[Federal Register Volume 62, Number 75 (Friday, April 18, 1997)]
[Proposed Rules]
[Pages 19200-19205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10060]
[[Page 19199]]
_______________________________________________________________________
Part III
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Part 12, et al.
Empowerment Contracting Federal Acquisition Regulations and Empowerment
Contracting Proposed Information Collection Requirement Comment
Request; Proposed Rule and Notice
Federal Register / Vol. 62, No. 75 / Friday, April 18, 1997 /
Proposed Rules
[[Page 19200]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 12, 14, 15, 26, 36, and 52
[FAR Case 97-603]
RIN 9000-AH58
Federal Acquisition Regulation; Empowerment Contracting
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule with request for comments.
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SUMMARY: The Department Of Defense, General Services Administration,
National Aeronautics And Space Administration are proposing amendments
to the Federal Acquisition Regulation (FAR) to establish phase one of
an Empowerment Contracting Program that provides procurement incentives
to both large and small businesses to encourage their activity in areas
of general and severe economic distress. This action is being taken to
implement Presidential Executive Order 13005 of May 21, 1996,
Empowerment Contracting. On September 13, 1996, the Department of
Commerce (DoC) published in the Federal Register proposed guidelines
for implementing Executive Order 13005 in the FAR. The amendments to
the FAR that are being proposed in this rule are largely based on those
guidelines. However, the amendments to the FAR in this proposed rule do
depart from the September 13, 1996, guidelines in certain respects
based either on comments received in response to the guidelines'
publication or on the need to develop a program that could more readily
be implemented. This regulatory action was subject to Office of
Management and Budget review under Executive Order 12866, dated
September 30, 1993. This is a major rule under 5 U.S.C. 804.
DATES: Comment Closing Date: Comments on the proposed rule should be
submitted in writing to the address below on or before June 17, 1997,
to be considered in the formulation of the final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (MVRS), 1800 F Street
NW., Room 4035, Washington DC 20405.
Please cite FAR case 97-603 in all correspondence related to this
issue.
FOR FURTHER INFORMATION CONTACT: Ms. Victoria Moss, Procurement
Analyst, Federal Acquisition Policy Division, General Services
Administration, Telephone: (202) 501-4764 or Mr. Mike Sipple,
Procurement Analyst, Office of the Director of Defense Procurement,
Department of Defense, Telephone: (703) 695-8567. For general
information pertaining to publication and scheduling call the FAR
Secretariat at (202) 501-4755.
SUPPLEMENTARY INFORMATION:
A. Background
Executive Order 13005 established the Empowerment Contracting
Program to encourage business activity in areas of general economic
distress by providing procurement incentives to qualified businesses.
The procurement incentive program prescribed in the Executive order
applies to both large and small businesses and is race neutral. DoC has
published for comment proposed guidelines for implementing the
Empowerment Contracting Program in the FAR (61 FR 48463, September 13,
1996). That program is expected to be implemented through revisions to
the FAR and the FAR Supplements and through the issuance of DoC
regulations. This proposed rule contains the FAR revisions. The program
that is described in this proposed rule represents phase one of a
phased implementation that will likely be amended following the
evaluation of its results. The planned duration of phase one of the
program is 18 months following the issuance of an interim or final FAR
rule. Agencies shall select the contracting activities that will
participate in phase one. Agencies shall select a sufficient number of
contracting activities such that approximately twenty five percent (in
terms of dollars) of the applicable acquisitions awarded during phase
one of the program, in each of the applicable Standard Industrial
Classification (SIC) major groups, are subject to an empowerment
contracting preference.
B. Regulatory Flexibility Act
This proposed rule may have a significant economic impact on a
substantial number of small entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because the rule
provides preferences through which small and large business concerns
may be provided benefits in Federal contracting. An Initial Regulatory
Flexibility Analysis (IRFA) has been prepared and may be obtained from
the FAR Secretariat. A copy of the IRFA has been submitted to the Chief
Counsel for Advocacy of the Small Business Administration. Comments are
invited. Comments from small entities concerning the affected FAR
subparts will be considered in accordance with Section 610 of the
Regulatory Flexibility Act. Such comments must be submitted separately
and cite FAR Case 97-603 in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (Pub. L. 104-13) applies
because the proposed rule contains reporting and recordkeeping
requirements. This proposed rule provides two means by which a firm can
apply for an evaluation preference. Under the first process,
prequalification with the DoC, a firm may submit information to DoC
under rules being developed by that agency and receive a qualification
certification which will be valid for the period of time determined by
DoC. When competing for Federal contracts, these firms need only show
that they are prequalified in order to receive the preference.
