7.  Regulatory Flexibility

Two respondents questioned the Initial Regulatory Flexibility Analysis (IRFA) and made recommendations for reducing the impact on small business.

Comment: These respondents questioned the assertion that the rule will not affect small business entities. One respondent stated that 5,148 small business awards over $150,000 is not an insubstantial figure. Another respondent stated that there could be adverse effects, especially with respect to commercial and low-dollar contracts sought by small businesses. According to this respondent, small businesses may be disproportionately impacted, because they may lack the resources to provide cost or pricing data. Another respondent disagreed with the conclusion of the IRFA that the burden for submission of cost or pricing data is already covered in the FAR. According to this respondent, the IRFA did not acknowledge that this rule will increase the requirement for submission of cost or pricing data by small businesses, because submission of cost or pricing data is not currently a requirement for full and open competition.

Response: The final rule has, however, reduced the impact on all businesses, including small businesses. As rewritten, the final rule is not inconsistent with the current FAR requirements to determine that the price is fair and reasonable when only one offer is received. It uses the FAR clause 52.215-20, but includes a mechanism whereby the FAR clause only becomes effective if only one offer is received, and the contracting officer cannot determine that the offered price is fair and reasonable without requiring additional data. This is part of the current FAR requirement to determine that adequate price competition exists if only one offer is received.

With regard to impact on commercial and low-dollar value contracts sought by small businesses, the rule does not apply at all to contracts with dollar values below the simplified acquisition threshold. For acquisitions above the simplified acquisition threshold, the contracting officer will only request the data necessary to determine a fair and reasonable price. No certified cost or pricing data is required for commercial items. A small business that is offering items to the Government in quantities that exceed the simplified acquisition threshold and are not commercial items should have an accounting system adequate to provide cost or pricing data upon request.

Comment: Another comment on the IRFA was that it does not explain the relationship between the submission of cost or pricing data and increased competition.

Response: As clarified in the revised policy of the final rule, there is no relationship between submission of cost or pricing data and increased competition. The submission of cost or pricing data is to determine whether the offered price is fair and reasonable, when the efforts to increase competition nevertheless resulted in only one offer and the contracting officer could not make that determination without additional data.

Comment: One respondent further recommended exclusion of--

Set-asides for small business; and

Acquisitions using full and open competition procedures that result in single offers from small businesses.

Response: An exception to the 30-day resolicitation requirement has been added at DFARS 215.371-4(b) for small business set-asides, because the FAR specifically provides at FAR 19.5, 19.305(c), 19.1405(c), and 19.1505(d) that if only one acceptable offer is received under these set-aside programs, the contracting officer should award to that concern. The final rule does not include any exception for when the single offer comes from a small business, because it is important to increase competition and allow all businesses sufficient time to respond to a solicitation, which could be of benefit to other small businesses.

In all cases, it is still essential to determine that the price is fair and reasonable.