[Federal Register Volume 60, Number 26 (Wednesday, February 8, 1995)]
[Rules and Regulations]
[Pages 7660-7675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2962]
[[Page 7659]]
_______________________________________________________________________
Part IV
Resolution Trust Corporation
_______________________________________________________________________
12 CFR Part 1617
Minority and Women Owned Business and Law Firm Program; Final Rule
Federal Register / Vol. 60, No. 26 / Wednesday, February 8, 1995 /
Rules and Regulations
[[Page 7660]]
RESOLUTION TRUST CORPORATION
12 CFR Part 1617
RIN 3205-AA08
Minority and Women Owned Business and Law Firm Program
AGENCY: Resolution Trust Corporation.
ACTION: Final rule.
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SUMMARY: The Resolution Trust Corporation (RTC) hereby promulgates a
final rule implementing section 1216(c) of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 (FIRREA), section 401 of
the RTC Refinancing, Restructuring and Improvement Act of 1991 (RRIA)
and section 21A(w) of the Federal Home Loan Bank Act (FHLBA), which was
added by section 3(a) of the Resolution Trust Corporation Completion
Act of 1993, (RTCCA). The final rule augments the RTC's existing
outreach program, which ensures the inclusion of minorities and women
and entities owned by minorities and women in RTC contracting to the
maximum extent possible, by meeting the mandates in RRIA and the RTCCA.
Specifically, this rule augments the bonus points required by the RRIA
for firms owned or controlled by minorities or women, as well as for
other entities in which they have substantial involvement. The final
rule implements new requirements imposed by the RTCCA, including the
requirement that the RTC revise its contracting procedures to ensure
that minority and women owned businesses and law firms are not
inadvertently excluded, and that contracts with fees of equal to or
greater than $500,000 not be awarded unless the contractor subcontracts
specified percentages of work to minority or women owned businesses and
law firms.
EFFECTIVE DATE: This regulation is effective February 8, 1995.
FOR FURTHER INFORMATION CONTACT: Johnnie B. Booker, Vice President,
Division of Minority and Women's Programs, Resolution Trust
Corporation, 801 17th Street, N.W., Washington, DC 20434-0001, 202-416-
6925. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
A. Background
FIRREA, enacted on August 9, 1989, amended the FHLBA, 12 U.S.C.
1421 et seq., by adding section 21A, that established the RTC. Section
21A(b)(11)(A)(ii) provides that, in carrying out the duties of the RTC,
the services of independent contractors shall be utilized if deemed
practicable and efficient by the RTC. FIRREA, at section 1216, 12
U.S.C. 1833e, additionally required the RTC to prescribe regulations to
establish and oversee a minority and women outreach program to ensure
inclusion, to the maximum extent possible, of minorities and women and
entities owned by minorities and women in contracting activities of the
RTC.
On August 15, 1991, the RTC published in the (56 FR 40484) an
Interim Final Rule (12 CFR 1617) (1991 Rule) to govern the outreach
portion of the program. The 1991 Rule also provided standards for
qualifying as a minority and women owned business (MWOB) or minority
and women owned law firm (MWOLF) for purposes of the program. Public
comment was solicited, and 57 comments were received.
In November of 1991, Congress passed the RRIA. The RRIA required
that in evaluating contract offers, the RTC provide technical bonuses
of at least 10 percent and cost bonuses of at least 5 percent to MWOBs,
MWOLFs and certain joint ventures. The RRIA also gave the RTC authority
to adjust the level of bonus points as necessary.
On August 10, 1992, the RTC published (57 FR 35728) a second
Interim Final Rule, 12 CFR 1617, (1992 Rule) to incorporate the
mandates of the RRIA and to respond to comments that were filed in
response to the 1991 Rule. The 1992 Rule set forth the scope of the
RTC's Minority and Women Outreach and Contracting Program (MWOC) and
set out as its mission the identification, promotion, and certification
of appropriate entities for inclusion in RTC contracting activities.
The 1992 Rule incorporated the Congressionally mandated program for
awarding cost and technical bonuses to eligible individuals and firms,
including qualified joint ventures.
The RTC stated in the preamble to the 1992 Rule, its expectation
that implementation of its augmented outreach program and authority to
award cost and technical bonus points would increase the percentage
awarded to MWOBs to 30 percent annually. The RTC also expected that the
percentage of fees paid would be commensurate with the percentage of
awards to MWOBs. The RTC expected that the Division of Legal Services
would increase the level of legal fees paid annually on new assignments
to MWOLFs to at least 20 percent. In addition, the RTC expected that at
least 10 percent of the fees paid annually to law firms would be for
services performed by minority or women partners and other minority and
women attorneys in non-MWOLFs. Public comment on the 1992 Rule was
solicited and four comments were received.
On December 17, 1993, the RTCCA was enacted which amended section
21A of the FHLBA. The RTC is specifically required to establish
guidelines for achieving the goal of a reasonably even distribution of
contracts awarded to the various subgroups of the class of MWOBs and
MWOLFs whose total number of certified contractors comprise not less
than 5 percent of all MWOBs and MWOLFs; to promulgate sanctions for
failure to comply with MWOB and MWOLF subcontracting provisions; and to
establish procedures to require all contracts let, including legal
services, under which the contractor would receive fees or other
compensation in an amount equal to or greater than $500,000, to have a
subcontract with a MWOB or MWOLF.
Section 21A(w)(6)(A) requires the RTC to revise the procedures for
reviewing and qualifying applicants for eligibility for future
contracts on all Basic Ordering Agreements/Task Order Agreements (BOAs/
TOAs) to ensure that minorities and women are not excluded from
eligibility for task orders or other contracting mechanisms. Section
21A(w)(6)(B) requires the RTC to review all lists of contractors
determined to be eligible for future task orders and other contracting
mechanisms to ensure the maximum participation level possible of
minority and women owned businesses; and to issue appropriate
regulations and procedures. In keeping with these requirements, this
rule defines procedures for ensuring that MWOBs and MWOLFs are not
excluded from eligibility for task orders and other contracting
mechanisms.
Section 21A(w)(7) requires the RTC to establish procedures and
uniform standards, and to commit sufficient resources, including
personnel, to contract oversight and enforcement of all laws,
regulations, orders, policies and standards governing contracts with
the Corporation. This rule identifies procedures for contract oversight
and enforcement relating to Minority and Women's Programs.
Section 21A(w)(15) requires the RTC to establish guidelines for
achieving the goal of a reasonably even distribution of contracts
awarded to the various subgroups of the class of MWOBs and MWOLFs whose
total number of certified contractors comprise not less than 5 percent
of all MWOBs and MWOLFs. The RTCCA states that these guidelines may
reflect the regional and local geographic distribution of contracts
awarded, but shall not be accomplished at the expense of any
[[Page 7661]] eligible MWOBs and MWOLFs in any subgroup that falls
below the 5 percent threshold in any region or locality. The RTC is
studying this issue to assess the reasonable distribution of contract
awards with commensurate fees to each ethnic and gender subgroup on a
region-by-region basis. Guidelines will be issued separately from this
regulation.
Section 21A(w)(16) requires the RTC to prescribe regulations which
provide contract sanctions for failure to comply with subcontract and
joint venture requirements. Under this provision, regulations defining
sanctions relating to violation of MWOB joint venture and
subcontracting plans, as well as, violations of MWOLF joint referral
arrangements are incorporated in this rule.
Section 21A(w)(18) requires the RTC to establish reasonable goals
for contractors for services with the Corporation to subcontract with
MWOBs and MWOLFs. The RTCCA states that the RTC may not enter into any
contracts under which the contractor would estimate to receive fees or
other compensation for services in an amount equal to or greater than
$500,000, unless the contractor subcontracts with MWOBs and MWOLFs in
an amount commensurate with the percentage of services provided by the
businesses. This rule sets forth guidelines and procedures to meet the
statutory mandates.
Given RTC's sunset date of December 31, 1995, and that contracting
activity is expected to decline in both awards and contract dollars,
the mandatory subcontracting goals are being set at a level that seem,
at a minimum, achievable based on RTC's data. For all contracts awarded
to non-MWOB and non-MWOLF prime contractors, and MWOB joint ventures
and MWOLF joint referrals with less than 50 percent MWOB/MWOLF
participation, a mandatory MWOB/MWOLF subcontracting requirement of 10
percent has been established for all contracts equal to or greater than
$500,000. In other words, on each such contract, a minimum of 10
percent of the fees and other compensation must be paid to an MWOB or
MWOLF subcontractor, which shall be commensurate with the percentage of
the services performed by such MWOB or MWOLF. For a MWOB or MWOLF prime
contractor, and a MWOB joint venture or a MWOLF joint referral with 50
percent or more MWOB/MWOLF participation, the RTC has established a 5
percent MWOB/MWOLF subcontracting requirement. These requirements serve
the dual purpose of increasing MWOB/MWOLF participation levels while
still encouraging MWOB joint venture and MWOLF joint referral
arrangements. For purposes of this subcontracting provision, if a non-
MWOLF, MWOLF or RTC joint venture, co-counsel, joint-counsel or
consortium arrangement is to be allocated legal fees equal to or
greater than $500,000, it is required to subcontract with an MWOLF, and
this MWOLF's share of the work and commensurate fees must equal no less
than 5 percent or 10 percent of the contract amount, as described
above. In the RTC Refinancing, Restructuring and Improvement Act of
1991, Congress mandated that the RTC ``provide additional incentives to
minority- or women-owned businesses by awarding any such business an
additional 10 percent of the total technical points and an additional 5
percent of the total cost preference points achievable'' when
evaluating contract proposals from such businesses. FHLBA section
21(A)(r), 12 U.S.C. 1441a(r). Congress required that such points be
afforded to offers by qualifying joint ventures as well as by prime
contract offerors. Congress authorized the RTC to adjust the points
prescribed by statute ``to the extent necessary to ensure the maximum
participation level possible for minority- or women-owned businesses.''
12 U.S.C. 1441a(r)(3). These statutory mandates were incorporated in
the 1992 Rule at 12 CFR 1617.61.
In light of the RTC's experience in contracting, and the limited
time until the RTC's sunset at the end of 1995, the RTC finds that, in
order to comply with Congress's directive to ensure the maximum
participation possible by MWOBs and MWOLFs for the duration of the RTC,
the RTC has, since March 30, 1994, found it necessary to increase the
bonus points available to MWOB and MWOLF prime contractors and joint
ventures. This was done in keeping with the increased emphasis by
Congress on ensuring maximum participation by MWOBs and MWOLFs, as
evidenced by the numerous management reforms prescribed in the RTCCA in
late 1993. Based upon its experience since that time, the RTC finds
that it is necessary to continue to provide the increased level of
bonus points contained in Secs. 617.51 (MWOBs) and 1617.201 (MWOLFs) of
the 1995 Rule. The RTC finds that the increased bonus point structure
provides additional incentives to improve their competitive positions
as prime contractors with the RTC and to encourage non-MWOBs and non-
MWOLFs to enter into more substantial, longer-lasting business
arrangements with MWOBs and MWOLFs.
