[Federal Register: July 26, 2000 (Volume 65, Number 144)]
[Rules and Regulations]               
[Page 46055-46063]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26jy00-43]                         

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 5, 12, 19, 23, 52, and 53

[FAC 97-19; FAR Case 2000-604; Item II]
RIN 9000-AI75

 
Federal Acquisition Regulation; North American Industry 
Classification System (NAICS)

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) to convert size 
standards and other programs in the FAR based on the Standard 
Industrial Classification (SIC) system to the North American Industry 
Classification System (NAICS).

DATES: Effective Date: October 1, 2000.
    Comment Date: Interested parties should submit comments to the FAR 
Secretariat at the address shown below on or before September 25, 2000 
to be considered in the formulation of a final rule.

ADDRESSES: Submit written comments to: General Services Administration, 
FAR Secretariat (MVR), 1800 F Street, NW, Room 4035, Attn: Ms. Laurie 
Duarte, Washington, DC 20405.
    Submit electronic comments via the Internet to: farcase.2000-
604@gsa.gov
    Please submit comments only and cite FAC 97-19, FAR case 2000-604 
in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact Ms. Victoria Moss, Procurement Analyst, at (202) 501-
4764. Please cite FAC 97-19, FAR case 2000-604.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule amends the FAR to convert size standards and 
other programs in the FAR that are based on the Standard Industrial 
Classification (SIC) system to the North American Industry 
Classification System (NAICS).
    The Small Business Administration (SBA) amended its regulations to 
convert small business size standards from the Standard Industrial 
Classification (SIC) System to the North American Industry 
Classification System (NAICS). These new size standards were published 
in the Federal Register at 65 FR 30836, May 15, 2000, and are effective 
on October 1, 2000. NAICS is a new system that classifies business 
concerns according to how they conduct their economic activity. SBA has 
determined that NAICS is a better description of industries in the U.S. 
economy than the SIC system for purposes of establishing size 
standards. This interim rule adopts the NAICS-based size standards 
effective October 1, 2000.
    This rule conforms the FAR to the final SBA size standards and 
converts other programs in the FAR currently based on SIC codes to 
NAICS codes. These programs include the Small Business Competitiveness 
Demonstration Program at Subpart 19.10, the Price Evaluation Adjustment 
for Small Disadvantaged Business Concerns at Subpart 19.11, the Small 
Disadvantaged Business Participation Program at Subpart 19.12, and the 
Historically Underutilized Business Zone (HUBZone) Program at Subpart 
19.13.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The interim rule is not expected 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 the 
coding changes are primarily internal to the Government. External uses 
of the codes under the small business subcontracting program and small 
disadvantaged business participation programs are primarily limited to 
large businesses. This rule includes implementation of SBA's final 
rule, and SBA has certified that the impact of the SIC to NAICS change 
on each business will not be substantial. Therefore, an Initial 
Regulatory Flexibility Analysis has not been performed. The Councils 
will consider comments from small entities concerning the affected FAR 
Parts in accordance with 5 U.S.C. 610. Interested parties must submit 
such comments separately and should cite 5 U.S.C 601, et seq. (FAC 97-
19, FAR case 2000-604), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (Pub. L. 104-13) applies; 
however, this interim rule does not impose new reporting and 
recordkeeping requirements that require the approval of the Office of 
Management and Budget under 44 U.S.C. 3501, et seq. This rule will 
require restructuring of contractors' record systems to collect data on 
small disadvantaged businesses under small business subcontracting 
plans and small disadvantaged business participation plans by NAICS 
rather than SIC. Because this merely involves use of a different 
industry classification system, this interim rule does not affect 
existing OMB clearances (9000-0006, 9000-0007, and 9000-0150).

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense

[[Page 46056]]

(DoD), the Administrator of General Services (GSA), and the 
Administrator for the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary because the Small Business Administration (SBA) issued a 
final rule on May 15, 2000, providing a new size standards listing that 
is based on NAICS rather than SIC codes. The SBA rule requires Federal 
agencies to use the new size standards, beginning October 1, 2000, to 
determine whether a business is a small business concern. Changes to 
the FAR are needed to establish policy for use of the new size 
standards in Government acquisitions. The required implementation date 
of October 1, 2000, does not permit time to issue a proposed FAR rule 
and evaluate public comments. However, pursuant to Public Law 98-577 
and FAR 1.501, the Councils will consider public comments received in 
response to this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 5, 12, 19, 23, 52, and 53

    Government procurement.

