82 FR 32137 - VA Veteran-Owned Small Business Verification Guidelines
DEPARTMENT OF VETERANS AFFAIRS Federal Register Volume 82, Issue 132 (July 12, 2017)
Federal Register Volume 82, Issue 132 (July 12, 2017)
| Page Range | 32137-32139 | |
| FR Document | 2017-14600 |
[Federal Register Volume 82, Number 132 (Wednesday, July 12, 2017)] [Rules and Regulations] [Pages 32137-32139] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-14600] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 74 RIN 2900-AP93 VA Veteran-Owned Small Business Verification Guidelines AGENCY: Department of Veterans Affairs. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: This document implements a portion of the Veterans Benefits, Health Care, and Information Technology Act of 2006, which requires the Department of Veterans Affairs (VA) to verify ownership and control of veteran-owned small businesses (VOSBs), including service-disabled veteran-owned small businesses (SDVOSBs) in order for these firms to participate in VA acquisitions set-aside for SDVOSB/VOSBs. This rule contains a minor revision to require re-verification of SDVOSB/VOSB status once every three years rather than biennially. The purpose of this change is to reduce the administrative burden on SDVOSB/VOSBs regarding participation in VA acquisitions set asides for these types of firms. DATES: Effective Date: July 12, 2017. FOR FURTHER INFORMATION CONTACT: Thomas McGrath, Director, Center for Verification and Evaluation (00VE), Department of Veterans Affairs, 810 Vermont Ave. NW., Washington, DC 20420, phone (202) 461-4300. SUPPLEMENTARY INFORMATION: On February 21, 2017, VA published in the Federal Register (82 FR 11154) an interim final rule to revise VA's rules regarding the length of the eligibility period for inclusion in the Vendor Information Pages database. Interested persons were invited to submit written comments on or before April 24, 2017. VA received numerous comments from members of the public. In a final rule published in the Federal Register on February 8, 2010, (75 FR 6098), VA established 38 Code of Federal Regulations (CFR) part 74, which set forth a mechanism for verifying ownership and control of VOSBs and SDVOSBs. At that time, VA anticipated that annual examinations were necessary to ensure the integrity of the Verification Program and was deemed consistent with the annual Federal size and status recertification requirement in the Central Contractor Registry. In June of 2012, the eligibility period was extended to two years. VA has determined that a biennial examination is not necessary to adequately maintain the integrity of the [[Page 32138]] program and proposed a three year eligibility period. This change is appropriate because VA conducts a robust examination of personal and company documentation to verify ownership and control by Veterans of applicant businesses. In addition to verifying individual owners' service-disabled veteran status or veteran status, VA reviews the following documents in accordance with 38 CFR 74.12: An applicant's financial statements; Federal personal and business tax returns; personal history statements; articles of incorporation/organization; corporate by-laws or operating agreements; organizational, annual, and board/member meeting records; stock ledgers and certificates; state- issued certificates of good standing; contract, lease, and loan agreements; payroll records; bank account signature cards; and licenses. Given the depth of this review, biennial re-verification examinations have become an unnecessary administrative burden on both participants and VA. Moreover, VA is confident that the integrity of the verification program will not be compromised by establishing a three year eligibility period. This is evidenced by fiscal year 2016 data from VA's Center for Verification and Evaluation (CVE), which administers the verification program, which shows that from a total of 1,109 reverification applications, only 11 were denied. Therefore, only 0.9 percent of firms submitting re-verification applications were found to be ineligible after two years. Furthermore, other aspects of the verification program ensure that establishing a three year eligibility period will not undermine the integrity of the verification program. For example, 38 CFR 74.15(a) mandates that the participant, once verified, must maintain its eligibility during its tenure. Moreover, if ownership or control changes occur, the participant must inform VA's CVE of any changes that would adversely affect its eligibility. Additionally, in accordance with 38 CFR 74.20(a), VA has the right to conduct random, unannounced site examinations of participants or conduct a further examination upon receipt of specific and credible information that a participant is no longer eligible. Lastly, status protests provide VA contracting officers and SDVOSB/VOSBs alike an opportunity, where appropriate, to challenge the SDVOSB/VOSB status of a verified firm in connection with SDVOSB/VOSB set-aside acquisitions. Additionally, establishment of a longer, three year eligibility period is consistent with other Federal set-aside programs. With respect to the Historically Underutilized Business Zone (HUBZone) small business certification program, U.S. Small Business Administration (SBA) regulations at 13 CFR 126.500 require that any qualified HUBZone small business concern seeking to remain on the HUBZone approved list must recertify every three years with SBA. With regard to SBA's Section 8(a) Business Development program, SBA authorizes a program term of up to nine years in 13 CFR 124.2. Furthermore, VA's determination that an eligibility period of three years is reasonable given the mandatory nature of VA's SDVOSB/VOSB set- aside authority. In accordance with 38 United States Code (U.S.C.) 8127 and VA Acquisition Regulation, 48 CFR part 819, VA is required to set aside any open market procurement for SDVOSBs