B. The 1995 Final Rule
The RTC is hereby adopting a final rule (1995 Rule) that
incorporates the new requirements contained in section 21A(w) (6), (7),
(16) and (18) of the FHLBA which relate to the RTC's contracting
program, and makes certain technical changes based on RTC's experience
under the 1992 Rule and the comments submitted in response to the 1992
Rule.
A specific regulatory change to the 1992 Rule intended to increase
the participation of MWOLFs is that the RTC will now, in competitive
solicitations for legal services, give higher bonus points to MWOLFs
and MWOLF joint ventures than to other joint referral arrangements. In
doing so, the regulation recognizes that joint ventures may take many
forms. Since the primary intent of this provision (which is consistent
with the mandates of FIRREA and RRIA) is to increase fees to MWOLFs and
MWOLF joint ventures, the bonus points provided to MWOLF joint ventures
which have a single tax identification number are greater than to MWOLF
joint-counsel arrangements wherein the law firms retain their
individual tax identification number.
Since announcing its MWOB/MWOLF contracting expectations in the
1992 Rule, the RTC has demonstrated the ability to reach these
expectations. The RTC is mindful, however, that it is necessary to
continue to meet these expectations each year.
During 1991, the RTC awarded 47,540 non-legal contracts with
related estimated fees of $1,675.4 million, of which 13,219 contracts
(28 percent) were awarded to MWOBS with related fees of $316.7 million
(19 percent). During 1992, the RTC awarded 45,949 non-legal contracts
with related estimated fees of $1,293.8 million, of which 16,093
contracts (35 percent) were awarded to MWOBs with related fees of
$303.9 million (23 percent). During 1993, the RTC awarded 24,500 non-
legal contracts with related estimated fees of $560.3 million, of which
10,483 contracts (43 percent) were awarded to MWOBs with related fees
of $210.3 million (38 percent). In 1994, the RTC awarded 17,946 non-
legal contracts with related estimated fees of $555.8 million, of which
8,725 contracts (49 percent) were awarded to MWOBs with related fees of
$268.8 million (48 percent).
Regarding legal services, the RTC had similar success. During the
1991 calendar year, the RTC paid $251,525,563 in fees to outside
counsel; [[Page 7662]] of that amount, $6,866,275 (2.7 percent) was
paid to MWOLFs. During 1992, the RTC paid $351,329,268 in fees to
outside counsel; of that amount $36,204,201 (10.3 percent) was paid to
MWOLFs. During 1993, the RTC paid $389,230,203 in fees to outside
counsel; of that amount, $61,713,140 (15.9 percent) was paid to MWOLFs.
In 1994, the RTC paid $232,100,704 in fees to outside counsel; of that
amount $60,344,296 (26.0 percent) was paid to MWOLFs.
On May 20, 1992, the Legal Division established a goal of
increasing fees paid on new referrals to MWOLFs to at least 20 percent
per year. The Legal Division has met this goal each year. From May 20,
1992 to December 31, 1992, the RTC paid $27.5 million to outside
counsel on new referrals (i.e. referrals made since May 20, 1992), and
of that amount, $7.4 million (26.8 percent) was paid to MWOLFs. During
1993, the RTC paid $145.3 million to outside counsel on new referrals,
of that amount, the RTC paid $38.7 million (26.7 percent) to MWOLFs;
and during 1994, the RTC paid $129.9 million on new referrals, of that
amount, the RTC paid $46.7 million (36 percent) to MWOLFs. The RTC will
continue its efforts to maximize participation by MWOBs, MWOLFs, and
minority and women partners in non-MWOLF firms.
It should be noted that the RTC's outreach efforts to minorities
and women include other matters beyond contracting. They also include
outreach to potential purchasers of assets from financial institutions
under the RTC's control and to acquirors of such institutions. In
addition, in keeping with the principles underlying the Americans with
Disabilities Act, the RTC provides outreach to individuals with
disabilities who wish to participate in its contracting and other
programs. The 1995 Rule, however, addresses only the RTC's MWOB/MWOLF
contracting program and strict conformance to this regulation is
required. FIRREA, RRIA, RTCCA, FHLBA and this regulation create no
private right of action and no such right should be inferred.
C. Discussion of Comments on the 1992 Rule
The following discussion summarizes comments submitted in response
to the 1992 Rule, and provides the RTC's response to those comments.
All comments were considered, however all were not specifically
addressed.
Four comments were filed in response to the 1992 Rule. Two
commenters were concerned that the RTC is interpreting both the MWOB
and the MWOLF provisions of the rules to exclude persons of Portuguese
descent from the categories of minorities entitled to participate in
the program. Both commenters asserted that the term ``Hispanic
American,'' one of the categories of minorities that the RTC
recognizes, includes descendants of Spain or Portugal. They asserted
that the RTC should either include Portuguese Americans as among the
categories of Hispanic Americans or revise the rules to make Portuguese
Americans an additional category.
The commenters cited several bases for their arguments. First, the
commenters asserted that, whether or not Portuguese Americans
technically fall within the category of Hispanic Americans, the
language in FIRREA should be as inclusive as possible, and that the
burden would be on the RTC to justify excluding Portuguese Americans
from the program. Second, the commenters argued that Portuguese are
historically included in the definition of Hispanic. Next, the
commenters asserted that federal agencies that have adopted regulations
concerning minority-related programs treat persons of Portuguese
descent as Hispanic. In addition, the commenters asserted that federal
agencies that have not adopted regulations concerning minority-related
programs, in practice, treat Portuguese Americans as Hispanic
Americans. They asserted that regardless of technicalities, Portuguese
Americans face discrimination as a minority group.
Another commenter commended the use of bonuses, but stated that the
RTC requirement that contractors have liability insurance coverage
impeded participation by minority-owned contractors. The commenter
suggested that future contract solicitations provide certain
considerations or assistance for minority contractors to enable them to
compete.
The last comment was filed by the National Bar Association (NBA).
The NBA offered suggestions for improving certain sections of the rule.
First, the NBA asserted that, in regard to Sec. 1617.3, awards and fees
should be tracked as follows: (1) white men; (2) white women; (3)
African Americans; (4) Hispanic Americans; (5) Asian Americans and
Pacific Islanders; and (6) American Indians. The commenter asserted
that this tracking procedure also should apply to the law firms. The
commenter also asserted that, in regard to Sec. 1617.91, the word
``and'' should connect subparagraphs 1 and 2 to help the RTC more
readily determine whether or not a woman has the requisite ownership of
the firm.
In regard to Sec. 1617.100, the commenter suggested that RTC
program personnel report results of their tracking efforts on a semi-
annual basis to the senior counsel for the MWOLF program in Washington,
and that senior counsel should make such reports available to the legal
community and in particular minority bar associations. This change
would purportedly eliminate the need to make Freedom of Information Act
requests, and would provide an incentive for RTC personnel to reach out
to MWOLFs. The same comment was made in regard to MWOBs as well as
MWOLFs. The commenter also argued that Sec. 1617.102 should be amended
to allow the legal minority and women outreach coordinators in the
field to report directly to the senior counsel in Washington rather
than reporting to their field supervisor. Finally, the commenter argued
that the RTC should promulgate stronger inspection and enforcement
regulations that will apply to firms that fraudulently certify that
they are minority or women owned law firms. The commenter suggested
that suspension or debarment should be made part of this regulation.
The commenter also argued that the Small Business Act of 1978 applies
to the RTC and that each contractor should be required to submit to the
RTC a subcontracting plan to ensure that the concentration of
subcontracts in the hands of large companies is reduced and that a fair
proportion will be placed with minorities and women.
The RTC hereby responds to these comments as follows:
The commenters raised the issue of whether persons of Portuguese
descent should be included in the definition of Hispanic American. Some
federal agencies have included persons of Portuguese descent in their
definitions of Hispanic American. RTC's definition of minority is based
on the definition in section 1204 of FIRREA, 12 U.S.C. 1811. After due
consideration, the definition in section 1204 does not provide a basis
for expanding the definition of Hispanic American. The RTC's definition
of minority includes persons of Central and South American origin.
RTC's definition, in common with that of other federal agencies, does
not include any persons with origins in Europe.
Regarding the comment on liability insurance requirements, the RTC
will review this in the context of its contracting procedures. It does
not feel that it would be appropriate to remove this requirement as a
part of this rulemaking proceeding. However, for those contracts where
insurance requirements may be lowered, a Division of Minority and
Women's Program representative shall coordinate [[Page 7663]] their
efforts with the Office of Contracts on a case by case basis.
In regard to the comments from the NBA, the RTC has the following
responses. In regard to the tracking of fees and awards, the RTC
believes that its current tracking is sufficient. In regard to the
reporting of tracking results to Washington and to the public, the RTC
believes that the comment is merited, and is amending the regulation
accordingly. In regard to the reporting relationship of MWOLF personnel
in the field to Washington, the RTC believes that the comment is
merited, and is amending the regulation accordingly. Regarding
enforcement procedures, the rule is being amended to state clearly that
suspension and debarment from the entire RTC contracting program as
well as from MWOB or MWOLF bonus considerations will be a potential
consequence of false or fraudulent certifications. There is no need,
however, to put detailed procedures in this regulation because the
RTC's existing suspension and exclusion regulation, 12 CFR part 1618,
provides sufficient procedures to handle these cases. Finally, the RTC
disagrees that the Small Business Act directly applies to the RTC.
However, the RTC is committed through this final rule and through its
program and procedures (as mandated by the RTC Completion Act of 1993)
to increase the percentage of contracts and subcontracts awarded to
minority and women owned firms.
D. Technical Changes to the 1992 Rule
In light of its experience in administering the program under the
1992 Rule, the RTC is making certain technical changes to the 1995
Rule. Sections 1617.20 and 1617.30 govern the requirements that MWOB
joint ventures and subcontracting arrangements receive technical and
cost bonuses. Under the 1992 Rule, joint ventures receive compensation
proportional to the work performed, whereas in subcontracting
arrangements, the subcontractors receive ``commensurate fees.'' The
requirements set forth in this Rule are the same for joint ventures and
subcontractors. That the MWOB joint venturer or subcontractor must
perform work that is significant and to be compensated in relation to
the work performed. The modified language reflects this requirement.
Section 1617.21(a) is being amended to clarify that the MWOB joint
venture participant(s) need not have the same degree of ownership and
control over the joint venture that a minority or woman would need in
order for the company to be certified as a ``stand alone'' MWOB.
Rather, the joint venture MWOB partner's percentage of ownership in the
joint venture must directly equate to the joint venture MWOB partner's
management and contract responsibilities.
E. Administrative Procedure Act
The RTC is adopting this final rule in order to implement the
provisions of section 1216 of FIRREA, section 401 of RRIA and section
21A(w) of the FHLBA as added by section 3(a) of the RTCCA. The rule
will be effective immediately upon publication in the Federal Register.
Several of the provisions of the final rule have been adopted
without the prior notice and comment generally required by the
Administrative Procedure Act (APA), 5 U.S.C. 533. The requirement of
prior notice and comment may be waived for ``good cause''. The RTC
hereby finds that there is good cause for such a waiver.
