B. Regulatory Flexibility Act

The Councils do not expect this interim rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. The rule removes the current requirements relating to subcontracts for COTS items, and in the case of commercial items, the requirement extends only to the first-tier subcontracts. This rule will impact small entities that are awarded a lower-tier subcontract for a non-COTS item that exceeds $30,000, in that these entities must now disclose to the higher-tier subcontractor whether they are suspended, debarred, or proposed for suspension.

Although a substantial number of small entities may be impacted by this rule, the impact is not significant. It will likely only take one minute to include the required information with an offer. For the other impact of the rule, which will require the higher-tier subcontractor to provide an explanation if desiring to subcontract with an entity that has been debarred, suspended, or proposed for debarment, the Councils do not expect this requirement to impact a substantial number of small entities, because it would only be in rare circumstances that a subcontractor would potentially jeopardize performance or integrity by knowingly contracting with an entity that is debarred, suspended or proposed for debarment. Therefore, an Initial Regulatory Flexibility Analysis has not been performed. The Councils invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

The Councils will also consider comments from small entities concerning the existing regulations in parts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAC 2005-47, FAR Case 2008-036) in correspondence.