Small Business Administration for final determination as to capacity and credit and for issuance of a certificate of competency. Invitations to bid are issued by this Department for items to meet our needs. Copies are sent to all firms on the appropriate bidder's list and, in addition, procurements are publicized in the Department of Commerce synopsis of U.S. Goyernment proposed procurement sales and contract awards in accordance with FPR 1-2.203-4 and 1-1.1003. The specifications of our invitations to bid describe the product or service which is required. These specifications are of necessity somewhat inflexible at times; however, this is necessary to insure that our requirements will be met. Every effort is made to avoid restrictive specifications or to require items or services of a quality which is in excess of our requirements. Many of the procurements made by this Department are of a relatively small monetary value, that is, less than $100,000. Invitations to bid are issued frequently for reasonable quantities, thereby giving small business concerns ample opportunity to submit bids. The majority of our present contracts are performed by the prime contractor. The clause entitled "Utilization of Small Business Concerns" prescribed by FPR 1-1.710-3a is included in all invitations which may exceed $5,000. In addition, the small business subcontracting program clause prescribed by FPR 1-1.710-3b is included in all invitations which may exceed $500,000. We will be glad to furnish any additional information which you may desire. Sincerely, 1 From Standard Form 37, Report on Procurement by Civilian Executive Agencies. 2 Headquarters only, excludes all field procurement actions. 2 Headquarters only, excludes all field procurement actions. 1 From Standard Form 37, Report on Procurement by Civilian Executive Agencies. 3 This information not available from our records. 1 From Standard Form 37, Report on Procurement by Civilian Executive Agencies. 1 Statistics on number of actions discountinued June 30, 1962. * From Standard Form 37, Report on Procurement by Civilian Executive Agencies. Headquarters only, excludes all field procurement actions. 4 This information not available from our records. TENNESSEE VALLEY AUTHORITY Hon. ABRAHAM J. MULTER, TENNESSEE VALLEY AUTHORITY, Select Committee on Small Business, Dear Mr. MULTER: This is in response to your letter of September 16, 1963, concerning TVA's small business procurement policies. Before answering the specific requests for information contained in your letter, it may be helpful for me to give you the following background information which will explain why some of the requests are inapplicable to TVA's procurement program. The nature of TVA's procurement program is such that small businesses receive a sizable portion of the TVA's procurement awards on items which they are in a position to supply, without the necessity of a formal set-aside program. TVA's larger purchases are usually for heavy electrical and mechanical equipment or for long-term coal contracts. Practically no small businesses are in a position to build large equipment of this kind, or to supply large tonnages of coal over a period of several years. A set-aside program for contracts of this nature would therefore not be possible. On the other hand, TVA purchases a considerable number of items which are available almost exclusively from small businesses. A review of TVA's records shows that 197 different mailing lists of potential suppliers of various items are made up of small busi nesses only, which means that these items are, in effect, "set aside" for small businesses. TVA indicated its willingness several years ago to enter into formal set-aside agreements with the Small Business Administration. On March 27, 1958, the TVA Board of Directors established the following policy: "Under the provisions of the Small Business Act, the Small Business Administration makes agreements with TVA to set aside certain TVA procurements for award exclusively to vendors qualifying as small business concerns." Representatives of TVA and the SBA have met from time to time to discuss the details of a possible formal set-aside agreement, but such an agreement has not been entered into, apparently because it is recognized by the SBA that TVA'S procurement program is achieving the same end result. The information which you requested is as follows: The foregoing figures do not reflect a true picture of TVA's annual procurement in that they include a number of large, long-term coal contracts which extend over a period of several years. For example, an order placed in 1960 for a 17-year contract in the amount of $190 million and another placed in 1962 for 15 years in the amount of $70 million unbalance the summary of purchases to such an extent as to make the results misleading. If TVA's awards for coal for fuel at TVA's steam generating plants are excluded, the figures are as follows: TVA so 3. TVA does not have the data requested in part 3 of your letter. licits bids from all known qualified small business concerns and if TVA failed to invite a small business concern to bid it would be because the concern was not qualified to supply the item in question or because TVA did not know about the concern. 4. This request is inapplicable to TVA's procurement program. 5. This request is inapplicable to TVA's procurement program. 6. TVA constantly reviews its sources of supply giving careful consideration to the addition of small business contractors. All known small business suppliers are invited to bid and receive awards when submitting low responsive bids. Standard commercial specifications common to most suppliers are used by TVA to the maximum extent possible. 7. TVA reports its purchase requirements daily to the Department of Commerce's Commerce Business Daily. This publication makes available to small businesses information concerning a large number of TVA requirements. The response by small businesses has been good and has resulted in awards to an additional number of small businesses. TVA follows the regulations established by War Manpower Order No. 4 which provides that preference shall be given to small business in making awards where bids are otherwise equal. TVA's needs for spare parts for its largest equipment have resulted in development of small business sources for producing these parts. Small businesses are very helpful in this respect and are being used to the maximum extent possible. 8. In all of TVA's large contracts use is made of a special subcontracting clause designed to increase participation of small businesses in subcontracting of TVA business. This clause provides as follows: "Subcontracting with small business.—It is the policy of the Government as expressed by the Congress that a fair proportion of purchases by or for it be made from small business concerns. To the greatest extent found consistent with the efficient performance of this contract, contractor shall secure material and supplies required for the completion thereof from small business concerns. If the contractor does not already have a formal small business contracting program, contractor shall work, to the extent necessary, with the regional office of the Small Business Administration in determining the availability of competent small business concerns from which such material and supplies may be secured." If you wish additional information, please let us know. AUBREY J. WAGNER, Chairman. DEPARTMENT OF THE TREASURY Hon. ABRAHAM J. MULTER, TREASURY DEPARTMENT, Washington, October 11, 1963. Chairman, Subcommittee No. 2, Select Committee on Small Business, House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: This is in response to your request of September 16, 1963, to the Secretary, for certain data concerning small business procurement policies, programs, procedures, and practices of the U.S. Treasury Department. Attachment A lists the data requested in questions 1 and 2 of your letter. Attachment B gives answers to questions 3 through 8. In accordance with the agreement reached between Mr. Charles Beller and a member of my staff, the data shown on attachment A represents procurement actions of $100 or more between Treasury bureaus and private industry. In some cases data was not available and was estimated in order to obtain comparability. However, where data for Coast Guard was not available for 1960 and 1961 we did not estimate, and showed separate totals for Coast Guard and the rest of Treasury. We felt this was preferable because of the size of Coast Guard procurement. Total procurement for Treasury is shown on attachment A to be $92 million for the fiscal year 1963 with approximately 70 percent of the procurement actions being made through small business and representing about 68 percent of the dollar volume. We estimate that about 20 percent of our procurement volume shown is obtained through contracts established by other agencies such as the General Services Administration which writes the Federal supply schedules. In the event that there is any question concerning this information, we will make every effort to be of further assistance. Mr. William J. Boteler on code 184, extension 5588, is the man on my staff who developed the data and can perhaps be most helpful. Sincerely, A. E. WEATHERBEE, Administrative Assistant Secretary. (The attachments referred to follow.) |