First, as discussed at length above, in the RTCCA, Congress
mandated several reforms to improve and maximize the participation of
MWOBs and MWOLFs in RTC's contracting activities. In one case (required
subcontracting by MWOBs/MWOLFs), Congress made such participation a
prerequisite to the RTC's ability to enter into or modify contracts
after December 17, 1993 where compensation would equal or exceed
$500,000. The RTC believes that in imposing these requirements,
Congress was mindful of the limited duration of the RTC (which in fact
was further limited by the RTCCA), and that Congress intended that the
RTC implement these mandates as soon as possible in order that the
maximum benefits of the mandates would be achieved.
Where the RTC has acted without prior Federal Register notice and
comment in implementing the RTCCA, it has not done so without providing
actual notice to contractors or considering feedback from such
contractors. All such changes have been incorporated into the RTC's
Contract Policies and Procedures Manual, which is widely available to
RTC contractors. RTC contractors and offerors are regularly in
communication with RTC contracting officers. If there had been major
problems in the implementation of the Completion Act mandates, there is
no doubt that the RTC would have been made aware of them and adjusted
for them.
On balance, the RTC finds that any harm to the public from
implementing the Completion Act reforms without prior rulemaking notice
and comment is outweighed by the benefit to the public, and therefore,
good cause as required by the APA exists.
F. Final Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act, 5 U.S.C. 601 et
seq., comments were specifically sought on an initial regulatory
flexibility analysis. No comments were specifically filed in response.
The following analysis is provided.
1. Reasons, Objectives, and Legal Basis Underlying the 1995 Rule.
These elements have been discussed elsewhere in the Supplementary
Information. By publishing this 1995 Rule, the RTC intends to ensure
the maximum participation levels possible of MWOBs and MWOLFs in RTC
contracting activities and awards.
2. Comments on Initial Regulatory Flexibility Analysis; Assessment
of Issues Raised. In the Preamble to the 1992 Rule, the RTC provided an
initial regulatory flexibility analysis and specifically sought
comments on alternative methods of compliance, or reporting
requirements. No such comments were filed.
3. Alternatives to the 1995 Rule. The RTC has not identified
alternatives that would be less burdensome to small businesses and yet
effectively accomplish the objectives of the 1995 Rule. The RTC has
made every attempt to bear the administrative burdens rather than
shifting them to prospective contractors.
List of Subjects in 12 CFR Part 1617
Government contracts, Lawyers, Legal services, Minority businesses
and Women.
For the reasons set out in the preamble, the RTC hereby revises
part 1617, title 12, chapter XVI, of the Code of Federal Regulations to
read as follows:
PART 1617--MINORITY AND WOMEN OWNED BUSINESS AND LAW FIRM PROGRAM
Subpart A--General Provisions
Sec.
1617.1 Purpose.
1617.2 Policy.
1617.3 Scope.
1617.4 RTC organizational responsibilities and staffing.
1617.5 Definitions.
Subpart B--General Provisions Applicable to Businesses
1617.10 Contracting objectives.
1617.11 Program components.
1617.12 Program promotion.
1617.13 Certification.
1617.14 Participation of MWOB contractors in task order
agreements. [[Page 7664]]
Subpart C--Joint Ventures
1617.20 General.
1617.21 Eligibility.
1617.22 Establishing joint ventures.
1617.23 Joint venture agreements.
1617.24 Joint venture reporting and sanctions.
Subpart D--Subcontracting
1617.30 Policy.
1617.31 Subcontracting plans.
1617.32 MWOB subcontracting requirements.
1617.33 Post-award oversight.
Subpart E--Solicitation and Contract Award Guidelines
1617.40 Inclusion in solicitations.
1617.41 Participation by the Division of Minority and Women's
Programs in the solicitation and award process.
1617.42 Participation by the Division of Minority and Women's
Programs in contract administration.
Subpart F--Technical and Cost Bonus Points
1617.50 Policy.
1617.51 Application of technical and cost bonus points.
1617.52 Authority to adjust technical and cost bonus points.
Subpart G--Conservatorship Contracting
1617.60 Policy and application.
Subpart H--General Provisions Applicable to Law Firms
1617.70 Contracting objectives.
1617.71 Program components.
1617.72 Certification.
Subpart I--Competitive Legal Engagements
1617.80 Inclusion in solicitations.
1617.81 Participation by the Division of Minority and Women's
Programs in solicitation and referral process.
Subpart J--Joint Referrals and Representations
1617.90 General.
1617.91 Joint referral agreements
1617.92 Other arrangements.
1617.93 MWOLF contracting requirements.
1617.94 Compliance.
Subpart K--Minority and Women Partners Program
1617.100 Minority and woman partner referral.
Subpart L--Technical and Cost Bonus Points
1617.200 Policy.
1617.201 Application of technical and cost bonus points.
1617.202 Authority to adjust technical and cost bonus points.
Subpart M--General Procedures Applicable to Contractor Suspension and
Exclusion, Contract Rescission, and Other Administrative Actions
1617.300 Procedures for MWOBs.
1617.301 Procedures for MWOLFs.
Subpart N--General Provisions Applicable to Program Compliance
1617.400 Program compliance.
1617.401 Performance appraisals.
Authority: 12 U.S.C. 1441a(t) and 1833e.
Subpart A--General Provisions
Sec. 1617.1 Purpose.
(a) Section 1216 of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 (FIRREA), 12 U.S.C. 1833e, requires that the
Resolution Trust Corporation (RTC or the Corporation) prescribe
regulations to establish and oversee a minority outreach program to
ensure inclusion, to the maximum extent possible, of minorities and
women, and entities owned by minorities and women, including financial
institutions, investment banking firms, underwriters, accountants, and
providers of legal services, in all contracts entered into by the
agency with such persons or entities, public and private, in order to
manage the institutions and their assets for which the agency is
responsible or to perform such other functions authorized under any law
applicable to the agency.
(b) This part details the procedures that the RTC will follow to
ensure the inclusion of businesses and law firms owned by minorities or
women in RTC's contracts for goods and services in connection with its
management of savings and loan institutions placed under RTC control
and the disposition of their assets.
Sec. 1617.2 Policy.
(a) It is the policy of the RTC that Minority and Women Owned
Businesses (MWOBs) and Minority and Women Owned Law Firms (MWOLFs) are
included to the maximum extent possible in all contracting activities
of the Corporation. The RTC's objectives in contracting will be
achieved through the establishment of goals using RTC contracting
procedures. This applies to contracting for the procurement of goods
and services, and the contracting activities of Conservatorships and
Receiverships. Every employee of the RTC has the affirmative duty and
responsibility to identify and seek to remove any barriers to the
maximum possible participation by MWOBs, MWOLFs and minority and women
partners in non-MWOLFs in the RTC's contracting activities.
(b) It is the policy of the RTC to ensure that MWOBs are included,
to the maximum extent possible, in all non- legal services contracted
for by the RTC, including non- legal services contracted for by private
sector contractors. It is expected that all program and sales offices
will increase the level of participation and fees paid annually by the
RTC to at least 30 percent for minority and women owned businesses.
(c) It is the policy of the RTC to ensure that MWOLFs, and minority
and women partners in non-MWOLFs are included to the maximum extent
possible, in all legal services contracted for by the RTC, including
legal services contracted for by private sector contractors. It is
expected that the RTC will increase the level of legal fees paid
annually on new referrals to MWOLFs to at least 20 percent. In
addition, at least 10 percent of the total legal fees paid annually
will be paid to minority or women partners and other minority and women
attorneys in non- MWOLFs.
Sec. 1617.3 Scope.
(a) This part applies to all contracting activities engaged in by
the RTC in its Corporate, Conservatorship and Receivership capacities
(including contracting by private sector contractors for the RTC,
services provided directly to the Corporation and services provided to
Conservatorships and Receiverships) with private persons and entities
for all functions authorized by law.
(b) Sections 1617.10 through 1617.60 and Sec. 1617.300 apply to all
non-legal contracting activities engaged in by the RTC, in any of its
capacities. It applies to non-legal services including, but not limited
to, asset management, accounting services, appraisals, property
management, information systems, property maintenance, surveying,
general contracting and subcontracting, architectural/engineering
consulting, title work, financial investigation services, marketing,
signage and printing services and related services.
(c) Sections 1617.70 through 1617.202 and Sec. 1617.301 apply to
all contracts for legal services engaged in by the RTC, in any of its
capacities (including contracting by private sector contractors for the
RTC, services provided directly to the Corporation and services
provided to Conservatorships and Receiverships). It applies to legal
services including, but not limited to, litigation, transactions,
bankruptcy, bond claims, director and officer liability, and other
areas of law specific to the RTC.
Sec. 1617.4 RTC organizational responsibilities and staffing.
(a) Organization. The RTC has established a Division of Minority
and Women's Programs (DMWP) in Washington with a Vice President to
[[Page 7665]] provide management, direction, consultation, and training
to other RTC offices in order to ensure that this program is being
effectively and consistently implemented. The RTC shall have staff and
resources within the DMWP dedicated to this program in each of its
offices.
(b) The DMWP staff in Washington and the RTC field offices both
report directly to the Vice President for the DMWP in Washington, D.C.
The RTC shall allocate sufficient resources, including personnel to
oversee, manage, and implement the MWOB and MWOLF programs in
accordance with statutory mandates, RTC policies, directives and
procedures. All DMWP personnel decisions that include selection,
performance appraisals, promotion and disciplinary actions shall be
made directly by, or through delegated authority of, the above-
mentioned Vice President of the DMWP.
(c) There are three major departments in the DMWP responsible for
including MWOBs and MWOLFs in RTC contracting:
(1) Department of Minority and Women Owned Business. The DMWP has
established a Department of Minority and Women Owned Business (DMWOB)
to ensure that firms owned and operated by minorities and women are
included, to the maximum extent possible, in all contracting activities
of the Corporation. The DMWOB is headed by a Director in the Washington
Office who has the responsibility for the direction of all MWOB
activities and programs relating to contracting, MWOB certification,
investor opportunities, and the preservation and expansion of minority
ownership of financial institutions. In each field office, there is
staff dedicated to the MWOB Program. Program efforts include direct
participation in the contracting process, promotion of joint ventures
and subcontracting, working with program areas to structure asset
management portfolios to facilitate MWOB participation, and other
special initiatives to increase the level of MWOB contract awards. The
DMWOB also targets and promotes opportunities for minorities and women
as investors and acquirors of thrift institutions and assets, and
encourages RTC deposits with financial institutions owned by
minorities.
(2) Department of Legal Programs. The DMWP has established a
Department of Legal Programs (DLP) to ensure that MWOLFs and minority
and women partners in non-MWOLFs are included, to the maximum extent
possible, in all legal contracting by the RTC and by its contractors on
behalf of the RTC. The DLP is a voting member of the RTC Legal Services
Committee which approves all outside counsel referrals for legal
services. The DLP is headed by a Senior Counsel/Director in the
Washington Office. In the field, each office has staff dedicated to
implementing, overseeing, monitoring and tracking the outreach program.
The DLP coordinates activities with the Legal Division to identify
MWOLFs and enhance contracting opportunities through direct referrals,
joint referrals or other arrangements.
