81_FR_72183 81 FR 71981 - Small Business Mentor Protégé Programs; Correction

81 FR 71981 - Small Business Mentor Protégé Programs; Correction

SMALL BUSINESS ADMINISTRATION

Federal Register Volume 81, Issue 202 (October 19, 2016)

Page Range71981-71983
FR Document2016-25080

The U.S. Small Business Administration (SBA) published a final rule in the Federal Register on July 25, 2016 (81 FR 48557), amending its regulations to establish a new Government-wide mentor- prot[eacute]g[eacute] program for all small business concerns, consistent with SBA's mentor-prot[eacute]g[eacute] program for Participants in SBA's 8(a) Business Development (BD) program. The rule also made several additional changes to current size, 8(a), Office of Hearings and Appeals, and HUBZone regulations, concerning among other things, ownership and control, changes in primary industry, economic disadvantage of a Native Hawaiian Organization (NHO), standards of review, and interested party status for some appeals. This document makes several technical corrections to that final rule, including correcting citations, eliminating a paragraph that conflicts with a new provision added by that final rule, and making conforming amendments.

Federal Register, Volume 81 Issue 202 (Wednesday, October 19, 2016)
[Federal Register Volume 81, Number 202 (Wednesday, October 19, 2016)]
[Rules and Regulations]
[Pages 71981-71983]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-25080]


=======================================================================
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SMALL BUSINESS ADMINISTRATION

13 CFR Parts 121, 124, and 126

RIN 3245-AG24


Small Business Mentor Prot[eacute]g[eacute] Programs; Correction

AGENCY: U.S. Small Business Administration.

ACTION: Correcting amendments.

-----------------------------------------------------------------------

SUMMARY: The U.S. Small Business Administration (SBA) published a final 
rule in the Federal Register on July 25, 2016 (81 FR 48557), amending 
its regulations to establish a new Government-wide mentor-
prot[eacute]g[eacute] program for all small business concerns, 
consistent with SBA's mentor-prot[eacute]g[eacute] program for 
Participants in SBA's 8(a) Business Development (BD) program. The rule 
also made several additional changes to current size, 8(a), Office of 
Hearings and Appeals, and HUBZone regulations, concerning among other 
things, ownership and control, changes in primary industry, economic 
disadvantage of a Native Hawaiian Organization (NHO), standards of 
review, and interested party status for some appeals. This document 
makes several technical corrections to that final rule, including 
correcting citations, eliminating a paragraph that conflicts with a new 
provision added by that final rule, and making conforming amendments.

DATES: Effective October 19, 2016.

FOR FURTHER INFORMATION CONTACT: Michael McLaughlin, Office of Policy, 
Planning & Liaison, U.S. Small Business Administration, 409 Third 
Street SW., Washington, DC 20416; 202-205-5353; 
[email protected].

SUPPLEMENTARY INFORMATION: The final rule published on July 25, 2016, 
at 81 FR 48557, contained several errors,

[[Page 71982]]

