[Weekly Compilation of Presidential Documents Volume 32, Number 21 (Monday, May 27, 1996)]
[Pages 908-909]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Executive Order 13005--Empowerment Contracting

May 21, 1996

    In order to promote economy and efficiency in Federal procurement, 
it is necessary to secure broad-based competition for Federal contracts. 
This broad competition is best achieved where there is an expansive pool 
of potential contractors capable of producing quality goods and services 
at competitive prices. A great and largely untapped opportunity for 
expanding the pool of such contractors can be found in this Nation's 
economically distressed communities.
    Fostering growth of Federal contractors in economically distressed 
communities and ensuring that those contractors become viable businesses 
for the long term will promote economy and efficiency in Federal 
procurement and help to empower those communities. Fostering growth of 
long-term viable contractors will be promoted by offering appropriate 
incentives to qualified businesses.
    Accordingly, by the authority vested in me as President by the 
Constitution and the laws of the United States, including section 486(a) 
of title 40, United States Code, and section 301 of title 3, United 
States Code, it is hereby ordered as follows:
    Section 1. Policy. The purpose of this order is to strengthen the 
economy and to improve the efficiency of the Federal procurement system 
by encouraging business development that expands the industrial base and 
increases competition.
    Sec. 2. Empowerment Contracting Program. In consultation with the 
Secretaries of the Departments of Housing and Urban Development, Labor, 
and Defense; the Administrator of General Services; the Administrator of 
the National Aeronautics and Space Administration; the Administrator of 
the Small Business Administration; and the Administrator for Federal 
Procurement Policy, the Secretary of the Department of Commerce shall 
develop policies and procedures to ensure that agencies, to the extent 
permitted by law, grant qualified large businesses and qualified small 
businesses appropriate incentives to encourage business activity in 
areas of general economic distress, including a price or an evaluation 
credit, when assessing offers for government contracts in unrestricted 
competitions, where the incentives would promote the policy set forth in 
this order. In developing such policies and procedures, the Secretary 
shall consider the size of the qualified businesses.
    Sec. 3. Monitoring and Evaluation. The Secretary shall:
    (a) monitor the implementation and operation of the policies and 
procedures developed in accordance with this order;
    (b) develop a process to ensure the proper administration of the 
program and to reduce the potential for fraud by the intended 
beneficiaries of the program;
    (c) develop principles and a process to evaluate the effectiveness 
of the policies and procedures developed in accordance with this order; 
and
    (d) by December 1 of each year, issue a report to the President on 
the status and effectiveness of the program.
    Sec. 4. Implementation Guidelines. In implementing this order, the 
Secretary shall:
    (a) issue rules, regulations, and guidelines necessary to implement 
this order, including a requirement for the periodic review of the 
eligibility of qualified businesses and distressed areas;
    (b) draft all rules, regulations, and guidelines necessary to 
implement this order within 90 days of the date of this order; and
    (c) ensure that all policies and procedures and all rules, 
regulations, and guidelines adopted and implemented in accordance with 
this order minimize the administrative burden on affected agencies and 
the procurement process.
    Sec. 5. Definitions. For purposes of this Executive order:
    (a) ``Agency'' means any authority of the United States that is an 
``agency'' under 44 U.S.C. 3502(1), other than those considered to be 
independent regulatory agencies, as defined in 44 U.S.C. 3502(10).
    (b) ``Area of general economic distress'' shall be defined, for all 
urban and rural communities, as any census tract that has a poverty rate 
of at least 20 percent or any designated Federal Empowerment Zone, 
Supplemental Empowerment Zone, Enhanced Enterprise Community, or 
Enterprise Community. In addition, the Secretary may des- 

[[Page 909]]

ignate as an area of general economic distress any additional rural or 
Indian reservation area after considering the following factors:
(1)          Unemployment rate;
(2)          Degree of poverty;
(3)          Extent of outmigration; and
(4)          Rate of business formation and rate of business growth.
    (c) ``Qualified large business'' means a large for-profit or not-
for-profit trade or business that (1) employs a significant number of 
residents from the area of general economic distress; and (2) either has 
a significant physical presence in the area of general economic distress 
or has a direct impact on generating significant economic activity in 
the area of general economic distress.
    (d) ``Qualified small business'' means a small for-profit or not-
for-profit trade or business that (1) employs a significant number of 
residents from the area of general economic distress; (2) has a 
significant physical presence in the area of general economic distress; 
or (3) has a direct impact on generating significant economic activity 
in the area of general economic distress.
    (e) ``Secretary'' means the Secretary of Commerce.
    Sec. 6. Agency Authority. Nothing in this Executive order shall be 
construed as displacing the agencies' authority or responsibilities, as 
authorized by law, including specifically other programs designed to 
promote the development of small or disadvantaged businesses.
    Sec. 7. Judicial Review. This Executive order does not create any 
right or benefit, substantive or procedural, enforceable at law or 
equity by a party against the United States, its agencies or 
instrumentalities, its officers or employees, or any other person.
                                            William J. Clinton
The White House,
May 21, 1996.

[Filed with the Office of the Federal Register, 8:45 a.m., May 23, 1996]

Note: This Executive order was published in the Federal Register on May 
24.