(3) Department of Policy, Evaluation and Field Management. The DMWP
has established a Department of Policy, Evaluation and Field Management
(DPEFM) to provide uniform policy development, interpretation,
implementation and management to ensure that the RTC achieves its
contracting, sales and other goals and objectives related to the
participation of minorities and women. The DPEFM evaluates the
effectiveness of the RTC's activities, initiatives, and actions to
determine adherence to, and compliance with, DMWP's policies, programs
and procedures. The DPEFM is headed by a Director in the Washington
Office who is responsible for the implementation of all policy
development, interpretation, evaluation, oversight and monitoring
functions for the DMWP to assure coordinated and consistent
implementation of the MWOB, MWOLF and other DMWP initiatives. The DPEFM
implements an oversight and evaluation program to ensure that the RTC
achieves its minority and women contracting program goals and
objectives. The DPEFM manages the administrative, resource
distribution, field planning, reporting, and related functions for the
DMWP. In addition, the DPEFM provides the official complete and up-to-
date information on contracting activities to RTC management, the
Congress, and the public.
Sec. 1617.5 Definitions.
The following definitions and eligibility criteria have been
established to allow RTC to review, evaluate, and approve private
sector certifications for minority- and woman-owned business and law
firm status.
(a) ``Control'' by a minority or women. RTC shall find that
minority or women owned businesses or law firms are controlled by a
minority or woman when the person(s) upon whom eligibility is based:
(1) Has the right to vote his or her shares or other equity
interest to elect the majority of voting members of the board of
directors or other governing body, and holds the position of
chairperson of the board, president, chief executive officer, or
equivalent position;
(2) Has direct full-time responsibility for the day-to-day
management of the business, as evidenced by:
(i) Directly related managerial or technical experience and
competency;
(ii) Establishment of company policies;
(iii) Determination and selection of business opportunities;
(iv) Supervision and coordination of projects;
(v) Control of major expenditures;
(vi) Hiring and dismissing key personnel;
(vii) Marketing and sales decisions; and
(viii) Signature on major business documents (including, but not
limited to any RTC documents, tax returns, leases, mortgages, notes,
contracts, and other financial documents);
(3) Has a significant percentage of senior management positions
held by women, if a woman-owned business; and
(4) Has met the expectation of the RTC that the requirements of
paragraph (a) of this section be performed on a day-to-day basis, at
the principle place of business of the minority- or woman-owned
business or law firm, by the minority or woman upon whom eligibility is
based. That is, the RTC expects that such individuals shall have
actual, direct, non-delegable, daily responsibility for the
requirements in paragraphs (a)(2) (i) through (viii) of this section.
(b) Direct referral. A direct assignment of a legal matter to an
MWOLF.
(c) Joint referrals. The assignment of a legal matter to two or
more law firms, at least one of which must be an MWOLF. The joint legal
referral may take a variety of forms:
(1) Co-counsel. A joint referral in which two or more outside
counsel, at least one of which must be a MWOLF, obtain work together
through a relationship established by the RTC. Each co-counsel law firm
has a separate taxpayer identification number.
(2) Joint-counsel. A joint referral in which two or more outside
counsel, at least one of which must be a MWOLF, obtain work together
through a relationship proposed in writing by them to the RTC. Each
joint-counsel law firm has a separate taxpayer identification number.
(3) Joint law firm venture. A joint referral in which two or more
outside counsel, at least one of which must be a MWOLF, obtain work
together through a partnership formed by them under [[Page 7666]] state
law to engage in and carry out the practice of law as a business
venture, for which purpose they combine their efforts, resources and
skills for joint profit. The joint law firm venture has a single
taxpayer identification number.
(4) Consortium of MWOLFs. A joint referral of more than two outside
counsels, all of which must be MWOLFs, pool their personnel, expertise,
support, staff and facilities to obtain work together through a
relationship proposed by them to the RTC. Each consortium law firm has
a separate taxpayer identification number.
(d) Joint venture with MWOB participation. An association of
entities and/or individuals, with the combined entity having its own
unique tax identification number, which at least one of the
participants is a certified MWOB, formed by written contract to engage
in and carry out a specific business venture for which purpose they
combine their efforts, resources, and skills for joint profit, but not
necessarily on a continuing or permanent basis for conducting business
generally.
(e) Legal services agreement. An agreement entered into between the
Legal Division and outside counsel, as defined in the RTC Legal
Division Contracting Procedures.
(f) Legal services committee. The committee established in each
office whose members represent the Legal Division and the DMWP, and
whose responsibility it is to select and engage all outside counsel
with regard to legal services to be performed within the supervision of
said office.
(g) List of counsel. The list of law firms in the Legal Division's
computer database that are eligible to perform legal services for the
RTC. Only law firms on this list may have legal matters referred to
them.
(h) Minority. Any Asian American, Black American, Hispanic
American, Native American, Eskimo or Pacific Islander who is either a
citizen or a permanent resident of the United States.
(1) Asian American. A person having origins in any of the original
peoples of the Far East, Southeast Asia or the Indian Subcontinent.
(2) Black American (not of Hispanic Origin). A person having
origins in any of the black racial groups of Africa.
(3) Hispanic American. A person of Mexican, Puerto Rican, Cuban,
Central or South American origin, regardless of race.
(4) Native American. A person having origins in any of the original
peoples of North America.
(5) Eskimo. A person having origin in the Eskimo or Aleutian
peoples.
(6) Pacific Islander. A person having origins in any of the
original nations commonly referred to as the ``Pacific Rim Countries'',
including the Hawaiian Islands.
(i) Minority owned business. Any business in which:
(1) More than 50 percent of the ownership or control is held by one
or more minority individuals; and
(2) More than 50 percent of the net profit accrues to one or more
minority individuals.
(j) Minority owned law firm. Any law firm or practice in which:
(1) More than 50 percent of the ownership or control is held by one
or more minority attorneys;
(2) More than 50 percent of the net profit accrues to one or more
minority attorneys; and
(3) All attorneys within the firm are in good standing with the
respective state bar licensing authority.
(k) MWOLF subcontractor. An RTC-approved outside counsel retained
by another RTC-approved outside counsel, for the purposes of the RTC
Completion Act, to provide legal services when anticipated fees or
other compensation are expected to be $500,000 or more. The outside
counsel retained as the subcontractor shall have the same professional
liability relationship with the RTC and the prime contractor as if the
subcontractor were joint counsel with the prime contractor in providing
legal services to the RTC.
(l) Outside counsel. A law firm or individual attorney therein, or
solo practitioner that has entered into a Legal Services Agreement with
the Legal Division to be available for engagement to provide legal
services.
(m) Bonus considerations. (1) Bonus considerations for MWOBs and
MWOLFs. Bonus considerations are authorized by Sec. 401(t)(1) of RRIA.
In the review and evaluation of proposals, the Corporation shall
provide additional incentives to minority or women owned businesses and
law firms by awarding any such business or firm a percentage of the
total technical points and a percentage of the total cost points
achievable in the technical and cost rating process applicable with
respect to such proposals.
(2) Bonus considerations for joint ventures. Bonus considerations
shall apply to any proposal submitted by a joint venture in which MWOBs
and MWOLFs have at least 25 percent MWOB/MWOLF participation.
(3) Bonus considerations for subcontracting. Bonus Considerations
shall apply to any proposal submitted by a non-minority firm in which a
certified MWOB or MWOLF has at least 25 percent MWOB or MWOLF
subcontracting participation.
(4) Authority to adjust technical and cost bonus considerations.
The RTC may adjust the technical and cost bonus points applicable in
evaluating proposals to the extent necessary to ensure the maximum
participation level possible for minority or women owned businesses and
law firms.
(n) Private sector contractor. Any person or entity that performs
services on behalf of the RTC pursuant to a contract, including, but
not limited to, an asset manager.
(o) Request for proposals (RFPs). Any request to a law firm for
proposals to provide certain legal services to or on behalf of the RTC.
(p) RTC oversight attorney. Any attorney within the RTC Legal
Division who oversees and manages outside counsel in relation to a
particular legal matter.
(q) Solicitation of services (SOS). Any request to a business for
proposals to provide certain services to or on behalf of the RTC.
(r) Women owned business. Any business in which:
(1) More than 50 percent of the ownership or control is held by one
or more women;
(2) More than 50 percent of the net profit or loss accrues to one
or more women; and
(3) A significant percentage of senior management positions are
held by women.
(s) Women owned law firm. Any law firm or practice in which:
(1) More than 50 percent of the ownership or control is held by one
or more women attorneys;
(2) More than 50 percent of the net profit or loss accrues to one
or more women attorneys;
(3) A significant percentage of senior management positions are
held by women attorneys; and
(4) All attorneys within the firm are in good standing with the
respective state bar licensing authority.
Subpart B--General Provisions Applicable to Businesses
Sec. 1617.10 Contracting objectives.
The RTC has established standards by which it will evaluate its
success in maximizing participation of minority and women owned
businesses (MWOBs) in its contracting activities. The awards and fees
shall be tracked separately for minorities and women. All awards and
fees shall be tracked by RTC regional and local geographic areas. The
RTC's success in meeting its objectives will be evaluated
[[Page 7667]] periodically, and modifications will be made as needed.
(a) Each office, including sales centers, shall make every effort
to raise MWOB participation in accordance with the RTC's objectives.
(b) Contractors are strongly encouraged to utilize joint ventures
and subcontracting arrangements with MWOBs to increase MWOB
participation. Bonus considerations shall be given to contractors that,
through joint ventures or subcontracting, achieve specified levels of
MWOB participation.
(c) Within six months of the date of conservatorship, each
conservatorship must bring its contracting activity into compliance
with the RTC's DMWP policies and procedures.
(d) Evaluation of performance of contractors shall include their
efforts and success in meeting RTC's DMWP goals, including mandatory
MWOB and MWOLF subcontracting. The DMWP will conduct periodic visits or
reviews of contractors to assess their compliance with RTC policies.
(e) RTC contractor's failure to comply with RTC rules and
regulations, including DMWP policies and procedures, particularly with
respect to certification, joint venture and subcontracting
requirements, may result in adverse actions against the MWOB, prime
contractor, or joint venture partners including, but not limited to,
withholding of fees, contract termination, and/or referral to the
Office of Ethics, which may result in suspension or exclusion from the
RTC contracting program pursuant to 12 CFR part 1618, with appropriate
referrals to the Office of the Inspector General.
Sec. 1617.11 Program components.
(a) The DMWOB coordinates with the Contracts, Program and Sales
Offices to ensure the inclusion of minority and women owned businesses
to the maximum extent possible in RTC contracting activities. DMWOB
monitors RTC private contractors to ensure that they are aware of,
adopt and adhere to, all RTC policies and procedures for contracting
with MWOBs.
(b) The DMWOB shall be a non-voting member of the Technical
Evaluation Panel (TEP) and shall participate directly in the contract
award process to ensure that the evaluation of proposals from MWOBs for
potential awards is fair and follows RTC's policies and procedures, and
that technical and cost bonus points are applied appropriately and
correctly. After the technical evaluation, scoring material shall be
available for review and concurrence by the Program Office, Legal
Division, and the DMWP.
(c) The DMWOB shall concur on the assignment of technical and cost
bonus points prior to selection of offerors in competitive range.