including inadvertent oversights and omissions that must be corrected 
in order to ensure consistency within the regulations and to avoid 
public uncertainty or confusion. First, a correction is needed because 
the amendment in instruction 5 on page 48579, column one, should have 
also applied to Sec.  121.702(b)(1)(i), not just paragraph (a)(1). 
Specifically, the instruction should have read: ``Amend Sec. Sec.  
121.702(a)(1)(i) and (b)(1)(i) by adding the words `an Indian tribe, 
ANC or NHO (or a wholly owned entity of such tribe, ANC or NHO),' 
before the words `or any combination of these.' '' The final rule 
amended the requirements for the Small Business Innovation Research 
(SBIR) Program to specifically recognize that a small business concern 
owned and controlled by an Indian tribe, Alaska Native Corporation 
(ANC) or a Native Hawaiian Organization (NHO) may be eligible to 
participate in the SBIR Program. Historically, the eligibility 
requirements for the SBIR Program have been consistent with those for 
SBA's Small Business Technology Transfer (STTR) Program. While the 
final rule amended the eligibility requirements for the SBIR Program in 
Sec.  124.702(a)(1)(i), it inadvertently did not make the same 
corresponding change to the STTR Program. As such, this correction is 
necessary to add that same clarifying language to the STTR eligibility 
requirements as that added to the SBIR requirements.
    Second, a correction is needed to delete Sec.  124.110(g)(2). After 
this correction, a corresponding correction to the numbering also needs 
to occur that would eliminate paragraph (g)(1) as a separate paragraph 
and move the substance of paragraph (g)(1) to the end of the 
introductory text of paragraph (g). In response to public comment, SBA 
changed the way in which SBA requires an applicant concern to 
demonstrate the economic disadvantage status of a NHO. See Sec.  
124.110(c) (81 FR 48580-48581). Section 124.110(g)(2) had meaning only 
with respect to the way SBA previously required an applicant concern to 
demonstrate the economic disadvantage status of an NHO. SBA mistakenly 
did not remove Sec.  124.110(g)(2) when it made the change to Sec.  
124.110(c). This correction is needed to remove the paragraph because 
it is now inconsistent with the July 25, 2016 final rule.
    Third, a correction is needed to make a conforming change to Sec.  
124.112. The final rule eliminated the requirement from Sec.  124.203 
that an applicant must submit IRS Form 4506T in every case, and 
clarified that SBA may request additional documentation during the 8(a) 
application process when necessary. However, the final rule did not 
make the conforming change that the IRS Form 4506T is not needed in 
every case for an annual review as well, but, rather, may be requested 
on a case-by-case basis during an annual review by SBA.
    Fourth, due to the change made to Sec.  121.103(h), which 
eliminated the ability of a joint venture to be populated with 
individuals intended to perform contracts awarded to the joint venture, 
a conforming correction is needed to Sec.  124.513(c), which references 
populated joint ventures. Specifically, Sec.  124.513(c)(4) provided 
that in the case of a populated separate legal entity joint venture, 
8(a) Participant(s) must receive profits from the joint venture 
commensurate with their ownership interests in the joint venture. 
Because SBA eliminated populated joint ventures, that provision is now 
superfluous and needs to be deleted.
    Fifth, a correction is needed to amend an incorrect cross 
reference. The final rule revised Sec.  126.615. That revised language 
referenced an exception contained in Sec.  126.618(d). There is no 
paragraph (d). Therefore, the cross reference contained in Sec.  
126.615 is revised to read Sec.  126.618.
    Sixth, a correction is needed to correct a mistaken instruction. 
Instruction 2 on page 48578 purported to revise the last two sentences 
of the introductory text of 13 CFR 121.103(h). However, on May 31, 
2016, SBA amended paragraph (h) by adding a new final sentence to the 
introductory text of paragraph (h). 81 FR 34243, 34258, instruction 
2.c. Consequently, a sentence that SBA intended to remove remains in 
paragraph (h), while a sentence that SBA added on May 31, 2016 was 
revised. Thus, SBA is revising the introductory text of paragraph (h) 
to read as intended under both rules.

List of Subjects

13 CFR Part 121

    Administrative practice and procedure, Government procurement, 
Government property, Individuals with disabilities, Loan programs--
business, Reporting and recordkeeping requirements, Small businesses.

13 CFR Part 124

    Administrative practice and procedures, Government procurement, 
Hawaiian natives, Indians--business and finance, Minority businesses, 
Reporting and recordkeeping requirements, Tribally-owned concerns, 
Technical assistance.

13 CFR Part 126

    Administrative practice and procedure, Government procurement, 
Penalties, Reporting and recordkeeping requirements, Small businesses.

    Accordingly, 13 CFR parts 121,124, and 126 are corrected by making 
the following correcting amendments:

PART 121--SMALL BUSINESS SIZE REGULATIONS

0
1. The authority citation for part 121 continues to read as follows:

    Authority: 15 U.S.C. 632, 634(b)(6), 662, and 694a(9).


0
2. Amend Sec.  121.103 by revising the introductory text of paragraph 
(h) to read as follows:


Sec.  121.103  How does SBA determine affiliation?

* * * * *
    (h) Affiliation based on joint ventures. A joint venture is an 
association of individuals and/or concerns with interests in any degree 
or proportion consorting to engage in and carry out no more than three 
specific or limited-purpose business ventures for joint profit over a 
two year period, for which purpose they combine their efforts, 
property, money, skill, or knowledge, but not on a continuing or 
permanent basis for conducting business generally. This means that a 
specific joint venture entity generally may not be awarded more than 
three contracts over a two year period, starting from the date of the 
award of the first contract, without the partners to the joint venture 
being deemed affiliated for all purposes. Once a joint venture receives 
one contract, SBA will determine compliance with the three awards in 
two years rule for future awards as of the date of initial offer 
including price. As such, an individual joint venture may be awarded 
more than three contracts without SBA finding general affiliation 
between the joint venture partners where the joint venture had received 
two or fewer contracts as of the date it submitted one or more 
additional offers which thereafter result in one or more additional 
contract awards. The same two (or more) entities may create additional 
joint ventures, and each new joint venture entity may be awarded up to 
three contracts in accordance with this section. At some point, 
however, such a longstanding inter-relationship or contractual 
dependence between the same joint venture partners will lead to a 
finding of general affiliation between and among them. For purposes of 
this provision and in order to facilitate tracking of the number of 
contract

