View Rule

DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement section 821 of the National Defense Authorization Act (NDAA) for FY 2015, section 872 of the NDAA for FY 2016, and section 826 of the NDAA for FY 2017.  Implementation of these sections in the DFARS is necessary to provide for the temporary extension and amendment of the Test Program for Negotiation of Comprehensive Small Business Subcontracting Plans as follows:

• Section 821 of the NDAA for FY 2015 (a) requires contractors with comprehensive subcontracting plans to report additional information on a semiannual basis in order to evaluate the effectiveness of the program; (b) reinstates liquidated damages under comprehensive subcontracting plans; (c) requires consideration, as part of the past performance evaluation of an offeror, of any failure to make a good faith effort to comply with its comprehensive subcontracting plan; (d) increases the threshold for participation in the Test Program from $5 million to $100 million; (e) prohibits negotiation of comprehensive subcontracting plans with contractors who failed to meet the subcontracting goals of their comprehensive subcontracting plan for the prior fiscal year; and (f) extends the Test Program through December 31, 2017.

• Section 872 of the NDAA for FY 2016 removes the prohibition on negotiation of comprehensive subcontracting plans with contractors who failed to meet the subcontracting goals of their comprehensive subcontracting plan for the prior fiscal year. 

• Section 826 of the NDAA for FY 2017 further extends the Test Program through December 31, 2027. One respondent submitted a public comment in response to the proposed rule; however, the comment was outside the scope of the rule. The objectives of this rule are to collect data to assist in assessing the successes or shortcomings of the Test Program and to provide the means to hold Test Program participants accountable for failure to make a good faith effort to comply with their comprehensive subcontracting plans.  This rule will both streamline regulatory requirements and reduce costs for the nine large businesses participating in the Test Program, and have a positive impact on small business subcontractors.  This rule will extend the Test Program Participants ability to submit a consolidated subcontracting report for all contracts with small business subcontracting plans, rather than an individual report per contract.  The rule may have a positive economic impact on small entities, because the rule encourages Test Program participants to make a good faith effort to comply with their comprehensive small business subcontracting plans.