[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Notices]
[Pages 63026-63027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29957]



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COMMITTEE FOR PURCHASE FROM PEOPLE WHO ARE BLIND OR SEVERELY DISABLED

Procurement List; Addition

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

ACTION: Addition to the Procurement List.

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

EFFECTIVE DATE: January 8, 1996.

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 September 29, 1995, the Committee for 
Purchase From People Who Are Blind or Severely Disabled published 
notice (60 F.R. 50558) of proposed addition to the Procurement List.
    Comments were received from the current contractor for this service 
before the notice of proposed rulemaking was published in the Federal 
Register. Some of these comments were transmitted to the Committee by a 
Member of Congress. The Committee initially was asked to add janitorial 
services at a group of buildings to the Procurement List, but the 
request was revised to include only the Ariel Rios Building to minimize 
the impact on the current contractor.
    Despite the limitation, the contractor continued to claim that the 
proposed addition would have a severe impact on the company. The 
contractor claimed that the percentage of contract revenues it would 
lose on its award for the remaining buildings exceeds a ``rule of 
thumb'' percentage beyond which the Committee will consider impact to 
be severe. The contractor also indicated that it has been a continuous 
supplier of building maintenance at various Government sites and is 
thus more dependent on such sales to the Government. The contractor 
claimed that the remaining buildings in the group would soon be closing 
for extensive renovations, so the limitation of the Procurement List 
addition to the one building would not lessen the impact on the 
contractor.
    The Committee's criteria on permissible impact on a current 
contractor for a Procurement List addition, at 41 CFR 51-2.4(a)(4), 
look at the impact on the total sales of a company, not the percentage 
of revenue for a particular contract. The Committee has no ``rule of 
thumb'' for total sales percentage, as impact determinations are made 
on the facts of each situation. In this situation, the percentage of 
sales which the contractor will lose is well below the percentage cited 
as the ``rule of thumb'' level and, even when consideration is given to 
the contractor's dependence on Government sales, does not reach a level 
which would be considered severe adverse impact. In addition, the 
contracting activity has informed the Committee that the other two 
buildings in the group will not close for renovation until April and 
December 1997, respectively, later than the contractor contended, which 
should give the contractor ample time to develop other business to 
replace business temporarily lost to the renovations.
    The contractor also claimed that addition of the services at the 
Ariel Rios Building does not meet the legislative intent of the 
Committee's statute, the Javits-Wagner-O'Day (JWOD) Act, 41 U.S.C. 46-
48c, in regard to the labor operations to be performed. According to 
the contractor, the JWOD Act requires that 75 percent of the total 
labor operations to be performed in providing these services must be 
done by people with a severe disability.
    The contractor has misconstrued the labor requirement in the JWOD 
Act. In order to qualify for participation in the JWOD Program, a 
nonprofit agency employing people with severe disabilities must employ 
such people for not less than 75 percent of the overall total of direct 
labor performed on commodities and services which the nonprofit agency 
provides, whether or not these commodities or services are provided to 
the Government under the JWOD Program. 41 U.S.C. 48b(4)(C). There is no 
statutory requirement for a specific percentage of direct labor on a 
JWOD contract, although it is anticipated that the designated nonprofit 
agency performing the services at the Ariel Rios Building will reach a 
75 percent disabled direct labor level on that contract. Addition of 
these services to the Procurement List will thus create substantial 
work for people with disabilities, and is not a ``front'' for 

[[Page 63027]]
awarding a contract to people without disabilities as the contractor 
contended. The statutory definition of direct labor, at 41 U.S.C. 
48b(5), excludes activities such as supervision, administration, 
inspection and shipping, which are considered indirect labor by the 
Committee and not counted in assessing direct labor ratios.
    The contractor also contended that the Committee has abused its 
authority to the disadvantage of small businesses and the competitive 
process of Government contracting. While the JWOD Program's share of 
Government contracts has grown in recent years, it is still only a very 
small part of total Government contracting, and is dwarfed by the share 
of Government contracts which goes to small businesses. The 
contractor's claim that the JWOD Program has permitted abuses of the 
competitive contracting process is based on the contractor's just-
discussed misunderstanding of the JWOD Act's direct labor requirement, 
and is thus without foundation.
    The contractor also attempted, in its comments relayed by a Member 
of Congress, to characterize the JWOD Act as requiring only that a 
Government agency give ``priority consideration'' to purchasing JWOD 
commodities and services, with the mandatory nature of such 
procurements coming only from a Committee regulation. However, the 
mandate comes directly from the JWOD Act, at 41 U.S.C. 48, which 
requires Government agencies intending to procure commodities or 
services on the Procurement List to buy them from a JWOD nonprofit 
agency, unless they are not available or are commodities available from 
Federal Prison Industries.
    After consideration of the material presented to it concerning 
capability of qualified nonprofit agencies to provide the service, fair 
market price, and impact of the addition on the current or most recent 
contractors, the Committee has determined that the service listed below 
is a 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 service to the 
Government.
    2. The action will not have a severe economic impact on current 
contractors for the service.
    3. The action will result in authorizing small entities to furnish 
the service 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 service proposed for addition to the 
Procurement List.
    Accordingly, the following service is hereby added to the 
Procurement List: Janitorial/Custodial, Ariel Rios Federal Building, 
12th & Pennsylvania Avenue, NW, Washington, DC.
    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. 95-29957 Filed 12-7-95; 8:45 am]
BILLING CODE 6820-33-P