OFFICE
OF MANAGEMENT AND BUDGET
OFFICE OF FEDERAL PROCUREMENT POLICY
OFPP
Policy Letter 99-1 on Government-Wide Small Business, HUBZone Small
Business, Small Disadvantaged Business, and Women-Owned Small Business
Goals for Procurement Contracts
AGENCY:
Executive Office of the President, Office of Management and Budget
(OMB), Office of Federal Procurement Policy (OFPP).
ACTION:
Notice of proposed policy letter.
SUMMARY:
OFPP is requesting comments on proposed OFPP Policy Letter 99-1.
This letter contains guidance on implementing government-wide goals
for procurement contracts awarded to small businesses, HUBZone small
businesses, small disadvantaged businesses, and women-owned small
businesses. The Policy Letter also provides guidance on reporting
requirements that will help the Small Business Administration (SBA)
determine whether executive agencies are reaching these goals. This
Policy Letter, when issued in final, will supersede OFPP Policy
Letter 91-1.
COMMENT
DATE: We must receive comments on or before June 1, 1999.
ADDRESS:
Send your comments to Deidre A. Lee, Administrator, Office
of Federal Procurement Policy, Old Executive Office Building, Room
352, Washington, DC 20503. Send e-mail comments to Keith Coleman
at kcoleman@omb.eop.gov.
FOR
FURTHER INFORMATION CONTACT: Keith Coleman at 202-395-7209
or Linda Williams at 202-395-3302.
SUPPLEMENTARY
INFORMATION: We issued an earlier Policy Letter, 91-1,
entitled "Government-Wide Small Business and Small Disadvantaged
Business Goals for Procurement Contracts" on March 11, 1991. That
policy letter addressed sections 502 and 503 of the Business Opportunity
Development Act of 1988. Section 502 establishes government-wide
goals for contract awards to small business concerns and small disadvantaged
businesses. Section 503 requires the President to include the agencies'
actual goal achievements in the "State of Small Business" report.
The report also includes an analysis of an agency's failure to achieve
the goals, and the number and dollar value of prime contracts awarded
to small firms through noncompetitive negotiated procurements, restricted
and unrestricted competitions, and information on subcontract awards.
We
need to issue this new policy letter because of statutory changes
made in 1994 and 1997. Section 7106 of the Federal Acquisition Streamlining
Act of 1994 (FASA) establishes a 5 percent women-owned small business
goal. Section 603 of the Small Business Reauthorization Act of 1997
increases the annual government-wide goal for prime contract awards
to small business concerns from not less than 20 percent to not
less than 23 percent. The Act also adds a 3 percent HUBZone small
business goal phased-in over the next 5 years.
This
Policy Letter, when issued in final, will supersede OFPP Policy
Letter 91-1. This proposed Policy Letter supports the Small Business
Administration's (SBA) policies of establishing its own guidance
on the new goals, establishing with each agency mutually acceptable
prime contract goals for awards made under section 8(a) of the Small
Business Act, and using procurement data in the Federal Procurement
Data System to measure accomplishments rather than requiring agencies
to provide this information in separate reports.
We
request comments on the proposed policy letter.
Deidre
A. Lee
Administrator
Dated:
March 29, 1999
POLICY
LETTER 99-1
TO
THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT:
Government-Wide Small Business, HUBZone Small Business, Small Disadvantaged
Business, and Women-Owned Small Business Goals for Procurement Contracts.
1.
Purpose. This Policy Letter provides guidance to
Executive branch departments and agencies on government-wide goals
for procurement contracts awarded to small businesses, HUBZone small
businesses, small disadvantaged businesses and women-owned small
businesses ("small businesses"). It also provides guidance on reporting
requirements that will help the Small Business Administration (SBA)
determine whether agencies are reaching these goals.
2.
Supersession Information. This Policy Letter replaces
OFPP Policy Letter 91-1, "Government-Wide Small Business and Small
Disadvantaged Business Goals for Procurement Contracts," dated March
11, 1991.
3.
Authority. This policy letter is based on the Small
Business Act, the Office of Federal Procurement Policy Act, the
Business Opportunity Development Reform Act of 1988, the Federal
Acquisition Streamlining Act of 1994, and the Small Business Reauthorization
Act of 1997.
4.
Background. The Small Business Act requires executive
agencies, in consultation with SBA, to develop annual goals for
contract awards to small businesses. SBA monitors agency performance
and reports their achievements to the President. The Office of Federal
Procurement Policy Act, 41 U.S.C. 405, empowers the Administrator
for Federal Procurement Policy to prescribe government-wide procurement
policies.
