[Federal Register Volume 64, Number 63 (Friday, April 2, 1999)]
[Notices]
[Pages 16003-16005]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8123]


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OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy


OFPP Policy Letter 99-1 on Government-Wide Small Business, 
HUBZone Small Business, Small Disadvantaged Business, and Women-Owned 
Small Business Goals for Procurement Contracts

AGENCY: Executive Office of the President, Office of Management and 
Budget (OMB), Office of Federal Procurement Policy (OFPP).

ACTION: Notice of proposed policy letter.

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SUMMARY: OFPP is requesting comments on proposed OFPP Policy Letter 99-
1. This letter contains guidance on implementing government-wide goals 
for procurement contracts awarded to small businesses, HUBZone small 
businesses, small disadvantaged businesses, and women-owned small 
businesses. The Policy Letter also provides guidance on reporting 
requirements that will help the Small Business Administration (SBA)

[[Page 16004]]

determine whether executive agencies are reaching these goals. This 
Policy Letter, when issued in final, will supersede OFPP Policy Letter 
91-1.

COMMENT DATE: We must receive comments on or before June 1, 1999.

ADDRESSES: Send your comments to Deidre A. Lee, Administrator, Office 
of Federal Procurement Policy, Old Executive Office Building, Room 352, 
Washington, DC 20503. Send e-mail comments to Keith Coleman at 
[email protected].

FOR FURTHER INFORMATION CONTACT: Keith Coleman at 202-395-7209 or Linda 
Williams at 202-395-3302.

SUPPLEMENTARY INFORMATION: We issued an earlier Policy Letter, 91-1, 
entitled ``Government-Wide Small Business and Small Disadvantaged 
Business Goals for Procurement Contracts'' on March 11, 1991. That 
policy letter addressed sections 502 and 503 of the Business 
Opportunity Development Act of 1988. Section 502 establishes 
government-wide goals for contract awards to small business concerns 
and small disadvantaged businesses. Section 503 requires the President 
to include the agencies' actual goal achievements in the ``State of 
Small Business'' report. The report also includes an analysis of an 
agency's failure to achieve the goals, and the number and dollar value 
of prime contracts awarded to small firms through noncompetitive 
negotiated procurements, restricted and unrestricted competitions, and 
information on subcontract awards.
    We need to issue this new policy letter because of statutory 
changes made in 1994 and 1997. Section 7106 of the Federal Acquisition 
Streamlining Act of 1994 (FASA) establishes a 5 percent women-owned 
small business goal. Section 603 of the Small Business Reauthorization 
Act of 1997 increases the annual government-wide goal for prime 
contract awards to small business concerns from not less than 20 
percent to not less than 23 percent. The Act also adds a 3 percent 
HUBZone small business goal phased-in over the next 5 years.
    This Policy Letter, when issued in final, will supersede OFPP 
Policy Letter 91-1. This proposed Policy Letter supports the Small 
Business Administration's (SBA) policies of establishing its own 
guidance on the new goals, establishing with each agency mutually 
acceptable prime contract goals for awards made under section 8(a) of 
the Small Business Act, and using procurement data in the Federal 
Procurement Data System to measure accomplishments rather than 
requiring agencies to provide this information in separate reports.
    We request comments on the proposed policy letter.
Deidre A. Lee,
Administrator.
Policy Letter 99-1
To the Heads of Executive Departments and Establishments
Subject: Government-Wide Small Business, HUBZone Small Business, Small 
Disadvantaged Business, and Women-Owned Small Business Goals for 
Procurement Contracts.

    1. Purpose. This Policy Letter provides guidance to Executive 
branch departments and agencies on government-wide goals for 
procurement contracts awarded to small businesses, HUBZone small 
businesses, small disadvantaged businesses and women-owned small 
businesses (``small businesses''). It also provides guidance on 
reporting requirements that will help the Small Business Administration 
(SBA) determine whether agencies are reaching these goals.
    2. Supersession Information. This Policy Letter replaces OFPP 
Policy Letter 91-1, ``Government-Wide Small Business and Small 
Disadvantaged Business Goals for Procurement Contracts,'' dated March 
11, 1991.
    3. Authority. This policy letter is based on the Small Business 
Act, the Office of Federal Procurement Policy Act, the Business 
Opportunity Development Reform Act of 1988, the Federal Acquisition 
Streamlining Act of 1994, and the Small Business Reauthorization Act of 
1997.
    4. Background. The Small Business Act requires executive agencies, 
in consultation with SBA, to develop annual goals for contract awards 
to small businesses. SBA monitors agency performance and reports their 
achievements to the President. The Office of Federal Procurement Policy 
Act, 41 U.S.C. 405, empowers the Administrator for Federal Procurement 
Policy to prescribe government-wide procurement policies.
    The Business Opportunity Development Reform Act establishes 
government-wide goals for small businesses and small disadvantaged 
businesses and requires the President to include the agencies' actual 
goal achievements in the ``State of Small Business'' report. The report 
must also include an analysis of any failure to achieve the goals, and 
the number and dollar value of prime contracts awarded to small 
businesses through noncompetitive negotiated procurements, restricted 
and unrestricted competitions, and information on subcontract awards. 
The Federal Acquisition Streamlining Act of 1994 (FASA) establishes a 5 
percent women-owned small business goal. The Small Business 
Reauthorization Act of 1997 (SBRA) adds a 3 percent HUBZone small 
business goal phased-in over the next 5 years. It also increases the 
annual government-wide goal for prime contract awards to small business 
concerns to not less than 23 percent.
    In March 1991, the OFPP issued Policy Letter 91-1 to implement 
government-wide goals for small businesses and small disadvantaged 
businesses. This proposed Policy Letter includes the guidance from 
Policy Letter 91-1, and also implements the more recent statutory 
provisions of FASA and SBRA.
    This proposed Policy Letter also supports the Small Business 
Administration's (SBA) policies of establishing its own guidance on the 
new goals, establishing with each agency mutually acceptable prime 
contract goals for awards made under section 8(a) of the Small Business 
Act, and using procurement data in the Federal Procurement Data System 
to measure accomplishments rather than requiring agencies to provide 
this information in separate reports.
    5. Policy. Prior to the beginning of each fiscal year, the SBA will 
mutually establish with each agency goals for participation by small 
business, small disadvantaged business, HUBZone small business, and 
women-owned small businesses. The agencies' cumulative goals shall 
count toward accomplishment of the government-wide goals.
    6. Goals.
    a. The government-wide small business goal is not less than 23 
percent of the total value of all prime contracts awarded for the 
fiscal year. This includes all the goals for the specific categories of 
small business.
    b. The following table lists the specific goals for small 
disadvantaged and women-owned small businesses.