[[Page 71983]]

awards made to a joint venture, a joint venture: Must be in writing and 
must do business under its own name; must be identified as a joint 
venture in the System for Award Management (SAM); may be in the form of 
a formal or informal partnership or exist as a separate limited 
liability company or other separate legal entity; and, if it exists as 
a formal separate legal entity, may not be populated with individuals 
intended to perform contracts awarded to the joint venture (i.e., the 
joint venture may have its own separate employees to perform 
administrative functions, but may not have its own separate employees 
to perform contracts awarded to the joint venture). SBA may also 
determine that the relationship between a prime contractor and its 
subcontractor is a joint venture, and that affiliation between the two 
exists, pursuant to paragraph (h)(5) of this section. For purposes of 
this paragraph (h), contract refers to prime contracts, and any 
subcontract in which the joint venture is treated as a similarly 
situated entity as the term is defined in part 125 of this chapter.
* * * * *


Sec.  121.702  [Amended]

0
3. Amend Sec.  121.702(b)(1)(i) by adding the words ``an Indian tribe, 
ANC or NHO (or a wholly owned business entity of such tribe, ANC or 
NHO),'' before the words ``or any combination of these''.

PART 124--8(A) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS 
STATUS DETERMINATIONS

0
3. The authority citation for part 124 continues to read as follows:

    Authority: 15 U.S.C. 634(b)(6), 636(j), 637(a), 637(d), 644 and 
Pub. L. 99-661, Pub. L. 100-656, sec. 1207, Pub. L. 101-37, Pub. L. 
101-574, section 8021, Pub. L. 108-87, and 42 U.S.C. 9815.


0
4. Amend Sec.  124.110 by revising paragraph (g) to read as follows:


Sec.  124.110  Do Native Hawaiian Organizations have any special rules 
for applying to the 8(a) BD program?

* * * * *
    (g) An NHO-owned firm's eligibility for 8(a) BD participation is 
separate and distinct from the individual eligibility of the NHO's 
members, directors, or managers. The eligibility of an NHO-owned 
concern is not affected by the former 8(a) BD participation of one or 
more of the NHO's individual members.
* * * * *


Sec.  124.112  [Amended]

0
5. Amend Sec.  124.112 by adding the word ``and'' at the end of 
paragraph (b)(8), removing paragraph (b)(9), and redesignating 
paragraph (b)(10) as paragraph (b)(9).

0
6. Amend Sec.  124.513 by revising paragraph (c)(4) to read as follows:


Sec.  124.513   Under what circumstances can a joint venture be awarded 
an 8(a) contract?

* * * * *
    (c) * * *
    (4) Stating that the 8(a) Participant(s) must receive profits from 
the joint venture commensurate with the work performed by the 8(a) 
Participant(s);
* * * * *

PART 126--HUBZONE PROGRAM

0
7. The authority citation for part 126 continues to read as follows:

    Authority: 15 U.S.C. 632(a), 632(j), 632(p), 644; and 657a; Pub. 
L. 111-240, 24 Stat. 2504.


Sec.  126.615  [Amended]

0
8. Amend Sec.  126.615 by removing ``Sec.  126.618(d)'' and adding in 
its place ``Sec.  126.618''.

A. John Shoraka,
Associate Administrator for Government Contracting and Business 
Development.
[FR Doc. 2016-25080 Filed 10-18-16; 8:45 am]
BILLING CODE 8205-01-P



                                                                 Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Rules and Regulations                                              71981

