[Federal Register Volume 60, Number 150 (Friday, August 4, 1995)]
[Notices]
[Pages 39945-39946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19242]



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COMMITTEE FOR PURCHASE FROM PEOPLE WHO ARE BLIND OR SEVERELY DISABLED

Procurement List Additions

AGENCY: Committee for Purchase From People Who Are Blind or Severely 
Disabled.

ACTION: Additions to the procurement list.

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SUMMARY: This action adds to the Procurement List hardwood flag cases 
to be furnished by nonprofit agencies employing persons who are blind 
or have other severe disabilities.

EFFECTIVE DATE: September 5, 1995.

ADDRESSES: Committee for Purchase From People Who Are Blind or Severely 
Disabled, Crystal Square 3, Suite 403, 1735 Jefferson Davis Highway, 
Arlington, Virginia 22202-3461.

FOR FURTHER INFORMATION CONTACT: Beverly Milkman (703) 603-7740

SUPPLEMENTARY INFORMATION: On June 2, 1995, the Committee for Purchase 
From People Who Are Blind or Severely Disabled published notice (60 FR 
28781) of proposed addition to the Procurement List.
    Comments were received from the current contractor for the flag 
cases, both Senators from North Carolina, two other members of the 
State's Congressional delegation, the State's Department of Commerce 
and its Small Business & Technology Development Center, a county 
commissioner for one North Carolina county, and the Chambers of 
Commerce of two other counties. Many of the commenters expressed 
concern that loss of sales of the flag cases proposed to be added to 
the Procurement List could severely affect the current contractor, 
which is a startup business that has not yet shown a profit from its 
activities to develop its flag case business and is located in an area 
classified as ``severely economically distressed.''
    The majority of the current contractor's Government sales of the 
flag cases are to the Army, Air Force, or exchange system. The 
Committee proposes to add only the Navy and Marine Corps requirements 
to the Procurement List. These requirements comprise less than five 
percent of the contractor's business, and the contractor has been 
selling the cases to the Navy and Marine Corps for less than a year. 
The Committee does not normally consider an impact of this size to be 
severe adverse impact, particularly when the contractor does not have a 
long-term dependence on sales of the item to the affected customer.
    Nevertheless, some of the commenters have indicated that even a 
sales loss of this lesser size would have a severe impact on the 
contractor, given its current profitability status, and particularly on 
its subsidiary which makes the cases and on the county in which the 
subsidiary is located if the subsidiary is forced to close. They 
contend that the contractor must continue to expand its business in 
order to become profitable, so it cannot afford to lose any part of its 
current sales or prospects, and it would not be fair for it to lose the 
fruits of its business development efforts.
    The contractor is currently selling the flag cases to the 
Government under the competitive purchasing system. In this system, no 
contractor is guaranteed that it will continue to receive Government 
contracts. Any company desiring to do business with the Government thus 
risks the loss of any expenditure of money or effort it makes in order 
to obtain this business. In addition, the Government's needs may change 
so that it would no longer buy the type of flag case that the 
contractor sells. Until last year, in fact, the Navy and Marine Corps 
bought a different type of flag case for the same purpose. Addition of 
the Navy and Marine Corps requirements for the case to the Procurement 
List is thus not the only way the contractor can lose this business.
    The Committee does not believe that the proposed addition will 
cause the contractor to close its subsidiary and impact the local 
economy as some of the commenters have indicated. In its initial 
comment, the contractor indicated that loss of its entire Government 
flag case business would only cause the loss of two sales positions and 
a possible closing of the subsidiary. Since the amount being added to 
the Procurement List is only one-fifth of the contractor's Government 
flag case business, it appears unlikely that the impact would force the 
subsidiary's closing. To the extent that the Committee's action causes 
losses to the contractor or its employees, the Committee believes the 
losses are outweighed by the creation of jobs for people with severe 
disabilities, whose overall unemployment rate exceeds 65 percent, well 
above the rate for nondisabled workers in the contractor's locality.
    One commenter expressed a fear that the Committee would expand its 
share of the Government market for the flag case beyond the Navy and 
Marine Corps requirements, causing a greater impact on the contractor. 
The Committee could not do that without conducting a separate 
rulemaking proceeding to add the additional quantities to the 
Procurement List. In that proceeding, the Committee would be required 
to consider the cumulative impact on the contractor caused by both 
addition actions. Unless the contractor's business fortunes had 
improved markedly, it is unlikely the Committee would add any further 
part of the contractor's Government sales of the flag case to the 
Procurement List.
    The same commenter indicated that making flag cases is dangerous 
work, and questioned the ability of the designated nonprofit agency to 
produce the flag cases at a competitive price and in sufficient 
quantity to meet wartime requirements. As the Navy official who 
conducted the plant inspection noted in finding the nonprofit agency 
capable of meeting all Navy and Marine Corps supply requirements, the 
nonprofit agency has a fully equipped commercial woodworking operation, 
with machines which have been specially designed to allow people with 
disabilities to operate them safely. The Committee is required to set a 
fair market price for each item on the Procurement List, and the 

[[Page 39946]]
nonprofit agency has agreed to produce the flag cases at the price that 
has been set.
    Another commenter indicated that the contractor's firm may have 
disabled employees. The contractor, however, did not support this 
contention in its comments either to the Committee or in its letters to 
Members of Congress. One commenter proposed that the Committee permit 
the contractor to hire some people with disabilities instead of 
adopting the proposed addition to the Procurement List. The Committee 
encourages companies to hire people with disabilities but does not 
believe this hiring should replace the creation of jobs for people with 
severe disabilities through additions to the Procurement List, which 
guarantees employment for these people while commercial businesses are 
free to terminate workers with disabilities for any reason.
    After consideration of the material presented to it concerning 
capability of qualified nonprofit agencies to provide the commodities, 
fair market price, and impact of the addition on the current or most 
recent contractors, the Committee has determined that the commodities 
listed below are suitable for procurement by the Federal Government 
under 41 U.S.C. 46-48c and 41 CFR 51-2.4.
    I certify that the following action will not have a significant 
impact on a substantial number of small entities. The major factors 
considered for this certification were:
    1. The action will not result in any additional reporting, 
recordkeeping or other compliance requirements for small entities other 
than the small organizations that will furnish the commodities to the 
Government.
    2. The action does not appear to have a severe economic impact on 
current contractors for the commodities.
    3. The action will result in authorizing small entities to furnish 
the commodities to the Government.
    4. There are no known regulatory alternatives which would 
accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 46-
48c) in connection with the commodities proposed for addition to the 
Procurement List.
    Accordingly, the following commodities are hereby added to the 
Procurement List:

Case, Flag, Hardwood
8345-00-NSH-0013 (18'' x 25'' Navy)
    8345-00-NSH-0014 (18'' x 25'' Marine Corps)
    (Requirements for the Naval Medical Logistics Command, Fort 
Detrick, Maryland)

    This action does not affect current contracts awarded prior to the 
effective date of this addition or options exercised under those 
contracts.
Beverly L. Milkman,
Executive Director.
[FR Doc. 95-19242 Filed 8-3-95; 8:45 am]
BILLING CODE 6820-33-P