OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
Small Disadvantaged Business Procurement: Reform of Affirmative Action in
Federal Procurement
AGENCY: Office of Federal Procurement Policy (OFPP)
ACTION: Notice of Determination Concerning the Price Evaluation Adjustment Program and the Small Disadvantaged
Business (SDB) Participation Program
SUMMARY: The Federal Acquisition Regulation (FAR), 48 CFR Subparts 19.11 and 19.12 contain procurement
mechanisms applicable to the SDB reform program. FAR Subpart 19.11 permits eligible SDBs to receive price evaluation
adjustments in Federal procurement programs. FAR Subpart 19.12 provides for an SDB participation program that
evaluates the extent of participation of SDB concerns in contract performance. The FAR provides further that the
Department of Commerce will determine on an annual basis the price evaluation adjustment by standard industrial
classification (SIC) major groups for the price evaluation adjustment program and the authorized SIC major groups for the
SDB participation program.
The Commerce Department, in the attached memorandum, determines that for fiscal year 2000 the price evaluation
adjustment and the authorized SIC major groups are the same as used in fiscal year 1999. The OFPP notice of June 30, 1998
(63 Fed. Reg. 35714) includes the Commerce determination for fiscal year 1999 of the price evaluation adjustment by SIC
major groups for the price evaluation adjustment program. Subsequently, OFPP published on December 29, 1998 (63 Fed.
Reg. 71724) the Commerce determination of authorized SIC major groups for the SDB participation program which were
the same SIC major groups applicable to the price evaluation adjustment program.
EFFECTIVE DATE: September 30, 1999
FOR FURTHER INFORMATION CONTACT: Michael Gerich, Deputy Associate Administrator, Office of Federal
Procurement Policy, Telephone, 202-395-3501. For information on the Commerce determination, contact Jeffrey Mayer,
Director of Policy Development, Economics and Statistics Administration, U.S. Department of Commerce, Telephone
202-482-1728.
SUPPLEMENTARY INFORMATION
PROCUREMENT MECHANISMS AND FACTORS
FAR Subparts 19.11 and 19.12 contain procurement mechanisms applicable to the SDB reform program. FAR Subpart
19.11 provides for the use of a price evaluation adjustment for eligible SDBs. FAR Subpart 19.12 provides for an SDB
participation program that consists of two mechanisms: (1) an evaluation factor or subfactor for evaluating the extent of
participation of SDBs in performance of the contract; and (2) an incentive subcontracting program for exceeding SDB
participation targets. OFPP gives notice that the attached memorandum from the Commerce Department determines that for
fiscal year 2000 the price evaluation adjustment and the authorized SIC major groups are the same as used in fiscal year
1999. (See 63 Fed. Reg. 35714 (June 30, 1998) for the price evaluation adjustment and the listing of the eligible SIC major
groups applicable in fiscal year 1999.) This determination affects solicitations issued on or after October 1, 1999.
Deidre A. Lee
Administrator
Attachment
MEMORANDUM FOR OFFICE OF FEDERAL PROCUREMENT POLICY
FROM: |
Jeffrey L. Mayer
Director of Policy Development |
| |
SUBJECT: |
Determination on the Price Evaluation Adjustment for Small Disadvantaged Business Concerns and the Small
Disadvantaged Business Participation Program for FY 2000 |
Pursuant to Federal Acquisition Regulation paragraph 19.201(b) and subparts 19.11 and 19.12, transmitted herein is the
Department of Commerce (DOC) determination on the Price Evaluation Adjustments for Small Disadvantaged Business
Concerns and the Small Disadvantaged Business Participation Program for use in Federal procurements in FY 2000.
DOC transmitted a Notice of Determination Concerning Price Evaluation Adjustments to the Office of Federal Procurement
Policy, which was published in the Federal Register on June 30, 1998 (see 63 Fed. Reg. 35714 (1998)). The Notice
identified the standard industrial classification (SIC) major industry groups in which offers by small disadvantaged businesses
on certain federal prime contracts would be eligible for ten percent price evaluation adjustments in FY 1999. In addition,
DOC transmitted a Notice of Determination Concerning the Small Disadvantaged Business Participation Program to the
Office of Federal Procurement Policy, which was published in the Federal Register on December 29, 1998 (see 63 Fed.
Reg. 71724 (1998)). In both cases, the determinations were based on DOC's benchmark and utilization estimates derived
from FY 1996 data.
In order to develop new benchmarks and utilization estimates for its FY 2001 determination, DOC plans to collect and
analyze FY 1999 data along the lines of the methodology outlined in the June 30, 1998 Notice. The determination based on
the resulting estimates will be published in June 2000 and will take effect on October 1, 2000. Based on its assessment of the
consistency in recent federal procurement patterns, DOC proposes to develop new benchmarks and utilization estimates
every three years. DOC will monitor procurement annually to see if benchmarks and utilization estimates should be updated
more frequently than every three years.
DOC's determination of industries eligible for both the Price Evaluation Adjustment for Small Disadvantaged Business
Concerns and the Small Disadvantaged Business Participation Program for FY 2000 is the same as its determination for FY
1999 and is reproduced in the table below.
