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(The statement and documents referred to follow.)
STATEMENT OF ROBERT T. GRIFFIN, ASSISTANT ADMINISTRATOR OF GENERAL
Mr. Chairman, and members of the subcommittee, I am Robert T. Griffin, Assistant Administrator of General Services, and I have with me Messrs. Charles W. Gasque, who until recently was the Director of our Office of Procurement and Economic Policy and is now the Deputy General Counsel of GSA; William A. Schmidt, Deputy Commissioner of our Public Buildings Service; and Henry A. Levy, Director, Business Services and Small Business of my Office.
As you know, Mr. Chairman, by letter dated October 8, 1963, to the Administrator of General Services, you advised that your subcommittee had scheduled public hearings for the purpose of reviewing the small business procurement practices of Federal departments and agencies and requested in connection therewith that a GSA witness testify on Thursday, November 14.
Since it is not possible for the Administrator, Mr. Bernard L. Boutin, to attend the hearing today as he is out of the city he asked me to represent him and testify in his behalf concerning the small business procurement practices and programs of the General Services Administration and those related subjects listed in your letter to him.
At the very outset, I wish to state that we firmly believe that an energetic and efficient program to assure a high degree of participation in Government contracting by qualified small business firms is essential to our national economy. In furtherance of the President's repeatedly pronounced policy in this field, GSA has assigned a high priority to, and will continue to actively support, the congressional policy of assuring that a fair proportion of the total purchases and contracts for property and services for the Federal Government be placed with small business enterprises. As you know, the Federal Property and Administrative Services Act of 1949, as amended, which governs the General Services Administration, specifically places such responsibility upon us. A faithful discharge of this statutory responsibility has been and shall continue to be one of our primary objectives.
This responsibility of the General Services Administration in the field of procurement is both Government-wide and internal. Under the provisions of title II of the Federal Property Act the Administrator of General Services is directed, with respect to executive agencies, to prescribe policies and methods of procurement and supply of personal property and nonpersonal services, including related functions, and to procure and supply personal property and nonpersonal services for the use of such agencies in the proper discharge of their responsibilities. I wish, therefore, to discuss with you our efforts to encourage small business participation in Government procurement in both of these areas of operation. First, our governmentwide responsibility
An interagency Procurement Policy Committee has been created by GSA, consisting of representatives of the Small Business Administration, the Atomic Energy Commission, the Department of Defense and Agriculture, and this agency. The purpose of this committee is to advise and consult on procurement policy matters warranting publication in the Federal Procurement Regulations. either in the form of a new regulation or as an amendment to an existing regulation. In addition, it is the policy of GSA to coordinate all of its Governmentwide procurement policy regulations and new or revised standard contract forms and clauses with all major Government procurement agencies prior to promulgation and publication in the Federal Procurement Regulations, taking into consideration the views and comments of all agencies concerned in the light of their program activities, but with the ultimate decision being based on what is most advantageous to the Government in terms of economy, efficiency, or service. In the field of Government-wide regulations, the following significant actions have been taken to help small businesses participate more fully in the procurement programs of Federal agencies:
1. There has been established the Federal Procurement Regulations System for the codification and publication, on a continuing basis, of policies and procedures governing all Federal procurement. Such codification and publication provide all business concerns, especially small businesses, a means for making it easier to obtain and understand the Government's contracting "ground rules." The Federal Procurement Regulations System consists of two major elements: (1) procurement policy and procedures for Government-wide use, prescribed and pub
lished as "Federal Procurement Regulations" and (2) individual agency implementing procurement regulations keyed into a common numbering system. Both the Federal Procurement Regulations, having Governmentwide applicability, and the implementing regulations of individual agencies are published in Title 41 of the Code of Federal Regulations, and thus are made readily available to all business concerns, both small and large businesses alike.
2. Since the inception of the Federal Procurement Regulations System, over 30 topics have been covered by regulations and published in the Federal Procurement Regulations, which are particularly helpful to small business concerns, such as:
(a) Procedures governing small business set-asides.
(b) Simplified contract forms for use in connection with small construction contracts.
(c) Payment of agreed damages where the Government unreasonably delays completion of work.
(d) Greater time allowance for bid preparation.
(e) The giving of preference to small businesses in the case of equal low bids and in the case of surplus labor area set-asides procedures.
(f) Administrative handling of alleged mistakes in bid, both prior to and after award, in order to provide ready relief to small businesses who have made errors in their bids.
(g) A requirement that proposed procurements in excess of $5,000 for civilian agencies and $10,000 for DOD be published promptly in the "Commerce Business Daily" which is issued by the Department of Commerce. Also contract awards in excess of $25,000 are so published.
(h) Policies and procedures for a small business and labor surplus area subcontracting program.