The
Business Opportunity Development Reform Act establishes government-wide
goals for small businesses and small disadvantaged businesses and
requires the President to include the agencies' actual goal achievements
in the "State of Small Business" report. The report must also include
an analysis of any failure to achieve the goals, and the number
and dollar value of prime contracts awarded to small businesses
through noncompetitive negotiated procurements, restricted and unrestricted
competitions, and information on subcontract awards. The Federal
Acquisition Streamlining Act of 1994 (FASA) establishes a 5 percent
women-owned small business goal. The Small Business Reauthorization
Act of 1997 (SBRA) adds a 3 percent HUBZone small business goal
phased-in over the next 5 years. It also increases the annual government-wide
goal for prime contract awards to small business concerns to not
less than 23 percent.
In
March 1991, the OFPP issued Policy Letter 91-1 to implement government-wide
goals for small businesses and small disadvantaged businesses. This
proposed Policy Letter includes the guidance from Policy Letter
91-1, and also implements the more recent statutory provisions of
FASA and SBRA.
This
proposed Policy Letter also supports the Small Business Administration's
(SBA) policies of establishing its own guidance on the new goals,
establishing with each agency mutually acceptable prime contract
goals for awards made under section 8(a) of the Small Business Act,
and using procurement data in the Federal Procurement Data System
to measure accomplishments rather than requiring agencies to provide
this information in separate reports.
5.
Policy. Prior to the beginning of each fiscal year,
the SBA will mutually establish with each agency goals for participation
by small business, small disadvantaged business, HUBZone small business,
and women-owned small businesses. The agencies' cumulative goals
shall count toward accomplishment of the government-wide goals.
6.
Goals.
a.
The government-wide small business goal is not less than 23 percent
of the total value of all prime contracts awarded for the fiscal
year. This includes all the goals for the specific categories of
small business.
b.
The following table lists the specific goals for small disadvantaged
and women-owned small businesses.
The
goal for... |
is... |
small
disadvantaged business prime contracts |
not
less than 5 percent of the value of all prime contract awards. |
small
disadvantaged business subcontracts |
not
less than 5 percent of the value of all subcontract awards. |
women-owned
small business prime contracts |
not
less than 5 percent of the value of all prime contract awards. |
women-owned
small business subcontracts |
not
less than 5 percent of the value of all subcontract awards. |
c.
The following table lists the specific goals for HUBZone small businesses.
For
FY... |
the
percentage goal is at least... |
1999 |
1
percent of the value of all prime contract awards |
2000 |
1.5
percent of the value of all prime contract awards |
2001 |
2
percent of the value of all prime contract awards |
2002 |
2.5
percent of the value of all prime contract awards |
2003
and after |
3
percent of the value of all prime contract awards |
d.
There is no specific statutory requirement to establish goals for
awards made pursuant to section 8(a) of the Small Business Act.
However, agencies must mutually establish with SBA acceptable goals
for awards to 8(a) firms.
e.
Agencies may count prime contract awards to small businesses toward
more than one goal. Prime contract awards to small businesses, women-owned
small businesses, small disadvantaged businesses, 8(a) firms, and
HUBZone small businesses count toward the government-wide small
business goal.
7.
Responsibilities.
a.
Agency Responsibilities
(1)
Each department or agency must negotiate annually in good faith
with the SBA to establish its specific goals for small business,
woman-owned small business, small disadvantaged business, HUBZone
small business, and 8(a) firms. These goals should provide the
maximum practicable opportunity for all these types of small businesses
to participate in contracts let by the agency. SBA's annual guidance
on establishing small business goals, entitled "Guidelines on
Goals Under Procurement Preference Programs," covers the goal-setting
process.
(2)
At the end of the fiscal year, agencies must submit a narrative
report to SBA analyzing its achievements and any failures to
achieve its small business goals for the year. The report must
also include plans for improving performance in the next year.
(3)
Agencies must ensure that their prime and subcontract data in
the Federal Procurement Data System is accurate and complete
in order to measure their small business goal accomplishments.
b.
SBA Responsibilities
(1)
Prior to the beginning of each fiscal year, the SBA will work with
each agency to establish mutually acceptable goals for the different
categories of small business.
(2)
SBA must ensure that the mutually established cumulative goals
for all agencies meet or exceed the government-wide small business
goal of 23 percent.
(3)
SBA must compile and analyze agencies' achievements against their
individual small business procurement goals and report the results
to the President.
(4)
SBA will use data in the Federal Procurement Data System to determine:
(i)
agencies' success in reaching their procurement goals for prime
and subcontracts;
(ii)
the number and dollar value of prime contracts awarded to small
business concerns, HUBZone small business concerns, small disadvantaged
business concerns, and women-owned small business concerns through:
- noncompetitive
negotiation,
- competition
restricted to small disadvantaged business concerns,
- competition
restricted to small business concerns and HUBZone small business
concerns, and
- unrestricted
competitions;
(iii)
the dollar value of subcontracts awarded to small business concerns,
HUBZone small business concerns, small disadvantaged business concerns,
and women-owned small business concerns.
8.
Information Contact. Direct any questions regarding
this Policy Letter to Linda Williams (202-395-3302) or Keith Coleman
(202-395-7209).
9.
Effective Date. The Policy Letter is effective
30 days after issuance.
Deidre
A. Lee
Administrator
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