(d) The DMWOB staff shall develop and maintain a direct
relationship with the Contract, Program and Sales Offices, Oversight
Managers and Conservatorship staff in order to increase the number of
non-legal contracts and fees awarded, as well as sales transactions, to
MWOBs.
(e) Outreach. A continuing effort of the RTC involves identifying
MWOBs capable of providing contracting services to the RTC. This effort
is nationwide in scope and focuses on networking and training.
(1) Networking. Washington and field office staff will network with
Federal, State and local governments, non-profit organizations,
professional and trade organizations; and participate in conventions
and seminars sponsored and widely attended by minorities and women.
Promotional campaigns will be developed to inform the minority and
women owned business community of the Corporation's needs and its
commitment to involve such firms in its contracting activities; and
information on purchasing RTC assets and thrifts shall be disseminated.
MWOB firms shall be assisted in understanding and meeting the RTC's
contracting needs, especially as they shall be represented in various
Solicitations of Services (SOSs), and these firms shall be placed on
appropriate source lists for SOSs. MWOB firms shall also be informed
about RTC's regulations governing ethical responsibilities, conflicts
of interest, confidentiality, and the certification process for
eligibility as a MWOB.
(2) Training. The Washington Office shall coordinate training
initiatives, workshops, and seminars for MWOBs and RTC staff. These
activities are designed to increase awareness and to ensure the
inclusion of minorities and women, and firms owned by minorities and
women, in the RTC's contracting process, regulations, and special
initiatives, as well as ensure that all RTC staff who interact with the
contracting and investment community are knowledgeable of and support
the program. Technical training needs of MWOB contractors shall be
identified and materials and training modules shall be developed to
increase MWOB participation. In addition, DMWP policies, directives and
program goals and objectives shall be incorporated into training
modules for an internal education program for all RTC staff to promote
RTC's commitment to the full participation of MWOBs in all contracting
and sales activities.
(3) Database review. The DMWP field staff shall enhance the efforts
of the outreach program through their ongoing review of the MWOB
database and the Contracting Activity Reporting System (CARS)
identifying geographic and service categories in which firms are under
represented. The outreach program shall target its efforts in areas
where the MWOB database indicates MWOBs are under represented.
(4) Special events. Special events shall be developed to meet the
needs or concerns of MWOBs. These events may include: subcontracting,
teaming, joint venture fairs or seminars, open houses with Standard
Asset Management and Disposition Agreement (SAMDA) contractors,
investor forums, and coordination of events with the Minority Business
Development Agency, Small Business Administration, other governmental
entities, and private and non-profit organizations.
Sec. 1617.12 Program promotion.
(a) The DMWOB shall conduct seminars and workshops for MWOB firms.
The focus of these events shall be to provide information regarding the
program, its goals and objectives, and companies qualified to
participate in the program; to facilitate interaction between RTC and
these firms; and to manifest RTC's commitment to doing business with
these groups.
(b) Contract opportunities for MWOBs shall be expanded by
encouraging both minority and women owned firms to form joint venture
arrangements and cooperative agreements with other larger firms.
Sec. 1617.13 Certification.
(a) Each firm claiming status as a MWOB shall be required to
provide certification of that status. To preserve the integrity and
foster the objectives of the program, RTC must satisfy itself that the
ownership or control requirements of the program are fulfilled. On-site
visits shall be performed by the DMWOB and may include the Office of
Contract Oversight and Surveillance (OCOS).
(b) RTC has implemented a certification policy and procedures
designed to prevent fraudulent representations. Procedures have been
established by which the DMWP shall review, evaluate, and approve
notarized certification forms and accompanying documents from MWOBs,
prior to submission of the firm for a source list, or prior to
participation in the contracting process. [[Page 7668]]
(c) When a MWOB firm is selected for an award, a pre-award on-site
verification is required for all contracts with estimated fees in
excess of $100,000, or when the award will result in accumulated fees
over $100,000. The DMWP reserves the right to perform an on-site
verification to firms with fees under $100,000. Additionally, all joint
ventures are subject to on-site verifications. If the eligibility of a
firm as a MWOB is questionable, based on misrepresentation, the OCOS
will participate in the on-site verification.
(d) RTC shall be notified of any changes in ownership, senior
management, MWOB joint venture participant(s), or other factors that
may affect eligibility.
(e) Any misrepresentations, (including falsification of MWOB
Certification), omissions or changes by the MWOB, the non-MWOB, or the
joint venture partnership with respect to ownership or control; senior
management; MWOB joint venture participant(s); the allocation of
profits and losses; or any other factors that may affect eligibility,
may result in adverse actions against the MWOB, prime contractor, or
joint venture partners including, but not limited to, withholding of
fees, contract termination, and/or referral to the Office of Ethics,
which may result in suspension or exclusion from the RTC contracting
program pursuant to 12 CFR part 1618, with appropriate referrals to the
Office of the Inspector General.
(f) If the firm is found ineligible for MWOB status, and is denied
such status, it shall be informed of its right to file an appeal to the
Vice President, DMWP in Washington, DC.
Sec. 1617.14 Participation of MWOB contractors in task order
agreements.
(a) To ensure the maximum participation of MWOBs in its contracting
activities, the RTC shall maintain procedures to ensure that minorities
and women shall not be inadvertently excluded from eligibility for Task
Order Agreements. Such procedures shall include reviewing lists of
contractors eligible to compete for such Task Order Agreements in order
to ensure that the maximum participation level of MWOBs.
(b) The RTC has promulgated detailed procedures to comply with this
policy. The procedures are contained in the RTC's Contract Policies and
Procedures Manual (CPPM). Copies of the CPPM are available from the RTC
Public Reading Room, 801 17th Street, NW., Room 100, Washington, DC
20434-0001.
Subpart C--Joint Ventures
Sec. 1617.20 General.
In an effort to ensure and enhance inclusion of MWOBs in the RTC's
contracting activities, the Corporation supports and promotes the
concept of joint ventures. The intention of this policy is to provide
MWOBs an opportunity to acquire training through their association with
a more established or larger firm and to increase resource development
opportunities so that MWOB firms will continue to develop the expertise
and capacity to compete independently.
Sec. 1617.21 Eligibility.
A joint venture will be eligible for this program if it meets the
following requirements:
(a) Each MWOB participant is responsible for a clearly defined
portion of the work to be performed and holds management/contract
oversight responsibilities related to the main purpose of the contract;
and
(b) The MWOB participant(s) performs at least 25 percent of the
substantive duties under the entire contract, and is contractually
entitled to compensation proportionate to its(their) duties.
Sec. 1617.22 Establishing joint ventures.
A firm receiving a solicitation from the RTC may form a qualifying
joint venture with one or more other firms that may or may not have
received the solicitation. Each joint venture that is established
before receipt of any SOS, and every joint venture engaged by RTC, must
have its own tax identification number (TIN) and must meet RTC's
fitness and integrity requirements.
Sec. 1617.23 Joint venture agreements.
To qualify for bonus considerations, the joint venture must provide
a copy of its written joint venture agreement to RTC prior to being
submitted for a source list or at the time it submits a proposal. That
agreement must identify clearly the work to be performed, the extent of
total work participation by each firm in the joint venture, the address
of each firm, and the following:
(a) The purpose of the joint venture;
(b) The date the joint venture was established;
(c) The joint venture's federal TIN;
(d) Any other names under which the joint venture has done or is
doing business;
(e) The management structure of the joint venture, including which
of the joint venture participant(s) employs each of the management
staff and the roles and responsibilities of each venturer in performing
the services under the contract;
(f) The percentage of joint venture ownership interests, the
percentage of substantive work to be performed by the MWOB
participant(s) on the contract and the percentage of RTC funds earned
by the joint venture to be distributed to the MWOB participant(s);
(g) The allocation of joint venture income/loss derived from the
joint venture's activities with the RTC (as measured by total joint
venture fees less total joint venture expenses). The joint venture
agreement also should state the method of determining income/loss
(i.e., cash or accrual and tax basis or using generally accepted
accounting principles);
(h) The initial capital investment, including investments made in
cash, equipment, facilities, etc., by each participant;
(i) Whether other resources will be furnished by each joint venture
participant and the basis on which such resources will be furnished;
(j) Whether the insurance requirements will be apportioned among
the joint venture participants and to what extent;
(k) That each party to the joint venture is liable for the
proportionate percentage of joint venture participation for all
activities of the joint venture;
(l) That the MWOB participant(s) in the joint venture will have the
opportunity to represent itself, at all RTC meetings related to the
contract, such as offerors' conferences, debriefings, contract closings
and contract oversight reviews;
(m) That all parties to the joint venture shall fully disclose to
one another all SOSs, Task Order Bids, Notices of Best and Final
Offers, SOS Amendments, Notices of Awards, Contracts and any and all
other documents or meetings necessary or relative to the joint venture.
Such disclosures must be made to the MWOB participant(s) before
submission of any proposals, bids or offers for contracts with the RTC;
and
(n) That financial, ownership, control, or shared employee
(including members of the board of directors) relationships of the
members of the joint venture, if such relationships exist, shall be
disclosed.
Sec. 1617.24 Joint venture reporting and sanctions.
(a) The contractor shall be required to submit periodic detailed
reports of substantive work and distribution of payments to each joint
venture partner, to allow the RTC to determine the extent of compliance
by the contractor with the [[Page 7669]] MWOB joint venture agreement.
Summary joint venture reports shall be required in accordance with RTC
instructions.
(b) The RTC shall evaluate the contractor's performance in relation
to its implementation of the MWOB joint venture agreement. The DMWP
shall give notice to the contractor during performance if the
contractor is failing to meet his or her commitments under the joint
venture agreement. If a contractor's performance is inadequate, the
contractor shall be given a 30-day period on contracts of one year or
more and a proportionate period on contracts of shorter duration to
resolve the non-compliance. If after the compliance period elapses, the
contractor has not corrected the non-compliance, the RTC shall initiate
appropriate remedial action. Any misrepresentations, omissions or
changes by the MWOB, the non-MWOB, or the joint venture partnership
with respect to ownership or control; senior management; MWOB joint
venture participant(s); the allocation of profits and losses; or any
other omissions or changes or other factors that may affect
eligibility, may result in adverse actions against the MWOB, prime
contractor, or joint venture partners including, but not limited to,
withholding of fees, contract termination, and/or referral to the
Office of Ethics, which may result in suspension or exclusion from the
RTC contracting program pursuant to 12 CFR part 1618, with appropriate
referrals to the Office of the Inspector General.
Subpart D--Subcontracting
Sec. 1617.30 Policy.
(a) The RTC has determined that one of the most effective methods
for increasing participation of MWOBs in its contracting activities is
the use of MWOBs as subcontractors. While the ability to subcontract is
within the power of the contractor, the RTC shall provide additional
bonus points to offerors subcontracting at least 25 percent of the
substantive work and commensurate fees to MWOBs. More bonus points will
be available to contractors who reach levels of subcontracting greater
than 25 percent.
(b) In accordance with RTC's other general requirements for
subcontracting activity, the RTC shall satisfy itself that all private
sector firms awarded a contract with the RTC will provide the maximum
opportunity possible to minority and women owned contractors to
participate in subcontracting awards. All RTC contractors must agree to
carry out this policy in a manner consistent with RTC's overall
contracting policies and procedures.