                                                the request for loss mitigation does the                    The Bureau emphasizes, however,                      flexibility analysis.32 The Bureau has
                                                cease communication prohibition apply                    that the cease communication                            determined that this rule does not
                                                to communicating about the specific                      prohibition continues to apply to a                     impose any new or revise any existing
                                                loss mitigation action.29                                servicer’s communications with a                        recordkeeping, reporting, or disclosure
                                                   The Bureau notes that this                            borrower about payment of the mortgage                  requirements on covered entities or
                                                interpretation provides a safe harbor                    loan that are outside the scope of loss                 members of the public that would be
                                                from FDCPA section 805(c) for servicers                  mitigation conversations. The Bureau’s                  collections of information requiring
                                                that are debt collectors with respect to                 interpretation does not protect a servicer              OMB approval under the Paperwork
                                                a particular mortgage loan                               that is a debt collector with respect to                Reduction Act, 44 U.S.C. 3501 et seq.
                                                communicating with the borrower in                       a mortgage loan and is using borrower-                    Dated: August 2, 2016.
                                                connection with a borrower’s initiation                  initiated communications concerning
                                                                                                                                                                 Richard Cordray,
                                                of communications concerning loss                        loss mitigation as a pretext for debt
                                                mitigation. Preceding a borrower’s loss                  collection in circumvention of a                        Director, Bureau of Consumer Financial
                                                mitigation application and during the                                                                            Protection.
                                                                                                         borrower’s invoked cease
                                                evaluation process, a servicer may                                                                               [FR Doc. 2016–18902 Filed 10–18–16; 8:45 am]
                                                                                                         communication right under FDCPA
                                                respond to borrower inquiries about                      section 805(c) with regard to that loan.                BILLING CODE 4810–AM–P
                                                potentially available loss mitigation                    Seeking to collect a debt under the guise
                                                options and provide information                          of a loss mitigation conversation is not
                                                regarding any available option.                          exempt from liability under FDCPA                       SMALL BUSINESS ADMINISTRATION
                                                Similarly, if that borrower submits a                    section 805(c) under this interpretation.
                                                loss mitigation application, the                         Thus, in subsequently communicating                     13 CFR Parts 121, 124, and 126
                                                servicer’s reasonable diligence                          with a borrower concerning loss                         RIN 3245–AG24
                                                obligations under § 1024.41(b)(1) require                mitigation, the servicer is strictly
                                                the servicer to request additional                       prohibited from making a request for                    Small Business Mentor Protégé
                                                information from the borrower,                           payment that is not immediately related                 Programs; Correction
                                                including by contacting the borrower,                    to any specific loss mitigation option.
                                                and these communications by the                          Some examples of impermissible                          AGENCY:  U.S. Small Business
                                                servicer to complete a loss mitigation                   communications include initiating                       Administration.
                                                application do not fall within the cease                 conversations with the borrower related                 ACTION: Correcting amendments.
                                                communication prohibition. The                           to repayment of the debt that are not for
                                                servicer may also seek information that                  the purposes of loss mitigation,                        SUMMARY:    The U.S. Small Business
                                                will be necessary to evaluate the                        demanding that the borrower make a                      Administration (SBA) published a final
                                                borrower for loss mitigation, though the                 payment, requesting that the borrower                   rule in the Federal Register on July 25,
                                                servicer may not seek a payment                          bring the account current or make a                     2016 (81 FR 48557), amending its
                                                unrelated to the purpose of loss                         partial payment on the account, or                      regulations to establish a new
                                                mitigation. Once the borrower’s loss                     attempting to collect the outstanding                   Government-wide mentor-protégé
                                                mitigation application is complete, a                    balance or arrearage, unless such                       program for all small business concerns,
                                                servicer’s communications with a                         communications are immediately                          consistent with SBA’s mentor-protégé
                                                borrower in accordance with the                          related to a specific loss mitigation                   program for Participants in SBA’s 8(a)
                                                procedures in § 1024.41 are not subject                  option.30 Additionally, all other                       Business Development (BD) program.
                                                to liability under FDCPA section 805(c)                  provisions of the FDCPA, including the                  The rule also made several additional
                                                because they arise from the borrower’s                   prohibitions contained in FDCPA                         changes to current size, 8(a), Office of
                                                application for loss mitigation.                         sections 805 through 808, continue to                   Hearings and Appeals, and HUBZone
                                                   The Bureau recognizes that, in order                  apply.31                                                regulations, concerning among other
                                                for a borrower to engage in meaningful                                                                           things, ownership and control, changes
                                                loss mitigation discussions with a                       III. Regulatory Requirements                            in primary industry, economic
                                                servicer, the servicer may discuss                          This rule articulates the Bureau’s                   disadvantage of a Native Hawaiian
                                                repayment options, the borrower’s                        interpretation of the FDCPA. It is                      Organization (NHO), standards of
                                                ability to make a payment, and how                       exempt from notice and comment                          review, and interested party status for
                                                much the borrower can afford to pay as                   rulemaking requirements under the                       some appeals. This document makes
                                                a part of a loss mitigation option for                   Administrative Procedure Act pursuant                   several technical corrections to that
                                                which the servicer is considering the                    to 5 U.S.C. 553(b). Because no notice of                final rule, including correcting citations,
                                                borrower. Furthermore, the Bureau                        proposed rulemaking is required, the                    eliminating a paragraph that conflicts
                                                understands that any offer for a loan                    Regulatory Flexibility Act does not                     with a new provision added by that
                                                modification or repayment plan is likely                 require an initial or final regulatory                  final rule, and making conforming
                                                to include a specific payment amount                                                                             amendments.
                                                the borrower must pay under the terms                      30 See 53 FR 50097, 50103 (Dec. 13, 1988)

