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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: March 23, 2005

SUBJECT: Federal Acquisition Circular (FAC) 2005-02, Service-Disabled Veteran-Owned Small Business Concerns Program

SOURCE: Federal Register, March 23, 2005, Vol. 70, No. 55, page 14950

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Final Rule

SYNOPSIS: The Federal Acquisition Secretariat is issuing FAC 2005-02 to finalize, with changes, the interim rule in FAC 2001-23 which 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 (SDVOSB) concerns.

EDITOR’S NOTE: For more on the Veterans Benefits Act of 2003, see the December 13, 2003, FEDERAL CONTRACTS DISPATCH “Enactment of the Veterans Benefits Act of 2003.”

For more on FAC 2001-23 and the corresponding SBA interim rule, 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 the Small Business Administration (SBA) SDVOSB final rule that is being issued with FAC 2005-02, see today’s FEDERAL CONTRACTS DISPATCH “Small Business Administration; Service-Disabled Veteran Owned Small Business Concern Program.”

EFFECTIVE DATE: March 23, 2005.

FOR FURTHER INFORMATION CONTACT: Rhonda Cundiff, 202-501-0044.

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 SDVOSBs if there is a reasonable expectation that two or more SDVOSBs 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 SDVOSBs 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.

FAC 2001-23 consisted of an interim rule which implemented the SDVOSB program by adding FAR Subpart 19.14, Service-Disabled Veteran-Owned Small Business (SBA issued an accompanying interim rule that amended its small business regulations to implement the SDVOSB program). Thirty-five (35) comments from 17 respondents were received. Based on the comments, the interim rule is finalized with changes.

The following are the key changes being made by FAC 2005-02:

• FAR 19.307, Protesting a Firm's Status as a Service-Disabled Veteran-Owned Small Business Concern, was essentially the same as FAR 19.306, Protesting a Firm's Status as a HUBZone Small Business Concern. However, the Small Business Administration (SBA) has finalized its SDVOSB regulations with changes to the protest procedures, and on February 24, 2005, SBA published an interim final rule detailing the appeal procedures it drafted as a result of comments it received on its original interim rule (see the February 24, 2005, FEDERAL CONTRACTS DISPATCH “Small Business Administration; Appeal Procedures for Service-Disabled Veteran-Owned Small Business Program”). Therefore, to avoid potential conflict between the FAR and SBA's final rules, FAR 19.307 is revised by removing the detailed discussion on protest procedures in paragraphs (i) through (m) and substituting a cross-reference to SBA's appeals regulations in 13 CFR Part 134, Rules of Procedure Governing Cases Before the Office of Hearings and Appeals.
  
  
• FAR 19.1404, Exclusions, is revised to delete commissary or exchange resale items from a list of actions excluded from the SDVOSB program (meaning commissary or exchange resale items are subject to the SDVOSB program).
  
  
• SDVOSB small business concerns are added to the lists of socioeconomic programs in FAR 4.502, Policy; FAR 5.503, Procedures; FAR 13.002, Purpose; FAR 15.404-4, Profit; FAR 15.407-2, Make or Buy Programs; FAR 42.302, Contract Administration Functions; FAR 42.501, General; FAR 42.502, Selecting Contracts for Postaward Orientation; and FAR 44.303, Extent of Review.
  
  
• Optional Form 347, Order for Supplies and Services; Standard Form 1447, Solicitation/Contract; and Standard Form 1449, Solicitation/Contract/Order for Commercial Items, are amended to add SDVOSB set-asides as a permissible type of set-aside.

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

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