DATE: June 23, 2000

FROM: Barry McVay, CPCM

SUBJECT: Environmental Protection Agency Acquisition Regulation (EPAAR); Business Ownership Representation

SOURCE: Federal Register, June 23, 2000, Vol. 65, No. 122, page 39115

AGENCIES: Environmental Protection Agency (EPA)

ACTION: Proposed Rule

SYNOPSIS: EPA is proposing to add to the EPAAR a clause that would request the successful awardee of an EPA contract to voluntarily identify the specific racial or ethnic category that best represents the ownership of its business.

EDITOR'S NOTE: The EPA Acquisition Regulation (EPAAR) is Chapter 15 of Title 48 of the Code of Federal Regulations. It is available on the Internet at http://www.epa.gov/oamrfp12/ptod/epaar.pdf.

DATES: Submit comments no later than August 22, 2000.

ADDRESSES: Submit comments to U.S. Environmental Protection Agency, Office of Acquisition Management (3802R), 1200 Pennsylvania Avenue, NW, Washington, DC 20460. Comments will also be accepted on disks in WordPerfect format or by (e-mail) to: smith.frances@epamail.epa.gov.

FOR FURTHER INFORMATION CONTACT: Frances Smith, U.S. Environmental Protection Agency, Office of Acquisition Management, 202-564-4368.

SUPPLEMENTAL INFORMATION: EPA proposes to add to the EPAAR a new clause 1552.204-70, Business Ownership Representation, which would be required in all solicitations and contracts over the $100,000 simplified acquisition threshold. This clause would ask the successful awardee to voluntarily identify the predominant racial or ethnic category of the owners. The categories are very similar to those in Alternate II of Federal Acquisition Regulation (FAR) 52.219-1, Small Business Program Representation, which is used the Department of Defense, the National Aeronautics and Space Administration, and the Coast Guard in solicitations expected to exceed $25,000: American Indian or Alaska Native; Asian; Black or African American; Hispanic or Latino; Native Hawaiian or Other Pacific Islander; or White.

EPA says that the purpose of the clause is to "provide statistical data concerning awards made by EPA to businesses owned by various racial/ethnic groups. The identification of these groups will help EPA target future outreach initiatives to those businesses owned by racial/ethnic groups who are unaware of EPA contracting opportunities." In addition, EPA says these outreach initiatives would be open to large businesses as well as small, and to the general public.

EDITOR'S NOTE: This seems to be another attempt to get around the Supreme Court's 1995 Adarand decision, which limited racial preference programs to "narrowly tailored measures that further compelling governmental interests." That decision wiped out the blanket preference programs accorded any small disadvantaged business. In response, the government produced the Small Business Administration's (SBA) small disadvantaged business certification process and the convoluted programs in FAR Subpart 19.11, Price Evaluation Adjustment for Small Disadvantaged Business Concerns, and FAR Subpart 19.12, Small Disadvantaged Business Participation Program, which apply only to industries with "persistent and significant underutilization of minority firms...attributable to past or present discrimination." To determine which industries have this "persistent and significant underutilization," the Department of Commerce performs all sorts of statistical gathering and analysis.

But this apparently isn't good enough for EPA. FAR 52.219-1, which merely permits the bidder or offeror to represent itself as a small disadvantaged business "for general statistical purposes", does not provide sufficient information for it to "target" its outreach efforts. So EPA wants its contractors to "voluntarily" identify their ownership by racial and ethnic category, then EPA can target the racial and ethnic categories that are not getting their share of EPA business.

Is EPA going to use this information to decide that native Hawaiians are not getting a proper percentage of EPA contract awards? Who is going to decide what is the "proper percentage"? And "proper percentage" of what -- contracts in New York City? And how does EPA propose "targeting" native Hawaiians to bid on New York City contracts? And is the native Hawaiian percentage proper when compared to blacks or Hispanics? There doesn't seem to be much point in this, especially since the SBA negotiates "small disadvantaged business" goals with each agency, not "Hispanic" or "Black" or "Native Hawaiian" goals.

Of course, furnishing this information is "voluntary." But is EPA going to consider the refusal to provide such information a demerit when it assesses "business cooperation" in its past performance evaluations?

Finally, if EPA has such a need for such information, it seems reasonable to assume that other agencies need the information, so why doesn't EPA submit this as a proposed FAR change?

Too many questions, and not enough answers in this proposed rule.

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

Copyright 2000 by Panoptic Enterprises. All Rights Reserved.

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