                                                of the loss mitigation agreement. Such                   (Section 805(c)–2 of the Federal Trade                  DATES:      Effective October 19, 2016.
                                                                                                         Commission’s (FTC) Official Staff Commentary on         FOR FURTHER INFORMATION CONTACT:
                                                communications, as long as for the                       FDCPA section 805(c)) (‘‘A debt collector’s response
                                                purpose of loss mitigation, are                          to a ‘cease communication’ notice from a consumer       Michael McLaughlin, Office of Policy,
                                                permissible because they should not be                   may not include a demand for payment, but is            Planning & Liaison, U.S. Small Business
                                                understood as within the scope of the                    limited to the three statutory exceptions [under        Administration, 409 Third Street SW.,
jstallworth on DSK7TPTVN1PROD with RULES




                                                                                                         FDCPA section 805(c)(1) through (3)].’’).               Washington, DC 20416; 202–205–5353;
                                                cease communication request.                               31 For example, servicers that are debt collectors

                                                                                                         must not: Engage in conduct the natural
                                                                                                                                                                 michael.mclaughlin@sba.gov.
                                                   29 See Bureau of Consumer Fin. Prot.,                 consequence of which is to harass, oppress, or          SUPPLEMENTARY INFORMATION: The final
                                                Implementation Guidance for Certain Mortgage             abuse any person in connection with the collection      rule published on July 25, 2016, at 81
                                                Servicing Rules, CFPB Bulletin 2013–12 (Oct. 15,         of a debt; use any false, deceptive, or misleading
                                                2013), available at http://                              representation or means in connection with the
                                                                                                                                                                 FR 48557, contained several errors,
                                                files.consumerfinance.gov/f/201310_cfpb_mortgage-        collection of a debt; or use unfair or unconscionable
                                                servicing_bulletin.pdf.                                  means to collect or attempt to collect any debt.          32 5   U.S.C. 603(a) and 604(a).



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                                                71982            Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Rules and Regulations