Firms that are not prequalified may self-certify on individual
solicitations. Under self-certification, a firm must indicate how it
will qualify against the stated empowerment criteria, report on its
actual performance against those criteria, and grant the Government
certain audit rights.
A request for approval of the paperwork burden has been submitted
to the Office of Management and Budget and a notice of that request
appears elsewhere in this issue.
List of Subjects in 48 CFR Parts 12, 14, 15, 26, 36, and 52
Government procurement.
Dated: April 14, 1997.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, 48 CFR Parts 12, 14, 15, 26, 36, and 52 are proposed to
be amended as follows:
1. The authority citation for 48 CFR 12, 14, 15, 26, 36, and 52
continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. Chapter 137; and 42
U.S.C. 2473(c).
PART 12--COMMERCIAL ITEMS
2. Section 12.301 is amended by adding paragraph (g) to read as
follows:
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(g) Empowerment Contracting Program. The contracting officer shall
[[Page 19201]]
ensure that solicitations and contracts subject to the Empowerment
Contracting Program (see subpart 26.4) include the appropriate
solicitation provisions and contract clauses (see 26.409).
PART 14--SEALED BIDDING
3. Section 14.206 is revised to read as follows:
14.206 Small business set-asides and the Empowerment Contracting
Program.
See part 19 for small business set-asides, and part 26 for the
Empowerment Contracting Program.
PART 15--CONTRACTING BY NEGOTIATION
4. Section 15.605 is amended by adding paragraph (b)(1)(v) to read
as follows:
15.605 Evaluation factors and subfactors.
* * * * *
(b)(1) * * *
(v) For acquisitions subject to subpart 26.4, Empowerment
Contracting Program, a 10 percent price evaluation preference shall be
used in acquisitions when cost or price is a significant evaluation
factor; a non-price empowerment contracting evaluation factor shall be
used when price or cost is not a significant evaluation factor (see
subpart 26.4).
* * * * *
5. Section 15.1003 is amended by adding paragraph (a)(3) to read as
follows:
15.1003 Notifications to unsuccessful offerors.
(a) * * *
(3) Preaward notices for the Empowerment Contracting Program. When
the apparently successful offeror has received an empowerment
contracting preference (see subpart 26.4) that was the determining
factor in its selection, upon completion of negotiations and
determinations of responsibility, but prior to award, the contracting
officer shall notify each unsuccessful offeror in writing of the name
and location of the apparently successful offeror. The notice shall
indicate whether the apparently successful offeror represented itself
as prequalified or self-certified, and shall indicate the type of
prequalification or self-certification. The notice also shall state
that--
(i) The Government will not consider subsequent revisions of the
unsuccessful offeror's proposal; and
(ii) No response is required unless a basis exists to challenge the
empowerment contracting status of the apparently successful offeror.
The notice is not required when the contracting officer determines in
writing that the urgency of the requirement necessitates award without
delay.
* * * * *
PART 26--OTHER SOCIOECONOMIC PROGRAMS
6. Part 26 is amended by adding subpart 26.4 to read as follows:
Subpart 26.4--Empowerment Contracting Program
26.401 General.
26.402 Definitions.
26.403 Status as a qualified business.
26.404 Protesting a firm's status as a qualified business.
26.405 Applicability.
26.406 Preferences.
26.406-1 Price evaluation preference.
26.406-2 Non-price evaluation factor.
26.407 Contractor obligations.
26.408 Agency reporting requirements.
26.409 Solicitation provisions and contract clauses.
26.401 General.
This subpart implements Executive Order 13005, Empowerment
Contracting. The Order provides for procurement preferences in certain
acquisition categories to encourage business activity by both large and
small businesses in areas of general economic distress. The program
that is described in this subpart represents phase one of a phased
implementation that will likely be amended following the evaluation of
its results. The planned duration of phase one of the program is 18
months following the issuance of an interim or final FAR rule. The head
of the agency shall select the contracting activities that will
participate in phase one. The head of the agency shall select a
sufficient number of contracting activities such that approximately 25
percent (in terms of dollars) of the applicable acquisitions awarded
during phase one of the program, in each of the applicable Standard
Industrial Classification (SIC) major groups (see 26.405), are subject
to an empowerment contracting preference.
