section 127.303
The proposed rule would add a new paragraph and reorganize §?127.303(a)(1) to provide that a concern certified as a veteran-owned or service-disabled veteran-owned small business for the Veteran Small Business Certification Program and owned and controlled by one or more women may use documentation of its Veteran-Owned Small Business Concern (VOSB) or Service-Disabled Veteran-Owned Small Business Concern (SDVOSB) certification or more recent recertification in support of its application for WOSB certification. The proposed rule would further provide that if the concern is also seeking EDWOSB certification, it must submit documentation that demonstrates it is owned and controlled by one or more women who are economically disadvantaged in accordance with §?127.203. This change would recognize a concern's ability to use documentation from SBA's other certification program in support of its application for WOSB certification and refer to the current veteran-owned and service-disabled veteran-owned certification program.
Section 127.305
The proposed rule would incorporate the same language used in §?124.207 for purposes of applying to the 8(a) Business Development (BD) Program. Section 124.207 provides that a concern that has applied to the 8(a) BD program and has been declined three times within 18 months of the date of the first final Agency decision finding the concern ineligible cannot submit a new application for admission to the program until 12 months from the date of the third final Agency decision to decline. SBA seeks to provide consistency among its various certification programs and believes that an applicant that has applied three times within a relatively short timeframe and has not corrected its deficiencies should be required to wait 12 months before applying again. SBA wants to encourage concerns to submit accurate applications in the first instance and to fully respond to all deficiencies noted in its decline decisions.
Section 127.356(c)
The proposed rule would revise §?127.356(c) to provide consistency between §?127.356(c) and §?127.356(a) and (b). Currently, §?127.356(c) states that an approved third-party certifier must ensure that all of a concern's documents are uploaded in https://certify.sba.gov or any successor system. SBA believes that is inconsistent with SBA's intent that it is the responsibility of the concern, not the SBA-approved third-party certifier, to ensure that all its documents are uploaded. Section 127.356(a) and (b) require the applicant concern to apply directly with a third-party certifier and register in SAM. Consistent with paragraphs (a) and (b), SBA believes that it is the responsibility of the applicant concern, and not the third-party certifier, to ensure that all documents necessary to determine its eligibility for certification by an approved certifier are uploaded with its application. SBA believes this uniformity within the section will lead to less confusion about whose duty it is to make sure documents have been made available to SBA when a third-party certifier is involved. Furthermore, a system has not yet been put in place for a third-party certifier to upload the documents on behalf of the concern.
Section 127.504(a)
Section 127.504 permits a concern that has submitted a complete application for WOSB or EDWOSB certification to SBA or a third-party certifier and has not received a negative determination regarding that application to submit an offer for a competitive WOSB or EDWOSB award. The proposed rule would define "pending application," as this term is not currently defined in this section or elsewhere in the WOSB regulations. SBA believes providing this definition will lead to less confusion amongst concerns and contracting officers who have been unsure when an application is pending and believed an application to be pending at the point of application. This change will support the acquisition process for WOSB and EDWOSB set-asides.
Section 127.604(f)
[top] The proposed rule would add the language describing the effects of a status determination on a concern and the obligation of a concern to update the System for Award Management (or any successor system) within two business days of a final determination. This change would be made to implement a
Section 127.701
The proposed rule would remove this section entirely as it contains outdated language regarding the previous WOSB program and system whereby a concern certified its WOSB or EDWOSB status on SAM in relation with specific eligibility requirements. This section, in its entirety, is no longer necessary, as 13 CFR 127.304(f) and other WOSB program regulations specify that SBA will update DSBS and SAM to indicate that a concern has been certified by SBA as a WOSB and/or EDWOSB.
Request for Comments
SBA invites all interested parties to participate in this rulemaking by submitting written data, views, comments, and arguments on all aspects of this proposed rule. Comments that will provide the most assistance to SBA in implementing these changes will reference a specific portion of the proposed rule, explain the reason for any recommended change, and include data, information, or authority that support such recommended change. Comments submitted in a manner other than the methods listed above will not be considered comments on the proposed rule and may not receive a response from SBA.
