FAR Update - Proposed HUBZone Small Business Rule and Final Rules On The Multiple-Award Fair Opportunity Threshold and Equipment Acquisitions

Recently, on June 10 and June 14, the U.S. Department of Defense (DoD), the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA) published proposed and final rules under the Federal Acquisition Regulation (FAR) covering HUBZone small businesses, the threshold for requiring fair opportunity on mutiple-award contract orders, and equipment acquisitions under FAR Subpart 7.4.  The proposed and final rules are discussed briefly below.

PROPOSED FAR RULE IMPLEMENTS THE SBA'S CHANGES TO THE HUBZONE PROGRAM

DoD, GSA, and NASA issued a proposed rule on June 14, 2021, that amends FAR in order to implement changes that the Small Business Administration (SBA) made to the SBA’s own regulations covering the Historically Underutilized Business Zone (HUBZone) Program.  Several of the proposed changes are to the definition of, and references to, “HUBZone small business concern” in FAR so that the definition and references direct readers to the Dynamic Small Business Search (DSBS). 

The proposed rule also eliminates requirements that a HUBZone small business notify a contracting officer of certain material changes.  Currently, under FAR, a HUBZone small business must be meet HUBZone eligibility requirements both at the time of its initial offer and at the time of contract award.  A small business, therefore, must notify a contracting officer of any changes that occur prior to contract award that might affect its HUBZone eligibility.  As amended, however, FAR only requires that a small business meet HUBZone eligibility requirements at the time of its initial offer.  Consequently, the requirement for notification to the contracting officer of material changes after an offer that could affect eligibility prior to contract award has been eliminated by the proposed rule. 

The proposed rule also made a number of changes to the procedures under FAR 19.306 for protesting a company’s status as a HUBZone small business, including by clarifying that HUBZone certification status for purposes of sole-source procurements can only be protested by the SBA and the contracting officer, while HUBZone status for purposes of all other procurements can be protested by the SBA, the contracting officer and other interested parties.  The proposed rule also specifies new requirements for protests filed against a HUBZone joint venture.  Specifically, the protests must state why the HUBZOne small business did not meet eligibility requirements at the time of certification and/or why the HUBZone joint venture did not meet HUBZone joint venture requirements under the SBA’s regulations at the time the HUBZone joint venture submitted its offer for a HUBZone contract.

Lastly, the proposed rule eliminates restrictions that prevent the application of HUBZone set-aside procedures to, and the award of HUBZone set-aside and sole-source contracts in, procurements at or below the simplified acquisition threshold and procurements for commercial items, including contracts for commercially available off-the-shelf (COTS) items.

Comments to the proposed rule are due by August 13, 2021.  To read the proposed rule, go here. 

FINAL FAR RULE INCREASES THRESHOLD FOR REQUIRING FAIR OPPORTUNITY ON MULTIPLE-AWARD CONTRACT ORDERS

On June 10, 2021, DoD, GSA, and NASA issued a final rule that increases the threshold under FAR Part 16 for requiring fair opportunity on orders under multiple-award contracts.  Currently, under FAR 16.505, contracting officers generally are required to give every awardee of a multiple-award contract a fair opportunity to be considered for an order under the contract if the order exceeds $3500.  As amended by the final rule, FAR 16.505 requires contracting officers to provide all awardees a fair opportunity to be considered for orders that exceed the micro-purchase threshold, which is currently $10,000.  DoD, GSA, and NASA expect that the rule change will streamline procurements for FAR part 16 orders that are below the micro-purchase threshold, since contracting officers will not be required to review multiple offers to make an award, resulting in time savings for each order awarded. 

The final rule becomes effective on July 12, 2021.  To read the final rule, go here.

FINAL FAR RULE IMPLEMENTS CHANGES MADE BY THE FAA REAUTHORIZATION ACT OF 2018 TO EQUIPMENT ACQUISITIONS

On June 10, 2021, DoD, GSA, and NASA issued a final rule under the Federal Acquisition Regulation (FAR) implementing provisions of the FAA Reauthorization Act of 2018 that require, when acquiring any equipment, a case-by-case comparative analysis of certain acquisition methods - namely, purchases, short-term rentals or leases, long-term rentals or leases, interagency acquisitions, and, if applicable, acquisition agreements with a State or local government.  The comparative analysis of the acquisition methods must consider cost and certain other factors.  The changes to equipment acquisitions made by the final rule are implemented in FAR Subpart 7.4 - Equipment Acquisition.

The final rule becomes effective on July 12, 2021.  To read the final rule, go here.