26.402 Definitions.
``Qualified business,'' as used in this subpart, means a for-profit
or not-for-profit business concern that has represented itself as
prequalified by the Department of Commerce for the Empowerment
Contracting Program or has self-certified to specific definitions in
accordance with the clause at 52.226-3, Empowerment Contracting--
Qualified Business Status.
26.403 Status as a qualified business.
(a) Size. The appropriate size standard for each acquisition shall
be established consistent with 19.102. Notwithstanding the definition
of business or concern at 13 CFR 121.403, the size standard for each
acquisition shall also apply to not-for-profit entities.
(b) Qualification process. In order to qualify for the procurement
preferences of this subpart, a business concern may obtain status as a
qualified business through either prequalification by the Department of
Commerce (DoC) or self-certification on a solicitation-by-solicitation
basis. Prequalification may be used when a business concern believes
that it already meets the qualification criteria established by DoC (XX
CFR Part XXX). Self-certification may be used when a business concern
can meet established criteria during the period of performance of a
contract (see 52.226-3). If a business concern is prequalified, it is
entitled to receive preferences for the effective period of its
prequalification. If a business concern chooses to qualify by self-
certifying, it must grant the Government certain audit rights and shall
be required to pay the amount of any premium paid due to an empowerment
contracting preference should it not fulfill its promises.
Prequalification by DoC will be conducted according to DoC regulations
at XX CFR Part XXX. Offerors shall represent to the contracting officer
whether they have obtained prequalification from DoC in the clause at
52.226-3. Self-certification also shall be accomplished using the
clause at 52.226-3. For an apparently successful offeror that
represented itself as prequalified or self-certified, the contracting
officer shall ensure that the offeror is not listed on DoC's List of
Ineligible Contractors for Empowerment Contracting Preferences by
accessing DoC's website at [insert URL].
26.404 Protesting a firm's status as a qualified business.
This section applies to protests of a business concern's status as
a qualified business. Protests of a concern's size shall be processed
in accordance with 19.302. Issues related to the Empowerment
Contracting Program, other than size, shall be resolved in accordance
with the procedures in this section. If a protest includes both size
and other issues, the protest shall be processed concurrently under the
procedures in 19.302 and this section. Any offeror, the contracting
officer, or the DoC may protest the apparently successful offerors
prequalified status or self-certification.
[[Page 19202]]
(a) An offeror may protest a concern's prequalified status or self-
certification by filing a protest with the contracting officer. The
protest--
(1) Must be filed within the times specified in paragraph (b) of
this section; and
(2) Must contain specific detailed evidence supporting the basis of
protest.
(b) In order to affect a specific solicitation, a protest must be
timely.
(1) To be timely, a protest by an interested party must be received
by the contracting officer by the close of business on the 5th business
day after bid opening (in sealed bid acquisitions) or by the close of
business on the 5th business day after receipt of the notification from
the contracting officer that identifies the apparently successful
offeror (in negotiated acquisitions) (see 15.1003(a)(3)).
(i) An oral protest must be confirmed in writing. The written
confirmation must be delivered to the contracting officer within the 5-
day period or sent by U.S. mail postmarked no later than one day after
the oral protest.
(ii) A written protest must be delivered to the contracting officer
within the 5-day period, or sent by U.S. mail postmarked within the 5-
day period.
(2) A contracting officer's protest is always considered timely
whether filed before or after award.
(c) The contracting officer or the DoC may protest a concern's
prequalified status or self-certification at any time.
(1) If a contracting officer's protest is based on information
provided by a party ineligible to protest directly or ineligible to
protest under the timeliness standard, the contracting officer must be
persuaded by the evidence presented before adopting the grounds for
protest as his or her own.
(2) The DoC may protest a concern's prequalified status or self-
certification by filing directly with its Office of XXXXX and notifying
the contracting officer.
(d) The contracting officer shall return untimely protests to the
protestor, including protests filed before bid opening or notification
of the apparently successful offeror.
(e) Upon receipt of a timely protest, the contracting officer shall
withhold award and forward the protest to the DoC Office of XXXXX, 14th
and Constitution Ave. NW, Washington, DC 20230. The contracting officer
shall send to DoC--
(1) The protest;
(2) The date the protest was received and a determination of
timeliness;
(3) A copy of the protested concern's submittals regarding
prequalified status or self-certification; and
(4) The date of bid opening or date on which notification of the
apparently successful offeror was sent to unsuccessful offerors.
