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COMMITTEE ON SMALL BUSINESS

NEAL SMITH, Iowa, Chairman TOM STEED, Oklahoma

JOSEPH M. McDADE, Pennsylvania JOHN D. DINGELL, Michigan

SILVIO O. CONTE, Massachusetts JAMES C. CORMAN, California

J. WILLIAM STANTON, Ohio JOSEPH P. ADDABBO, New York

WILLIAM S. BROOMFIELD, Michigan FERNAND J. ST GERMAIN, Rhode Island TIM LEE CARTER, Kentucky PARREN J. MITCHELL, Maryland

DAN QUAYLE, Indiana HENRY B. GONZALEZ, Texas

DAN MARRIOTT, Utah JAMES M. HANLEY, New York

TOBY ROTH, Wisconsin JOHN J. LAFALCE, New York

LYLE WILLIAMS, Ohio BERKLEY BEDELL, Iowa

OLYMPIA J. SNOWE, Maine FREDERICK W. RICHMOND, New York DOUGLAS K. BEREUTER, Nebraska ALVIN BALDUS, Wisconsin

ED BETHUNE, Arkansas RICHARD NOLAN, Minnesota

ARLEN ERDAHL, Minnesota RICHARD H. ICHORD, Missouri

THOMAS J. TAUKE, Iowa HENRY J. NOWAK, New York

JOHN EDWARD PORTER, Illinois
THOMAS A. LUKEN, Ohio
ANDY IRELAND, Florida
DALE E. KILDEE, Michigan
IKE SKELTON, Missouri
BILLY LEE EVANS, Georgia
DOUG BARNARD, JR., Georgia
CLAUDE LEACH, Louisiana
TONY P. HALL, Ohio
CHARLES W. STENHOLM, Texas
GLADYS NOON SPELLMAN, Maryland

THOMAS G. POWERS, General Counsel
Lois LIBERTY, Publications Specialist
RAYMOND S. WITTIG, Minority Counsel

SUBCOMMITTEE ON GENERAL OVERSIGHT AND MINORITY ENTERPRISE

JOHN J. LAFALCE, New York, Chairman JAMES C. CORMAN, California

TIM LEE CARTER, Kentucky JOSEPH P. ADDABBO, New York

LYLE WILLIAMS, Ohio PARREN J. MITCHELL, Maryland

DOUGLAS K. BEREUTER, Nebraska
HENRY B. GONZALEZ, Texas
FREDERICK W. RICHMOND, New York

ROBERT I. BRICKMAN, Subcommittee Counsel
DOUGLAS L. FRANCISCO, Minority Subcommittee Professional Staff Member

CONTENTS

Page

1

Hearing held on February 19, 1980.--

La Falce, Hon. John J., chairman, Subcommittee on General Oversight and

Minority Enterprise: Opening statement.--

Testimony of —

Cantey, Wilbert E., Director, Office of Small and Disadvantaged

Business Utilization, Department of Transportation.

Clement, William A., Jr., Associate Administrator for Minority Small

Business and Capital Ownership Development, Small Business

Administration; accompanied by Bernard Kulik..

Clinkscales, Richard, Director, Office of Small and Disadvantaged

Business Utilization, Department of Health, Education, and Wel-

fare; accompanied by Edward Rhodes, Deputy Assistant Secretary

for Grants and Procurement.

Currie, James D., Acting Administrator, Office of Federal Procure-

ment Policy, Office of Management and Budget; accompanied by

Thomas F. Williamson, Associate Administrator for Acquisition

Law, Office of Federal Procurement Policy -----

Harvey, Thomas E., Principal Deputy, Assistant Secretary of the

Navy for Logistics, Department of the Navy -

McBride, Gerald, Assistant Administrator for Acquisition Policy,

General Services Administration; accompanied by William F.

Madison, Director, Office of Small and Disadvantaged Business

Utilization.

Patterson, Charles T., Staff Director, Small and Disadvantaged

Business Utilization, Defense Logistics Agency -

Rellins, Donald E., Director, Small and Disadvantaged Business

Utilization, Office of the Secretary of the Air Force, Department

of the Air Force.--

Schooling, Roy L., Assistant Deputy for Procurement Procedures,

Office of the Assistant Secretary of the Army, Department of the

Army-

Trimble, Robert F., Director, Contracts and Systems Acquisition

Office of the Deputy Under Secretary of Defense for Research and

Engineering-Acquisition Policy

Additional material supplied for the hearing record-

Cantey, Wilbert E., Director, Office of Small and Disadvantaged

Business Utilization, Department of Transportation: Prepared state-

ment and attachment..

Clement, William A., Jr., Associate Administrator for Minority Small

Business and Capital Ownership Development, Small Business

Administration:

Exceptions to DAC-76-19 and comments and suggested changes

Letters on the analysis of the goals by SBA.

Prepared statement-

Table: Where $900,000,000 comes from by agency,

Clinkscales, Richard, Director, Office of Small and Disadvantaged

Business Utilization, Department of Health, Education, and Wel-

fare: Prepared statement and attachments.

Currie, James D., Acting Administrator, Office of Federal Procure-

ment Policy, Office of Management and Budget: Prepared state-

ment.

Harvey, Thomas E., Principal Deputy, Assistant Secretary of the
Navy for Logistics, Department of the Navy: Prepared statement.

