(a) Not invited to bid: As indicated by the statistics reported below there are two principal reasons why small business was not invited to bid: (1) In some situations there was no known small business source for the item; and (2) in some situations a sole source item was involved. A relatively small percentage was excluded for "other reasons" such as the fact that the proposals were unsolicited or that quantity and delivery requirements were such as to preclude small business participation. Request No. 4.-Total procurement invitations by number, dollars, and percentage for fiscal years 1960–63 set aside: (b) Partially: None. It has been impractical for the National Aeronautics and Space Administration to provide for partial set-asides for small business. See further discussion of this in the reply to request No. 5. Request No. 5.—The criteria and guidelines which determine a small business set-aside procurement, including: (a) Personnel contributing to and responsible for such determination; (b) Feasibility of component breakout for this purpose. Reply.-Part 1, subpart 7 of the procurement regulations of the National Aeronautics and Space Administration (copy attached) sets forth the criteria and guidelines which NASA has fixed for its small business program. These specifically provide for individual and class set-asides for small business in addition to a procedure of review by the NASA small business specialist for the suggestion of additional sources to be solicited in procurement actions. Consideration is given to a set-aside after determining the number of qualified small business sources known and whether sufficient competition would be had to insure a fair price to the Government. Personnel contributing to the determination include NASA technical personnel who initiated the procurement, the negotiator, or contract specialist, and the NASA small business specialist as well as the Small Business Administration representative. The final responsibility rests with the contracting officer. Since the bulk of NASA procurement is in the area of research and development and prototype engineering or construction, component breakout for set-aside determination is not feasible. Component breakout or partial set-aside is not feasible unless a production quantity is involved. Request No. 6.—The techniques or procedures by which the agency screens and monitors its procurement actions to determine: (a) Feasibility of small business set-asides; (b) Availability of small business for bidding; (c) Validity of the failure to invite small business to bid; (d) Validity of the failure to award procurement to small business; (e) Timeliness and effectiveness of invitations to bid; (f) Reasonableness of specifications. Reply. Under the above-mentioned and attached NASA procurement regulation applicable to small business concerns, all procurement actions involving $2,500 or more are screened for items (a) through (d). In addition to the screening required under the regulations, NASA Headquarters Office of Procurement conducts periodic surveys or inspections of the procurement activities at NASA field installations for compliance with the regulations, receives written reports from the centers, and reviews new procurement actions prior to final award. As to item (e): The timeliness and effectiveness of invitations to bid are governed by such matters as the kind of supplies or services being contracted for, the required delivery schedule, and the extent of competition available. Consistent with these requirements, it is NASA's policy to solicit as widely as possible and to afford adequate time to prospective bidders in which to prepare and submit bids-generally at least 30 days. As to item (f): Since most of the NASA requirements are in the research and development area, specifications are generally prepared on a "performance" basis. Detailed specifications are used in the purchase of supplies and construction work. Request No. 7.—The techniques and devices to generate and encourage small business procurement. Reply. The number of NASA set-asides in fiscal year 1963 was more than double that of the previous fiscal year. (See the reply to request No. 4 above.) Besides the NASA source lists as a basis for solicitation and inclusion of small business concerns on the list of invited bidders, the Small Business Administration facilities and research and development source lists are screened for qualified small business concerns. Various State redevelopment and economic development agencies are advised of the pending procurement, and the U.S. Department of Commerce, Area Redevelopment Administration, receives advance information of procurements pending so that additional sources may be included. NASA also participates in many small business procurement and industry conferences throughout the country. The brochure, "Selling to NASA" (copy attached) is widely distributed, and notice of all pending procurements estimated to exceed $10,000 is posted for public inspection at NASA headquarters, and at its Western Operations Office, and NASA North Eastern Office. NASA works in close cooperation with the Small Business Administration and conducts seminars with representatives of that Administration at its centers for training and for the establishment of closer cooperative effort in the program. Request No. 8.