100R84101
5601
U.S. ENVIRONMENTAL PROTECTION AGENCY
RECIPIENT'S GUIDANCE FOR UTILIZATION OF MINORITY BUSINESS ENTERPRISE IN PROCUREMENTS
UNDER EPA ASSISTANCE AGREEMENTS
PREPARED
BY
THE OFFICE OF SMALL AND DISADVANTAGED BUSINESS UTILIZATION
OFFICE OF THE ADMINISTRATOR
WASHINGTON, D.C. 20460
MARCH 1984
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RECIPIENT'S GUIDANCE FOR UTILIZATION OF MINORITY BUSINESS ENTERPRISE IN PROCUREMENTS
UNDER EPA ASSISTANCE AGREEMENTS
On July 14, 1983, President Reagan issued Executive Order 12432 on
"Minority Business Enterprise Development," which directed Federal agencies
to develop annual plans establishing minority business enterprise (MBE)
objectives and to encourage recipients of Federal grants and cooperative
agreements to achieve a reasonable level of minority business participation
in contracts awarded under its grants and cooperative agreements. In awards
made to State and local governments this encouragement is to be consistent
with the principles of "federalism."
Subsequently, on February 15, 1984, Administrator William D.
Ruckelshaus issued his commitment memorandum on minority business
enterprise. In this statement he affirmed both his personal commitment
and that of the Environmental Protection Agency (EPA) to furthering economic
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opportunities for MBEs.
This guidance is provided to assist grant recipients to achieve a
reasonable minority business participation in subagreements. It may also
be used for procuring with small and women's businesses.
As expressed in the Deputy Administrator's February 16, 1984,
memorandum to the Assistant and Regional Administrators, the Agency is
committed to the "fair share" concept which is now applicable to all
EPA assistance agreements. A fair share is defined as a reasonable
commitment of subagreement funds commensurate with the total project
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funding, local demographic factors and the availability of minority and
women's businesses. In those cases where there is a State or local
executive directive, ordinance or statute prescribing goals for MBE
participation, those goals will constitute the fair share.
To implement the fair share concept, negotiations will be conducted
between State environmental officials or assistance recipients and a designated
EPA official. As stated in the Deputy Administrator's memorandum," ... In
all probability, these early negotiations will establish the basis for
MBE utilization in the future. The State's fair share should be based
upon the State project priority list, cumulative grant awards and other
goals or standards for utilization of minority businesses of the State
and potential grantees. A fair share for each grant is not required."
In the Wastewater Treatment Construction Grant Program, the Regional
Administrators will negotiate an overall fair share with delegated States.
The delegated State may allocate its fair share to particular construction
grant projects as it sees fit. The delegated State and not EPA may
determine whether, and to what extent a fair share objective should be
established for each project.
For other EPA financial assistance programs, the Assistant Administrator,
Regional Administrator, or a designated EPA official, as appropriate, will
conduct fair share negotiations directly with the recipients.
As part of the fair share concept, recipients must comply with the MBE-
related requirements set forth in EPA's procurement regulations, 40 CFR
Part 33. Specifically, in contracting for construction, supplies or services
on an EPA funded project, State and local government recipients must
follow the 6 affirmative steps contained in 40 CFR Section 33.240.
Contractors for these supplies, services and construction are also required
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to carry out the affirmative steps in the award of subcontracts. In
accordance with 40 CFR Section 33.815, institutions of higher education,
hospitals and other non-profit organizations must implement the "positive
effort requirements" of OMB Circular A-110. This circular provides,
"Positive efforts shall be made by recipients to utilize ... minority-owned
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business sources of supplies and services. Such efforts should allow these
sources the maximum feasible opportunity to compete for contracts utilizing
Federal funds."
