APPENDICES FURTHER QUESTIONS TO WITNESS AGENCIES FROM CHAIRMAN LAFALCE WITH AGENCY RESPONSES EXHIBIT A.-OFFICE OF FEDERAL PROCUREMENT POLICY, OMB agency compliance At the close of my oversight subcommittee hearing held on Kindly provide to the Subcommittee attached questions by January 4, 1980. responses to the If you have any questions concerning this request, please contact Mr. George Neidich of my subcommittee staff at (202) 225-9321. 1. Section 222 of Public Law 95-507 requires OFPP to promulgate uniform regulations implementing the subcontracting program and to establish procedures for ensuring compliance by all federal agencies. (a)What justification can be given as to why some federal agencies still are not following your April 10, 1979 final regulations? (b) What actions did you take to ensure that both GSA and DOD amended their respective regulations to conform to the April 10, 1979 OFPP regulations? (c) Was there any follw-up by OF PP to assure that GSA and DOD's amended regulations were being complied with? 2. What analyses have you conducted pursuant to Section 222 of P.L. 95-507 in consultation with the SBA of the impact of the revised procurement regulations on small business concerns? How have you incorporated into the subcontracting regulations simplified bidding contract performance and contract administration procedures for small business concerns, as required by said section 222? 3. On March 7, 1979 OF PP issued policy letter #79-1 to all agencies requiring establishment of an Office of Small and Disadvantaged Business Utilization and required each agency to report back to OFPP within 90 days of steps taken to implement the provisions of that letter. Have all agencies reported to you in accordance with your March 7 request? Please describe the extent of agency compliance or lack thereof. Please explain what actions OFPP has taken to enforce compliance where same is not evident. Also, provide this subcommittee with a list of all agency Directors of SADBUS, including a designation of whether they are full-time. 4. Please describe the extent of federal agency compliance in responding to your September 7, 1979 request for information regarding each agency's progress in implementing section 211 of P.L. 95-507. Also describe what actions OFPP took when discovered that most of the agencies were not in compliance with the law. it 5. An OFPP internal memorandum dated October 24, 1979 regarding updates on agency responses to your September 7, 1979 data request, states that "most of the agencies did not require the 95-507 clauses until the summer of 1979 and have made no awards. The total solicitations with the 95-507 clauses are 441 with only 80 contracts awarded. 68 of the awards are from Energy. The other awards are from Treasury (2), DOT (1), and Interior (9)." (a) What action did you take subsequent thereto to ensure compliance; (b) what responses did you receive from Justice, State and IVA which according to that memo had not responded as of that date; (c) please provide a copy of USDA's response which was stated to be due on October 27; and (d) has Treasury in fact required the subcontracting awards indicated in their response? -2 6. OF PP policy letter #79-3 set forth the uniform policy guidance for the federal agencies and departments to establish goals for the participation by small and minority business in procurement contracts, as well as in the performance of subcontracts. Please describe the responses of the agencies and departments to that policy letter, including actions taken by OFPP to ensure full compliance therewith. 7. When does OFPP intend to issue detailed instructions on the implementation of that portion of section 221 of the law dealing with procurements of under $10,000? EXECUTIVE OFFICE OF THE PRESIDENT WASHINGTON, D.C. 20503 JAN .4 1980 Honorable John J. LaFalce Chairman, Committee on Small Business Dear Mr. Chairman: I have received your letter to me dated December 21, 1979, submitting additional questions to supplement my testimony before you on December 4, 1979. The questions you posed, and my answers, are as follows: 1. Section 222 of Public Law 95-507 requires OFPP to promulgate uniform regulations implementing the subcontracting program and to establish procedures for ensuring compliance by all federal agencies. (a) What justification can be given as to why some federal agencies still are not following your April 10, 1979, final regulations? (b) What actions did you take to ensure that both GSA and DOD amended their respective regulations to conform to the April 10, 1979, OFPP regulations? (c) Was there any follow-up by OFPP to assure that GSA and DOD's amended regulations were being complied with? The ANSWER. Section 222 required OFPP to promulgate a single simplified uniform federal procurement regulation and establish procedures for insuring compliance with such provisions by all federal agencies. In fact, OFPP began developing such a regulation, known as the Federal Acquisition Regulation (FAR), in January 1978. The development of this new regulation was thus well underway when P.L. 95-507 was enacted. specific direction in Section 222 was later superceded by the Office of Federal Procurement Policy Amendments of 1979, P.L. 96-83, Section 11, but OFPP nonetheless continues to develop the FAR under the authority of P.L. 96-83. The FAR section on small and small disadvantaged business is now being written and will be available for public comment in the near future. (a) We are disappointed and concerned over the delay by agencies in adopting the guidance contained in the OFPP April 10 final regulations. The justification for the delay that has been given us by the agencies is generally that the law and the regulations are complex, and require training, new procurement techniques, and new organizations, and that it just takes a certain amount of time to impose these new requirements on the bureaucracy. (b) We became concerned shortly after the promulgation of the April OFPP regulations that the agencies were still raising fundamental questions as to how to proceed under the act. For example, they requested more guidance on what constitutes a satisfactory subcontracting plan, how to set goals, and what to do if the contractor failed to fulfill his plan. Special problems were also raised in connection with the procurement of commercial products, make-or-buy decisions, incentive clauses, and data collection for compliance and evaluation purposes. Accordingly, OFPP has been working with the agencies since April 1978 to develop additional detailed guidance on the implementation of the law. There have been periodic additional OFPP issuances starting in June 1979, and this effort culminated in the October 29, 1979, OFPP Federal Register notice. The responses to that notice are now being analyzed, and we expect additional final regulations and guidance to be issued in the near future. (c) As I stated, OFPP has worked closely with the agencies to ease their problems in the implementation of the law. It was not until August 1979, when we expected agency implementation to be well underway, that we became aware that some delays were occurring. In order to monitor progress, OFPP on September 7, 1979, requested that the agencies report the numbers of contracts issued with the P.L. 95-507 provisions, and on November 21, 1979, called for a more complete report on implementing progress by January 15, 1980, as well as a review and modification of contracts and solicitations issued without the subcontracting provisions. We will provide the committee with a report on these matters when the data are compiled. 2. What analyses have you conducted pursuant to Section 222 of P.L. 95507 in consultation with the SBA of the impact of the revised procurement regulations on small business concerns? How have you incorporated into the subcontracting regulations simplified bidding contract performance and contract administration procedures for small business concerns, as required by said Section 222? ANSWER. The small and small disadvantaged business section of the Federal Acquisition Regulation is now under preparation. A member of the professional staff of the Small Business Administration has been detailed full-time to OFPP to help with its development, as well as assisting in analyzing the impact upon small business of other FAR sections. As the sections of the FAR are developed, SBA will be fully consulted as to their contents. The subcontracting provisions of P.L. 95-507 exempt small business from the requirement to furnish subcontracting plans, and this is of course reflected in the implementing regulations. In addition, the old "Best |