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Federal Register / Vol. 86, No. 112 / Monday, June 14, 2021 / Proposed Rules
exempt acquisitions at or below the SAT
that are set aside for, or awarded on a sole-source basis to HUBZone small businesses.
The law is silent on the applicability of these requirements to acquisitions at or below the SAT and does not independently provide for criminal or civil penalties; nor does it include terms making express reference to 41 U.S.C.
1905 and its application to acquisitions at or below the SAT. Therefore, it does not apply to acquisitions at or below the SAT unless the FAR Council makes a B. Applicability to Contracts for the written determination as provided at 41
Acquisition of Commercial Items, U.S.C. 1905.
Including Commercially Available OffApplication of the law to acquisitions The-Shelf COTS Items at or below the SAT will maximize the 41 U.S.C. 1906 governs the positive impact set-aside and soleapplicability of laws to contracts for the source contracts provide for HUBZone acquisition of commercial items, and is small businesses by ensuring these intended to limit the applicability of benefits extend to the many contracts laws to contracts for the acquisition of valued at or below the SAT. According commercial items. Section 1906
to the Federal Procurement Data provides that if the FAR Council makes System, an average of 283,374 contracts a written determination that it is not in per year resulted from FAR part 19 setthe best interest of the Federal asides and sole-source awards at or Government to exempt commercial item below the SAT during fiscal years 2016
contracts, the provision of law will 2018. Failure to apply the HUBZone Act apply to contracts for the acquisition of to the maximum extent possible would commercial items.
exclude a significant number of 41 U.S.C. 1907 states that acquisitions acquisitions, which would not advance of COTS items will be exempt from the interests of small businesses and certain provisions of law unless the increase their opportunities in the Administrator for Federal Procurement Federal marketplace. The Federal Policy makes a written determination Government has a policy of promoting and finds that it would not be in the best HUBZone participation in Government interest of the Federal Government to contracting. The Small Business Act exempt contracts for the procurement of Section 15g1, 15 U.S.C. 644g1
COTS items.
includes a 3% annual HUBZone The FAR Council intends to make a contracting goal for all prime contracts determination to apply this statute to and subcontract awards each fiscal year.
acquisitions for commercial items. The Historically, the Federal Government Administrator for Federal Procurement has not achieved the HUBZone goal.
Policy intends to make a determination Applying the requirement below the to apply this statute to acquisitions for SAT will aid Federal agencies in COTS items.
achieving the goal.
C. Determinations For these reasons, it is in the best interest of the Federal Government to The HUBZone Act of 1997, 15 U.S.C.
apply the requirements of the rule to 657a, tasks SBA with administering a acquisitions at or below the SAT.
program to assist participating small In addition, SBAs final rule did not businesses located in areas with low exempt the acquisition of commercial income levels, high poverty and high items that are set aside for, or awarded unemployment rates, Indian on a sole-source basis to HUBZone reservations, closed military bases, or small businesses. The law is silent on disaster areas with contracting the applicability of these requirements opportunities in the form of set-asides, to acquisitions of commercial items and sole-source awards, and pricedoes not independently provide for evaluation preferences. Its primary objectives are job creation and increased criminal or civil penalties; nor does it include terms making express reference capital investment in distressed to 41 U.S.C. 1906 and its application to communities. The purpose of this rule acquisitions of commercial items.
is to implement revisions SBA has Therefore, it does not apply to finalized in their HUBZone program.
acquisitions of commercial items unless These statutory requirements are the FAR Council makes a written reflected in SBAs final rule published determination as provided at 41 U.S.C.
in the Federal Register at 84 FR 65222
1906.
on November 26, 2019, which did not
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acquisitions at or below the SAT, but provides that such acquisitions will not be exempt from a provision of law under certain circumstances, including when the FAR Council makes a written determination and finding that it would not be in the best interest of the Federal Government to exempt contracts and subcontracts in amounts not greater than the SAT from the provision of law.
The FAR Council intends to make a determination to apply this statute to acquisitions at or below the SAT.

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Application of the law to acquisitions of commercial items will maximize the positive impact set-aside and solesource contracts provide for HUBZone small businesses by ensuring these benefits extend to the many contracts for commercial items. According to the Federal Procurement Data System, an average of 1,548,105 contracts per year resulted from FAR part 19 set-asides and sole-source awards for commercial items during fiscal years 20162018.
Failure to apply the HUBZone Act to the maximum extent possible would exclude a significant number of acquisitions, which would not advance the interests of small businesses and increase their opportunities in the Federal marketplace. The Federal Government has a policy of promoting HUBZone participation in Government contracting. The Small Business Act Section 15g1, 15 U.S.C. 644g1
includes a 3% annual HUBZone contracting goal for all prime contracts and subcontract awards each fiscal year.
Historically the Federal Government has not achieved the HUBZone goal.
Applying the requirement to commercial items will aid Federal agencies in achieving the goal.
For these reasons, it is in the best interest of the Federal Government to apply the requirements of the rule to the acquisition of commercial items.
IV. Expected Impact of the Rule This proposed rule will impact the operations of the Government as described in this section. The proposed rule specifies SBA certifies firms as HUBZone small business concerns in DSBS. The HUBZone small business certification data contained in SBAs DSBS is also available in the System for Award Management SAM. Contracting officers may use this information to identify certified HUBZone small business concerns. The proposed rule removes the requirement for a HUBZone offeror to be a HUBZone small business concern at the time of contract award and to notify the contracting officer if material changes occur before contract award that could affect its HUBZone eligibility. Additionally, minor changes are made to the processing of HUBZone status protests.
This proposed rule is not expected to result in any costs to contractors or offerors.
V. Executive Orders 12866 and 13563
Executive Orders E.O.s 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits
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