-The techniques, devices, policies, and procedures to encourage small business subcontracting by prime contractors and to screen and monitor such program. Reply. The small business subcontracting program of the National Aeronautics and Space Administration was established under the mandate of the Space Act of 1958 and its own procurement regulation. Its small business subcontracting program parallels the program of the Department of Defense because many of the large contracts of that Department and of NASA are placed with the contractors, having small business subcontracting programs in being. Reviews and monitoring of the contractors' programs are usually assigned to the agency having the major share of the business with a particular company. To assist small business concerns in securing subcontracts, NASA publishes in the Commerce Business Daily notices of pending procurements estimated to cost $10,000 or more and, in addition, on research and development procurements involving $100,000 or more, which offer subcontracting opportunities. The names and addresses of firms being solicited are also published so that small business concerns may make direct contact with possible prime contractors for subcontract work. NASA has established a reporting system in connection with this program so that the extent of its implementation may be determined. recent compilation, which covers the first 6 months of fiscal year 1963, shows that small business concerns have received 40 percent of the $251 million subcontracted by the contractors reporting under this program. That figure compares favorably with the 37 percent of the amount subcontracted during the same period in fiscal year 1962. A If additional information on the National Aeronautics and Space Administration small business program is needed, please do not hesitate to call on us. Sincerely yours, PAUL G. DEMBLING, Director, Office of Legislative Affairs. (The following entitled booklets were submitted and placed in the subcommittee files.) "Selling to NASA." "NASA Management Manual-Chapter 18-Procurement." Mr. MULTER. Thank you very much, gentlemen. We stand in recess until 10 o'clock tomorrow morning in room 1302. (Whereupon, at 12:15 p.m., November 13, 1963, the hearing recessed, to reconvene at 10 a.m., Thursday, November 14, 1963.) GOVERNMENT SMALL BUSINESS PROCUREMENT PRACTICES AND PROGRAMS THURSDAY, NOVEMBER 14, 1963 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE No. 2 ON GOVERNMENT PROCUREMENT OF THE SELECT COMMITTEE TO CONDUCT STUDIES AND INVESTIGATIONS OF THE PROBLEMS OF SMALL BUSINESS, Washington, D.C. The subcommittee met, pursuant to recess, at 10:05 a.m., in room 1302, Longworth House Office Building, Hon. Abraham J. Multer (chairman of the subcommittee) presiding. Present: Representatives Multer, Smith of California, and Robison. Also present: Hon. John C. Kunkel, a U.S. Representative in Congress from the State of Pennsylvania; Charles S. Beller, subcommittee counsel; Myrtle Ruth Foutch, clerk; and John J. Williams, minority counsel. Mr. MULTER. Good morning, ladies and gentlemen. We will resume our hearings this morning. GENERAL SERVICES ADMINISTRATION (The following is the invitation to General Services Administration to testify.) Hon. BERNARD L. BOUTIN, Administrator, General Services Administration, OCTOBER 8, 1963. DEAR MR. BOUTIN: In connection with public hearings scheduled by Subcommittee No. 2 on Small Business and Government Procurement of the House Select Committee on Small Business to review small business procurement practices of Federal departments and agencies, your agency is invited to testify before the subcommittee on November 14, 1963, at a place to be designated, regarding the following subjects: 1. The programs, practices, techniques, and devices your agency is employing to effectuate small business participation in Government procurement. 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. 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. 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. 5. A statistical report for the same period showing the number of actions, dollar amounts, and percentages of total procurement of (a) Joint small business set-asides; and 6. Criteria and guidelines which determine joint and unilateral small business set-asides. 7. The respective roles of the contracting officer, small business specialist, if any, and Small Business Administration representative in small business set-aside determinations and prime and subcontract awards. 8. Techniques or procedures by which procurement actions are screened and monitored to determine (a) Feasibility of small business set-asides; (d) Decisions not to invite small business to bid ; (e) Causes for failure to award procurements to small business; and (f) Adequacy of specifications to encourage small business bidding. 9. Proposed techniques and devices to generate and encourage small business procurement, including research and development. 10. Techniques and devices to screen and monitor prime contractors' makeor-buy decisions. 11. Manner in which the agency is coordinating its procurement activities with the Small Business Administration in furtherance of the Government's small business procurement policies, including such activities as set-asides, subcontracting, and make-or-buy decisions. 12. Such comments as the Department may wish to make relating to the subject matter of the hearings. It would be appreciated if you would furnish the committee with the name of the witness who is to testify on behalf of your agency, together with 10 copies of his statement, on or before November 4, 1963. Sincerely yours, ABRAHAM J. MULTER, Chairman, Subcommittee No. 2. Mr. MULTER. The first witness will be the representative of the General Services Administration, Mr. Robert T. Griffin. Will you come forward, sir, and bring whomever you have with you from your agency, take your seats at the witness table, and introduce yourself and those with you? TESTIMONY OF ROBERT T. GRIFFIN, ASSISTANT ADMINISTRATOR OF GENERAL SERVICES; ACCOMPANIED BY CHARLES W. GASQUE, ACTING DEPUTY GENERAL COUNSEL OF GSA; WILLIAM A. SCHMIDT, DEPUTY COMMISSIONER, PUBLIC BUILDINGS SERVICE; HENRY A. LEVY, DIRECTOR, BUSINESS SERVICES AND SMALL BUSINESS; AND EUGENE ENGLISH, DIRECTOR OF PROCUREMENT, OPERATIONS DIVISION, FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION Mr. GRIFFIN. Good morning, Mr. Chairman. I am Robert T. Griffin, Assistant Administrator of General Services, and I have with me Messrs. Charles W. Gasque, who has been for years the Director of our Office of Procurement and Economic Policy and is now the Acting Deputy General Counsel of GSA; William A. Schmidt, Deputy Commissioner of our Public Buildings Service; Henry A. Levy, Director, Business Services and Small Business of my office; and Eugene English, Director of Procurement Operations Division of our Federal Supply Service. I have a prepared statement, Mr. Chairman, which I can either read or submit for the record. Mr. MULTER. Suppose we make it part of the record in full together with the documents annexed to it, and then you may briefly summarize it, and we will ask appropriate questions. Mr. GRIFFIN. Very good, sir. |