IV. Regulatory Flexibility Act

A final regulatory flexibility analysis has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., and is summarized as follows:

The objective of the rule is to establish a definition for contractor business systems and implement compliance mechanisms to improve DoD oversight of those contractor business systems. The requirements of the rule will apply to solicitations and contracts that are subject to the Cost Accounting Standards under 41 U.S.C. chapter 15, as implemented in regulations found at 48 CFR 9903.201-1 (see the FAR Appendix), other than in contracts with educational institutions, Federally Funded Research and Development Centers operated by educational institutions, or University Associated Research Centers, and include one or more of the defined contractor business systems.

No comments were submitted by the public or from the Chief Counsel for Advocacy of the Small Business Administration in response to the initial regulatory flexibility analysis published with the interim rule.

DoD does not expect this 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 contracts and subcontracts with small businesses are exempt from Cost Accounting Standards (CAS) requirements.

The business systems clause in the proposed rule contains a requirement for contractors to respond to initial and final determinations of deficiencies. The information contractors will be required to submit to respond to deficiencies in the six business systems defined in this rule have been approved by the Office of Management and Budget as follows:

(1) Accounting Systems--OMB Clearance 9000-0011.

(2) Estimating Systems--OMB Clearance 0704-0232.

(3) Material Management and Accounting Systems (MMAS)--OMB Clearance 0704-0250.

(4) Purchasing Systems--OMB Clearance 0704-0253.

(5) Earned Value Management Systems--OMB Clearance 0704-0479.

(6) Property Management Systems--OMB Clearance 0704-0480.

Since contracts and subcontracts with small businesses are exempt from CAS requirements, DoD estimates that small entities will not be impacted by projected reporting, recordkeeping, and other compliance requirements of the rule.

There were no significant alternatives identified that would meet the requirements of the applicable statutes.