(i) Uniform procurement policies and procedures for aiding persistent or substantial labor surplus areas in which small business concerns are given first priority.
(j) Policies and procedures for the use of brand name or equal purchase descriptions in the procurement of supplies.
(k) Definitions of small business concerns on an industry-by-industry basis covering such industries as construction, transportation, manufacturing, and services not otherwise covered.
3. A proposed revision to the Federal Procurement Regulations bearing directly on small business procurement reporting by civilian executive agencies has been developed by GSA and is presently being circulated among such agencies for their review and comment. This proposed revision, among other things, requires, for the first time, reports on the dollar volume of contracts entered into with small business firms under the small business subcontracting program. Further, it requires, also for the first time, reports on the dollar volume of contracts placed with firms located in labor surplus areas on a preference as well as a nonpreference basis. We anticipate formal issuance of this revised reporting system in early 1964.
In March of 1961 the President established the White House Committee on Small Business and appointed the Administrator of General Services to serve as a member. This Committee meets periodically for the purpose of considering the problems of small business and surveying the work being done by executive departments and agencies for the protection and encouragement of small busi
Second, our internal operations
Having discussed our Government-wide responsibility I wish now to outline for you our internal operations with respect to the interests of small business. GSA has aggressively supported a small business program in connection with its procurement of personal property and nonpersonal services, including construction, maintenance, and repair services. In the procurement of personal property, both in the central office and in our 10 regional offices, we make extensive efforts to acquaint small businessmen with Government buying programs and practices and to encourage their participation in supplying the Government's needs. This is accomplished in part by (1) the counseling of small business sup pliers by our 11 business service centers; (2) active participation by appropriate officials of GSA in small business seminars and clinics; (3) encouraging all known small business firms to enter on our bidders' mailing ilsts; (4) providing free copies of specifications to interested small business concerns; (5) acquainting small businessmen with the types of products and services normally acquired by
GSA; (6) extensive publicizing of requirements in the Commerce Business Daily; (7) posting of bids in U.S. post offices; (8) contacts with local chambers of commerce; and (9) simplified procedures to encourage small businessmen who wish to introduce new items for use by the Government.
Contract needs and techniques have been simplified to make it easier for small businessmen to participate in our buying programs. Particular attention is given to adjustments in the size of lots and to the making of contracts on a zone basis to insure that small business concerns may effectively compete for Government business. Where necessary, delivery terms are modified to accommodate small business capabilities. Certain types of contracts are delivered by hand to small business contractors at which time terms and conditions are reviewed with them to help them avoid pitfalls and difficulties which might otherwise occur in contract performance. In addition, quality control inspectors assist small business firms in meeting contract requirements and in solving production, delivery, and quality control problems.
An aggressive small business set-aside program is conducted by GSA in its buying programs. Close liaison is maintained with Small Business Administration representatives at each of our Federal Supply Service buying offices. Clearly worded regulations and procedures to encourage and promote joint set-aside determinations have been issued and are kept current to reflect latest Small Business Administration policy. Likewise, invitations for bids involving small business set-asides are clearly worded to assure that small business concerns understand the bidding procedures.
In addition to joint determinations under the Small Business Act to set aside certain procurements for award to small businesses, the Administrator of General Services, in February 1961 made a finding and determination under the authority of section 302 (c) (1) of the Federal Property and Administrative Services Act that where small business joint determinations are not feasible, to unilaterally set aside contracts for small business concerns whenever it is determined by the contracting officer that such actions would be in the national interest. Under the same finding and determination of the Administrator, procurements providing supply support to U.S. military forces abroad will be restricted, wherever practicable, to supplies, equipment, and material of U.S. origin, thereby precluding foreign competition to the probable benefit and enjoyment of more domestic small business suppliers.
In the procurement of construction, alteration, maintenance, and repair services, an agreement has been made with the Small Business Administration to initiate a joint set-aside for small business with regard to each proposed contract for such services having an estimated value from $2,500 up to $500,000. Proposed contracts of this nature having an estimated value of more than $500,000 are considered for small business set-asides on an individual basis.
In our public buildings service repair and improvement program, approximately 92 percent of the total program is accomplished by small business concerns. This program amounted to $65 million in fiscal year 1963. The repair and improvement program is particularly available to diversified locations because contracts are awarded every year among the majority of approximately 4.000 Federal building locations throughout the United States, Puerto Rico, and the Virgin Islands. In addition to these repair and improvement contracts, approximately 350 contracts, estimated at $3 million annually, are in effect during the course of a year for cleaning and servicing Federal buildings. These contracts are all with small business firms.