Compliance With Executive Orders 12866, 12988, 13132, 13563, and the Paperwork Reduction Act (44 U.S.C. Ch. 35), the Regulatory Flexibility Act (5 U.S.C. 601-612)
Executive Order 12866
The Office of Management and Budget has determined that this proposed rule is not a "significant regulatory action" under Executive Order 12866. This proposed rule would amend the WOSB regulations to provide uniformity amongst SBA's government contracting programs and to clarify certain regulations that have been misunderstood by concerns and contract officers. As such, the proposed rule has no effect on the amount or dollar value of any Federal contract requirements or of any financial assistance provided through SBA. Therefore, the proposed rule is not likely to have an annual economic effect of $200 million or more, result in a major increase in costs or prices, or have a significant adverse effect on competition or the United States economy. In addition, this proposed rule does not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency, materially alter the budgetary impact of entitlements, grants, user fees, loan programs, or the rights and obligations of such recipients, nor raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive order.
Executive Order 13563
Executive Order 13563, Improving Regulation and Regulatory Review (January 18, 2011), requires agencies to adopt regulations through a process that involves public participation, and to the extent feasible, base regulations on the open exchange of information and perspectives from affected stakeholders and the public as a whole. SBA has developed this proposed rule in a manner consistent with these requirements, and the public will have the opportunity to provide comments following the publication of this proposed rule.
Executive Order 12988
This action meets applicable standards set forth in section 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
This proposed rule does not have Federalism implications as defined in Executive Order 13132. It 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, as specified in the Executive order. As such, it does not warrant the preparation of a Federalism Assessment.
Paperwork Reduction Act
The SBA has determined that this proposed rule does not impose additional reporting or recordkeeping requirements under the Paperwork Reduction Act, 44 U.S.C. chapter 35.
Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980, as amended (RFA), 5 U.S.C. 601-612, requires Federal agencies to prepare an initial regulatory flexibility analysis (IRFA) to consider the potential impact of the regulations on small entities. Small entities include small businesses, small not-for-profit organizations, and small governmental jurisdictions. Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an IRFA, if the rulemaking is not expected to have a significant economic impact on a substantial number of small entities.
This proposed rule would revise the WOSB regulations to update definitions and adopt similar language to that used in SBA's other government contracting program regulations. Specifically, the proposed rule would amend the length of time in which a firm that has been declined three times must wait before reapplying to the WOSB Program and remove reference to the 15-calendar day timeframe in which SBA will notify an applicant for certification to the WOSB Program that their application is either complete or incomplete. While SBA does not anticipate that this proposed rule would have a significant economic impact on any small business, we do welcome comments from any small business setting out how and to what degree this proposed rule would affect it economically. Therefore, the Administrator of SBA certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.
List of Subjects
13 CFR Part 124
Administrative practice and procedure, Government procurement, Government property, Small businesses.
13 CFR Part 127
Government contracts, Reporting and recordkeeping requirements, Small businesses.
13 CFR Part 128
Government contracts, Government procurement, Reporting and recordkeeping requirements, Small businesses, Technical assistance, Veterans.
Accordingly, for the reasons stated in the preamble, SBA proposes to amend 13 CFR parts 124, 127, and 128 as follows:
PART 124-8(a) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS STATUS DETERMINATIONS
1. The authority citation for part 124 continues to read as follows:
Authority:
15 U.S.C. 634(b)(6), 636(j), 637(a), 637(d), 644, 42 U.S.C. 9815; and Pub. L. 99-661, 100 Stat. 3816; Sec. 1207, Pub. L. 100-656, 102 Stat. 3853; Pub. L. 101-37, 103 Stat. 70; Pub. L. 101-574, 104 Stat. 2814; Sec. 8021, Pub. L. 108-87, 117 Stat. 1054; and Sec. 330, Pub. L. 116-260.
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2. Amend §?124.106 by:
a. Revising paragraphs (a)(3) and (4);
b. Redesignating paragraph (a)(5) as paragraph (a)(6); and
c. Adding a new paragraph (a)(5).
The revisions and addition read as follows:
§?124.106 When do disadvantaged individuals control an applicant or Participant?
(a) * * *
(3) One or more disadvantaged individuals who manage the applicant or Participant generally must devote full-time to the business concern during its normal hours of operations. The disadvantaged individual who holds the highest officer position of the business concern may not engage in outside employment that prevents the disadvantaged individual from devoting the time and attention to the concern necessary to control its management and daily business operations.
(4) Where a disadvantaged individual claiming to control a business concern devotes fewer hours to the business than its normal hours of operation, SBA will assume that the disadvantaged individual does not control the business concern, unless the concern demonstrates that the disadvantaged individual has ultimate managerial and supervisory control over both the long-term decision making and day-to-day management of the business.