    Dated: July 19, 2000.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA amend 48 CFR parts 5, 12, 19, 23, 52, 
and 53 as set forth below:
    1. The authority citation for 48 CFR parts 5, 12, 19, 23, 52, and 
53 continues to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 5--PUBLICIZING CONTRACT ACTIONS

    2. Amend section 5.205 by revising paragraph (f)(2) to read as 
follows:


5.205  Special situations.

* * * * *
    (f) * * *
    (2) Specifying the North American Industry Classification System 
(NAICS) code;
* * * * *

PART 12--ACQUISITION OF COMMERCIAL ITEMS


12.603  [Amended]

    3. Amend section 12.603 in the first sentence of paragraph 
(c)(2)(iv) by removing ``standard industrial classification'' and 
adding, in its place, ``NAICS''.

PART 19--SMALL BUSINESS PROGRAMS

    4. Amend section 19.001 by revising the definition ``Industry'' to 
read as follows:


19.001  Definitions.

* * * * *
    Industry, as used in this part, means all concerns primarily 
engaged in similar lines of activity, as listed and described in the 
North American Industry Classification system (NAICS) manual (available 
via the Internet at http://www.census.gov/epcd/www/naics.html).
* * * * *

    5. Amend section 19.102 by revising paragraphs (b)(1) and (h) to 
read as follows:


19.102  Size standards.

* * * * *
    (b) * * *
    (1) Classifying the product or service being acquired in the 
industry whose definition, as found in the North American Industry 
Classification System (NAICS) Manual (available via the Internet at 
http://www.census.gov/epcd/www/naics.html), best describes the 
principal nature of the product or service being acquired;
* * * * *
    (h) the industry size standards are published by the Small Business 
Administration and are available via the Internet at http://
www.sba.gov/size/NAICS-cover-page.htm.


19.201  [Amended]

    6. Amend section 19.201--
    a. In the first sentence of paragraph (b) by removing ``Major 
Groups as contained in the Standard Industrial Classification (SIC) 
manual'' and adding, in its place, ``North American Industry 
Classification System (NAICS) Industry Subsector'';
    b. In the sixth sentence of paragraph (b) by removing ``SIC MAJOR 
Group'' and adding, in its place, ``NAICS Industry Subsector'';
    c. In the first sentence of the introductory text of paragraph 
(f)(1) by removing ``major industry groups'' and adding, in its place, 
``Industry subsectors''; and
    d. In paragraphs (f)(1)(ii) and (f)(1)(iii) by removing ``SIC Major 
Group'' and adding, in their place, ``Industry subsector''.


19.303  Determining North American Industry Classification System 
(NAICS) codes and size standards.

    7. Amend section 19.303 by revising the section heading to read as 
set forth above; and in paragraph (a) by removing ``standard industrial 
classification'' and adding ``NAICS'' in its place.


19.501  [Amended]

    8. Amend section 19.501 in paragraph (g) by removing ``product 
classification'' and adding ``NAICS code'' in its place.


19.805-1  [Amended]

    9. Amend section 19.805-1 in paragraph (a)(2) by removing 
``standard industrial classification (SIC)'' and adding ``North 
American Industry Classification System (NAICS)'' in its place.


19.1002  [Amended]

    10. Amend section 19.1002 in the definition ``Emerging small 
business'' by removing ``standard industrial classification'' and 
adding ``North American Industry Classification System (NAICS)'' in its 
place.

    11. Amend section 19.1005 by revising paragraph (a) to read as 
follows:


19.1005  Applicability.

    (a) Designated industry groups.

------------------------------------------------------------------------
        NAICS code                       NAICS description
------------------------------------------------------------------------
                              Construction
      Subsector 233--Building, Developing, and General Contracting
------------------------------------------------------------------------
23311....................  Land Subdivision and Land Development.
23321....................  Single Family Housing Construction.
23322....................  Multifamily Housing Construction.
23331....................  Manufacturing and Industrial Building
                            Construction.
23332....................  Commercial and Institutional Building
                            Construction.
------------------------------------------------------------------------

[[Page 46057]]


                    Subsector 234--Heavy Construction
------------------------------------------------------------------------
23411....................  Highway and Street Construction.
23412....................  Bridge and Tunnel Construction.
23491....................  Water, Sewer, and Pipeline Construction.
23492....................  Power and Communication Transmission Line
                            Construction.
23493....................  Industrial Nonbuilding Structure
                            Construction.
23499....................  All Other Heavy Construction.
------------------------------------------------------------------------
                Subsector 235--Special Trade Contractors
------------------------------------------------------------------------
23511....................  Plumbing, Heating, and Air-Conditioning
                            Contractors.
23521....................  Painting and Wall Covering Contractors.
23531....................  Electrical Contractors.
23541....................  Masonry and Stone Contractors.
23542....................  Drywall, Plastering, Acoustical, and
                            Insulation Contractors.
23543....................  Tile, Marble, Terrazzo, and Mosaic
                            Contractors.
23551....................  Carpentry Contractors.
23552....................  Floor Laying and Other Floor Contractors.
23561....................  Roofing, Siding, and Sheet Metal Contractors.
23571....................  Concrete Contractors.
23581....................  Water Well Drilling Contractors.
23591....................  Structural Steel Erection Contractors.
23592....................  Glass and Glazing Contractors.
23593....................  Excavation Contractors.
23594....................  Wrecking and Demolition Contractors.
23595....................  Building Equipment and Other Machinery
                            Installation Contractors.
23599....................  All Other Special Trade Contractors.
------------------------------------------------------------------------
                         Nonnuclear Ship Repair
336611...................  Ship Building and Repairing
Architectural and Engineering Services (including surveying and mapping)
------------------------------------------------------------------------
54131....................  Architectural Services.
54133....................  Engineering Services.
54136....................  Geophysical Surveying and Mapping Services.
54137....................  Surveying and Mapping (except Geophysical)
                            Services.
------------------------------------------------------------------------
                   Refuse Systems and Related Services
------------------------------------------------------------------------
562111...................  Solid Waste Collection.
562119...................  Other Waste Collection.
562219...................  Other Nonhazardous Waste Treatment and
                            Disposal.
------------------------------------------------------------------------