The surplus personal property disposal program, over which the General Services Administration exercises general supervision, is presently operating to the maximum benefit of small business firms. Lotting practices provide for quantities small enough to attract small business participation, participation for items that should be of interest to purchasers for their own use. Sufficient time is allowed to permit inspection of property prior to bid closing dates. Catalog and property listings used commercial descriptions so that prospective small business purchases can readily identify property. It is interesting to note that complaints from small business quarters on the matter of a fair share of awards have been and continue to be practically nonexistent.
Another GSA program designed particularly in the interest of assisting small business is our business services program. The primary mission of this program is the providing of information, counseling, and assistance to small firms in order to help them achieve their maximum potential for doing business with GSA and other Federal agencies. To accomplish this mission, GSA operates
business service centers located in 11 principal cities throughout the country. These business service centers provide the small businessman with a central and convenient contact point where his needs can be efficiently serviced by trained personnel whose sole function, responsibility, and interest is to do so. The centers are daily engaged in providing small businessmen with :
Information concerning Government business opportunities-purchases and
Counseling on how to do business with the Government-facts about the actions to be taken.
Information and counseling include:
Locations of contracting offices.
How to get on bidders mailing lists.
How and where to obtain specifications.
How to establish Government consumer demand and promote sales.
How to keep informed of current bidding opportunities.
Statistics on types and volume of supplies and services procured by GSA Assistance tailored to fit the needs of the individual businessman.
In addition, these centers continuously seek to interest businessmen, particularly small businessmen, who have not previously done business with the Government, to participate in our procurement programs. This is done through— individual invitations to such businessmen ;
maximum utilization of the trade and local press, chambers of commerce, trade associations, State development corporations, mayors' and Governors' advisory groups, local business and civic organization, small business councils, etc.;
participation in local business opportunity meetings sponsored by State and local business, or governmental groups; and
followup contacts with individual small firms previously counseled to identify their successes, failures, problem areas, etc., and to determine what further actions need to be taken by the firms or by GSA to increase their opportunities and capacity to compete effectively for contracts and to encourage future participation.
During fiscal year 1963, GSA business service centers handled over 500,000 business and general public inquiries, reflecting the extent to which businessmen-the vast majority of which represented small firms-availed themselves of the services provided.
At this time, Mr. Chairman, and with your permission, I wish to submit for the record as a supplement to my prepared statement an attachment which responds in more detail to those subjects listed in your letter of October 8, 1963. The attachment includes, among other things, available small business procurement statistics for fiscal years 1961, 1962, and 1963.
In conclusion, I wish to emphasize the fact that GSA shares the interest of the President and the Congress in furthering the role of small business in Government procurement. We will continue to strive to improve our regulations, our techniques, and our procedures to this end, both in the field of our governmentwide regulatory program and in our internal procurement operation. In addition, we are expanding our efforts throughout the United States to assist businessmen, particularly small businessmen, through counseling, instruction, and making readily available to them all pertinent information relating to Government procurement. Finally, but not in any sense of less importance, is our determination to work closely and cooperatively at all levels with officials of the Small Business Administration to insure greater participation of small business in Government procurement.
SUPPLEMENT TO PREPARED STATEMENT OF ASSISTANT ADMINISTRATOR OF GENERAL SERVICES
Responding to subjects 2 through 11 as listed in letter of October 8, 1963, from the chairman of the Subcommittee on Small Business and Government Procurement of the House Select Committee on Small Business
Question 2. A statistical report for fiscal years 1961, 1962, and 1963 showing small business participation in prime procurements, by supplies, services, and construction, indicating number of actions, dollar amounts, and percentages of total procurement.
Answer 2. The GSA procurement reporting system does not require data to be broken down between supplies, services, and construction. However, FSS procurements are mainly of the supply and service variety, while PBS procurement could be classified as substantially construction in nature. Below is a schedule of GSA procurements for the fiscal years 1961, 1962, and 1963 showing FSS and PBS data separately, and grouping together the relatively minor purchases of the other GSA services. The number of procurement actions are not available for fiscal years 1962 and 1963.
Question 3. A statistical report for the same period showing small business participation in research and development procurement by number of actions, dollar amounts, and percentages of total research and development procurement. Answer 3. During fiscal years 1961, 1962, and 1963 there was only one GSA contract for research and development. It was made in fiscal year 1961 and covered the following:
Contractor: The University of Texas.
Description: Experimental study for PBS of the interaction of a frame on the behavior of the long column (to prevent frame sidesway).
Amount: $13,000. Of this fee, $4,000 was payable by the Army, $3,000 by the Navy, $3,000 by the Air Force, and $3,000 by GSA.
Question 4. A statistical report for the same period showing small business participation in subcontracting procurement by number of actions, dollar amounts, and percentages of total procurement.