an award be considered to other than a small business firm which is the low bidder, because of matters relating to competency and credit, the small business firm is afforded an opportunity to obtain a certificate of competency. (e) Timeliness and effectiveness of invitations to bid.

The timeliness and effectiveness of an invitation to bid are screened and monitored through three separate channels: (1) it receives an engineering review as to clarity and adequacy of technical data; (2) it receives a legal review as to legal sufficiency of the invitation; and (3) it receives a contracting officer review as to the completeness, the realistic nature of the delivery schedule, and conformance with applicable policy and procedure. (f) Reasonableness of specifications.

Specifications are reviewed by engineering personnel, contract negotiators, and by legal personnel to insure that they are not restrictive and are sufficiently clear and informative to secure free and full competition.

7. The techniques and devices to generate and encourage small business procurement.

As previously stated, the Agency has recently established at staff level in the Office of the Chief, Procurement Division, a full-time position of small business specialist. Further, the Agency has recently instituted a system for centralized posting at headquarters of all headquarters solicitations and those initiated by field offices which exceed $25,000.

In addition, the Agency has sent representatives to small business, industrial, and Government seminars and conferences where small business representatives can present product potential and are encouraged to submit bidders' mailing list applications. A Small Business Administration directory widely distributed to small business concerns lists commodities and services procured by the FAA and includes a listing of all Agency procuring offices.

8. The techniques, devices, policies, and procedures to encourage small business subcontracting by prime contractors and to screen and monitor such program.

In order to encourage small business contracting, the following approaches are being instituted:

(a) The Agency small business representative will participate in major negotiated procurements as part of the contracting officer's team to insure adequate small business participation as subcontractors to the successful bidder.

(b) A plan is being developed for visitations by the Agency small business representative to plants holding FAA major contracts to discuss the progress of subcontract awards to small business.

(c) Provisions are being made for receiving reports from major contractors so they can be analyzed to determine the degree of small business participation in subcontracting programs. All Agency contracts which offer substantial subcontracting possibilities will be reviewed by the Agency's small business representative.

In the event your committee needs additional information, please be assured of our willingness to provide such data upon request.

Sincerely,

N. E. HALABY, Administrator.

(The Agency Order referred to in par. 5(a) follows.)

[Agency Order MS 4472.1]

FEDERAL AVIATION AGENCY,

December 5, 1961.

ASSISTANCE TO SMALL BUSINESS CONCERNS

1. Purpose. The purpose of this order is to inform Agency personnel of national and Agency policy concerning assistance to small business concerns. 2. Background.-It is the policy of the Government to aid, counsel, assist and protect, insofar as possible, the interests of small business concerns in order to preserve free competitive enterprise; and to place with small business concerns a fair proportion of the total Government purchases and contracts. As a byproduct, the national economy is aided in that extensive use of small business concerns spreads Government business to countless areas not reached by large business concerns. The nominal investment by the Government which is involved in the conveyance of preferential treatment to small business concerns and in otherwise implementing this policy pays big dividends in the sense that it preserves competition.

3. Policy. The Federal Procurement Regulations (sec. 1-1.702), delineate specific policies which are to be followed to further the general policy of the Government expressed above. These regulations essentially stress (1) setting aside requirements for exclusive bidding by small business concerns; (2) widely advertising needs to small business concerns; and (3) tailoring needs to small business fulfillment.

Procuring activities (and other activities in the Agency to the extent that their services are requested or relevant) are directed to exercise diligent efforts to aid, counsel and assist small business concerns to the maximum extent permitted by laws and regulations.

A basic requisite for an efficient small business procurement program is ample procurement leadtime. Therefore, requisitioners of supplies and services (including construction and research and development work) are directed to project needs as far as practicable so that maximum consideration can be given to small business concerns.

4. Guidelines. Specific guidelines to contracting personnel for implementing this policy shall be developed and issued by the Office of Management Services as required.

5. Effective date. This order is effective upon the date of issuance.

D. D. THOMAS, Acting Administrator.

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE STAFF REPORT ON SMALL BUSINESS PROCUREMENT POLICIES, PROGRAMS, PROCEDURES, AND PRACTICES This staff report has been prepared in response to a letter dated September 16, 1963, from Congressman Abraham J. Multer, chairman, Subcommittee No. 2 of the Select Committee on Small Business, U.S. House of Representatives. Mr. Multer requested information concerning departmental small business procurement policies, programs, procedures, and practices. This report presents available data in item order outlined in the letter of September 16, 1963.

I. Total procurement actions by number and dollars for fiscal years 1960, 1961, 1962, and for 1963, if available; if not, for the latest period of time available.