Industries Eligible for a Ten Percent Price Evaluation Adjustment and the Small
Disadvantaged Business Participation Program |
SIC Major
Industry
Group |
Eligibility
(*) |
Description of Industry Grouping |
AGRICULTURE, FORESTRY, AND FISHING |
01 |
|
Agricultural production -- crops |
02 |
|
Agricultural production -- livestock |
07 |
|
Agricultural services |
08 |
|
Forestry |
09 |
|
Fishing, hunting, & trapping |
MINING |
10 |
* |
Metal mining |
12 |
* |
Coal mining |
13 |
* |
Oil & gas extraction |
14 |
* |
Extraction of nonmetallic minerals, ex. Fuels |
CONSTRUCTION |
15 |
|
Building construction -- general contractors |
15 |
* |
East North Central |
15 |
* |
East South Central |
15 |
* |
Middle Atlantic |
15 |
|
Mountain |
15 |
|
New England |
15 |
|
Pacific |
15 |
|
South Atlantic |
15 |
|
West North Central |
15 |
* |
West South Central |
16 |
|
Heavy construction other than buildings -- contractors |
16 |
|
East North Central |
16 |
* |
East South Central |
16 |
|
Middle Atlantic |
16 |
|
Mountain |
16 |
|
New England |
16 |
|
Pacific |
16 |
|
South Atlantic |
16 |
|
West North Central |
16 |
* |
West South Central |
17 |
|
Construction -- special trade contractors |
17 |
|
East North Central |
17 |
|
East South Central |
17 |
|
Middle Atlantic |
17 |
|
Mountain |
17 |
* |
New England |
17 |
|
Pacific |
17 |
|
South Atlantic |
17 |
* |
West North Central |
17 |
|
West South Central |
MANUFACTURING |
20 |
|
Food & kindred products |
21 |
|
Tobacco products |
22 |
* |
Textile mill products |
23 |
* |
Apparel & other finished products made from fabrics |
24 |
* |
Lumber & wood products, ex. Furniture |
25 |
* |
Furniture & fixtures |
26 |
* |
Paper & allied products |
27 |
* |
Printing, publishing, & allied industries |
28 |
* |
Chemicals & allied products |
29 |
* |
Petroleum refining & related industries |
30 |
* |
Rubber & miscellaneous plastics products |
31 |
* |
Leather & leather products |
32 |
|
Stone, clay, glass, & concrete products |
33 |
|
Primary metal industries |
34 |
* |
Fabricated metal products |
35 |
|
Industrial & commercial machinery & computer equipment |
36 |
* |
Electronic & other electrical equipment & components, ex. Computers |
37 |
* |
Transportation equipment |
38 |
* |
Measuring, analyzing, & controlling instruments; photographic, medical & optical
goods; watches & clocks |
39 |
* |
Miscellaneous manufacturing industries |
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS, SANITARY SERVICES |
40 |
|
Railroad transportation |
41 |
* |
Local & suburban transit & interurban highway passenger transportation |
42 |
* |
Motor freight transportation & warehousing |
44 |
* |
Water transportation |
45 |
|
Transportation by air |
46 |
* |
Pipelines, exc. natural gas |
47 |
* |
Transportation services |
48 |
* |
Communications |
49 |
* |
Electric, gas, & sanitary services |
WHOLESALE TRADE |
50 |
* |
Wholesale trade -- durable goods |
51 |
* |
Wholesale trade -- nondurable goods |
RETAIL TRADE |
52 |
* |
Building materials, hardware, garden supply, & mobile home dealers |
53 |
* |
General Merchandise stores |
54 |
* |
Food stores |
55 |
* |
Automotive dealers & gasoline service stations |
56 |
* |
Apparel & accessory stores |
57 |
* |
Home furniture, furnishings, & equipment stores |
58 |
* |
Eating & drinking places |
59 |
* |
Miscellaneous retail |
FINANCE, INSURANCE, AND REAL ESTATE |
60 |
* |
Depository institutions |
61 |
* |
Nondepository adjustment institutions |
62 |
* |
Security & commodity brokers, dealers, exchanges, & services |
63 |
* |
Insurance carriers |
64 |
* |
Insurance agents, brokers, & services |
65 |
* |
Real estate |
67 |
* |
Holding & other investment offices |
SERVICES |
70 |
* |
Hotels, rooming houses, camps, & other lodging places |
72 |
|
Personal services |
73 |
* |
Business services |
75 |
* |
Automotive repair, services, & parking |
76 |
* |
Miscellaneous repair services |
78 |
|
Motion pictures |
79 |
|
Amusement & recreation services |
80 |
* |
Health services |
81 |
|
Legal services |
82 |
* |
Educational services |
83 |
|
Social services |
84 |
|
Museums, art galleries, & botanical & zoological gardens |
86 |
|
Membership organizations |
87 |
* |
Engineering, accounting, research, management, & related services |
88 |
|
Private households |
89 |
* |
Miscellaneous services |
Recommendations specific to major industry groups (and combinations thereof) apply nation-wide for all industry groupings
except the major construction industry groups (SIC Major Industry Groups 15, 16, and 17). Determinations in these three
major groups apply regionally rather than nationally. Regional definitions are based on the nine multi-state Divisions used by
the Bureau of the Census when it reports certain sub-national data. DOC augmented the Bureau's basic definitions for the
Divisions by including Guam in the Pacific Region and Puerto Rico and the Virgin Islands in the South Atlantic Region. A
complete list of the states and outlying areas that comprise each of the nine regions used by DOC follows:
East North Central: Illinois, Indiana, Michigan, Ohio, Wisconsin
East South Central: Alabama, Kentucky, Mississippi, Tennessee
Middle Atlantic: New Jersey, New York, Pennsylvania
Mountain: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming
New England: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont
Pacific: Alaska, California, Guam, Hawaii, Oregon, Washington
South Atlantic: Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina,
Puerto Rico, South Carolina, Virgin Islands, Virginia, West Virginia
West North Central: Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota,
South Dakota
West South Central: Arkansas, Louisiana, Oklahoma, Texas
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