(c) Bonus points are available to any offeror who subcontracts at
least 25 percent of the substantive work and commensurate fees under a
contract to MWOBs. Any offeror that seeks to obtain bonus points on a
prime contract or task order agreement through subcontracting work to
MWOBs must submit with its proposal a subcontracting plan. The
offeror's subcontracting plan shall apply throughout the life of the
contract.
(d) If a prime contractor proposes to contract with a MWOB
subcontractor(s), the RTC requires that an offeror certify that if
awarded a contract, the firm will implement the MWOB Subcontracting
Plan submitted with its proposal, to provide the approved percentage of
MWOB participation to the named MWOB subcontractor(s).
(e) The prime contractor must obtain a completed MWOB certification
package from each proposed MWOB subcontractor in its subcontracting
plan and must submit these documents with its proposal or RTC certified
MWOB affidavit. The prime contractor shall not substitute the named
MWOB subcontractor(s) without prior approval from the DMWP.
Sec. 1617.31 Subcontracting plans.
The subcontracting plan must include within the proposal:
(a) Specific name(s), roles and responsibilities of the MWOB
subcontractor(s);
(b) Separate percentages of work allocated to minority and/or woman
subcontractor(s) (how much to each) and projections of the monthly work
distribution schedule for the term of the contract for each
subcontractor and/or joint venture partner;
(c) Estimated dollar amount of participation of MWOB
subcontractor(s);
(d) The name of an individual employee of the offeror who will
administer the offeror's subcontracting program, and a description of
the duties of the individual;
(e) A statement as to whether the MWOB subcontractor(s) will be
required to provide the following insurance and to what extent:
fidelity bond, errors and omissions, and liability;
(f) Previous experience working with MWOB firms;
(g) Assurances that the offeror will cooperate in any oversight,
review, study or survey, as may be required;
(h) A copy of the written agreement between the contractor and the
subcontractor establishing that the plan meets at least the 25 percent
participation requirement; and
(i) Disclosure of financial, ownership, control, or shared employee
(including members of the board of directors) relationships between the
MWOB subcontractor and the primary contractor, if such relationships
exist.
Sec. 1617.32 MWOB subcontracting requirements.
(a) Effective December 17, 1993, the RTC shall not, in any
capacity, enter into or modify any contract for the provision of goods
and services to RTC under which the contractor would receive fees or
other compensation in an amount equal to or greater than $500,000,
unless the contractor subcontracts part of the engagement with one or
more MWOBs, and pays fees or other compensation to such MWOBs in an
amount commensurate with the percentage of services provided by the
MWOB(s). The mandatory MWOB subcontracting provisions apply to both
non-minority and minority contractors. For all contracts with estimated
fees and other compensation equal to or greater than $500,000, non-MWOB
contractors shall be required to subcontract no less than 10 percent of
the contract services and commensurate fees to MWOBs. A MWOB or a joint
venture with 50 percent or more MWOB participation is required to
subcontract no less than 5 percent of contract services and
commensurate fees to a MWOB.
(b) The RTC shall not enter into or extend a contract, task order
and modification thereto which will result in fees or other
compensation equal to or greater than $500,000, unless the contractors
agree to meet the MWOB mandatory subcontracting requirements.
(c) More specific procedures and guidelines for the implementation
of paragraphs (a) and (b) of this section are contained in the RTC's
Contract Policies and Procedures Manual (CPPM). Copies of the CPPM are
available from the RTC Public Reading Room, 801 17th Street, NW, Room
100, Washington, DC 20434-0001.
(d) The RTC may exclude a contractor from the requirements of
paragraph (b) of this section if the Chief Executive Officer of the
Corporation determines, through written documentation, that imposing
such a subcontracting requirement would:
(1) Substantially increase the cost of contract performance; or
(2) Undermine the ability of the contractor to perform its
obligations under the contract.
(e) Reports and notarized certifications subject to 18 U.S.C. 1001.
[[Page 7670]]
(f) The RTC, through a written determination by the Chief Executive
Officer, may grant a waiver from the requirements of paragraphs (a) and
(b) of this section for any contract, provided that the contractor
certifies that it has determined that no eligible MWOB is available to
enter into a subcontract, with respect to a contract to which
paragraphs (a) and (b) of this section are otherwise applicable;
provides a list of MWOB contractors contacted, including firm name,
MWOB tax identification number, address, telephone number, and contact
official; and provides a detailed explanation of the basis for the
contractor's determination, including written documentation from the
local RTC DMWP concurring in the determination that there are no
eligible MWOBs available.
(g) The offeror/contractor is subject to Secs. 1617.30, 1617.31 and
1617.33.
Sec. 1617.33 Post-award oversight.
(a) The contractor will be required to submit periodic detailed
reports of substantive work and payments to MWOB subcontractors, to
allow the RTC to determine the extent of compliance by the contractor
with the MWOB subcontracting plan. Summary subcontracting reports will
be required in accordance with RTC instructions.
(b) The RTC will evaluate the contractor's performance in relation
to its implementation of the MWOB subcontracting plan. The RTC will
give notice to the contractor if the contractor is failing to meet his
or her commitments under the subcontracting plan. If a contractor's
performance is inadequate, the contractor will be given notice in
accordance with the terms and conditions of the contract. If after the
compliance period elapses, the contractor has not corrected the non-
compliance issue, the RTC shall initiate appropriate remedial action,
that could result in the withholding of fees, contract termination,
and/or referral to the Office of Ethics which may result in suspension,
or exclusion of the contractor.
Subpart E--Solicitation and Contract Award Guidelines
Sec. 1617.40 Inclusion in solicitations.
RTC policies and guidelines will ensure, to the maximum extent
possible, participation of MWOBs in each contract solicitation. In
order to increase competition for MWOBs, the RTC shall implement
smaller contract assignments, such as soliciting proposals for asset
managers to manage small, homogeneous, geographically concentrated
asset pools. For noncompetitive contracts under $5,000, the use of MWOB
firms is encouraged.
Sec. 1617.41 Participation by the Division of Minority and Women's
Programs in the solicitation and award process.
(a) The DMWP staff shall participate in the initial review and
Statement of Work meeting with the requesting program office and the
Legal Division to establish milestones, specific task descriptions, and
contractor responsibilities. The DMWP shall participate in the Source
Selection Plan process to assure inclusion of MWOB firms. The DMWP
shall assure that the following contract requirements are fair,
equitable and consistent:
(1) The selection criteria for notices or issuance of SOSs;
(2) The advertising language; and
(3) Standards for most important, more important, and important
factors, and scoring criteria.
(b) The DMWP shall participate in the preparation of responses to
questions received from offerors in consultation with the Contracts
Office, Program Office, and Legal Division.
(c) The DMWP staff shall participate as non-voting members in the
technical evaluation process. After the technical evaluation, scoring
material shall be available for review and concurrence by the Program
Office, Legal Division, and the DMWP.
(d) The DMWP shall concur on the assignment of technical and cost
bonus points prior to selection of offerors in competitive range.
(e) To ensure inclusion by MWOBs in the contracting process, the
DMWP must concur in the selection of the contractor.
(f) In the post-award phase, the DMWP shall participate in MWOB
debriefings and contractor performance evaluations.
(g) The DMWP, in conjunction with OCOS, will conduct quarterly and
annual site visitations of SAMDA contractors to review contractor
compliance with RTC policies and procedures.
(h) The DMWP shall conduct quarterly and annual site visitations of
any contractor who is subject to MWOB participation in joint ventures
and subcontracting plan(s).
Sec. 1617.42 Participation by the Division of Minority and Women's
Programs in contract administration.
The DMWP shall participate in the oversight (i.e. evaluation,
rating, and other matters) relating to contract performance and
compliance, specifically those matters related to the implementation of
DMWP activities and fulfillment of subcontracting plan and joint
venture agreement obligations and commitments. This includes
interactions between parties once payment has been made, during the
resolution of any disputes or adjustments, and until the contract is
formally closed. The DMWP shall participate and concur in decisions
related to contract changes and modifications to assure that MWOBs are
fully included in decisions related to changes and modifications to
their contracts; and in conformance with the joint venture agreement
and subcontracting plan terms and conditions related to MWOB
eligibility. The DMWP shall:
(a) Participate and concur in the preparation of the Contract
Administration Plan with the oversight managers and contract officer;
the post-award conference to discuss milestones, reporting
requirements, training needs, roles and responsibilities; and technical
requirements of MWOB Program implementation;
(b) Participate as a contract administration team member with full
responsibility for monitoring compliance of all firms with MWOB Program
requirements; attending site visits and performance reviews; and
providing technical oversight, assistance, training, and other
direction as required;
(c) Monitor contractor payments for timeliness and accuracy of the
contractor's payment to MWOB subcontractors in accordance with
established and previously approved subcontracting plans;
(d) Monitor contractor fee splits for timeliness and accuracy, and
verify fee distributions to MWOB joint venture participants;
(e) Review and concur on all requests for contract amendments and
modifications initiated by the contractor or RTC to assure that they
are not prohibitive or impediments to maximizing the levels of
participation for MWOBs in potential contract opportunities; and
(f) Review and concur in all requests for the assignment and/or re-
assignment of contracts to determine the impact of such assignments on
RTC's MWOB goals and on the participation of minorities and women.
Subpart F--Technical and Cost Bonus Points
Sec. 1617.50 Policy.
In the review and evaluation of proposals submitted by firms
eligible as MWOBs, MWOB joint ventures, or non-MWOBs with qualifying
subcontracting [[Page 7671]] plans, RTC shall provide bonus points in
the technical and cost rating process.
Sec. 1617.51 Application of technical and cost bonus points.
(a) Technical bonus points shall be awarded as a percentage of the
total technical points achievable in the rating process in addition to
each offeror's technical score.
(b) Cost bonus points shall be awarded as a percentage of the total
cost points achievable in the rating process in addition to each
offeror's cost score.
(c) The technical and cost bonus points shall be allocated as
follows:
------------------------------------------------------------------------
Percent Percent
Firm type technical cost
------------------------------------------------------------------------
MWOB............................................ 15 10
Joint Venture with at least 40 percent MWOB
participation.................................. 15 10
Joint Venture with at least 25 percent MWOB
participation.................................. 10 5
Non-MWOB firm with sub-contracting plan of at
least 40 percent MWOB participation............ 10 5
Non-MWOB firm with sub-contracting plan of at
least 25 percent MWOB participation............ 5 2.5
------------------------------------------------------------------------
(d) All contracts which have estimated fees or other compensation
equal to or greater than $500,000 or when the award will result in
accumulated fees or other compensation which will be equal to or
greater than $500,000, the contractor shall be required to satisfy the
5 percent or 10 percent mandatory MWOB subcontracting requirement. For
non-MWOB contractors, this 10 percent subcontracting requirement is
deemed satisfied in cases where offerors submit acceptable MWOB
subcontracting plans of at least 25 percent and are requesting
technical and cost bonus consideration.
Sec. 1617.52 Authority to adjust technical and cost bonus points.
(a) The DMWP shall evaluate the Corporation's application of bonus
points annually. This annual review shall determine whether the
Corporation is meeting the mandate to ensure the maximum participation
possible for MWOBs and the need to adjust the bonus points.