                                                including inadvertent oversights and                     8(a) application process when                         13 CFR Part 126
                                                omissions that must be corrected in                      necessary. However, the final rule did                  Administrative practice and
                                                order to ensure consistency within the                   not make the conforming change that                   procedure, Government procurement,
                                                regulations and to avoid public                          the IRS Form 4506T is not needed in                   Penalties, Reporting and recordkeeping
                                                uncertainty or confusion. First, a                       every case for an annual review as well,              requirements, Small businesses.
                                                correction is needed because the                         but, rather, may be requested on a case-
                                                amendment in instruction 5 on page                                                                               Accordingly, 13 CFR parts 121,124,
                                                                                                         by-case basis during an annual review
                                                48579, column one, should have also                                                                            and 126 are corrected by making the
                                                                                                         by SBA.
                                                applied to § 121.702(b)(1)(i), not just                                                                        following correcting amendments:
                                                                                                            Fourth, due to the change made to
                                                paragraph (a)(1). Specifically, the                      § 121.103(h), which eliminated the                    PART 121—SMALL BUSINESS SIZE
                                                instruction should have read: ‘‘Amend                    ability of a joint venture to be populated            REGULATIONS
                                                §§ 121.702(a)(1)(i) and (b)(1)(i) by                     with individuals intended to perform
                                                adding the words ‘an Indian tribe, ANC                   contracts awarded to the joint venture,               ■ 1. The authority citation for part 121
                                                or NHO (or a wholly owned entity of                      a conforming correction is needed to                  continues to read as follows:
                                                such tribe, ANC or NHO),’ before the                     § 124.513(c), which references                          Authority: 15 U.S.C. 632, 634(b)(6), 662,
                                                words ‘or any combination of these.’ ’’                  populated joint ventures. Specifically,               and 694a(9).
                                                The final rule amended the                               § 124.513(c)(4) provided that in the case
                                                requirements for the Small Business                                                                            ■ 2. Amend § 121.103 by revising the
                                                                                                         of a populated separate legal entity joint            introductory text of paragraph (h) to
                                                Innovation Research (SBIR) Program to                    venture, 8(a) Participant(s) must receive
                                                specifically recognize that a small                                                                            read as follows:
                                                                                                         profits from the joint venture
                                                business concern owned and controlled                    commensurate with their ownership                     § 121.103 How does SBA determine
                                                by an Indian tribe, Alaska Native                        interests in the joint venture. Because               affiliation?
                                                Corporation (ANC) or a Native Hawaiian                   SBA eliminated populated joint                        *      *     *     *    *
                                                Organization (NHO) may be eligible to                    ventures, that provision is now                          (h) Affiliation based on joint ventures.
                                                participate in the SBIR Program.                         superfluous and needs to be deleted.                  A joint venture is an association of
                                                Historically, the eligibility requirements                                                                     individuals and/or concerns with
                                                for the SBIR Program have been                              Fifth, a correction is needed to amend
                                                                                                         an incorrect cross reference. The final               interests in any degree or proportion
                                                consistent with those for SBA’s Small
                                                                                                         rule revised § 126.615. That revised                  consorting to engage in and carry out no
                                                Business Technology Transfer (STTR)
                                                                                                         language referenced an exception                      more than three specific or limited-
                                                Program. While the final rule amended
                                                                                                         contained in § 126.618(d). There is no                purpose business ventures for joint
                                                the eligibility requirements for the SBIR
                                                                                                         paragraph (d). Therefore, the cross                   profit over a two year period, for which
                                                Program in § 124.702(a)(1)(i), it
                                                                                                         reference contained in § 126.615 is                   purpose they combine their efforts,
                                                inadvertently did not make the same
                                                                                                         revised to read § 126.618.                            property, money, skill, or knowledge,
                                                corresponding change to the STTR
                                                                                                            Sixth, a correction is needed to                   but not on a continuing or permanent
                                                Program. As such, this correction is
                                                                                                         correct a mistaken instruction.                       basis for conducting business generally.
                                                necessary to add that same clarifying
                                                language to the STTR eligibility                         Instruction 2 on page 48578 purported                 This means that a specific joint venture
                                                requirements as that added to the SBIR                   to revise the last two sentences of the               entity generally may not be awarded
                                                requirements.                                            introductory text of 13 CFR 121.103(h).               more than three contracts over a two
                                                   Second, a correction is needed to                     However, on May 31, 2016, SBA                         year period, starting from the date of the
                                                delete § 124.110(g)(2). After this                       amended paragraph (h) by adding a new                 award of the first contract, without the
                                                correction, a corresponding correction                   final sentence to the introductory text of            partners to the joint venture being
                                                to the numbering also needs to occur                     paragraph (h). 81 FR 34243, 34258,                    deemed affiliated for all purposes. Once
                                                that would eliminate paragraph (g)(1) as                 instruction 2.c. Consequently, a                      a joint venture receives one contract,
                                                a separate paragraph and move the                        sentence that SBA intended to remove                  SBA will determine compliance with
                                                substance of paragraph (g)(1) to the end                 remains in paragraph (h), while a                     the three awards in two years rule for
                                                of the introductory text of paragraph (g).               sentence that SBA added on May 31,                    future awards as of the date of initial
                                                In response to public comment, SBA                       2016 was revised. Thus, SBA is revising               offer including price. As such, an
                                                changed the way in which SBA requires                    the introductory text of paragraph (h) to             individual joint venture may be
                                                an applicant concern to demonstrate the                  read as intended under both rules.                    awarded more than three contracts
                                                economic disadvantage status of a NHO.                                                                         without SBA finding general affiliation
                                                See § 124.110(c) (81 FR 48580–48581).                    List of Subjects                                      between the joint venture partners
                                                Section 124.110(g)(2) had meaning only                   13 CFR Part 121                                       where the joint venture had received
                                                with respect to the way SBA previously                                                                         two or fewer contracts as of the date it
                                                required an applicant concern to                           Administrative practice and                         submitted one or more additional offers
                                                demonstrate the economic disadvantage                    procedure, Government procurement,                    which thereafter result in one or more
                                                status of an NHO. SBA mistakenly did                     Government property, Individuals with                 additional contract awards. The same
                                                not remove § 124.110(g)(2) when it                       disabilities, Loan programs—business,                 two (or more) entities may create
                                                made the change to § 124.110(c). This                    Reporting and recordkeeping                           additional joint ventures, and each new
                                                correction is needed to remove the                       requirements, Small businesses.                       joint venture entity may be awarded up
                                                paragraph because it is now inconsistent                 13 CFR Part 124                                       to three contracts in accordance with
                                                with the July 25, 2016 final rule.                                                                             this section. At some point, however,
jstallworth on DSK7TPTVN1PROD with RULES