and VOSBs, if two or more such concerns are reasonably anticipated to submit offers at fair and reasonable pricing. Given the large volume of appropriated funds subject to these set-aside requirements, a three year eligibility period prior to re-examination is appropriate to balance the burden on SDVOSB/VOSBs and to protect the integrity of the program. VA received comments requesting clarification as to whether currently verified SDVOSBs/VOSBs would be automatically extended. All firms that were verified and in the VIP database automatically had their eligibility term extended by one year. Numerous commenters expressed support for the extension of the eligibility period, asserting that it allows veterans more time to focus on the success of their businesses, and reduces their administrative burden of gathering and submitting the required documentation. One such commenter supported the extension, but suggested that firms should be required to submit a certified statement stating that the firm's ownership stake has not changed, and based on the original certifying criteria that they are still eligible for their status at the two year mark. The comment continues to suggest that any firm unable to provide the statement would be required to re-verify at that time. However, VA's risk analysis on the extension has shown that risk of extending the period from two to three years is very low, and that requiring firms to submit a statement at the two year mark is an unnecessary administrative burden on both the firm and the government. Therefore, we will not make any changes to the rule based on this comment. Another commenter asserted that VA should have issued this change as a proposed rule rather than an interim final rule because the determination of good cause that exempts this rule from the notice and comment procedures is incorrect; the notice and comment is not impracticable, unnecessary, or contrary to public interest. VA has determined that relieving the administrative burden on both program participants and verifying officials, and eliminating delays in verification caused by repetitive biennial reviews, is in the best interest of the public. Therefore, we will not make any changes to the rule based on this comment. VA appreciates the comments submitted in response to the interim final rule. This final rule adopts the interim final rule as a final rule without change. Regulatory Flexibility Act The Regulatory Flexibility Act, 5 U.S.C. 601-612, applies to this final rule. This final rule is generally neutral in its effect on small businesses because it relates only to small businesses applying for verified status in VA's SDVOSB/VOSB verified database. The overall impact of the rule benefits small businesses owned by veterans or service-disabled veterans because it reduces the administrative burden associated with maintaining verified status by extending the period for re-verification from two years to three years. VA has estimated the cost to an individual business to be insignificant. Increasing the verification period will decrease the frequency of any costs associated with document submission. On this basis, the Secretary certifies that the adoption of this final rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. Therefore, under 5 U.S.C. 605(b), this regulation is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604. Executive Orders 12866 and 13563 Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and [[Page 32139]] Review) defines a ``significant regulatory action,'' which requires review by the Office of Management and Budget, as ``any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.'' The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined and it has been determined not to be a significant regulatory action under Executive Order 12866. Unfunded Mandates The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any given year. This final rule has no such effect on state, local, and tribal governments, or on the private sector. Paperwork Reduction Act This document contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501- 3521). Catalog of Federal Domestic Assistance This final rule affects the verification guidelines of veteran- owned small businesses, for which there is no Catalog of Federal Domestic Assistance program number. Signing Authority The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Gina S. Farrisee, Deputy Chief of Staff, Department of Veterans Affairs, approved this document on July 5, 2017, for publication. List of Subjects in 38 CFR Part 74 Administrative practice and procedures, Privacy, Reporting and recordkeeping requirements, Small business, Veteran, Veteran-owned small business, Verification. Dated: July 7, 2017. Michael Shores, Director, Regulation Policy & Management, Office of the Secretary, Department of Veterans Affairs. PART 74--VETERANS SMALL BUSINESS REGULATIONS Accordingly, the interim rule amending 38 CFR part 74 which was published at 82 FR 11154 on February 21, 2017, is adopted as final without change. [FR Doc. 2017-14600 Filed 7-11-17; 8:45 am] BILLING CODE 8320-01-P
![Federal Register / Vol. 82, No. 132 / Wednesday, July 12, 2017 / Rules and Regulations 32137
E. Unfunded Mandates Reform Act Authority: 33 U.S.C. 1231; 50 U.S.C. 191; DEPARTMENT OF VETERANS
33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5; AFFAIRS
The Unfunded Mandates Reform Act
Department of Homeland Security Delegation
of 1995 (2 U.S.C. 1531–1538) requires
No. 0170.1. 38 CFR Part 74
Federal agencies to assess the effects of
their discretionary regulatory actions. In ■ 2. Add § 165.T09–0614 to read as RIN 2900–AP93
particular, the Act addresses actions follows:
that may result in the expenditure by a VA Veteran-Owned Small Business
State, local, or tribal government, in the § 165.T09–0614 Safety Zone; Main Branch Verification Guidelines
aggregate, or by the private sector of of the Chicago River, Chicago, IL.