------------------------------------------------------------------------
              The goal for...                           is...
------------------------------------------------------------------------
small disadvantaged business prime          not less than 5 percent of
 contracts.                                  the value of all prime
                                             contract awards.
small disadvantaged business subcontracts.  not less than 5 percent of
                                             the value of all
                                             subcontract awards.
women-owned small business prime contracts  not less than 5 percent of
                                             the value of all prime
                                             contract awards.

[[Page 16005]]

 
women-owned small business subcontracts...  not less than 5 percent of
                                             the value of all
                                             subcontract awards.
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    c. The following table lists the specific goals for HUBZone small 
businesses.

------------------------------------------------------------------------
                                              the percentage goal is at
                 For FY...                            least...
------------------------------------------------------------------------
1999......................................  1 percent of the value of
                                             all prime contract awards
2000......................................  1.5 percent of the value of
                                             all prime contract awards
2001......................................  2 percent of the value of
                                             all prime contract awards
2002......................................  2.5 percent of the value of
                                             all prime contract awards
2003 and after............................  3 percent of the value of
                                             all prime contract awards.
------------------------------------------------------------------------

    d. There is no specific statutory requirement to establish goals 
for awards made pursuant to section 8(a) of the Small Business Act. 
However, agencies must mutually establish with SBA acceptable goals for 
awards to 8(a) firms.
    e. Agencies may count prime contract awards to small businesses 
toward more than one goal. Prime contract awards to small businesses, 
women-owned small businesses, small disadvantaged businesses, 8(a) 
firms, and HUBZone small businesses count toward the government-wide 
small business goal.
    7. Responsibilities.
    a. Agency Responsibilities.
    (1) Each department or agency must negotiate annually in good faith 
with the SBA to establish its specific goals for small business, woman-
owned small business, small disadvantaged business, HUBZone small 
business, and 8(a) firms. These goals should provide the maximum 
practicable opportunity for all these types of small businesses to 
participate in contracts let by the agency. SBA's annual guidance on 
establishing small business goals, entitled ``Guidelines on Goals Under 
Procurement Preference Programs,'' covers the goal-setting process.
    (2) At the end of the fiscal year, agencies must submit a narrative 
report to SBA analyzing its achievements and any failures to achieve 
its small business goals for the year. The report must also include 
plans for improving performance in the next year.
    (3) Agencies must ensure that their prime and subcontract data in 
the Federal Procurement Data System is accurate and complete in order 
to measure their small business goal accomplishments.
    b. SBA Responsibilities.
    (1) Prior to the beginning of each fiscal year, the SBA will work 
with each agency to establish mutually acceptable goals for the 
different categories of small business.
    (2) SBA must ensure that the mutually established cumulative goals 
for all agencies meet or exceed the government-wide small business goal 
of 23 percent.
    (3) SBA must compile and analyze agencies' achievements against 
their individual small business procurement goals and report the 
results to the President.
    (4) SBA will use data in the Federal Procurement Data System to 
determine:
    (i) agencies' success in reaching their procurement goals for prime 
and subcontracts;
    (ii) the number and dollar value of prime contracts awarded to 
small business concerns, HUBZone small business concerns, small 
disadvantaged business concerns, and women-owned small business 
concerns through:
     Noncompetitive negotiation,
     Competition restricted to small disadvantaged business 
concerns,
     Competition restricted to small business concerns and 
HUBZone small business concerns, and
     Unrestricted competitions; and
    (iii) the dollar value of subcontracts awarded to small business 
concerns, HUBZone small business concerns, small disadvantaged business 
concerns, and women-owned small business concerns.
    8. Information Contact. Direct any questions regarding this Policy 
Letter to Linda Williams (202-395-3302), or Keith Coleman (202-395-
7209).
    9. Effective Date. The Policy Letter is effective 30 days after 
issuance.

[FR Doc. 99-8123 Filed 4-1-99; 8:45 am]
BILLING CODE 3110-01-P