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Federal Register / Vol. 86, No. 152 / Wednesday, August 11, 2021 / Rules and Regulations
b. Recommended Language To Be Added to Final Rule Comment: One respondent requested the proposed FAR language at 19.705
7d include language to indicate that the contractor has an opportunity to rebut and appeal before a determination of noncompliance is rendered and provided recommended text.
Response: The clause at FAR 52.219
16, Liquidated Damages Subcontracting Plan, which is cited in proposed FAR text 19.7057d, specifically 52.21916c, allows the contractor an opportunity to demonstrate what good faith efforts have been made and to discuss the matter, before the contracting officers final decision. No changes were made to the final rule as a result of this comment.

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3. Clarifications a. Ensure Consistency Between FAR
52.21916 and Proposed FAR 19.705
7b2
Comment: One respondent recommended that to remain consistent, the proposed language at FAR 19.705
7b2 should either include the language contained in 52.21916 or include references to the intent of 52.21916, as the examples provided at FAR 19.7057b2 may occur without willful or intentional behavior. The respondent also recommended that intent and examples should be read together providing that an occurrence of the examples without intent would not constitute a violation. Specifically, failure to make a good faith effort must meet the willful or intentional standard. The respondent also provided various reasons why the FAR should make it clear that an occurrence of the examples without intent would not constitute a violation.
Response: This final rule is implementing current SBA regulation.
SBAs language at 13 CFR 125.3d3
provides guidance on evaluating whether the prime contractor made a good faith effort to comply with its small business subcontracting plan.
This language parallels the language in SBAs rule providing contracting officers with examples to consider, in the context of the contractors total effort, as possible indicators of a failure to make a good faith effort. SBAs rule does not reference the willful and intentional language. The FAR text will not be revised to incorporate the requested language as the willful and intentional language already appears in the definition of failure to make a good faith effort to comply with the subcontracting plan at both FAR

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19.701 and in the clause at FAR 52.219
16. No changes were made to the final rule as a result of this comment.

d. Clarify Applicability to Contracts at or Below the Simplified Acquisition Threshold
b. Clarify the Intent of the Proposed Language at FAR 19.7057b2vi Comment: One respondent stated FAR
19.7057b2vi, as written, could be misinterpreted to hold a lower-tier contractor to the terms of a prime contractors contract with the Government and recommended a revision to provide the intent of the text is to ensure a contractor pays its small business subcontractors in accordance with the terms of their contract with the small business.
Response: The current text states, Failure to pay small business subcontractors in accordance with the terms of the contract with the prime contractor; and provides that the intent pertains to the subcontractors contract with the prime contractor. The final rule FAR text will not be revised to include the recommended text.

Comment: One respondent stated that the preamble to the proposed rule indicates that the FAR Council is considering expanding the scope of the rule to include contracts at or below the simplified acquisition threshold SAT
and recommended that the final FAR
rule under this case should specify that it does not apply to contracts at or below the SAT. The respondent further stated that contracts at or below the SAT
must be exempt from any policy or regulatory requirements pertaining to Small Business Plans.
Response: Section 8d of the Small Business Act 15 U.S.C. 637d requires subcontracting plans only for acquisitions valued above $750,000
$1.5 million for construction contracts.
As stated in section III of this preamble, the requirements of section 1821 of the NDAA for FY 2017 Pub. L. 114328; 15
U.S.C 637 note do not apply to contracts at or below the SAT.

c. Clarify Intent of FAR 19.705
7b2vii
e. Clarify Intent of FAR 19.705
7b1v
Comment: One respondent stated that the language at FAR 19.7057b2vii should be revised to expressly require prime contractors to attend training as a remedy to any performance review findings. The respondent further stated that this is necessary given that a failure to attend the training offered by the Government could be perceived as a failure to make a good faith effort. The respondent provided recommended revisions to 19.7057b2vii.
Response: The respondents interpretation of the language at FAR
19.7057b2vii is correct. If a contractor does not either correct substantiated findings or participate in subcontracting plan management training offered by the Government, it could be perceived by the contracting officer as a failure to make a good faith effort. This is not all inclusive of failure to make a good faith effort, but is one of many instances and examples used to show a lack of good faith effort on behalf of the prime contractor.
Additionally, the contracting officer has the choice of requiring or recommending other corrective remedies as deemed necessary. The respondents recommended language is more restrictive by suggesting and instead of or as written in the SBA
rule. The final rule FAR text will not be revised to include the recommended text.

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Comment: One respondent stated that the language at FAR 19.7057b1v does not make clear how a contracting officer would make a determination that a contractor has negotiated in good faith with interested small business.
The respondent also states that it is not clear how a contractor would negotiate with a small business that is merely interested in participating as a subcontractor.
Response: The language at FAR
19.7057b1v is broadly written, as the intent is not to restrict or limit the contracting officers authority or ability to determine the prime contractors effort to negotiate in good faith. No changes were made to the FAR final rule as a result of this comment.
4. Outside the Scope of This Rule Comment: One respondent had no issue with the proposed changes and clarifications in the language FAR text and agreed that the requirements should be consistent. However, the respondent disagreed with commercial subcontracting plans allowing large businesses to capture and be credited for small dollars spent that have nothing to do with the specific awarded Federal contract. The respondent recommended a maximum cap proposed at 0.5 percent to the large business and that any remaining credit or subcontracting expenditure allowed be with the small business directly involved and subcontracted to the
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