AGENCY: Department of Veterans Affairs.
$100,000,000 (adjusted for inflation) or
(a) Location. All U.S. navigable waters ACTION: Final rule.
more in any one year. Though this rule
will not result in such an expenditure, of the Main Branch of the Chicago River,
between the Wells Street Bridge and SUMMARY: This document implements a
we do discuss the effects of this rule portion of the Veterans Benefits, Health
elsewhere in this preamble. Dearborn Street Bridge in Chicago, IL.
Care, and Information Technology Act
(b) Enforcement period. This rule will
F. Environment of 2006, which requires the Department
be enforced on each day from 8:15 p.m. of Veterans Affairs (VA) to verify
We have analyzed this rule under through 8:45 p.m. on July 11, 2017,
Department of Homeland Security ownership and control of veteran-
August 8, 2017, and September 12, owned small businesses (VOSBs),
Management Directive 023–01 and 2017.
Commandant Instruction M16475.lD, including service-disabled veteran-
which guide the Coast Guard in (c) Regulations. (1) In accordance with owned small businesses (SDVOSBs) in
complying with the National the general regulations in § 165.23 of order for these firms to participate in
Environmental Policy Act of 1969 (42 this part, entry into, transiting, or VA acquisitions set-aside for SDVOSB/
U.S.C. 4321–4370f), and have anchoring within this safety zone is VOSBs. This rule contains a minor
determined that this action is one of a prohibited unless authorized by the revision to require re-verification of
category of actions that do not Captain of the Port Lake Michigan or a SDVOSB/VOSB status once every three
individually or cumulatively have a designated on-scene representative. years rather than biennially. The
significant effect on the human purpose of this change is to reduce the
(2) This safety zone is closed to all administrative burden on SDVOSB/
environment. This rule involves the vessel traffic, except as may be
establishment of a safety zone for a VOSBs regarding participation in VA
permitted by the Captain of the Port acquisitions set asides for these types of
bridge based pyrotechnics display on Lake Michigan or a designated on-scene
the Main Branch of the Chicago River in firms.
representative. DATES: Effective Date: July 12, 2017.
Chicago, IL. It is categorically excluded
from further review under paragraph (3) The ‘‘on-scene representative’’ of FOR FURTHER INFORMATION CONTACT:
34(g) of Figure 2–1 of the Commandant the Captain of the Port Lake Michigan Thomas McGrath, Director, Center for
Instruction. A Record of Environmental is any Coast Guard commissioned, Verification and Evaluation (00VE),
Consideration (REC) supporting this warrant or petty officer who has been Department of Veterans Affairs, 810
determination is available in the docket designated by the Captain of the Port Vermont Ave. NW., Washington, DC
where indicated in the ADDRESSES Lake Michigan to act on his or her 20420, phone (202) 461–4300.
section of this preamble. We seek any behalf. SUPPLEMENTARY INFORMATION: On
comments or information that may lead (4) Vessel operators desiring to enter February 21, 2017, VA published in the
to the discovery of a significant or operate within the safety zone shall Federal Register (82 FR 11154) an
environmental impact from this rule. contact the Captain of the Port Lake interim final rule to revise VA’s rules
G. Protest Activities Michigan or an on-scene representative regarding the length of the eligibility
to obtain permission to do so. The period for inclusion in the Vendor
The Coast Guard respects the First Information Pages database. Interested
Amendment rights of protesters. Captain of the Port Lake Michigan or an
on-scene representative may be persons were invited to submit written
Protesters are asked to contact the comments on or before April 24, 2017.