                                                   Third, a correction is needed to make                   Administrative practice and                         such a longstanding inter-relationship
                                                a conforming change to § 124.112. The                    procedures, Government procurement,                   or contractual dependence between the
                                                final rule eliminated the requirement                    Hawaiian natives, Indians—business                    same joint venture partners will lead to
                                                from § 124.203 that an applicant must                    and finance, Minority businesses,                     a finding of general affiliation between
                                                submit IRS Form 4506T in every case,                     Reporting and recordkeeping                           and among them. For purposes of this
                                                and clarified that SBA may request                       requirements, Tribally-owned concerns,                provision and in order to facilitate
                                                additional documentation during the                      Technical assistance.                                 tracking of the number of contract


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                                                                 Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Rules and Regulations                                            71983

                                                awards made to a joint venture, a joint                  § 124.112    [Amended]                                Administration, 409 Third Street SW.,
                                                venture: Must be in writing and must do                  ■ 5. Amend § 124.112 by adding the                    Washington, DC 20416; 202–205–5353;
                                                business under its own name; must be                     word ‘‘and’’ at the end of paragraph                  michael.mclaughlin@sba.gov.
                                                identified as a joint venture in the                     (b)(8), removing paragraph (b)(9), and                SUPPLEMENTARY INFORMATION: SBA
                                                System for Award Management (SAM);                       redesignating paragraph (b)(10) as                    published a final rule in the Federal
                                                may be in the form of a formal or                        paragraph (b)(9).                                     Register on May 31, 2016 (81 FR 34243).
                                                informal partnership or exist as a                       ■ 6. Amend § 124.513 by revising                      That rule amended § 125.6. On July 25,
                                                separate limited liability company or                    paragraph (c)(4) to read as follows:                  2016, SBA published a separate final
                                                other separate legal entity; and, if it                                                                        rule in the Federal Register (81 FR
                                                exists as a formal separate legal entity,                § 124.513 Under what circumstances can a              48557) that purported to amend § 125.6
                                                may not be populated with individuals                    joint venture be awarded an 8(a) contract?            by removing ‘‘§ 125.15’’ from the
                                                intended to perform contracts awarded                    *     *     *     *     *                             introductory text of paragraph (b) and
                                                to the joint venture (i.e., the joint                      (c) * * *                                           adding in its place ‘‘§ 125.18’’ and by
                                                venture may have its own separate                          (4) Stating that the 8(a) Participant(s)            removing ‘‘§ 125.15(b)(3)’’ from
                                                employees to perform administrative                      must receive profits from the joint                   paragraph (b)(5) and adding in its place
                                                functions, but may not have its own                      venture commensurate with the work                    ‘‘§ 125.18(b)(3)’’. These amendments
                                                separate employees to perform contracts                  performed by the 8(a) Participant(s);                 could not be implemented as instructed
                                                awarded to the joint venture). SBA may                   *     *     *     *     *                             because paragraph 125.6 (b) does not
                                                also determine that the relationship                                                                           contain the text to be removed. These
                                                between a prime contractor and its                       PART 126—HUBZONE PROGRAM                              changes inadvertently failed to take into
                                                subcontractor is a joint venture, and that                                                                     account the amendments made to
                                                affiliation between the two exists,                      ■ 7. The authority citation for part 126              § 125.6 by the final rule published on
                                                pursuant to paragraph (h)(5) of this                     continues to read as follows:                         May 31, 2016. This correction removes
                                                section. For purposes of this paragraph                    Authority: 15 U.S.C. 632(a), 632(j), 632(p),        the instruction to amend § 125.6
                                                (h), contract refers to prime contracts,                 644; and 657a; Pub. L. 111–240, 24 Stat.              published on July 25, 2016, in 81 FR
                                                and any subcontract in which the joint                   2504.                                                 48558.
                                                venture is treated as a similarly situated                                                                        In the FR Rule Doc. No. 2016–16399
                                                                                                         § 126.615    [Amended]
                                                entity as the term is defined in part 125                                                                      in the issue of July 25, 2016, beginning
                                                of this chapter.                                         ■  8. Amend § 126.615 by removing                     on page 48557, make the following
                                                *      *     *    *      *                               ‘‘§ 126.618(d)’’ and adding in its place              correction:
                                                                                                         ‘‘§ 126.618’’.                                        ■ On page 48585, in the third column,
                                                § 121.702   [Amended]                                                                                          remove amendatory instruction 34 in its
                                                                                                         A. John Shoraka,
                                                ■ 3. Amend § 121.702(b)(1)(i) by adding                  Associate Administrator for Government                entirety and the amendment to § 125.6.
                                                the words ‘‘an Indian tribe, ANC or                      Contracting and Business Development.                 A. John Shoraka,
                                                NHO (or a wholly owned business                          [FR Doc. 2016–25080 Filed 10–18–16; 8:45 am]          Associate Administrator for Government
                                                entity of such tribe, ANC or NHO),’’                     BILLING CODE 8205–01–P                                Contracting and Business Development.
                                                before the words ‘‘or any combination of                                                                       [FR Doc. 2016–24832 Filed 10–18–16; 8:45 am]
                                                these’’.                                                                                                       BILLING CODE 8025–01–P
                                                                                                         SMALL BUSINESS ADMINISTRATION
                                                PART 124—8(A) BUSINESS
                                                DEVELOPMENT/SMALL                                        13 CFR Part 125
                                                DISADVANTAGED BUSINESS STATUS                                                                                  DEPARTMENT OF TRANSPORTATION
                                                                                                         RIN 3245–AG24
                                                DETERMINATIONS                                                                                                 Federal Aviation Administration
                                                                                                         Small Business Mentor Protégé
                                                ■ 3. The authority citation for part 124                 Programs; Correction                                  14 CFR Chapter I
                                                continues to read as follows:
                                                                                                         AGENCY:  U.S. Small Business                          [Docket No. FAA–2016–9288]
                                                  Authority: 15 U.S.C. 634(b)(6), 636(j),                Administration.
                                                637(a), 637(d), 644 and Pub. L. 99–661, Pub.                                                                   Hazardous Materials: Emergency
                                                                                                         ACTION: Final rule; correction.
                                                L. 100–656, sec. 1207, Pub. L. 101–37, Pub.                                                                    Restriction/Prohibition Order
                                                L. 101–574, section 8021, Pub. L. 108–87,
                                                                                                         SUMMARY:   The U.S. Small Business
                                                and 42 U.S.C. 9815.                                                                                            AGENCY:  Federal Aviation
                                                                                                         Administration (SBA) published a final
                                                                                                         rule in the Federal Register on July 25,              Administration (FAA), DOT.
                                                ■ 4. Amend § 124.110 by revising
                                                                                                         2016, (81 FR 48557) to, among other                   ACTION: Emergency restriction/
                                                paragraph (g) to read as follows:
                                                                                                         things, implement provisions of the                   prohibition order.
                                                § 124.110 Do Native Hawaiian                             National Defense Authorization Act of
                                                Organizations have any special rules for                                                                       SUMMARY:   This document provides
                                                                                                         2013, which pertain to performance                    Emergency Restriction/Prohibition
                                                applying to the 8(a) BD program?                         requirements applicable to small                      Order No. FAA–2016–9288, issued
                                                *     *     *    *     *                                 business and socioeconomic program                    October 14, 2016 and effective at 12
                                                  (g) An NHO-owned firm’s eligibility                    set-aside contracts and small business                p.m. (noon) Eastern Daylight Time
                                                for 8(a) BD participation is separate and                subcontracting. That rule contained an                (EDT), October 15, 2016 to Samsung
jstallworth on DSK7TPTVN1PROD with RULES




