Acquisition regulation would end SDB/HBCU effort

The rule, announced Sept. 9, would delete DoD, NASA, and the U.S. Coast Guard (USCG), Small Disadvantaged Business (SDB) Participation Program in response to a federal appeals court decision in a 1992 lawsuit.

Comments on the rulemaking are due by Nov. 8 in response to FAR Case 2009–016.

The constitutionality of section 1207 of the National Defense Authorization Act of
1987, Public Law 99–661 (10 U.S.C. 2323) was challenged in a 1998 suit by Roche Development Corp. Mitchell and other members of the Congressional Black Caucus began inserting business inclusion provisions into appropriations legislation in the 1980s, beginning with transportation appropriations.   A Texas U.S. District Court ruled in favor of the Dept. of Defense in 2007, but the Court of Appeals for the Federal Circuit declared the law unconstitutional in 2008.

The section in question gave contracting officers the ability to give a price adjustment of up to 10 percent for small disadvantaged businesses and historically black colleges and universities in open competition.

In the Federal Register, the agencies contend the change would have minimal impact, since the provision has not been used for more than a decade.

According to the proposed rule, there are 24,702 small disadvantaged businesses registered in the Central Contractor Registry.

The change comes as the administration celebrates MED Week on Sept. 27-30 in a three day conference at the Marriott Wardman Park in Washington, D.C.   Despite extensive litigation by such organizations as the Associated General Contractors against business inclusion programs alleging harm to non-SDB businesses, the current ratio of small disadvantaged business contracting is a small fraction of the $500 billion in federal contracts.