person listed in the FOR FURTHER contacted via VHF Channel 16 or
contact Sector Lake Michigan at (414) VA received numerous comments from
INFORMATION CONTACT section to
747–7182. Vessel operators given members of the public.
coordinate protest activities so that your In a final rule published in the
message can be received without permission to enter or operate in the
Federal Register on February 8, 2010,
jeopardizing the safety or security of safety zone must comply with all
(75 FR 6098), VA established 38 Code of
people, places or vessels. directions given to them by the Captain Federal Regulations (CFR) part 74,
of the Port Lake Michigan, or an on- which set forth a mechanism for
List of Subjects in 33 CFR Part 165
scene representative. verifying ownership and control of
Harbors, Marine safety, Navigation
(water), Reporting and recordkeeping Dated: July 6, 2017. VOSBs and SDVOSBs. At that time, VA
requirements, Security measures, A.B. Cocanour, anticipated that annual examinations
Waterways. Captain, U.S. Coast Guard, Captain of the were necessary to ensure the integrity of
Port, Lake Michigan. the Verification Program and was
For the reasons discussed in the
deemed consistent with the annual
preamble, the Coast Guard amends 33 [FR Doc. 2017–14531 Filed 7–11–17; 8:45 am]
Federal size and status recertification
nlaroche on DSK30NT082PROD with RULES
CFR part 165 as follows: BILLING CODE 9110–04–P
requirement in the Central Contractor
PART 165—REGULATED NAVIGATION Registry. In June of 2012, the eligibility
AREAS AND LIMITED ACCESS AREAS period was extended to two years.
VA has determined that a biennial
■ 1. The authority citation for part 165 examination is not necessary to
continues to read as follows: adequately maintain the integrity of the
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![Federal Register / Vol. 82, No. 132 / Wednesday, July 12, 2017 / Rules and Regulations 32139
Review) defines a ‘‘significant approved this document on July 5, 2017, exceeding an applicable Corporate
regulatory action,’’ which requires for publication. Average Fuel Economy (CAFE) standard
review by the Office of Management and was among the penalties adjusted for
List of Subjects in 38 CFR Part 74
Budget, as ‘‘any regulatory action that is inflation in the interim final rule. In
likely to result in a rule that may: (1) Administrative practice and accordance with the Inflation
Have an annual effect on the economy procedures, Privacy, Reporting and Adjustment Act and guidance on
of $100 million or more or adversely recordkeeping requirements, Small calculating the inflationary adjustment
affect in a material way the economy, a business, Veteran, Veteran-owned small mandated by the Act issued by the
sector of the economy, productivity, business, Verification. Office of Management and Budget,
competition, jobs, the environment, Dated: July 7, 2017. NHTSA increased the civil penalty for
public health or safety, or State, local, Michael Shores, failing to meet an applicable CAFE
or tribal governments or communities; Director, Regulation Policy & Management,
standard from $5.50 per tenth of a mile
(2) Create a serious inconsistency or Office of the Secretary, Department of per gallon (mpg) to $14 per tenth of an
otherwise interfere with an action taken Veterans Affairs. mpg.
or planned by another agency; (3) The Auto Alliance and Global
Materially alter the budgetary impact of PART 74—VETERANS SMALL Automakers jointly petitioned NHTSA
entitlements, grants, user fees, or loan BUSINESS REGULATIONS for reconsideration of the interim final
programs or the rights and obligations of rule regarding the inflationary
Accordingly, the interim rule adjustment of CAFE non-compliance
recipients thereof; or (4) Raise novel
amending 38 CFR part 74 which was penalties (hereafter, the Alliance and
legal or policy issues arising out of legal
published at 82 FR 11154 on February Global petition will be referred to as the
mandates, the President’s priorities, or
21, 2017, is adopted as final without ‘‘Industry Petition’’) 1 on August 1,
the principles set forth in this Executive
change. 2016. The Industry Petition argued that
Order.’’