* * * * *

    12. Revise the introductory text of section 19.1201 to read as 
follows:


19.1201  General.

    This subpart addresses the evaluation of the extent of 
participation of small disadvantaged business (SDB) concerns in 
performance of contracts in the North American Industry Classification 
System (NAICS) Industry Subsectors as determined by the Department of 
Commerce (see 19.201(b)), and to the extent authorized by law. Two 
mechanisms are addressed in this subpart--
* * * * *

    13. Amend section 19.1306 by revising paragraph (a)(2)(i) to read 
as follows:


19.1306  HUBZone sole source awards.

    (a) * * *
    (2) * * *
    (i) $5,000,000 for a requirement within the North American Industry 
Classification System (NAICS) codes for manufacturing; or
* * * * *


19.303, 19.803, 19.804-2, 19.804-3, 19.804-5, 19.804-6, 19.810, 
19.1007, 19.1102, 19.1202-1, 19.1202-2, 19.1202-4, 19.1203, and 
19.1306  [Amended]

    14. In addition to the amendments set forth above, in the table 
below, for each section indicated in the left column, remove the text 
indicated in the middle column from wherever it appears in the section, 
and add the text indicated in the right column:

------------------------------------------------------------------------
             Section                    Remove                Add
------------------------------------------------------------------------
19.303(c)(1) (twice);             SIC...............  NAICS.
 19.303(c)(2)(ii)(B);
 19.303(c)(3)(ii); 19.303(c)(4)
 (twice); 19.803(b)(4)(i)(B);
 19.803(b)(4)(ii); 19.804-
 2(a)(3); 19.804-3(d)
 introductory text; 19.804-
 3(d)(1) (twice); 19.804-3(d)(2)
 (twice); 19.804-5(c); 19.804-
 6(c); 19.810(a)(3);
 19.1007(a)(1).
19.1102(a); 19.1202-1; 19.1202-   SIC Major Groups..  NAICS Industry
 2(a) and introductory text of                         Subsector.
 paragraph (b); 19.1202-4(a);
 19.1203.
19.1306(a)(2)(ii)...............  SIC...............  NAICS.
------------------------------------------------------------------------


[[Page 46058]]

PART 23--ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY, AND
DRUG-
FREE WORKPLACE

    15. Amend section 23.906 by revising paragraph (a)(2)(iv) to read 
as follows:


23.906  Requirements.

    (a) * * *
    (2) * * *
    (iv) Do not fall within Standard Industrial Classification Code 
(SIC) major groups 20 through 39 or their corresponding North American 
Industry Classification System (NAICS) sectors 31 through 33; or
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    16. Amend section 52.212-1 by revising the date and paragraph (a) 
of the provision to read as follows:


52.212-1  Instructions to Offerors--Commercial Items.

* * * * *

Instructions to Offerors--Commercial Items (Oct. 2000)

    (a) North American Industry Classification System (NAICS) code 
and small business size standard. The NAICS code and small business 
size standard for this acquisition appear in Block 10 of the 
solicitation cover sheet (SF 1449). However, the small business size 
standard for a concern which submits an offer in its own name, but 
which proposes to furnish an item which it did not itself 
manufacture, is 500 employees.
* * * * *


52.212-3  [Amended]

    17. Amend section 52.212-3 by revising the date of the clause to 
read ``(Oct 2000)''; and in paragraph (a) of the clause, in the 
definition ``Emerging small business,'' by removing ``standard 
industrial classification'' and adding, in its place, ``NAICS''.

    18. Amend section 52.219-1 by revising the date and paragraph 
(a)(1) of the provision to read as follows:


52.219-1  Small Business Program Representations.