(5) Any disadvantaged individual who seeks to engage in outside employment after certification must notify SBA of the nature and anticipated duration of the outside employment and demonstrate to SBA that the outside employment will not prevent the disadvantaged individual from controlling the business concern.
PART 127-WOMEN-OWNED SMALL BUSINESS FEDERAL CONTRACT PROGRAM
3. The authority citation for part 127 continues to read as follows:
Authority:
15 U.S.C. 632, 634(b)(6), 637(m), 644 and 657r.
4. Amend §?127.102 by:
a. Adding the definition of "Applicant" in alphabetical order;
b. Revising the definitions of "Interested party" and "System for Award Management (SAM) (or any successor system)"; and
c. Removing the definition of "WOSB Program Repository".
The addition and revisions read as follows:
§?127.102 What are the definitions of the terms used in this part?
Applicant means a firm applying for certification in the WOSB Certification Program.
Interested party means a concern certified as, or pending certification as, a WOSB or EDWOSB that submits an offer for a specific EDWOSB or WOSB requirement (including Multiple Award Contracts), any concern that submitted an offer in a full and open competition and its opportunity for award will be affected by a reserve of an award given to a WOSB or EDWOSB, the contracting activity's contracting officer, or SBA.
System for Award Management (SAM) (or any successor system) means the primary Government repository for prospective Federal awardee and Federal awardee information and the centralized Government system for certain contracting, grants, and other assistance-related processes. It includes-
(1) Data collected from prospective Federal Awardees required for the conduct of business with the Government;
(2) Prospective contractor-submitted annual representations and certifications in accordance with FAR subpart 4.12; and
(3) Identification of those parties excluded from receiving Federal Contracts, certain subcontracts, and certain types of Federal financial and non-financial assistance and benefits.
5. Amend §?127.202 by revising paragraph (c) to read as follows:
§?127.202 What are the requirements for control of an EDWOSB or WOSB?
(c) Limitation on outside employment. (1) A woman or economically-disadvantaged woman generally must devote full-time to the business concern during its normal hours of operations. The woman or economically-disadvantaged woman who holds the highest officer position of the business concern may not engage in outside employment that prevents her from devoting sufficient time and attention to the business concern to control its management and daily operations.
(2) Where a woman or economically disadvantaged woman claiming to control a business concern devotes fewer hours to the business than its normal hours of operation, SBA will assume that she does not control the business concern, unless the concern demonstrates that she has ultimate managerial and supervisory control over both the long-term decision making and day-to-day management and administration of the business.
(3) Any qualifying woman or economically disadvantage woman who seeks to engage in outside employment after certification must notify SBA of the nature and anticipated duration of the outside employment and demonstrate to SBA that the outside employment will not prevent her from controlling the business concern.
6. Amend §?127.300 by revising the section heading and paragraphs (a)(2), (b)(3), and (c) to read as follows:
§?127.300 How is a concern certified as an EDWOSB or WOSB?
(a) * * *
(2) A concern may submit evidence to SBA that it is a women-owned and controlled small business that is an SBA-certified participant in the Veteran Small Business Certification Program.
(b) * * *
(3) A concern may submit evidence to SBA that it is an economically disadvantaged women-owned and controlled small business that is a certified participant in the Veteran Small Business Certification Program.
(c) If SBA determines that the concern is a qualified WOSB or EDWOSB, it will issue a letter of certification and designate the concern as a certified WOSB or EDWOSB on the Dynamic Small Business Search (DSBS) system, SAM, or successor system.
7. Amend §?127.303 by:
a. Redesignating paragraph (a)(1)(iii) as paragraph (a)(1)(iv);
b. Adding new paragraph (a)(1)(iii);
c. Removing paragraph (a)(2); and
d. Redesignating paragraph (a)(3) as paragraph (a)(2).
The addition reads as follows:
§?127.303 What must a concern submit for certification?
(a) * * *
(1) * * *
[top] (iii) A concern that is certified by SBA as a veteran-owned or service-disabled veteran-owned small business for the Veteran Small Business Certification Program and is owned and controlled by one or more women may use documentation of its VOSB or SDVOSB certification or most recent recertification in support of its application for WOSB certification. If the concern is also seeking EDWOSB certification, the concern must also submit documentation demonstrating
8. Amend §?127.304 by revising paragraph (a) to read as follows:
§?127.304 How is an application for certification processed?
