Question #2

The SBA was given considerable responsibility to make the subcontracting program work. The House and Senate conferees intended that SBA and procuring agencies coordinate their reporting requirements to avoid unproductive duplication or contradiction. Please explain how you have carried out your reporting functions as they relate to sections 211 and 221 of the law.

Briefly, there are two reports required by sections 211 and
221 as follows:

(1) A report on subcontracting plans found acceptable by any Federal agency which the Administration determines do not contain maximum practicable opportunities for small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals to participate in the performance of contracts;

and

(2) A report on Federal agency achievement toward established
goals for small business and small business concerns owned
and controlled by socially and economically disadvantaged.
The goals are developed under Chapter 3, Section 221,
Section 15 (g).

In the first report the SBA is the sole collector of data. The individuals primarily responsible for review and evaluation are the Procurement Center Representatives who are in turn supported by the Subcontract Specialists and the Minority Small Business representatives. Procedures have been developed and sent to the SBA field offices and have been implemented. There should be no duplication of other Federal agency efforts.

The second report goes to the basic data collection format which procuring agencies will utilize to acquire statistics from prime contractors. The SBA in conjunction with the Office of Federal Procurement Policy established an interagency task force which developed two universal Federal agency data collection forms which will replace several forms currently in use by various agencies and departments.

All of these data will be utilized by SBA in its compliance evaluation reviews of subcontracting programs and subcontracting plans of individual prime contractors as well as by the procuring agencies in their compliance evaluations and fiscal year-end reports of subcontracting program performance to SBA.

The scheduling of subcontracting program and subcontracting plan
compliance evaluation reviews will be coordinated between the
Federal procuring agencies and the SBA to the extent practicable;
however, in the event that the procuring agency cannot, or will
not, comply with the SBA schedule, SBA will accomplish its reviews
alone. This procedure is necessary in order to accomplish the
anticipated number of reviews in the time available with the
limited number of Subcontract Specialists assigned.

Question #3

What studies or surveys has SBA conducted to determine the extent of a contractor's compliance with the "best efforts" clause? Has SBA formulated any guidelines to make this evaluation?

a. During Fiscal Years 1979 and 1980 (through the month of December), 853 reviews were conducted evaluating contractor's subcontracting programs.

b.

Guidelines, revised to implement the P.L. 95-507 requirement for
"maximum practicable opportunity" in the conduct of subcontracting
compliance evaluation reviews, were published on October 25, 1979.
(See Chapter 3 of SBA Standard Operating Procedures (SOP) 60 03 1 and
SBA Forms 745 and 745A at Attachment 1).

The Small Business Act states that "It is the policy of the United
States that Small Business Concerns and Small Business Concerns
Owned and Controlled by Socially and Economically Disadvantaged
Individuals shall have the maximum practicable opportunity to
participate in the performance of contracts let by any Federal
Agency."

a. This policy statement is the foundation of the basic subcontracting program which is in effect for contracts or subcontracts in the dollar range of $10,000 to less than $1,000,000 for construction and $10,000 to less than $500,000 for all others. The basic program will not be implemented when the contract does not exceed $10,000; including all subcontracts under such contracts, will be performed entirely outside of any State, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico; or is for services which are personal in nature.

16. DEFINITIONS

a. The term "small business concern" shall mean a small business
as defined pursuant to section 3 of the Small Business Act and
all relevant regulations promulgated pursuant thereto. The term
"small business concern owned and controlled by socially and
economically disadvantaged individuals" shall mean a small concern-
(1) which is at least 51 percent owned by one or more

(2)

socially and economically disadvantaged individuals; or,
in the case of any publicly owned business, at least 51
percent of the stock is owned by one or more socially
and economically disadvantaged individuals, and

whose management and daily business operations are
controlled by one or more of such individuals.

17. SELF CERTIFICATION

a. Large business contractors acting in good faith may rely
on written representations by their subcontractors regarding
their status as either a Small Business Concern or a Small
Business Concern Owned and Controlled by Socially
and Economically Disadvantaged Individuals.

EFFECTIVE DATE
10-25-79

PAGE

27

SBA FORM 989 A (3-75) REF 00232 REPLACES PREVIOUS EDITIONS AND SBA FORM 9898

a. Contractors shall presume that Socially and Economically
Disadvantaged Individuals include Black Americans, Hispanic
Americans, Native Americans, U.S. citizens whose origins
are from Japan, China, the Philippines, Viet Nam, Korea,
Samoa, Guam, the U.S. Trust Territories of the Pacific,
Northern Marianas, Laos, Cambodia and Taiwan, and other
minorities, or any other individual found to be disadvantaged
by the Administration pursuant to section 8 (a) of the Small
Business Act.

The Office of Regional and District Minority Small Business/
Capital Ownership Development shall answer inquiries from
prime contractors and others relative to the class of eligibles.

19. SBA REVIEW AUTHORITY

a. The contractor agrees to carry out the policy of the United
States and further agrees to cooperate in any studies or surveys
as may be conducted by the United States Small Business
Administration or the awarding agency of the United States
as may be necessary to determine the extent of the contractor's
compliance.

20. RESPONSIBLE CONTRACTORS

a. Contractors, large or small, who meet the criteria, are subject
to compliance evaluations of their subcontracting program. The
contractor may have contracts with subcontracting plans and, if so,
is subject to both types of evaluations.

b. The evaluation is made to determine compliance or non-compliance
only. Non-compliance evaluations will contain recommended
improvements to the contractor's subcontracting program which
will assist the contractor with the program.

21. PREPARATION FOR EVALUATION

a. The Subcontract Specialist shall prepare and maintain an up-to-date
file for each contractor to be evaluated. The file, in addition
to reports, shall contain, as a minimum, the following:

SBA FORM 989A (3-75) REF 002 32 REPLACES PREVIOUS EDITIONS AND SBA FORM 989 B

(3)

Name of the person responsible for the Subcontracting
Program.

(4) Copy of company procedures and policies relating to
subcontracting.

(5) Brief description of company products.

(6) Total annual sales.

(7) Total annual Federal Government sales received by
prime contractor or subcontractor.

(8) Explanation of any affiliation with other companies.

b. Only companies with a reasonable amount of potential subcontracting for Small Business and Small Business Owned and Controlled by Socially and Economically Disadvantaged Individuals will be evaluated for compliance purposes.

c. For review and evaluation purposes, the Subcontract Specialist
shall, in the main, confine the evaluation to the factors
delineated herein. The various Federal awarding agencies may
perform evaluations and utilize their own criteria for
determinations. These criteria may be considered in SBA's
evaluation but it is not mandatory to do so.

22. SMALL BUSINESS FORMS

Small Business Administration Forms 745 and 745A shall be
utilized for Subcontracting Program evaluations as described
in paragraph 15(a) above for contracts in excess of $10,000
which do not contain subcontracting plans.

FORM 989A (3-75) REF 002 32 REPI ACES PREVIOUS EDITIONS AND SBA FORM 9898