The above information was taken from "Reports on Procurement by Civilian Executive Agencies" (Standard Form 37). This report form was revised, beginning with fiscal year 1962. In this revision the requirement for reporting the number of procurement transactions was deleted.

The following transactions were not included on "Reports on Procurement by Civilian Executive Agencies" for fiscal years 1960 and 1961:

1. Transactions of $25 or less.

2. Indefinite quantity term contracts.

Individual procurement instruments

executed against such contracts were included in the reports.

3. Procurement from Federal sources of supply, such as:

(a) GSA stores depots.

(b) GSA fuel yards.

(c) GSA direct delivery programs.

(d) GSA maintenance and repair shops.

(e) Government Printing Office.

(f) Federal Prison Industries, Inc.

(g) District of Columbia, Department of Corrections.
(h) Excess personal property.

4. Procurements of:

(a) Architectural and engineering services.

(b) Professional and/or technical services.

(c) Medical and hospital care.

(d) Research and development work.

5. Purchase of blind-made products purchased under the act of June 25, 1938 (41 U.S.C. 46-48).

6. Contracts and purchases made by procuring activities located outside the continental United States.

7. Procurement from foreign contractors.

8. Procurement of water, gas, electricity, communication, and other services from public utility companies.

9. Actions for leasing of space.

10. Cash purchases made by Government employees for which they were to be reimbursed.

11. Purchases by use of petty cash, imprest funds, or against cashier funds. 12. Purchases on credit cards.

13. Purchases made at activities where the total annual transactions of the types included in the report did not exceed $1,000.

14. Procurement actions for the following (except that procurements of administrative property and services in connection therewith were reported): (a) Price support, grants to farmers, or stabilization.

(b) Agricultural commodities for transfer to foreign government or for foreign aid, relief, or rehabilitation.

(c) Programs under section 6(b) of the Farm Credit Act of 1937, as amended.

(d) Property acquired by foreclosure.

(e) Transportation of things by Government bills of lading and transportation of personnel by Government travel orders.

(f) Transportation of mail.

(g) Acquisition of land.

(h) Programs under the Defense Production Act of 1950, as amended. Departmental procurement transactions that are not reflected on reports on procurement by civilian executive agencies for fiscal years 1962 and 1963 are: 1. Which are $100 or less.

2. By use of imprest funds (petty cash) and credit cards.

3. At stations or offices for which total annual transactions, of the types covered by this report, are less than $2,500.

4. From Federal sources of supply, such as: District of Columbia Government, Federal Prison Industries, Inc., Government Printing Office, General Services Administration (stores depots, fuel yard, consolidated and special purchasing service, repair shops and furniture rehabilitation service, and excess property).

5. From educational and nonprofit institutions and State and local governments.

6. Of blind-made products under the act of June 25, 1938 (41 U.S.C. 46–48). 7. By activities outside the United States, and from foreign contractors. 8. Of transportation and public utilities services.

9. Of land and easements; leasing of space; acquisition of property by foreclosure.

10. Under the Defense Production Act of 1950, as amended.

11. For price support, grants to farmers, or stabilization; of agricultural commodities for transfer to foreign governments or for foreign aid, relief, or rehabilitation; and under section 6 of the Farm Credit Act of 1937, as amended (12 U.S.C. 6407).

II. Total procurement actions by number, dollars, and percentage awarded to small business for fiscal years 1960–63:

III. Total procurement actions by number, dollars, and percentage for fiscal years 1960-63 for which small business—

(a) Was not invited to bid, and the reasons for such exclusion;
(b) Was invited to bid, but did not bid.

Procuring activities have not been required to report this information. To provide the information now, these activities would have to search bid files, and many of these have been transferred to Federal records centers.

Departmental procurement regulations require procurement officers to consult and cooperate with representatives of the Small Business Administration. Through this action, joint efforts are made to insure that small business firms are afforded equitable opportunities to compete for awards.

IV. Total procurement invitations by number, dollars, and percentage for fiscal years 1960-63 set-aside:

Data relative to set-asides for fiscal years 1960 and 1961 are not available. Procurement of products by the Department generally are not of sizes and types that warrant their severance into two or more economic production runs or reasonable lots. All set-asides, therefore, are reported as total in nature.

V. The criteria and guidelines which determine a small business set-aside procurement, including—

(a) Personnel contributing to and responsible for such determination, and (b) Feasibility of component breakout for this purpose.

The Federal Procurement Regulations are the criteria and guidelines that are utilized to determine small business set-aside procurements. Contracting officers work with representatives of the Small Business Administration in jointly carrying out responsibilities of the set-aside program.