45

Page

58 89

58

48

43

37

Additional Material supplied for the hearing record—Continued

McBride, Gerald, Assistant Administrator for Acquisition Policy,
General Services Administration:

Prepared statement...
Remarks, letter, and status report-
Responses to questions submitted to Mr. McBride by Chairman

La Falce ---
Patterson, Charles T., Staff Director, Small and Disadvantaged Busi-

ness Utilization, Defense Logistics Agency: Prepared statement.-Rellins, Donald E., Director, Small and Disadvantaged Business

Utilization, Office of the Secretary of the Air Force, Department

of the Air Force: Prepared statement.--
Trimble, Robert F., Director, Contracts and Systems Acquisition,

Office of the Deputy Under Secretary of Defense for Research and
Engineering—Acquisition Policy: Prepared statement.

APPENDIXES
Appendix A.-General Services Administration:

Exhibit 1: Instructions regarding implementation of Public Law

95-507. Representative subcontracting plans:

94

Exhibit 2..
Exhibit 3.
Exhibit 4.

Exhibit 5.
Appendix B.-Department of Transportation:
Representative subcontracting plans:

Exhibit l..
Exhibit 2.

263 266 292 299

308 313 319

Exhibit 3.---

Appendix C.-Department of Defense:
Subcontracting plans:

Exhibit 1: Defense logistics agency -
Exhibit 2: Department of the Army.
Exhibit 3: Department of the Navy-
Exhibit 4: Department of the Air Force--

347 439 741 1015

IMPLEMENTATION OF SUBCONTRACTING PROVISIONS

OF PUBLIC LAW 95-507 (Part 2)

TUESDAY, FEBRUARY 19, 1980

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON GENERAL OVERSIGHT

AND MINORITY ENTERPRISE OF THE
COMMITTEE ON SMALL BUSINESS,

Washington, D.C. The subcommittee met, pursuant to notice, at 10:10 a.m., in room 2359A, Rayburn House Office Building, Hon. John J. LaFalce (chairman of the subcommittee) presiding.

Mr. LaFalce. The Subcommittee on General Oversight and Minority Enterprise will come to order.

OPENING STATEMENT OF CHAIRMAN LaFALCE Mr. LAFALCE. First, I would like to apologize to everyone present. I like to be on time, but the Banking Committee, of which I am a member, was having a markup session today on my bill, and I had to be there. We just concluded.

This morning's hearing is a followup to our December 4, 1979, hearing at which we reviewed the then unsatisfactory performance of the Federal agencies with respect to their implementation of the subcontracting provisions of Public Law 95–507. Since that time, considerable corrective activity has taken place, including a memorandum from President Carter to the heads of all departments and agencies.

In addition to calling their attention to the subcontracting provisions of Public Law 95–507, the President directed each head to:

Review the performance of your agency with regard to the subcontracting provision of the law, and take every action required to insure that, henceforth, no contract covered by the provisions of this law is let by your agency which does not have the subcontracting plan.

This morning, we have with us many of the agencies which appeared on December 4 that we may learn precisely what actions have been taken and are contemplated with respect to the subcontracting provisions of this new law. While the subcommittee's initial inclination was to hold this hearing in April or May, the apparent neglectful performance by GSA has precipitated our convening this hearing at an earlier date.

GSA had, in response to followup questions submitted in connection with the December 4 hearing, advised the subcommittee, by letter dated January 29, that it had issued 93 solicitations without the

(1)

required subcontracting notice, and 61 contracts valued at over $460 million without the required subcontracting plans. These data were subsequently supplemented and amended by letter dated February 7 to reflect merely 58 contracts awarded which were valued at approximately $100 million. This counterpoints with the remaining four

an agencies testifying at our last hearing, all of whom have subsequently indicated to us that no deficient solicitations or contracts have gone out since our last hearing. As a result of their response to our questions, as well as their testimony at our last hearing, we have not called back the Department of the Interior nor the Veterans Administration, both of which appear to have the implementation of the subcontracting provisions well under control.

At this morning's hearing, we plan to review with the agencies the steps that they are taking to insure full implementation of this new law, and to review with them problems they may be encountering. I hope that this hearing proves productive both for the subcommittee as well as the representatives of each of the agencies.

Dr. Carter, do you have a statement?
Mr. CARTER. Thank you, Mr. Chairman. Yes, sir.

I want to thank you for calling these meetings on Public Law 95– 507. I was not able to be at the December meeting, much as I would have liked to be there. However, I read your testimony, and I must say that I was greatly disappointed. The prepared remarks were uninformative and the responses to the questions were unenlightening.

It seems to me that this law has been the law of the land long enough so that the agencies before us in December and today have had ample time to implement this program as the Congress intended it to do.

Thank you, Mr. Chairman.

Mr. LaFalce. It is my intent to move rather quickly, but proceed in the following fashion. We have three panels. The first is of administrative agencies; the second is of the military agencies; the third is of civilian agencies.

With that in mind, I would like to call to the table the Office of Federal Procurement Policy and the Small Business Administration.

Mr. Currie, would you please proceed.

TESTIMONY OF JAMES D. CURRIE, ACTING ADMINISTRATOR,

OFFICE OF FEDERAL PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET; ACCOMPANIED BY THOMAS F. WILLIAMSON, ASSOCIATE ADMINISTRATOR FOR ACQUISITION LAW, OFFICE OF FEDERAL PROCUREMENT POLICY

Mr. CURRIE. Thank you, Mr. Chairman.

On my left is Thomas F. Williamson, the Associate Administrator for Acquisition Law in the Office of Federal Procurement Policy.

I will try to limit my comments to just some highlights of my testimony, as you requested.

Mr. LAFALCE. That will be fine.

Without objection, your entire prepared statement will be inserted in the record.

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