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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations leaving the 8a BD program. As such, the targets increase incrementally during the transitional stage of the program. Where a Participant fails to meet its applicable competitive business activity target for the just completed program year and SBA determines that the Participant did not make good faith efforts to obtain the requisite non-8a revenue, that Participant will be ineligible for sole source 8a contracts in the current program year unless a waiver is granted by SBA.
Currently, a Participant in the ninth year of its program term must derive at least 50 percent of its revenues from sources other than sole source or competitive 8a contracts. As noted above, the statutory language contained in section 330 of the Appropriations Act and section 869 of the NDAA 2021 was added because Congress believed that firms participating in the 8a BD
program may not have been able to experience the full benefits of the program due to complications caused by the pandemic. Thus, it is our view that firms that were in program year nine as of March 13, 2020 should not be subject to a higher business activity target for the time added on to the end of their program terms by section 330 and section 869. As such, the same 50
percent business activity target that applies to program year nine will also apply to the extended program term. In order to receive sole source 8a contracts during the extended program term a Participant must meet or have met the applicable 50 percent non-8a business activity target or have made good faith efforts to obtain the requisite non-8a revenue in the ninth program year or fifth year of the transitional stage. Because the period of extension for firms that were participating as of March 13, 2020 but have since graduated or otherwise left the program may be less than a full year, SBA
understands that it may be more difficult to meet the 50 percent non-8a business activity target for the extended program term. However, SBA
encourages Participants to make good faith efforts to obtain at least 50 percent of their revenue from non-8a sources during the extension period in order to ease the transition to the competitive marketplace after graduating from the 8a BD program. As a point of clarification, SBA notes that this interim final rule does not revise the schedule of the transitional stage or the corresponding business activity target requirements for current 8a Participants in years one through five of the transitional stage of the program. In other words, for purposes of the
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business activity target requirements any such Participant that elects to extend its participation in the program under the Act will not repeat a year in the transitional stage or revert back to a prior year in the transitional stage as a result of the program extension.
II. Comments and Immediate Effective Date This interim final rule is effective without advance notice and public comment because section 330b of the Appropriations Act and section 869b of the NDAA 2021 authorize SBA to issue implementing regulations without regard to notice requirements under 5
U.S.C. 553b. However, SBA is providing a 60-day comment period for the public to comment on this Interim Final Rule. SBAs justification for the use of an interim final rule and immediate effective date follow.
III. Justification for Interim Final Rule In general, SBA publishes a rule for public comment before issuing a final rule, in accordance with the Administrative Procedure Act, 5 U.S.C.
553. The Administrative Procedure Act provides an exception to this standard rulemaking process, however, where an agency finds good cause to adopt a rule without prior public participation. 5
U.S.C. 553b3B. The good cause requirement is satisfied when prior public participation is impracticable, unnecessary, or contrary to the public interest. Under such circumstances, an agency may publish an interim final rule without soliciting public comment.
SBA has determined that there is good cause for dispensing with advance public notice and comment on the grounds that that it would be contrary to the public interest. Specifically, advance public notice and comment would delay the delivery of critical business development assistance Congress sought to extend to firms that are presently not eligible for the programs assistance because they have already graduated or otherwise left the 8a BD program. As explained above, such firms will need to notify SBA that they would like to be readmitted to the program as soon as possible in order to take full advantage of the extension period.
In addition, both the Appropriations Act and the NDAA provisions cited provide specific authority for SBA to proceed with this rule. Section 330b of the Appropriation Act provides: b.
Emergency Rulemaking AuthorityNot later than 15 days after the date of enactment of this Act, the Administrator shall issue regulations to carry out this section without regard to the notice
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requirements under section 553b of title 5, United States Code. Similarly, section 869b of the NDAA 21 provides:
b Emergency Rulemaking Authority.Not later than 15 days after the date of enactment of this section, the Administrator shall issue regulations to carry out this section without regard to the notice requirements under section 553b of title 5, United States Code.
Although this interim final rule is effective immediately, comments are solicited from interested members of the public on all aspects of the interim final rule. These comments must be received on or before the close of the comment period noted in the DATES section of this interim final rule. SBA will then consider these comments in making any necessary revisions to these regulations.
IV. Justification for Immediate Effective Date The APA requires that publication or service of a substantive rule shall be made not less than 30 days before its effective date, except asotherwise provided by the agency for good cause found and published with the rule. 5
U.S.C. 553d3. The purpose of this provision is to provide interested and affected member of the public sufficient time to adjust their behavior before the rule takes effect.
In light of the urgent need to assist 8a small business concerns during the pandemic, SBA finds that there is good cause for making this rule effective immediately instead of observing the 30-day period between publication and effective date. While this interim final rule is effective immediately upon publication, SBA is inviting public comment on the rule during a 60-day period and will consider the comments in developing a final rule. SBA has included an applicability date to make clear that the rule is applicable for eligible 8a companies to either retain or regain their 8a status as quickly as possible.
V. Compliance With Executive Orders 12866, 13771, 12988, 13132, and 13175, the Paperwork Reduction Act 44
U.S.C., Ch. 35, and the Regulatory Flexibility Act 5 U.S.C. 601612
Executive Order 12866
The Office of Information and Regulatory Affairs has determined that this interim final rule is not significant for the purposes of Executive Order 12866 and is not considered a major rule under the Congressional Review Act.
This interim final rule is necessary to implement section 330 of the Appropriations act and section 869 of
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