(a) The SBA's Director of Government Contracting (D/GC) or designee is authorized to approve or decline applications for certification. SBA must receive all required information and supporting documents before it will begin processing a concern's application. SBA will not process incomplete applications.
(1) SBA will advise each applicant after the receipt of an application whether the application is complete and suitable for evaluation and, if not, what additional information or clarification is required to complete the application.
(2) SBA will make its determination within ninety (90) calendar days after receipt of a complete package, whenever practicable.
9. Amend §?127.305 by revising paragraph (a) to read as follows:
§?127.305 May declined or decertified concerns seek recertification at a later date?
(a) A concern that SBA or a third-party certifier has declined or that SBA has decertified may seek certification after ninety (90) days from the date of decline or decertification if it believes that it has overcome all of the reasons for decline or decertification and is currently eligible. However, a concern that has been declined three times within 18 months of the date of the first final Agency decision finding the concern ineligible cannot submit a new application for admission to the program until 12 months from the date of the third final Agency decision to decline.
10. Amend §?127.356 by revising paragraph (c) to read as follows:
§?127.356 How does a concern obtain certification from an approved certifier?
(c) The concern must ensure that all documents necessary to determine its eligibility for certification by an approved certifier are uploaded in https://certify.sba.gov or any successor system.
11. Amend §?127.504 by adding a sentence to the end of the introductory text of paragraph (a) to read as follows:
§?127.504 What requirements must an EDWOSB or WOSB meet to be eligible for an EDWOSB or WOSB requirement?
(a) * * * An application is pending upon notification from SBA that the application is deemed complete and has sufficient documentation for full analysis.
12. Amend §?127.604 by adding paragraph (f)(5) to read as follows:
§?127.604 How will SBA process an EDWOSB or WOSB status protest?
(f) * * *
(5) Once a final determination has been made that a concern does not meet the requirements of a WOSB or EDWOSB, the concern cannot self-certify as a WOSB or EDWOSB, as applicable, for any WOSB or EDWOSB contract. If a concern does so, it may be in violation of criminal laws, including section 16(d) of the Small Business Act, 15 U.S.C. 645(d). If the concern has already certified itself as a WOSB or EDWOSB on a pending procurement, the concern must immediately inform the contracting officer for the procuring agency of its decertification.
(i) Not later than two days after the date on which a final determination is made, such concern must update its WOSB/EDWOSB status in the System for Award Management (or any successor system).
(ii) If a business concern fails to update its WOSB/EDWOSB status in the System for Award Management (or any successor system) in response to the final determination, SBA will make such update within two business days of the concern's failure to do so.
(iii) A concern required to make an update in the System for Award Management (or any successor system) shall notify a contracting officer for each contract with respect to which such concern has an offer or bid pending of the determination made, if the concern finds, in good faith, that such determination affects the eligibility of the concern to perform such contract.
§?127.701 [Removed]
13. Remove §?127.701.
PART 128-VETERAN SMALL BUSINESS CERTIFICATION PROGRAM
14. The authority citation for part 128 continues to read as follows:
Authority:
15 U.S.C. 632(q), 634(b)(6), 644, 645, 657f, 657f-1.
15. Amend §?128.203 by revising paragraph (i) to read as follows:
§?128.203 Who does SBA consider to control a VOSB or SDVOSB?
(i) Limitation on outside employment. (1) A qualifying veteran generally must devote full-time to the business concern during its normal hours of operations. The qualifying veteran who holds the highest officer position of the business concern may not engage in outside employment that prevents the qualifying veteran from devoting the time and attention to the concern necessary to control its management and daily business operations.
(2) Where a qualifying veteran claiming to control a business concern devotes fewer hours to the business than its normal hours of operation, SBA will assume that the qualifying veteran does not control the business concern, unless the concern demonstrates that the qualifying veteran has ultimate managerial and supervisory control over both the long-term decision making and day-to-day management of the business.
(3) Any qualifying veteran who seeks to engage in outside employment after certification must notify SBA of the nature and anticipated duration of the outside employment and demonstrate to SBA that the outside employment will not prevent the qualifying veteran from controlling the business concern.
Isabella Casillas Guzman,
Administrator.
[FR Doc. 2024-10518 Filed 5-15-24; 8:45 am]
BILLING CODE 8026-09-P