(b) The Vice President of the DMWP, with the concurrence of the
Chief Executive Officer, has the authority to increase the technical
and cost bonus points to ensure maximum MWOB participation in the
contracting process.
Subpart G--Conservatorship Contracting
Sec. 1617.60 Policy and application.
(a) The RTC recognizes the role of conservatorships in ensuring
inclusion of MWOBs in RTC contracting and disposition activities to the
maximum extent possible. Within six months after an institution has
been placed into conservatorship, each conservatorship shall comply
with DMWP policies and procedures.
(b) Accordingly, it is the responsibility of the Conservatorship
and Contracting Departments to provide the DMWP with an opportunity to
review and concur on:
(1) Requests for contracting services;
(2) Solicitation of Services (SOS) lists;
(3) SOS, contract, Statement of Work;
(4) Other contracting documents;
(5) Application of MWOB bonus points; and
(6) Certification/verification of contractor's MWOB status.
(c) In addition, the DMWP shall have the opportunity to participate
in conferences, debriefings, negotiation meetings, final interviews,
and any other meetings between RTC and MWOB contractors.
(d) Because of the large number of small awards emanating from
conservatorships, the conservatorships are strongly encouraged, in all
sole source contracts, to give preference to local MWOBs. The DMWP
staff at RTC field offices shall work with the conservatorship
contracting offices in identifying and certifying MWOBs, prior to the
conservatorship offices soliciting for services.
Subpart H--General Provisions Applicable to Law Firms
Sec. 1617.70 Contracting objectives.
(a) The Division of Legal Services shall, to the maximum extent
possible, increase the level of legal fees paid annually on new
assignments to MWOLFs to at least 20 percent. In addition, at least 10
percent of the total legal fees paid annually will be paid to
minorities or women partners and other minority and women attorneys in
non-MWOLFs.
(b) Further, the Division of Legal Services shall:
(1) Increase MWOLF participation and fees at each field office and
in Washington in accordance with the RTC goals and objectives.
(2) Assist RTC attorneys and outside counsels in identifying both
the capacity and the experience to provide the required legal services
to the RTC.
(3) Encourage non-MWOLFs to utilize joint referral arrangements
with MWOLFs to increase MWOLF participation and fees. Bonus points will
be awarded to law firms that engage in joint referrals, and achieve
specified levels of fees for MWOLF participation.
(4) Consistent with Division of Legal Services Policy No. 92-04,
Minority and Women Partners Program, refer legal matters to the
minority or women partners in non-MWOLFs who are identified as the RTC
contact persons listed in the RTC Legal Information System (RLIS) and
are principally responsible for the coordination of the legal services
provided to the RTC. These partners are responsible for ensuring that
RTC legal matters are successfully performed by other minority and
women attorneys in non-MWOLFs.
(5) Copies of the document referred to in paragraph (b)(4) of this
section are available from the RTC Public Reading Room, 801 17th Street
NW., Room 100, Washington, DC 20434-0001.
Sec. 1617.71 Program components.
The Department of Legal Programs (DLP) shall:
(a) Design and implement a nationwide program, to identify MWOLFs
capable of meeting the legal services contracting needs of the RTC.
Implementation of the outreach program will entail having on-going
communications with national, state and local bar associations, and
other entities, and will participate in professional conventions and
seminars sponsored and widely attended by MWOLFs.
(b) Coordinate with the Legal Division to identify and develop
opportunities to increase referrals to MWOLFs, and minority and women
partners in non-MWOLFs.
(c) Develop and implement outreach programs, such as seminars,
conferences, and training workshops on legal contracting to increase
the referrals and fees to MWOLFs and to minority and women partners in
non-MWOLFs, and encourage the use of MWOLFs in joint referrals, such as
co-counsel, joint counsel, joint venture arrangements, and consortia of
MWOLFs.
(d) Monitor the implementation of the DMWP goals and objectives.
(e) Conduct on-site reviews of each field office and the Washington
Office to determine compliance with the RTC's minority and women
outreach goals and objectives.
[[Page 7672]]
Sec. 1617.72 Certification.
(a) A law firm seeking status as a MWOLF shall provide
certification of that status. To this end, RTC must satisfy itself that
the ownership, control and licensing requirements of the program are
fulfilled. Therefore, on-site visits shall be performed by the DLP and
may include OCOS.
(b) RTC has developed and implemented a certification policy and
procedures designed to prevent fraudulent representations. Procedures
have been established by which the DMWP shall review, evaluate, and
approve notarized certification forms and accompanying documents from
MWOLFs prior to any engagement.
(c) When an MWOLF is awarded an engagement with estimated fees of
$100,000 and over, or applies for a new or renewed Legal Services
Agreement (LSA), an on-site verification may be performed by DMWP to
ensure that no changes have occurred in the eligibility for MWOLF
status. Verification of a certification may also be required when a
referral would result in an accumulation of over $100,000 in estimated
fees to a MWOLF. Further, the DMWP reserves the right to perform an on-
site verification upon certification, if fees under a referral would
amount to less than $100,000. As part of its oversight role, DMWP also
reserves the right to verify any MWOLF's eligibility at any time. If
the eligibility of a firm as a MWOLF is questionable, the Legal
Division's Outside Counsel Management Section (OCMS) may participate in
the on-site verification.
(d) RTC shall be notified immediately of any factors that may
affect MWOLF certifications as a result of changes in ownership, senior
management or MWOLF joint referral participant(s).
(e) Any misrepresentations (including falsification of MWOLF
certification), omissions or changes by the MWOLF, non-MWOLF or the
joint referral participants with respect to MWOLF status shall be
referred to the Legal Services Committee, which may result in
termination of the Legal Services Agreement, termination or suspension
of the engagement(s) and/or exclusion from the RTC legal contracting
program, and/or referral to the Office of Inspector General.
(f) Any firm found ineligible for MWOLF certification shall be
informed of its right to file an appeal to the Vice President, DMWP in
Washington, DC.
Subpart I--Competitive Legal Engagements
Sec. 1617.80 Inclusion in solicitations.
RTC shall ensure, to the maximum extent practicable, that MWOLFs
and minority and women partners in non-MWOLFs who are the RTC contact
persons are included in each competitive engagement solicitation.
Sec. 1617.81 Participation by the Division of Minority and Women's
Programs in solicitation and referral process.
(a) The DMWP shall participate as a voting member on each of the
RTC's Legal Services Committees to ensure that the evaluation of MWOLFs
for potential outside counsel engagements is consistent with the
overall objectives of inclusion, to the maximum extent practical, and
where applicable, that the award of technical and cost bonus points to
MWOLFs, and non-MWOLFs with qualifying joint referral arrangements with
MWOLFs, is assigned appropriately.
(b) The DMWP staff may participate in the initial review and
Statement of Work preparation to establish milestones, specific task
descriptions and law firm responsibilities. The DMWP shall participate
in the source list preparation to ensure inclusion of MWOLFs.
(c) The DMWP shall ensure that the following requirements for
competition are fair, equitable and consistent:
(1) The selection criteria for notices or issuance of RFPs;
(2) The solicitation language; and
(3) The engagement parameters, including reasonable standards for
substantive, technical and scoring criteria.
(d) The DMWP, in consultation with the Legal Division, shall
participate in the preparation of responses to questions concerning the
RTC's Minority and Women Outreach Program received from offerors.
(e) The technical and cost bonus points shall be assigned prior to
selection of the competitive range.
(f) In the post-engagement phase, the DMWP may participate, in
conjunction with OCMS, in periodic site visits conducted by the Legal
Division of outside counsel(s) to review contractor compliance with the
RTC's goals and objectives regarding MWOLFs and minority and women
partners in non-MWOLFs.
Subpart J--Joint Referrals and Representations
Sec. 1617.90 General.
(a) A joint referral will be used to combine the resources of two
or more law firms. MWOLFs with experience in the area of the referral
will be paired with other MWOLFs or with non-MWOLFs that have more
experience in the same area or have greater resources to provide legal
services to the RTC.
(b) All joint referrals to outside counsel will provide the maximum
opportunity possible for MWOLFs to participate in the engagement. RTC
outside counsel shall implement this policy in a manner consistent with
RTC's overall legal contracting policies and procedures. As MWOLFs
become more experienced in RTC legal issues, their level of
participation in matters referred pursuant to the Joint Referral
Program, as well as the fees they are paid, shall increase.
(c) Written justification will be provided for a referral made
pursuant to the joint referral exemption in the Legal Division Policy
No. 92-03, Statement of Policy and Procedures Concerning Limitations
Upon the Use of Outside Counsel, (Fee Cap Policy) as amended.
(d) The DLP, in conjunction with the Legal Division, shall review
the joint referral arrangement. The agreement must set forth the
distribution of legal fees and work for each firm. This agreement shall
apply throughout the term of the engagement. These arrangements must be
in conformance with Legal Division Policy No. 92-02, Joint Referrals
and Representation Program, as amended.
(e) All arrangements must be approved by the RTC Legal Services
Committee.
(f) The overriding objective of these arrangements and others
pursuant to Sec. 1617.91 is that less experienced MWOLFs receive
sufficient training in the relevant issues while pursuing a matter as
cost effectively as possible.
(g) To qualify for bonus points, at least 25 percent of the fees
shall be earned by a MWOLF.
(h) Copies of documents referred to in paragraph (c) and (d) of
this section are available from the RTC Public Reading Room, 801 17th
Street, NW., room 100, Washington, DC 20434-0001.
Sec. 1617.91 Joint referral agreements.
(a) Outside counsel shall prepare and execute a Joint-Venture
Agreement, a Joint-Counsel Agreement, or a Consortium Agreement. Each
such agreement must include:
(1) The name of each firm, its role and responsibilities;
(2) The percentage of substantive work allocated to each firm;
(3) Estimated legal fees to be generated by each firm;
(4) A requirement for each engagement under the agreement that a
[[Page 7673]] lead attorney will be designated and a description of the
duties and responsibilities of this individual;
(5) Assurances that outside counsel will cooperate in any
oversight, review, study or survey, as may be required;
(6) A statement that the minority or women owned law firm is a
certified RTC MWOLF;
(7) A statement that the joint referral arrangement is entitled to
MWOLF bonus points, if it meets the minimum 25 percent MWOLF
participation requirement; and
(8) A statement that, if engaged, the firm will implement the joint
referral agreement submitted with its proposal to provide the approved
percentage of MWOLF participation and fees.
(b) The RTC Oversight Attorney shall be encouraged to prepare the
MWOLF Co-Counsel engagement memorandum, said memorandum to include:
(1) The name of each firm, their role and responsibilities;
(2) An indication of the percentage of substantive work allocated
to each firm;
(3) Estimated legal fees to be generated by each firm;
(4) A requirement for each engagement under the agreement that a
lead attorney will be designated and responsibilities of this
individual;
(5) Assurances that outside counsel will cooperate in any
oversight, review, study or survey, as may be required;
(6) A statement that the minority or women owned law firm is a
certified RTC MWOLF; and
(7) A statement that, if engaged, the RTC Oversight Attorney will
implement the joint referral agreement to provide the approved
percentage of MWOLF participation and fees.