(f) When the contracting officer makes a written determination that
award must be made to protect the public interest, award may be made
notwithstanding the protest.
(g) The DoC, Office of XXXXX, will determine the qualification
status of the challenged offeror and will notify the contracting
officer, the challenged offeror, and the protestor. Award may be made
on the basis of that determination. The determination is final for
purposes of the instant acquisition, unless--
(1) It is appealed; and
(2) The contracting officer receives the DoC's decision on the
appeal before award.
(h) If the contracting officer does not receive a DoC determination
within 15 business days after the DoC's receipt of the protest, the
contracting officer shall presume that the challenged offeror's
prequalified status or self-certification is valid.
(i) A DoC determination may be appealed by--
(1) The interested party whose protest has been denied;
(2) The concern whose status was protested; or
(3) The contracting officer. The appeal must be filed with the
DoC's Office of XXXXX within five business days after receipt of the
determination.
26.405 Applicability.
(a) Except as stated in paragraph (b) of this section, the
empowerment contracting preferences shall be applied in competitive
acquisitions, at contracting activities designated by the head of the
agency, in the following Standard Industrial Classification (SIC) Major
Groups:
15 Building Construction-General Contractors and Operative
Builders;
20 Food and Kindred Products;
23 Apparel and Other Finished Products Made from Fabrics and
Similar Materials;
25 Furniture and Fixtures;
27 Printing, Publishing, and Allied Industries;
30 Rubber and Miscellaneous Plastic Products;
34 Fabricated Metal Products, Except Machinery and Transportation
Equipment;
42 Motor Freight Transportation and Warehousing;
51 Wholesale Trade-Nondurable Goods;
73 Business Services; and
87 Engineering, Accounting, Research, Management, and Related
Services.
(b) Do not use the empowerment contracting preferences in
acquisitions that--
(1) Are not greater than the simplified acquisition threshold;
(2) Are set-aside for small business concerns;
(3) Are awarded pursuant to the 8(a) program;
(4) Are awarded to required sources of supply under part 8 (e.g.,
Federal Prison Industries, Committee for Purchase from People Who are
Blind or Severely Disabled, and Federal Supply Schedule Contracts); or
(5) Will be performed entirely outside of any State, territory, or
possession of the United States, the District of Columbia, and the
Commonwealth of Puerto Rico.
26.406 Preferences.
For each acquisition subject to this subpart, the contracting
officer shall use a 10 percent price evaluation preference or a non-
price evaluation factor. When the non-price evaluation factor is used,
and the source selection uses a numerical rating system, the non-price
evaluation factor for empowerment contracting may be given a weight of
up to 15 percent. The Empowerment Contracting Program shall not
displace the agencies' authority or responsibilities, as authorized by
law, regarding any other programs designed to promote the development
of small, small disadvantaged, or woman-owned small businesses.
Accordingly, any preference a business receives under this program
shall be added to the preference it may receive pursuant to other
statutory or regulatory programs.
26.406-1 Price evaluation preference.
(a) Policy. A price evaluation preference of 10 percent shall be
used in acquisitions subject to this subpart when price or cost is a
significant evaluation factor.
(b) Procedures. (1) The contracting officer shall--
(i) Give offers from qualified businesses a price evaluation
preference by adding ten percent to all offers, except offers from
qualified businesses;
(ii) Apply the preference on a line item basis or apply it to any
group of items on which award may be made; and
(iii) Add other evaluation factors such as transportation costs or
rent-free use of Government facilities to the offers before applying
the price evaluation preference.
(2) This preference shall be additive along with any other price
evaluation preferences. Preferences shall not be calculated based on an
offer with
[[Page 19203]]
another preference added, but rather on the base offer alone. For
example, if an acquisition is subject to this subpart and a price
evaluation preference or adjustment for small disadvantaged business
concerns, each of the preferences shall be applied to the initial
offers and the preferences combined to arrive at total evaluated
prices.
26.406-2 Non-price evaluation factor.
A non-price evaluation factor shall be used in acquisitions when
price or cost is not a significant evaluation factor. The contracting
officer shall ensure that the factor will be given sufficient weight to
be meaningful when source selection is made on a best value basis. When
the non-price evaluation factor is used, and the source selection uses
a numerical rating system, the non-price evaluation factor for
empowerment contracting may be given a weight of up to 15 percent. The
solicitation shall describe the empowerment contracting non-price
evaluation factor.
