3/23/05 Dispatch: Small Business Administration - Service-Disabled Veteran-Owned Business Program

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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: March 23, 2005

SUBJECT: Small Business Administration; Service-Disabled Veteran-Owned Small Business Program

SOURCE: Federal Register, March 23, 2005, Vol. 70, No. 55, page 14523

AGENCIES: Small Business Administration (SBA)

ACTION: Final Rule

SYNOPSIS: This rule finalizes, with changes, the interim final rule that implemented Section 308, Procurement Program for Small Business Concerns Owned and Controlled by Service-Disabled Veterans, of the Veterans Benefits Act of 2003 (Public Law 108-183), which permits set-aside and sole source procurements for service-disabled veteran-owned small business concerns (SDVOSBCs). In particular, this final rule clarifies SDVOSBC protest procedures.

EDITOR'S NOTE: The SBA's regulations are in Title 13 of the Code of Federal Regulations (CFR).

For more on the interim final rule that is being finalized, see the May 5, 2004, FEDERAL CONTRACTS DISPATCH “Federal Acquisition Circular (FAC) 2001-23 and Small Business Administration (SBA), Program for Service-Disabled Veteran-Owned Small Business Concerns.”

For more on Federal Acquisition Circular (FAC) 2005-02, which finalizes FAC 2001-23 and is being published in conjunction with this final rule, see today’s FEDERAL CONTRACTS DISPATCH “Federal Acquisition Circular (FAC) 2005-02, Service-Disabled Veteran-Owned Small Business Concerns Program.”

EFFECTIVE DATE: March 23, 2005.

FOR FURTHER INFORMATION CONTACT: Dean Koppel, Assistant Administrator, Office of Policy and Research, 202-205-7322, or e-mail: SDVOSBCProgram@sba.gov.

SUPPLEMENTAL INFORMATION: Section 308 of Public Law 108-183 amended the Small Business Act to establish a SDVOSB set-aside program which permits contracting officers to (1) award contracts set aside for SDVOSBCs if there is a reasonable expectation that two or more SDVOSBCs will submit offers and that the award can be made at a fair market price, or (2) award contracts to a sole source SDVOSB when there is not a reasonable expectation that two or more SDVOSBCs will submit offers, and the anticipated contract price (including options) will not exceed $5,000,000 for manufacturing or $3,000,000 for all else.

On May 5, 2004, SBA published an interim final rule which implemented Section 308 of Public Law 108-183 by amending 13 CFR Part 125, Government Contracting Programs, to define “service-disabled veterans,” explain when competition may be restricted to service-disabled veteran-owned small business concerns (SDVOSBCs), and establish procedures for protesting and appealing the status of an SDVOSBC. SBA received 45 comments in response to the interim final rule. As a result of those comments, SBA is finalizing the interim final rule with changes. (EDITOR’S NOTE: One comment SBA received on the May 5, 2004, interim final rule asked for a clarification of the appeal procedures in 13 CFR Part 134, Rules of Procedure Governing Cases Before the Office of Hearings and Appeals. As a result of the request for clarification, SBA prepared appeal procedures, published them on February 24, 2005, as an interim final rule, and asked for comments. See the February 24, 2005, FEDERAL CONTRACTS DISPATCH “Small Business Administration; Appeal Procedures for Service-Disabled Veteran-Owned Small Business Program.”)

The following are the significant differences between the interim final rule and the final rule:

Section 125.6, Prime Contractor Performance Requirements (Limitations on Subcontracting), is amended by adding a statement that “the SDVOSBC joint venture must perform the applicable percentage of work.” This requirement is also in paragraph (b)(3) of Section 125.15, What requirements must an SDVOSBC meet to submit an offer on a contract?, but SBA believes it would be helpful to include it in Section 125.6 as well.
In Section 125.8, What definitions are important in the Service-Disabled Veteran-Owned (SDVO) Small Business Concern (SBC) Program?, the definition of “service-disabled veteran with a permanent and severe disability” is clarified to explain that SBA is relying on written documentation from the U.S. Department of Veterans Affairs (VA) that the veteran has a service-connected, permanent and total disability.
Paragraph (b) of Section 125.25, How does one file a service disabled veteran-owned status protest?, is clarified with an example of an insufficient protest allegation -- “A protester submits a protest stating that the awardee's owner is not a service-disabled veteran. The protest does not state any basis for this assertion. The protest allegation is insufficient.” Also, paragraph (e) is amended to require the contracting officer, when referring protests to SBA, to include “when the protested concern submitted its offer (i.e., made the self-representation that it was a SDVOSBC)” and “when the protester received notification about the apparent successful offeror...” This information is necessary for SBA to determine whether the protest has been submitted on time and the date SBA must use to determine eligibility.
To Section 125.26, What are the grounds for filing an SDVOSBC protest?, which had stated that contracting officers would only consider protests that present specific allegations supporting the contention that the owner(s) cannot provide documentation from the VA or DOD showing that the owner(s) meet the definition of service-disabled veteran or service-disabled veteran with a permanent and severe disability based upon information it has received, is added documentation from the National Archives and Records Administration (NARA). This is because a fire in St. Louis years ago destroyed many of these records, so the affected veterans have to contact NARA for documents evidencing their status as a service-disabled veteran.
In Section 125.27, How will SBA process an SDVO protest?, paragraph (c)(1) is amended to revise the amount of time a concern has to respond to a protest from five business days to ten business days. This is because SBA has learned that it could take a service-disabled veteran up to ten days to receive information from NARA, and perhaps longer from the different services, about their service-disabled veteran status.