A major portion of departmental contracting with business concerns involves research and technical services. These are not of the nature and size to make component breakout feasible.

VI. 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.

The Department complies with Federal Procurement Regulations, especially subpart 1-1.7, "Small Business Concerns," in screening and monitoring procurement actions.

Representatives of the Small Business Administration are afforded opportunities by procuring activities to review proposed procurements for the purpose of recommending set-asides. Contracting officers, in addition, permit these representatives to recommend names of small business concerns for inclusion on lists of bidders to be solicited in connection with current and future procurements. Procuring activities are primarily responsible for monitoring procurement actions to assure compliance with the small business policies of the Federal Procurement Regulations. Functions which are performed under this responsibility are (1) including established and potential small business concerns on bidders mailing lists and offering them equitable opportunities to submit bids; (2) publicizing procurement actions in the "Synopsis of U.S. Government Procurement, Sales, and Contract Awards," published by the Department of Commerce; (3) providing, in bid invitations, a reasonable time for preparing and submitting bids and establishing delivery schedules; (4) incorporating applicable specifications in bid invitations; (5) cooperating and consulting with representatives of the Small Business Administration in carrying out Government policy regarding small business concerns; (6) giving due consideration to small busi ness concerns when equal lows bids are received.

VII. The techniques and devices to generate and encourage small business procurement.

In addition to steps already cited in this report, the Office of the Secretary (1) publishes a "Listing of Principal Purchasing Offices in the Department of

Health, Education, and Welfare," and distributes it to prospective bidders; (2) distributes Bidder's Mailing List Applications (Standard Form 129); (3) informs the Small Business Administration of the products and services which the Department purchases, and (4) provides business concerns with copies of the U.S. Government Purchasing, Specifications, and Sales Directory which is published by the Small Business Administration. In this directory are listed the principal purchasing offices of the department and the categories of products and services that they purchase.

VIII. The techniques, devices, policies, and procedures to encourage small business subcontracting by prime contractors and to screen and monitor such program.

The Federal Procurement Regulations, especially section 1-1.710, are followed in encouraging prime contractors to undertake the maximum amount of small business subcontracting which is consistent with efficient contract performance. Briefly, these regulations require (1) that, where feasible, prime contractors establish and conduct small business subcontracting programs; and (2) that procurement officers and representatives of the Small Business Administration periodically review subcontracting procedures and practices of contractors and their subcontractors to insure compliance with governmental policy that small business concerns, as subcontractors, are considered fairly.

POST OFFICE DEPARTMENT

Hon. ABRAHAM J. MULTER,

THE DEPUTY POSTMASTER GENERAL,
Washington, October 21, 1963.

Chairman, Subcommittee No. 2, Select Committee on Small Business, U.S. House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: Reference is made to your letters of September 16 and October 15, 1963, and our interim reply of September 18, 1963, in connection with a study of small business procurement policies and practices. The information requested in questions numbered 1, 2, 3, and 4 is presented in the attached tabulation.

The Post Office Department is guided by provisions of the Federal Procurement. Regulations which prescribe small business policies. While individual procurements are not screened by a representative of the Small Business Administration, the Post Office Department has entered into an agreement with the Small Business Administration to set aside 50 percent of the total dollar value of all contracts awarded during the current fiscal year for various kinds and types of items procured by this Department. A second agreement covers the set-aside for small business of 85 percent of the total dollar value of all contracts awarded for the current fiscal year for job cleaning, trash removal, window cleaning, lawn mowing, etc.

The Procurement Division of the Bureau of Facilities is responsible for determining those individual procurements which are to be set aside for small business. Copies of each invitation to bid are made available to the Small Business Administration representative for subsequent review.

The Small Business representative and the Chief, Inventory and Distribution Branch, Procurement Division, Bureau of Facilities, are primarily responsible for the determination to set aside certain procurements for small business concerns. This procedure has worked extremely well, and we are of the opinion that a component breakout for this purpose would require at least one additional person by this Department, thereby incurring additional expense.

Each individual invitation is considered for small business set-aside at the time of preparation. Complexity of the item, past bidding experience and the ability of small business concerns to meet the terms, conditions, and specifications are carefully considered before a final decision is made. Small business concerns are not excluded from bidding on any of our procurements as copies of the invitations are mailed to all persons or firms, regardless of size, on our bidder's list. Our invitations to bid do not exclude small business concerns from bidding. Awards are not withheld from small business concerns simply because they are classified as such. All firms, regardless of size, must, of course, meet the standards of a responsible prospective contractor as set forth in FPR 1-1.310-5. Any questions with respect to capacity or credit are referred to the

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