EPA offers the following suggestions to assist State and local government
recipients in carrying out the affirmative steps of 40 CFR 33.240. These
suggestions may also be used by institutions of higher education, hospitals
and other non-profit organizations in carrying out the "positive effort"
standard:
1. Including qualified minority businesses on solicitation lists.
o Do you, the recipient, maintain and update a listing of
qualified MBEs that can be solicited for supplies, construction
and/or services?
o Is this listing appropriately provided to all interested parties
who have requested to be placed on your bidder's mailing
lists or requested copies of the bidding or proposing documents?
o Do you contact the appropriate sources within your general area
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and State to identify qualified MBEs for placement on your
minority business listings?
o Are any other MBE listings utilized such as the State's
minority business office, the Small Business Administration,
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Minority Business Development Agency, USEPA Office of Small
and Disadvantaged Business Utilization (OSDBU), or the
Department of Transportation?
o Is this listing appropriately reviewed by State environmental
agency personnel?
2. Assuring that minority businesses are solicited.
o Do you conduct meetings, conferences, and follow-ups with
MBEs, minority business associations, minority media, etc.,
to inform these groups of supplies, services, and building
opportunities?
o Do you conduct pre-bid, pre-solicitation, and post-award
conferences to ensure that consultants, suppliers, and builders
solicit MBEs?
o Do you provide bidders and offerers with listings of qualified
MBEs and establish that a fair share of contracts should
be awarded?
o Do you advertise in general circulation, trade publications,
State agency publications of identified sources, minority
focused media, etc., concerning contracting opportunities
on your projects?
o Do you provide interested MBEs with adequate information
about plans, specifications, timing and other requirements
of the proposed project?
o Do you provide MBE trade organizations with succinct summaries
of solicitations?
o Do you maintain a list of minority focused publications
that may be utilized to solicit MBEs?
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3. Dividing total requirements, when economically feasible, into
small tasks or quantities to permit maximum participation of
minority businesses.
o Is an analysis performed to identify portions of work that
can be contracted and performed by qualified MBEs?
o Are the elements of the total project scrutinized to develop
economically feasible units of work that are within the
bonding range of MBEs?
o Are bid packages analyzed to afford MBEs maximum participation?
4. Establishing delivery schedules, where requirements of the work
permit, which will encourage participation by minority businesses.
o Do you consider lead times and scheduling requirements
often needed by MBEs?
o Do you develop realistic delivery schedules which may
provide for greater MBE participation?
o Do you consider notifying MBEs of future procurement
opportunities so that they may establish bidding, solicitation
and procurement plans?
5. Using the services and assistance of the Small Business
Administration and the Minority Business Development Agency of
the U.S. Department of Commerce, as appropriate.
o Do you use the services of outreach programs sponsored by
the Minority Business Development Agency and/or the Small
Business Administration to recruit bonafide firms for
olacement on MBEs bidders lists to assist in the development
of bid packaging?
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o Do you use these services to provide management, technical
and financial assistance to MBEs?
6. If the contractor awards subagreements, requiring the contractors
to take the affirmative steps.
o Do you monitor work in progress to assess actual MBE
participation and determine if MBE fair share will be met?
o Do you monitor and record contractor and consultants
activities to ensure "affirmative steps" are being utilized?
7. Other Actions may include:
o Do you require the successful contractor to timely submit
a subcontracting plan which includes the contractor's
strategy for involving MBEs, the name of the contractor's
MBE coordinator, a projected dollars amount of MBE
utilization, etc.?
o Do you appoint knowledgeable MBE liaison officers who are
familiar with contracting requirements and are able to
assist contractors as well as MBEs?
o Does your MBE liaison officer assist contractors in determining
whether subcontracting plans are feasible and their goals are
attainable?
o Does your internal management system ensure effective contract
administration of the MBE affirmative steps?
o Do you ensure proper reporting of MBE participation?
The recipient is ultimately responsible for ensuring that the
contractor awarding subagreements carries out the affirmative steps as
required by the regulations. If a fair share objective has been established
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for a particular project, but is not achieved the mere fact of non-achievement
does not preclude an award, provided that the recipient can demonstrate
that the 6 affirmative steps were followed.
The Agency is confident that a fair share of procurement dollars
will accrue to minority entrepreneurs if sincere, responsive efforts are
made hy recipients of funds made available under EPA grants or cooperative
agreements.
U.S. Environment--!
Region V Uhr
230 Sou* DC-' -
Chicago,
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