26.407 Contractor obligations.
(a) All qualified business contractors shall comply with the
limitations on subcontracting specified in the clause at 52.226-5.
(b) Contractors that qualify by self-certification--(1) Reporting
requirement. Not later than 30 days after completion of the contract,
the contractor shall submit a report to the contracting officer that
documents its compliance or failure to comply with the criteria by
which the contractor self-certified its status as a qualified business.
(2) Government right to audit. The contracting officer, or an
authorized representative of the contracting officer, shall have the
right to examine and audit all of the contractor's records necessary to
determine whether the contractor complied with the terms of the self-
certification. ``Records'' includes books, documents, accounting
procedures and practices, and other data, regardless of type and
regardless of whether such items are in written form, in the form of
computer data, or in any other form.
(3) Failure to comply with the terms of the self-certification. In
addition to other remedies available to the Government, the following
apply:
(i) Preference recoupment. When a contractor does not comply with
the terms of a self-certification, the Government shall require a
preference recoupment. If the contracting officer finds that the
contractor failed to comply with the terms of the self-certification,
the contracting officer shall issue a final decision to the contractor
to that effect and require recoupment of the dollar amount of the
premium paid by the Government due to an empowerment contracting
preference. The contracting officer's final decision shall state that
the contractor has the right to appeal under the clause in the contract
entitled Disputes. Preference recoupments shall be in addition to any
other remedies that the Government may have.
(ii) List of Ineligible Contractors for the Empowerment Contracting
Program. If the contracting officer suspects that the contractor failed
to make a good faith effort to comply with the terms of its self-
certification, the matter shall be referred to DoC's Office of XXXXX
for a determination on whether the contractor should be included on the
List of Ineligible Contractors for Empowerment Contracting Program.
This is in addition to other remedies, including suspension, debarment,
and ineligibility under Part 9.
26.408 Agency reporting requirements.
Each agency shall submit to the DoC Office of XXXXX, 14th and
Constitution Ave. NW, Washington, DC 20230, a report covering each
fiscal year in which it has conducted procurements under the
Empowerment Contracting Program described in this subpart. The report
shall be submitted within three months after the end of the fiscal year
and shall contain the following information:
(a) The number and dollar amount of solicitations in which an
empowerment contracting preference was offered. This information will
be broken down by SIC Major Group and by the use of the 10 percent
price evaluation preference and non-price evaluation factor;
(b) The contract numbers, dollar amounts, names of awardees, and
price premiums paid (if identifiable) for awards made as a result of an
empowerment contracting preference. This information will be broken
down by SIC Major Group.
(c) Comments on the advantages and disadvantages of the Empowerment
Contracting Program, including comments on whether the program had any
impact on the quality of supplies and services procured through its
use.
26.409 Solicitation provisions and contract clauses.
(a) The contracting officer shall insert the clause at 52.226-3,
Empowerment Contracting--Qualified Business Status, in solicitations
and contracts that include an empowerment contracting preference.
(b) The contracting officer shall insert the provision at 52.226-4,
Empowerment Contracting--Notice of Price Evaluation Preference, in
solicitations that include an empowerment contracting price evaluation
preference.
(c) The contracting officer shall insert the clause at 52.226-5,
Empowerment Contracting--Contractor Obligations, in solicitations and
contracts that include an empowerment contracting preference. The
clause shall be used with its Alternate I when the contracting officer
believes that the amount of the preference recoupment should be
specified in the contract.
PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
7. 36.602-1 is amended by adding paragraph (a)(8) to read as
follows:
36.602-1 Selection criteria.
(a) * * *
(8) Status as a qualified business, if the acquisition is subject
to subpart 26.4, Empowerment Contracting.
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
8. Part 52 is amended by adding 52.226-3, 52.226-4, and 52.226-5 to
read as follows:
52.226-3 Empowerment Contracting--Qualified Business Status.
As prescribed in 26.409(a), use the following clause:
EMPOWERMENT CONTRACTING--QUALIFIED BUSINESS STATUS (XXX 1997)
(a) Definitions. As used in this clause--
``Area of general economic distress'' means, for all urban and
rural communities, any census tract that has a poverty rate of at
least 20 percent or any designated Federal Empowerment Zone,
Supplemental Empowerment Zone, Enhanced Enterprise Community, or
Enterprise Community. It also means any rural area or Indian
reservation that currently meets the criteria for designation as a
redevelopment area under section 401(a) of the Public Works and
Economic Development Act of 1965, as amended (42 U.S.C. 3161(a)), as
set forth at 13 CFR 301.2 (loss of population), 13 CFR 301.4 (Indian
Lands), and 13 CFR 301.7 (special impact areas). Note: These areas
have been identified by the Department of Commerce (DoC) and are
available on the DoC website at [enter URL].
