L. Impacts to Small Businesses

Comment: The proposed rule's Regulatory Flexibility Act section states that the reporting requirements will not apply to a significant number of small businesses. If the reporting requirement is not limited to major contractors and is not on a per project basis, the low threshold likely will capture many small businesses. Given the current state of DoD contracting and the complex systems required to support DoD, there are very few IR&D projects that can be performed for less than $50,000 and thus the requirements, in effect, will apply to most IR&D, including those performed by small businesses. The respondent, therefore, respectfully disagreed with DoD's suggestion that the requirements will not apply to a significant number of small businesses.

Response: DoD does not expect this proposed rule 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., because 231.205-18(c)(iii) applies only to major contractors, which are defined as those whose covered segments allocated a total of more than $11,000,000 in IR&D/B&P costs to covered contracts during the preceding fiscal year. The $50,000 contractor annual IR&D threshold has been removed from the final rule. However, DoD has included a new sentence in the rule to encourage small businesses to submit their project description since there may be an advantage to any size business to have its projects included.