The final recommendation is a special Public Law 95-507 Minority Business Enterprise Task Force should be established at SBA to monitor the MBE subcontracting activity of the top 100 Department of Defense prime contractors and to aggressively promote the expanded utilization of qualified MBE's by these major prime contractors.

Now, we know that SBA has a MBE monitoring office. We would like a task force which, among other things, would advise that office to contain representatives of trade associations and minority businesses. It was recommended that the President include this in his Executive order issued last July, but it was not included. Recommendation 6: It was recommended that the President include this in his Executive order issued last July. That was not included.

The SBA should recommend that the Director of the Office of Federal Procurement Policy of the Office of Management and Budget issue regulations prescribing the inclusion of a clause, in contracts let by Federal agencies where section 211 of Public Law 95-507 is applicable under which the contractor certifies a 35-percent dollar volume of subcontracting to small businesses and 15 percent to minority businesses.

Now, idealy we prefer that minority businesses receive the 35percent dollar volume of subcontracting, but realistically, we know that it is unlikely to happen. The 15 percent, we think, is doable. Recommendation 7: The SBA should recommend that an Executive order be issued by the President which includes the following: A clear statement that it is a goal of the Reagan administration to achieve an annual level of 15-percent minority business in Federal procurement subcontracting within the next 6 years, to be achieved through an increase of 2 percent per year beginning in 1983; that it is a goal of the Reagan administration to achieve a 10-percent increase in the number of minority businesses over the next 10 years. Reagan's Executive order called for 60,000 new businesses and expansion of 60,000 businesses over a period of 10 years.

Two, direction to the heads of all Federal agencies and departments requiring that they establish agency program and performance goals, an evaluation points system, a monetary incentive system and critical performance standards in matters involving subcontracting under Federal procurement. This also was not included in the President's Executive order.

Three, the heads of all Federal agencies and departments should be required to submit to the Office of Management and Budget and the Small Business Administration within 60 days from issuance of the Executive order, their program and performance goals and their plans for implementing evaluation points, monetary incentives, and critical performance standards, and thereafter to submit annual reports on their achievement to OMB and the SBA.

I have four more points before I conclude.

Four, a direction to OMB and the SBA to evaluate the plans and comment thereon, and a direction to OMB and the SBA to report on a quarterly basis to the President and Congress on whether the various agencies and departments are meeting the minority business subcontracting goals negotiated between the agencies and the

departments and the SBA. This was not included in the President's Executive order.

Five, direction to SBA to establish a special Public Law 95-507 MBE Task Force which will work to improve and promote small and minority business, and which will issue to the President and the SBA Administrator an annual report on its monitoring efforts and its promotion of small and minority subcontracting Public Law under Public Law 95-507.

Six, a direction to OFPP and the Office of Management and Budget to issue regulations prescribing the inclusion of a clause in contracts let by Federal agencies where section 211 of Public Law 95-507 is applicable, under which the contractor certifies a 35 percent dollar volume of subcontracting to small businesses and 15 percent to minority businesses or documents reasons for not meeting these goals. It was not included in the Executive order.

Seven, finally, a clear statement that the administration fully supports similar greater participation by small and minority businesses in procurement under grants and a direction to SBA to establish a system for reviewing procurement under grants, and reporting the results of these evaluations.

This also was not included in the Executive order.

We, the Black Presidents' Roundtable participated in this task force, Mr. Alexander, Mr. Joseph, and I are available to answer questions.

This SBA report is submitted along with our opening statement as our testimony before this hearing.

[Mr. Martin's prepared statement with attachments follow:]

PREPARED STatement of LAWYER A. MARTIN, PRESIDENT, BLACK PRESIDENTS' ROUNDTABLE ASSOCIATION

of

Mr. Chairman, I am Lawyer A. Martin, president of the Black Presidents' Roundtable Association (BPRA). I am also president Evaluation Technologies, Inc. (ETI) which is a multidisciplinary professional and technical services company incorporated in 1970. Accompanying me today are two of cur BPRA members, Mr. Marshall D. Joseph, president of TechMatics Corporation, Inc. (TMC) and Mr. Gordon G. Alexander, president of Congressional Education Associates, Inc. (CEA).

The Black Presidents' Roundtable is an organization of the presidents of over two hundred black-owned firms in the greater metropolitan Washington area with members as far away as California. Our companies are diverse in nature with capabilities that include manufacturing, retail, architecture and engineering, communications, financial management, research and development, construction, computer systems and engineering

and public affairs.

Mr. Chairman, BPPA welcomes this opportunity to share cur thoughts with you regarding the implementation of the subcontracting provisions established under Section 211 of Public Law 95-507. We have testified previously before this committee and we have maintained continuous dialogue with committee staff members regarding the problems confronting small minority businesses in their struggle to achieve competitive viability.

Testimony Page 2

This committee has been very responsive to our requests for discussion and supportive of our efforts to solve our problems.

on

Mr. Chairman, in view of the emphasis of the Reagan Administration on decreased dependence of minority businesses federal contracts, we feel that subcontracting opportunity is clearly consistent with this objective. As we have said many times before this committee and other public bodies, the opportunity for a minority firm to subcontract with a prime, we strongly believe, is often a vital first step for that firm to decrease its dependence or federal requirements as well as to

facilitate its

private sector.

transition to competitive performance in the

It has also been demonstrated that prime contractors can experience savings through the use of small business subcontractors. The requirements of public law, the incentive of savings to government and increased minority business partnership with the private sector are three compelling reasons for more effective administration of the subcontracting program under

Section 211 of P.L. 95-507.

Mr. Chairman, many members of BPRA have committed considerable time during the past five years in an attempt to provide thoughtful and constructive comment on a variety of legisla

tive initiatives and public policies

which impact negatively on

Testimony Page 3

the development and growth of our businesses. We are of the frank opinion that too often, the final products of such thoughtful deliberation which are submitted to agencies of government in the form of reports and recommendations on minority business interests are either totally ignored or given cursory This is certainly true regarding implementation of the subcontracting program under Section 211

attention at best.

of P.L. 95-507.

The questions you asked us to address in our testimony are:

(1) How should subcontracting goals be assigned to federal agencies?

(2)

(3)

How should goals be established for individual

contracts?

How can adminstration of the contracts containing plans be improved?

(4) How should the government use its authority to include incentive clauses in connection with subcontracting plans?

(5) What sanctions should be applied in the event of non

compliance?

BPRA decided that there is no need to re-create yet another wheel in our response to these questions. We therefore submit as the essence of our testimony, a report submitted to the SBA Administrator on November 3, 1982 by the Small Business Administration Task Force to Review Implementation of Public Law 95-507. Several members of BPRA served on this task force and Committed considerable time to deliberations of the task force