Sec. 1617.92 Other arrangements.
Other forms of affiliation between less experienced MWOLFs and more
experienced MWOLFs or non-MWOLFs are available and are encouraged for
work on a particular matter or for a specified period of time.
Sec. 1617.93 MWOLF contracting requirements.
(a) For the purposes of this section, any referral to outside
counsel constitutes an engagement.
(b) Effective December 17, 1993, when RTC enters into or modifies
any engagement for the provision of legal services to the RTC for which
the contractor would receive fees or other compensation in an amount
equal to or greater than $500,000:
(1) An MWOLF must be included in the referral as a subcontractor.
This requirement applies if the arrangement is with a single outside
counsel whether or not such outside counsel is an MWOLF or; outside
counsel consists of a joint referral or co-counsel relationship.
(2) A subcontractor MWOLF will be allocated not less than 10
percent of the substantive legal work and commensurate fees. However,
if there is a joint counsel or co-counsel referral relationship in
which an MWOLF has been allocated at least 50 percent of the
substantive legal work and commensurate fees, a subcontractor MWOLF
will be allocated no less than 5 percent of the total.
(c) The RTC may exempt a referral from the requirements of
paragraph (b) of this section if the Chief Executive Officer of the
Corporation determines, through written documentation, that imposing
such a joint representation requirement would:
(1) Substantially increase the cost of the engagement performance;
or
(2) Undermine the ability of the majority firm to perform its
obligations under the engagement.
(d) Reports and notarized certifications subject to 18 U.S.C. 1001.
(e) The RTC, through a written determination by the Chief Executive
Officer, may grant a waiver from the requirements of paragraph (b) of
this section for any engagement, provided that the majority firm has
certified that no eligible MWOLF is available and has provided a basis
for that conclusion.
Sec. 1617.94 Compliance.
The Legal Division shall evaluate the performance of law firms as
it relates to their efforts and success in meeting DMWP goals and
objectives. The evaluation may include on-site reviews of law firms to
assess their compliance with DMWP policies. The DMWP will evaluate
outside counsel's performance in relation to its implementation of the
MWOLF joint referral agreement. When outside counsel is failing to meet
its commitments under the MWOLF joint referral agreement, the DMWP will
give written notice to the RTC Oversight Attorney, with a copy to the
Legal Services Committee. When outside counsel's performance falls
below the written commitment, the outside counsel may be given a 30-day
period to resolve the non-compliance. When the compliance period
expires, and outside counsel has not corrected the non-compliance, the
matter shall be referred to the Legal Services Committee for
appropriate remedial action, including but not limited to termination
or suspension of the engagement and/or exclusion of the firm from the
RTC legal contracting program.
Subpart K--Minority and Women Partners Program
Sec. 1617.100 Minority and women partner referral.
(a) Legal matters may be referred to minority or women partners in
non-MWOLFs who are the RTC contact persons. Pursuant to the Minority
and Women Partners Program, the RTC will provide opportunities for
these minority and women partners who are the RTC contact persons to
render legal services to the RTC.
(b) The RTC expects that as minority and women partners in non-
MWOLFs become more experienced in RTC legal issues, their level of
participation in matters referred pursuant to the Partners Program, as
well as the fees they generate, shall increase.
(c) The DLP, in conjunction with the Legal Division, will review
the minority and women partner referral arrangements that must set
forth the distribution of legal work and commensurate fees for each
minority and woman partner within the firm. These proposals must be in
conformance with Legal Division Policy No. 92-04, Minority and Women
Partners Program, as amended.
(d) Copies of the document referred to in paragraph (c) of this
section are available from the RTC Public Reading Room, 801 17th
Street, N.W., Room 100, Washington, DC 20434-0001.
Subpart L--Technical and Cost Bonus Points
Sec. 1617.200 Policy.
When reviewing and evaluating proposals submitted by firms eligible
as MWOLFs or MWOLF joint referral, the RTC has the statutory authority
to award bonus points in the technical and cost rating process. With
regard to joint referral arrangements, (i.e., joint venture, joint
counsel, MWOLF consortia or subcontracting arrangements), the RTC shall
have the authority to provide bonus points to joint referral
arrangements when at least 25 percent of the substantive work and
commensurate fees are paid to MWOLFs. Additional bonus points may be
awarded to joint referrals when a minimum of 40 percent of the
substantive work and commensurate fees are paid to MWOLFs.
Sec. 1617.201 Application of technical and cost bonus points.
(a) In addition to each offeror's technical score, technical bonus
points shall be awarded as a percentage of the total technical points
achievable in the rating process. [[Page 7674]]
(b) In addition to each offeror's cost score, cost bonus points
shall be awarded as a percentage of the total cost points achievable in
the rating process, in addition to each offeror's cost score.
(c) Beginning with the effective date of this final rule, the
technical and cost bonus points shall be allocated as follows:
------------------------------------------------------------------------
Percent Percent
Firm type technical cost
------------------------------------------------------------------------
MWOLF or MWOLF Consortia........................ 15 10
Joint Venture with at least 40 percent MWOLF
legal fees..................................... 15 10
Joint Venture with at least 25 percent MWOLF
legal fees..................................... 10 5
Joint Counsel or Subcontractors with at least 40
percent MWOLF legal fees....................... 10 5
Joint Counsel or Subcontractors with at least 25
percent MWOLF legal fees....................... 5 2.5
------------------------------------------------------------------------
(d) All non-MWOLF outside counsels who receive referrals in which
fees and expenses are equal to or greater than $500,000 are required to
satisfy the 10 percent MWOLF referral requirement. All MWOLF outside
counsels who receive referrals in which fees and expenses are equal to
or greater than $500,000 are required to satisfy the 5 percent MWOLF
referral requirement. For non-MWOLF outside counsels requesting
technical and cost bonus consideration, this 10 percent is deemed
satisfied in cases where referrals are at least 25 percent.
Sec. 1617.202 Authority to adjust technical and cost bonus points.
(a) The DMWP shall periodically evaluate the RTC's application of
bonus points. The review shall determine whether the Corporation is
meeting its legislative mandate to ensure the maximum participation
possible for MWOLFs and determine if there is a need to increase the
bonus points.
(b) The Vice President of the DMWP, with the concurrence of the
Chief Executive Officer, has the authority to increase the technical
and cost bonus points applicable in evaluating proposals to the extent
necessary to ensure the maximum participation for MWOLFs.
Subpart M--General Procedures Applicable to Contractor Suspension
and Exclusion, Contract Rescission, and Other Administrative
Actions
Sec. 1617.300 Procedures for MWOBs.
(a) Once any RTC department or office recognizes and/or identifies
a problem arising out of an award to a MWOB and alleges issues
concerning action that may involve the suspension or the exclusion of a
MWOB, the rescission of an award to a MWOB, or any other adverse action
against the MWOB, the DMWP shall be notified in writing immediately.
This includes emergency asset management and disposition matters
arising out of an award to a MWOB.
(b) The DMWP shall have the opportunity to participate in the
process, from identification of the alleged problem through resolution,
to determine whether adverse or disciplinary action shall be taken
against any MWOB as a result of any alleged problem.
(c) By including this Sec. 1617.300, the RTC does not intend to
create any right of action in private parties that would not otherwise
exist.
Sec. 1617.301 Procedures for MWOLFs.
(a) Once the Legal Division or any other RTC department or office
recognizes and/or identifies a problem arising out of a MWOLF referral
which alleges issues concerning actions that may involve the suspension
or the exclusion of a MWOLF, the rescission of a referral to a MWOLF,
or any other adverse action against the MWOLF, the DMWP shall be
notified in writing immediately. This includes emergency litigation
matters, arising out of a referral to a MWOLF.
(b) The DMWP shall have the opportunity to participate in all
phases of the process, (i.e., from the identification of the alleged
problem through the resolution stage) to determine whether adverse or
disciplinary action shall be taken against any MWOLF as a result of any
alleged problem.
(c) In compliance with the RTC's Procedures Regarding Adverse
Actions Affecting Minority- and Women-Owned Law Firms, the DMWP shall
be notified immediately when the Legal Division refers a matter subject
to said procedures to the Outside Counsel Conflicts Committee or to the
Legal Services Committee. The Legal Division, in consultation with the
MWP Division, will determine whether the RTC is required to take
adverse or disciplinary action against a MWOLF, and, if so, will
consult with DMWP regarding the course of adverse or disciplinary
action to be taken.
(d) Nothing in this section precludes the Legal Division from
taking an adverse action in an emergency situation.
(e) By including this Sec. 1617.301, the RTC does not intend to
create any right of action in private parties that would not otherwise
exist.
Subpart N--General Provisions Applicable to Program Compliance
Sec. 1617.400 Program compliance.
(a)(1) The RTC recognizes that the success of the MWOB and MWOLF
programs involves commitment and leadership from senior management. The
RTC pledges the continuing involvement of all levels of its staff in
ensuring the success of these programs.
(2) Department of Policy, Evaluation and Field Management (DPEFM)
staff dedicated to oversight and monitoring shall continuously assess
the implementation of RTC policies, procedures, and guidelines for
compliance with the goals of FIRREA, the RTC Funding Act of 1991, the
RRIA, and the RTCCA to ensure the maximum inclusion of MWOBS and MWOLFs
in the management and disposition of assets of failed thrifts. An
oversight and evaluation program has been established utilizing a
uniform assessment process to assure RTC's adherence to Minority and
Women's Programs goals and objectives, including certification
requirements and MWOLF contracting plan commitments.
(b) RTC field office shall be visited periodically by the DPEFM
staff to:
(1) Review the effectiveness of RTC's efforts to assure the maximum
inclusion and participation of MWOBs and MWOLFs in all of its programs
and activities;
(2) Determine the effectiveness of the interface of the DMWP field
staff with the contract program, sales offices, contractor oversight
management, conservatorship, the legal division and administration
staff;
(3) Evaluate and assess the results of the MWOB and MWOLF program
activities; and
(4) Develop comprehensive performance assessments in accordance
with established criteria and make recommendations for program
improvements, including specialized technical assistance and training.
These oversight and monitoring reviews shall serve, in part, as a basis
for the annual performance appraisal of DMWP field managers.
(c) Monitoring, evaluation and reporting. The DPEFM shall track,
[[Page 7675]] review and periodically report on the implementation of
RTC's DMWP activities and accomplishments to RTC management, the
Congress, and the public. These reports will address RTC's progress in
utilizing MWOBs and MWOLFs including, but not limited to, identifying
geographic and service categories in which MWOBs and MWOLFs are under
represented.
Sec. 1617.401 Performance appraisals.
Adherence to, and assistance with, MWOB and MWOLF program policies
shall be reflected in RTC Personnel Appraisals for senior and
management officials to encourage performance and maintain individual
accountability. All annual performance evaluations for such officials
in each RTC office shall include a review of their success in meeting
the goals and objectives of the RTC's Minority and Women's Programs.
By order of the Chief Executive Officer.
Dated at Washington, DC, this 30th day of January, 1995.
Resolution Trust Corporation.
John M. Buckley, Jr.,
Secretary.
[FR Doc. 95-2962 Filed 2-7-95; 8:45 am]
BILLING CODE 6714-01-P