[FR Doc. 2017–14600 Filed 7–11–17; 8:45 am] NHTSA used the wrong base year to
The economic, interagency,
budgetary, legal, and policy BILLING CODE 8320–01–P calculate the inflationary adjustment to
implications of this regulatory action the CAFE civil penalty and raised
have been examined and it has been concerns about applying the adjusted
DEPARTMENT OF TRANSPORTATION civil penalty retroactively. The Industry
determined not to be a significant
regulatory action under Executive Order Petition also argued that in the event
National Highway Traffic Safety
12866. that NHTSA chose not to adopt the base
Administration
year suggested in the petition, NHTSA
Unfunded Mandates should seek comment on whether
49 CFR Part 578
The Unfunded Mandates Reform Act NHTSA should adopt a lower penalty
of 1995 requires, at 2 U.S.C. 1532, that [Docket No. NHTSA–2016–0136] level than the one in the interim final
agencies prepare an assessment of RIN 2127–AL82 rule based on ‘‘negative economic
anticipated costs and benefits before impacts,’’ as permitted by the Inflation
issuing any rule that may result in the Civil Penalties Adjustment Act.
expenditure by state, local, and tribal On December 28, 2016, NHTSA
AGENCY: National Highway Traffic published a final rule in response to the
governments, in the aggregate, or by the
Safety Administration (NHTSA), Industry Petition.2 To address concerns
private sector, of $100 million or more
Department of Transportation (DOT). raised in the Industry Petition about
(adjusted annually for inflation) in any
given year. This final rule has no such ACTION: Final rule; delay of effective applying the adjusted penalty
effect on state, local, and tribal date. retroactively, NHTSA delayed
governments, or on the private sector. application of the $14 per tenth of an
SUMMARY: NHTSA is delaying the mpg penalty until the 2019 model year,
Paperwork Reduction Act effective date of the final rule entitled which begins in October 2018 for most
‘‘Civil Penalties,’’ published in the manufacturers. The final rule did not
This document contains no provisions Federal Register on December 28, 2016,
constituting a collection of information address the other points raised in the
because NHTSA is reconsidering the Industry Petition.
under the Paperwork Reduction Act of appropriate level for CAFE civil
1995 (44 U.S.C. 3501–3521). The December 28, 2016 final rule is
penalties. not yet effective and would currently
Catalog of Federal Domestic Assistance DATES: As of July 7, 2017, the effective become effective on July 10, 2017.3
date of the final rule published in the NHTSA is now reconsidering the final
This final rule affects the verification
Federal Register on December 28, 2016, rule because the final rule did not give
guidelines of veteran-owned small
at 81 FR 95489, is delayed indefinitely adequate consideration to all of the
businesses, for which there is no Catalog
pending reconsideration. relevant issues, including the potential
of Federal Domestic Assistance program
FOR FURTHER INFORMATION CONTACT:
economic consequences of increasing
number.
Rebecca Schade, Office of Chief CAFE penalties by potentially $1 billion
Signing Authority Counsel, at (202) 366–2992. per year, as estimated in the Industry
Petition. Thus, in a separate document
The Secretary of Veterans Affairs, or SUPPLEMENTARY INFORMATION: On July 5,
designee, approved this document and 2016, NHTSA published an interim 1 Jaguar Land Rover North America, LLC also
authorized the undersigned to sign and final rule updating the maximum civil
nlaroche on DSK30NT082PROD with RULES
filed a petition for reconsideration in response to
submit the document to the Office of the penalty amounts for violations of the July 5, 2016 interim final rule raising the same
Federal Register for publication statutes and regulations administered by concerns as those raised in the Industry Petition.
Both petitions can be found in Docket No. NHTSA–
electronically as an official document of NHTSA, pursuant to the Federal Civil 2016–0075, accessible via www.regulations.gov.
the Department of Veterans Affairs. Gina Penalties Inflation Adjustment Act 2 81 FR 95489.
S. Farrisee, Deputy Chief of Staff, Improvements Act of 2015 (Inflation 3 82 FR 8694 (Jan. 30, 2017); 82 FR 15302 (Mar.
Department of Veterans Affairs, Adjustment Act). The penalty for 28, 2017); 82 FR 29009 (June 27, 2017).
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Document Created: 2017-07-12 03:00:27
Document Modified: 2017-07-12 03:00:27
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective Date: July 12, 2017. | |
| Contact | Thomas McGrath, Director, Center for Verification and Evaluation (00VE), Department of Veterans Affairs, 810 Vermont Ave. NW., Washington, DC 20420, phone (202) 461-4300. | |
| FR Citation | 82 FR 32137 | |
| RIN Number | 2900-AP93 | |
| CFR Associated | Administrative Practice and Procedures; Privacy; Reporting and Recordkeeping Requirements; Small Business; Veteran; Veteran-Owned Small Business and Verification |
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