                                                distinct from the individual eligibility of              instruction to amend portions of § 125.6              Galaxy Note 7 Users and air carriers.
                                                the NHO’s members, directors, or                         that do not exist. This document                      The Emergency Order prohibits persons
                                                managers. The eligibility of an NHO-                     removes the amendatory instruction.                   from offering for air transportation or
                                                owned concern is not affected by the                     DATES: Effective October 19, 2016.                    transporting via air any Samsung Galaxy
                                                former 8(a) BD participation of one or                   FOR FURTHER INFORMATION CONTACT:                      Note 7 device on their person, in carry-
                                                more of the NHO’s individual members.                    Michael McLaughlin, Office of Policy,                 on baggage, in checked baggage, or as
                                                *     *     *    *     *                                 Planning & Liaison, U.S. Small Business               cargo; requires individuals who


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Document Created: 2016-10-19 02:11:59
Document Modified: 2016-10-19 02:11:59
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionCorrecting amendments.
DatesEffective October 19, 2016.
ContactMichael McLaughlin, Office of Policy, Planning & Liaison, U.S. Small Business Administration, 409 Third Street SW., Washington, DC 20416; 202-205-5353; [email protected]
FR Citation81 FR 71981 
RIN Number3245-AG24
CFR Citation13 CFR 121
13 CFR 124
13 CFR 126
CFR AssociatedAdministrative Practice and Procedure; Government Procurement; Government Property; Individuals with Disabilities; Loan Programs-Business; Reporting and Recordkeeping Requirements; Small Businesses; Administrative Practice and Procedures; Hawaiian Natives; Indians-Business and Finance; Minority Businesses; Tribally-Owned Concerns; Technical Assistance and Penalties

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