Also, a new paragraph (e) is added to permit the contracting officer to “award the contract after receipt of a protest if the contracting officer determines in writing that an award must be made to protect the public interest.” This is in addition to the contracting officer’s authority to award the contract if SBA does not issue its protest determination within the 15-day period required by its regulations (paragraph (d).

Finally, paragraph (g) and Section 125.28, What are the procedures for appealing an SDVO status protest?, are revised to clarify the effects of a protest or appeal determination. If the contract has already been awarded and the protest is sustained, or the Office of Hearings and Appeals (OHA) judge affirms on appeal that the SDVOSBC does not meet a status or ownership and control requirement, then the procuring agency cannot count the award as an award to a SDVOSBC. If a contract has not yet been awarded and the protest is sustained, or the OHA judge affirms on appeal that the protested concern does not meet a status or ownership and control requirement, then the protested concern is ineligible for an SDVOSBC contract award.

EDITOR’S NOTE: SBA provides the following note in the introduction to the final rule:

Copies of most military personnel and medical records are on file at the National Personnel Records Center in St. Louis, MO; however some military personnel records are maintained by the military services depending on when the veteran was discharged. Veterans who filed or are filing a medical claim should contact the VA regional office in their state in order to determine if their medical record and claim for service connected disability is already on file. To request military personnel records, the below contact information is provided:

Branch of Service	Discharge Date	Information	Address
1. Air Force	Discharged or retired since September 25, 1947	Full name, Social Security Number and/or Service Number (both when available), enlistment and discharge dates, date of birth and place of birth (city and state), rank upon discharge or release, address where record is to be mailed, and signature	National Personnel Records Center, 9700 Page Avenue, St. Louis, MO 63132-5100, 314-801-0800, http://vetrecs.archives.gov
2. Army	Discharged or retired between November 1, 1912 - September 30, 2002	Full name, Social Security Number and/or Service Number (both when available), enlistment and discharge dates, date of birth and place of birth (city and state), rank upon discharge or release, address where record is to be mailed, and signature	National Personnel Records Center, 9700 Page Avenue, St. Louis, MO 63132-5100, 314-801-0800, http://vetrecs.archives.gov
	Discharged or retired since October 1, 2002	Full name, Social Security Number and/or Service Number (both when available), enlistment and discharge dates, date of birth and place of birth (city and state), rank upon discharge or release, address where record is to be mailed, and signature	U.S. Army Human Resources Command, ATTN: AHRC-PAV-V, 1 Reserve Way, St. Louis, MO 63132-5200, 314-592-0521
3. Marine Corps	Discharged or retired between 1905 – December 31, 1998	Full name, Social Security Number and/or Service Number (both when available), enlistment and discharge dates, date of birth and place of birth (city and state), rank upon discharge or release, address where record is to be mailed, and signature	National Personnel Records Center, 9700 Page Avenue, St. Louis, MO 63132-5100, 314-801-0800, http://vetrecs.archives.gov
	Discharged or retired since 1999	Full name, Social Security Number, date discharged from Marine Corps service, address where record is to be mailed, and signature of member	Commandant of the Marine Corps, Headquarters, USMC (MMSB-10), 2008 Elliot Road, Quantico, VA 22134-5030
4. Navy	Discharged or retired between 1885 – December 31, 1994	Full name, Social Security Number and/or Service Number (both when available), enlistment and discharge dates, date of birth and place of birth (city and state), rank upon discharge or release, address where record is to be mailed, and signature	National Personnel Records Center, 9700 Page Avenue, St. Louis, MO 63132-5100, 314-801-0800, http://vetrecs.archives.gov
	Discharged or retired since 1995	Full name, Social Security Number, date discharged from Naval service, address where record is to be mailed, and signature of member	Navy Personnel Command, PERS-312E, 5720 Integrity Drive, Millington, TN 38055-3120, DSN: 882-4885 or COM: 901-874-4885

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953.

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