[Federal Register: August 8, 2006 (Volume 71, Number 152)]
[Rules and Regulations]               
[Page 44926-44928]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



Defense Acquisition Regulations System

48 CFR Part 219

[DFARS Case 2003-D060]

Defense Federal Acquisition Regulation Supplement; Threshold for 
Small Business Specialist Review

AGENCY: Defense Acquisition Regulations System, Department of Defense 

ACTION: Final rule.


SUMMARY: DoD has issued a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to revise text pertaining to 
DoD implementation of small business programs. This rule is a result of 
a transformation initiative undertaken by DoD to dramatically change 
the purpose and content of the DFARS.

DATES: Effective Date: August 8, 2006.

Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 
3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-
0289; facsimile (703) 602-0350. Please cite DFARS Case 2003-D060.


A. Background

    DFARS Transformation is a major DoD initiative to dramatically 
change the purpose and content of the DFARS. The objective is to 
improve the efficiency and effectiveness of the acquisition process, 
while allowing the acquisition workforce the flexibility to innovate. 
The transformed DFARS will contain only requirements of law, DoD-wide 
policies, delegations of FAR authorities, deviations from FAR 
requirements, and policies/procedures that have a significant effect 
beyond the internal operating procedures of DoD or a significant cost 
or administrative impact on contractors or offerors. Additional 
information on the DFARS Transformation initiative is available at 

    This final rule is a result of the DFARS Transformation initiative. 
The rule--

[[Page 44927]]

    [cir] Deletes an unnecessary general policy statement at DFARS 
    [cir] Revises DFARS 219.201(d)(10)(A) to eliminate mandatory 
requirements for small business specialists to review proposed 
acquisitions that are under $100,000 and totally set aside for small 
business concerns;
    [cir] Revises DFARS 219.201(d)(10)(C) for consistency with the 
procedures at FAR 19.402(a), regarding referral of small business 
matters to the appropriate party when a Small Business Administration 
procurement center representative is not assigned to a contracting 
activity (added at 71 FR 36925, June 28, 2006 (FAC 2005-10)); and
    [cir] Deletes text at DFARS 219.201(e) regarding the appointment 
and functions of DoD small business specialists. Text on this subject 
has been relocated to the DFARS companion resource, Procedures, 
Guidance, and Information (PGI), available at http://www.acq.osd.mil/dpap/dars/pgi

    DoD published a proposed rule at 69 FR 21997 on April 23, 2004. 
Five sources submitted comments on the proposed rule. A discussion of 
the comments is provided below.
    1. Comment: Review of Task Orders. One respondent stated that the 
proposed language at 219.201(d)(10)(A)(1), ``Within the scope and under 
the terms of the existing contract,'' will not provide for a review of 
proposed task orders under multiple award contracts. This will preclude 
small business specialist efforts to steer requirements toward multiple 
award contracts set aside for small businesses.
    DoD Response: DoD agrees that task orders should not be excluded 
from small business specialist review. The phrase ``Within the scope 
and under the terms of the existing contract'' has been eliminated from 
the final rule to make it clear that acquisitions being accomplished 
through placement of task orders are not excluded from small business 
specialist review. In addition, the phrase ``including orders placed 
against Federal Supply Schedule contracts,'' has been added to 
219.201(d)(10)(A) to reinforce this requirement. The wording in the 
proposed rule had been intended to clarify that modifications to a 
contract that did not increase the scope of the contract, such as 
change of address or incremental funding actions, need not be reviewed 
by the small business specialist. Modifications that increase the scope 
of a contract or order would, however, be reviewed since these are 
considered to be acquisitions.
    2. Comment: Opportunities for Participation in Actions Between 
$10,000 and $100,000. Three respondents stated that actions between 
$10,000 and $100,000 provide significant opportunities for 8(a), 
HUBZone, and service-disabled veteran-owned small business concerns; 
and that the proposed rule does not provide small business specialists 
with an opportunity to review actions that have been set aside for 
small businesses to identify potential requirements for 8(a), HUBZone, 
or service-disabled veteran-owned small business concerns.
    DoD Response: The language in the final rule does not preclude 
agencies from having a small business specialist review and make 
recommendations for acquisitions that are totally set aside for small 
businesses. The rule is intended to permit small business specialist 
resources to be focused on acquisitions where input from the small 
business specialist would be of the most benefit to an agency. An 
agency still may have its small business specialist review total small 
business set-asides if the agency believes this is necessary to assist 
contracting officers in identifying opportunities appropriate for 
particular categories of small businesses. By not requiring that all 
total small business set-asides over $10,000 be reviewed, the DFARS 
rule provides needed flexibility.
    3. Comment: Movement of DFARS Text. One respondent suggested that 
movement of DFARS text to PGI creates the perception of a reduced 
emphasis upon or weakening of the current small business programs.
    DoD Response: The movement of procedural or informational text from 
DFARS to PGI is intended to improve the acquisition process by 
facilitating more efficient change to internal DoD requirements. DoD 
believes that the changes in this rule are in keeping with numerous 
other revisions to the DFARS involving movement of text into PGI and, 
when viewed in the aggregate, do not foster the perception of weakening 
the commitment to small business programs.
    4. Comment: 8(a) Program Participants. One respondent recommended 
that DoD add language to PGI 219.201(e)(vii) to highlight the 
prohibition against participation by brokers in the 8(a) Program.
    DoD Response: DFARS 219.201(e)(vii) addresses negotiation and 
administration of small business subcontracting plans. An 8(a) firm is 
not required to have a small business subcontracting plan. The clauses 
in the contract between the Small Business Administration and the 8(a) 
firm govern the conditions under which the 8(a) firm can subcontract 
    5. Comment: Concurrence with the Change. One respondent stated that 
small business specialist review of actions set aside for small 
business concerns or placed against another contract is an unnecessary 
step in the process, and that small business specialists could use 
their time to better advantage.
    DoD Response: Noted.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD certifies that this final rule will not 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, et seq., 
because the rule pertains to internal DoD procedures for the 
implementation of small business programs.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply, because the rule does 
not impose any information collection requirements that require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

List of Subjects in 48 CFR Part 219

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

Therefore, 48 CFR part 219 is amended as follows:


1. The authority citation for 48 CFR Part 219 continues to read as 

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

2. Section 219.201 is amended as follows:
a. By removing paragraph (a); and
b. By revising paragraphs (d)(10) and (e) to read as follows:

219.201  General policy.

    (d) * * *
    (10) Contracting activity small business specialists perform this 
function by--
    (A) Reviewing and making recommendations for all acquisitions 
(including orders placed against Federal Supply Schedule contracts) 
over $10,000, except those under $100,000 that are totally set aside 
for small business concerns in accordance with FAR 19.502-2. Follow the 
procedures at PGI 219.201(d)(10) regarding such reviews;

[[Page 44928]]

    (B) Making the review before issuance of the solicitation or 
contract modification and documenting it on DD Form 2579, Small 
Business Coordination Record; and
    (C) Referring recommendations that have been rejected by the 
contracting officer to the Small Business Administration (SBA) 
procurement center representative. If an SBA procurement center 
representative is not assigned, see FAR 19.402(a).
* * * * *
    (e) For information on the appointment and functions of small 
business specialists, see PGI 219.201(e).
* * * * *
[FR Doc. E6-12781 Filed 8-7-06; 8:45 am]