[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]]

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Part IV





Resolution Trust Corporation





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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.

-----------------------------------------------------------------------

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