IV. Regulatory Flexibility Act

On November 12, 2010, DoD published an interim rule at 75 FR 69360 implementing section 823 of the NDAA for FY 2010. The interim rule was immediately effective upon publication. Section 823 required contracting officers to consider reduction or denial of award fee if the actions of the contractor or a subcontractor at any tier jeopardize the health or safety of Government personnel. DoD did not prepare an initial regulatory flexibility analysis at that time because generally, contracts awarded to small business are not likely to utilize incentive- and award-fee contract structures. No comments were received on the regulatory flexibility section of the notice for the interim rule implementing section 823.

DoD does not expect this interim rule implementing section 834 of the NDAA for FY 2011 to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. This rule does not apply to firms that are subject to the jurisdiction of U.S. courts. By definition, small businesses are U.S. businesses and, therefore, are subject to the jurisdiction of the U.S. courts. Accordingly, this rule will not affect small businesses. An initial regulatory flexibility analysis has not been performed because this rule will apply only to primes and subcontractors at any tier that are not subject to the jurisdiction of the U.S. courts. DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD will also consider comments from small entities concerning the existing regulations in subparts affected by the rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2011-D033) in correspondence.