``Area of severe economic distress'' means any census tract that
has a poverty rate of at least 50 percent. Note: These areas have
been identified by DoC and are available on the DoC website at
[enter URL].
(b) General. This clause is used to assess an offeror's
qualified status for the purpose of obtaining an empowerment
contracting preference for this acquisition. Status as a
[[Page 19204]]
small business is covered by 52.219-1, Small Business Program
Representations or 52.212-3, Offeror Representations and
Certifications--Commercial Items. An offeror claiming qualified
business status must either represent that it has obtained
prequalification from DoC or certify to specified definitions. (The
offeror shall check one of the following.)
____ The offeror is claiming qualified business status on the basis
of prequalification by DoC (the offeror must complete subparagraph
(b)(1)).
____ The offeror is claiming qualified business status on the basis
of self-certification to specified definitions (the offeror must
complete subparagraph (b)(2)).
(1) Prequalification by the Department of Commerce. If DoC has
prequalified the offeror as meeting one or more of the definitions
for qualification (see XX CFR XXX), the offeror shall provide a copy
of its current prequalification certificate with its offer. Based on
its current prequalification certificate and the size standard
applicable to this acquisition, the offeror represents its status as
a (the offeror shall check one of the following):
____ Qualified small business.
____ Qualified large business in areas of general economic distress.
____ Qualified business in areas of severe economic distress.
(2) Self-certification. The offeror certifies, as part of its
offer, that it meets the definitions of qualified small business,
qualified large business in areas of general economic distress, or
qualified business in areas of severe economic distress for the
Standard Industrial Classification (SIC) Major Group of this
acquisition (the offeror shall check the applicable criterion or
criteria):
____ (i) Qualified small business (check one of the following).
____ The contractor will pay, during the period of performance of
the contract, at least 25 percent of its total wages and benefits to
residents from areas of general economic distress; or
____ The contractor will maintain, during the period of performance
of the contract, physical plant(s) in areas of general economic
distress where at least 25 percent of its employees will perform
their jobs (employees will be considered to perform their jobs at
the location where they spend the most time working, as long as it
is at least six hours per work week); or
____ The contractor will incur, during the period of performance of
the contract, at least 25 percent of its expenses on goods,
materials, and services from firms located in areas of general
economic distress.
____ (ii) Qualified large business in areas of general economic
distress. The contractor will pay, during the period of performance
of the contract, at least 25 percent of its total wages and benefits
to residents from areas of general economic distress; and at least
one of the following:
____ The contractor will maintain, during the period of performance
of the contract, physical plant(s) in areas of general economic
distress where at least 25 percent of its employees will perform
their jobs (employees will be considered to perform their jobs at
the location where they spend the most time working, as long as it
is at least six hours per work week); or
____ The contractor will pay, during the period of performance of
the contract, at least 50 percent of its total wages and benefits to
residents from areas of general economic distress; or
____ The contractor will incur, during the period of performance of
the contract, at least 25 percent of its expenses on goods,
materials, and services from firms located in areas of general
economic distress.
____ (iii) Qualified business in areas of severe economic distress
(check one of the following).
____ The contractor will pay, during the period of performance of
the contract, at least 25 percent of its total wages and benefits to
residents from areas of severe economic distress; or
____ The contractor will maintain, during the period of performance
of the contract, physical plant(s) in areas of severe economic
distress where at least 25 percent of its employees will perform
their jobs (employees will be considered to perform their jobs at
the location where they spend the most time working, as long as it
is at least six hours per work week); or
____ The contractor will incur, during the period of performance of
the contract, at least 25 percent of its expenses on goods,
materials, and services from firms located in areas of severe
economic distress.
(End of clause)
52.226-4 Empowerment Contracting--Notice of Price Evaluation
Preference.
As prescribed in 26.409(b), use the following provision:
EMPOWERMENT CONTRACTING--NOTICE OF PRICE EVALUATION PREFERENCE (XXX
1997)
(a) Definition.