* * * * *

Small Business Program Representations (Oct. 2000)

    (a)(1) The North American Industry Classification System (NAICS) 
code for this acquisition is--[insert NAICS code].
* * * * *
    19. Amend section 52.219-9 by revising the date and paragraph 
(j)(2) of the clause to read as follows:


52.219-9  Small Business Subcontracting Plan.

* * * * *

Small Business Subcontracting Plan (Oct. 2000)

* * * * *
    (j) * * *
    (2) Standard Form 295, Summary Subcontract Report. This report 
encompasses all of the contracts with the awarding agency. It must 
be submitted semi-annually for contracts with the Department of 
Defense and annually for contracts with civilian agencies. If the 
reporting activity is covered by a commercial plan, the reporting 
activity must report annually all subcontract awards under that 
plan. All reports submitted at the close of each fiscal year (both 
individual and commercial plans) shall include a breakout, in the 
Contractor's format, of subcontract awards, in whole dollars, to 
small disadvantaged business concerns by North American Industry 
Classification System (NAICS) Industry Subsector. For a commercial 
plan, the Contractor may obtain from each of its subcontractors a 
predominant NAICS Industry Subsector and report all awards to that 
subcontractor under its predominant NAICS Industry Subsector.
* * * * *


52.219-19  [Amended]

    20. Amend section 52.219-19 by revising the date of the provision 
to read ``(Oct. 2000)'' and in paragraph (a) by removing ``standard 
industrial classification'' and adding, in its place, ``North American 
Industry Classification System (NAICS)''.


52.219-24  [Amended]

    21. Amend section 52.219-24 by--
    a. Revising the date of the provision to read ``(Oct. 2000)''; and
    b. In paragraph (b) of the provision by removing ``Standard 
Industrial Classification (SIC) Major Groups'' and adding, in its 
place, ``North American Industry Classification System (NAICS) Industry 
Subsectors''.


52.219-26  [Amended]

    22. Amend section 52.219-26 by--
    a. Revising the date of the clause to read ``(Oct. 2000);''
    b. In paragraph (a) of the clause by removing ``Standard Industrial 
Classification (SIC) Major Groups'' and adding, in its place, ``North 
American Industry Classification System (NAICS) Industry Subsectors''; 
and
    c. In paragraph (b) of the clause by removing ``SIC Major Groups'' 
and adding, in its place, ``NAICS Industry Subsectors.''

    23. Amend section 52.223-13 by revising the date of the provision 
and paragraph (b)(2)(iv) to read as follows:


52.223-13  Certification of Toxic Chemical Release Reporting.

* * * * *

Certification of Toxic Chemical Release Reporting (Oct. 2000)

* * * * *
    (b) * * *
    (2) * * *
    {time}  (iv) The facility does not fall within Standard 
Industrial Classification Code (SIC) major groups 20 through 39 or 
their corresponding North American Industry Classification System 
(NAICS) sectors 31 through 33; or
* * * * *

    24. Amend section 52.223-14 by revising the date of the clause and 
paragraph (b)(4) to read as follows:


52.223-14  Toxic Chemical Release Reporting.

* * * * *

Toxic Chemical Release Reporting (Oct. 2000)

    (b) * * *
    (4) The facility does not fall within Standard Industrial 
Classification Code (SIC) major groups 20 through 39 or their 
corresponding North American Industry Classification System (NAICS) 
sectors 31 through 33; or
* * * * *

PART 53--FORMS


53.204-2  [Amended]

    25. Amend section 53.204-2--
    a. In paragraph (a) by removing ``(Rev. 10/97)'' and adding in its 
place ``(Rev 10/00)''; and
    b. In paragraph (b) by removing ``(Rev. 5/96)'' and adding in its 
place ``(Rev 10/00)''.


53.219  [Amended]

    26. Amend section 53.219 in paragraph (c) by removing ``(1/99)'' 
and adding in its place ``(10/00)''.

    27. Revise section 53.301-279 to read as follows:
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[[Page 46059]]

53.301-279  Federal Procurement Data System (FPDS) Individual Contract 
Action Report.
[GRAPHIC] [TIFF OMITTED] TR26JY00.000


[[Page 46060]]


[GRAPHIC] [TIFF OMITTED] TR26JY00.001


    28. Revise section 53.301-281 to read as follows:

[[Page 46061]]

53.301-281  Federal Procurement Data System (FPDS) Summary Contract 
Action Report ($25,000 or Less).
[GRAPHIC] [TIFF OMITTED] TR26JY00.002

    29. Revise section 53.302-312 to read as follows:

[[Page 46062]]

53.302-312  Small Disadvantaged Business (SDB) Participation Report.
[GRAPHIC] [TIFF OMITTED] TR26JY00.003


[[Page 46063]]


[GRAPHIC] [TIFF OMITTED] TR26JY00.004

[FR Doc. 00-18669 Filed 7-25-00; 8:45 am]
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