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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


December 2020
Vol. XXI, No. 12
[pdf version]

CONTENTS


OMB Issues Instructions for Reviews of Compliance with Executive Order 13940
DOD Tidies Things Up a Bit
Eight More Sector Size Standards to be Revised
SBA Tinkers with VOSB Regulations



OMB Issues Instructions for Reviews of
Compliance with Executive Order 13940

In August, President Trump issued Executive Order (EO) 13940, Aligning Federal Contracting and Hiring Practices with the Interests of American Workers, to create opportunities for United States workers to compete for jobs, including jobs created through federal contracts (see the September 2020 Federal Contracts Perspective article “President Orders Review of Foreign Labor on Contracts”). The Office of Management and Budget (OMB) has issued instructions to the heads of all departments and agencies for conducting reviews of contractor hiring practices and developing reports on their findings.

EO 13940 explained that federal contractors’ use of temporary foreign labor or offshoring the performance of a contract may take work away from American workers and adversely affect national security.

The EO directed each agency head to review “performance of contracts (including subcontracts) awarded by the agency in fiscal years 2018 and 2019 to assess: (i) whether contractors (including subcontractors) used temporary foreign labor for contracts performed in the United States, and, if so, the nature of the work performed by temporary foreign labor on such contracts; whether opportunities for United States workers were affected by such hiring; and any potential effects on the national security caused by such hiring; and (ii) whether contractors (including subcontractors) performed in foreign countries services previously performed in the United States, and, if so, whether opportunities for United States workers were affected by such offshoring; whether affected United States workers were eligible for assistance...; and any potential effects on the national security caused by such offshoring.”

To ensure that all federal agencies conduct reviews that are consistent with the EO, the OMB has issued the following instructions:

These reports are to be submitted to OMB at MBX.OMB.OFPPv2@OMB.eop.gov by December 31, 2020.



DOD Tidies Things Up a Bit

The Department of Defense (DOD) took it easy in November, only issuing two final rules, two proposed rules, one deviation, and two memoranda.



Eight More Sector Size Standards to be Revised

Just like in October, in November the Small Business Administration (SBA) is seeking comments on two proposed rules that would revise the small business size standards in 13 CFR 121.201, What Size Standards has SBA Identified by North American Industry Classification System Codes?, for businesses in eight North American Industrial Classification System (NAICS) sectors to increase small business eligibility for SBA’s loan and contracting programs. The SBA estimates that more than 7,300 additional firms in these eight sectors will become eligible for SBA’s programs under the revised size standards if adopted.

The first rule proposes to increase the receipts-based small business size definitions (commonly referred to as “size standards”) for 27 industries in NAICS Sector 54, Professional, Scientific and Technical Services; two industries in NAICS Sector 55, Management of Companies and Enterprises; and 17 industries in NAICS Sector 56, Administrative and Support and Waste Management and Remediation Services. Comments on this proposed rule must be submitted by January 12, 2021, identified as “RIN 3245-AG91” and submitted by one of the following methods: (1) Federal eRulemaking Portal: https://www.regulations.gov; or (2) mail/hand delivery/courier to: Khem R. Sharma, Ph.D., Chief, Office of Size Standards, 409 Third Street SW, Mail Code 6530, Washington, DC 20416.

The second rule proposes to increase the receipts-based small business size standards for 14 industries in NAICS Sector 61, Education Services; 18 industries in NAICS Sector 62, Health Care and Social Assistance; 11 industries in NAICS Sector 71, Arts, Entertainment, and Recreation; four industries in NAICS Sector 72, Accommodation and Food Services; and 23 industries in NAICS Sector 81, Other Services. Comments on this proposed rule must be submitted by January 26, 2021, identified as “RIN 3245-AG88” and submitted by one of the following methods: (1) Federal eRulemaking Portal: https://www.regulations.gov; or (2) mail/hand delivery/courier to: Khem R. Sharma, Ph.D., Chief, Office of Size Standards, 409 Third Street SW, Mail Code 6530, Washington, DC 20416.

SBA’s proposed revisions rely on its recently revised “Size Standards Methodology,” which is available at https://www.sba.gov/document/support--size-standards-methodology-white-paper. SBA seeks comments on its proposed changes to size standards in the above sectors, and the data sources it evaluated to develop the proposed size standards. The SBA considers the structural characteristics of individual industries, including average firm size, the degree of competition, and federal government contracting trends. This ensures that small business size standards reflect current economic conditions in those industries.

For more on the October proposed revisions to eight industrial sectors, see the November 2020 Federal Contracts Perspective article “Eight Industrial Sector Size Standards to be Revised.”



SBA Tinkers with VOSB Regulations

Besides proposes changes to the small business size standards in eight industrial sectors (see above), the SBA has issued two final rules that have a direct affect on veteran-owned small businesses (VOSB).





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