``Qualified business,'' as used in this provision, means a for-
profit or not-for-profit business concern that has represented
itself as prequalified by the Department of Commerce for the
Empowerment Contracting Program or has self-certified to specific
definitions in accordance with the clause at 52.226-3, Empowerment
Contracting--Qualified Business Status.
(b) Evaluation preference.
(1) Offers will be evaluated by adding a factor of ten percent
to the price of all offers, except offers from qualified businesses.
(2) The preference shall be applied on a line item basis or to
any group of items on which award may be made. Other evaluation
factors described in the solicitation shall be applied before
application of the factor described in paragraph (b)(1) of this
provision.
(3) This preference is additive along with any other price
evaluation preferences. Preferences shall not be calculated based on
an offer with another preference added, but rather on the base offer
alone.
(End of provision)
52.226-5, Empowerment Contracting--Contractor Obligations.
As prescribed in 26.409(a), use the following clause:
EMPOWERMENT CONTRACTING--CONTRACTOR OBLIGATIONS (XXX 1997)
This clause applies to Contractors that claim qualified business
status under the Empowerment Contracting Program.
(a) Limitations on subcontracting. The Contractor agrees that in
performance of this contract in the case of a contract for--
(1) Services, except construction, at least 50 percent of the
cost of personnel for contract performance will be spent for
employees of the concern.
(2) Supplies, at least 50 percent of the cost of manufacturing,
excluding the cost of materials, will be performed by the concern.
(3) General construction, at least 15 percent of the cost of the
contract, excluding the cost of materials, will be performed by
employees of the concern.
(4) Construction by special trade contractors, at least 25
percent of the cost of the contract, excluding the cost of
materials, will be performed by employees of the concern.
(b) Additional requirements. This paragraph applies if the
Contractor self-certified its status as a qualified business in the
clause at 52.226-3, Empowerment Contracting--Qualified Business
Status.
(1) Reporting requirement. Not later than 30 days after the
completion of this contract, the Contractor shall submit a report to
the Contracting Officer that documents its compliance or failure to
comply with the criteria by which the Contractor self-certified its
status as a qualified business.
(2) Government right to audit. The Contracting Officer, or an
authorized representative of the Contracting Officer, shall have the
right to examine and audit all of the Contractor's records necessary
to determine whether the Contractor complied with the terms of its
self-certification. ``Records'' includes books, documents,
accounting procedures and practices, and other data, regardless of
type and regardless of whether such items are in written form, in
the form of computer data, or in any other form.
(3) Failure to comply with the terms of the self-certification--
(i) Preference recoupment. If the Contractor does not comply with
the terms of the self-certification, the Government shall require a
preference recoupment. If the Contracting Officer finds that the
Contractor failed to comply with the terms of the self-
certification, the Contracting Officer shall issue a final decision
to the Contractor to that effect and unilaterally reduce the price
of the contract by the dollar amount of the premium paid by the
Government due to an empowerment contracting preference. The
Contractor has the right to appeal the Contracting Officer's
[[Page 19205]]
final decision in accordance with the Disputes clause of this
contract. Preference recoupment shall be in addition to any other
remedies that the Government may have.
(ii) List of Ineligible Contractors for the Empowerment
Contracting Program. If the Contracting Officer suspects that the
Contractor failed to make a good faith effort to comply with the
terms of its self-certification, the Contracting Officer shall refer
the Contractor to Department of Commerce's Office of XXXXX for a
determination on whether or not the contractor should be included on
the List of Ineligible Contractors for Empowerment Contracting
Program.
(End of clause)
Alternate I (XXX 1997). As prescribed in 26.409(c), substitute
the following paragraph (b)(3)(i) for paragraph (b)(3)(i) of the
basic clause:
(i) Preference recoupment. If the Contractor does not comply
with the terms of the self-certification, the contract price shall
be reduced by an amount equal to ______ (Contracting Officer shall
insert an amount equal to the dollar amount of the premium paid by
the Government due to an empowerment contracting preference). If the
Contracting Officer finds that the Contractor failed to comply with
the terms of the self-certification, the Contracting Officer shall
issue a final decision to the Contractor to that effect, reduce the
contract price, and require payment of the preference recoupment in
the amount stated in this paragraph. The Contractor has the right to
appeal the Contracting Officer's final decision in accordance with
the Disputes clause of this contract. Preference recoupment shall be
in addition to any other remedies that the Government may have.
[FR Doc. 97-10060 Filed 4-17-97; 8:45 am]
BILLING CODE 6820-EP-P
