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summarize the recommendations of that report. Because of its total

relevance to this hearing, I respectfully request that the entire 34 page Task Force report be reprinted in the hearing record. I have provided your staff with a complete copy for that purpose.

During the period of the Task Force study, we estimated the P. L. 95-507 subcontract potential at $40 billion per year, of which the MBE community was receiving less than two percent. Given the extent of the current Defense build-up, the annual subcontract potential is probably much greater today. The recommendations of the SBA Task Force are aimed at increasing the level of subcontracting to MB ES and achieving 15 percent minority business participation in federal procurement subcontracting. goal proposed by the White House commission on Small Business. (See Report to the President: America's Small Business Economy, Agenda for Action.

This was the

The White House Commission on Small Business, April 1980, p. 67.)

The Task Force recommended that the Reagan Administration establish, as

a national priority, the achievement of 15 percent MBE subcontracting in federal procurement. The goals would be achieved through an modest annual increase of two percent and would be tied in with Presidentially

established goals and monitoring devices as per the additional

recommendations of the report.

The specific recommendations of the SBA Task Force are as follows:

1.

2.

The SBA should establish a goal for minority business

subcontracting under P. L. 95-507 at an annual level of 15%, to be
achieved through an increase of 2% per year beginning in 1983.
The SBA should recommend that each procurement agency award
points to a contractor which, in its response to a government
"Request for Proposal", plans to use small and minority
businesses as subcontracting team members for the proposed
contract.

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3.

4.

5.

6.

7.

The SBA should recommend that additional monetary incentive
payments be given to a contractor, which, in the performance of
its contract, exceeds its small and minority subcontracting
goals, as set out in the contract clause required by Section 211
(Section 8(d) of the Small Business Act).

The SBA should recommend that agency program and performance
goals he established with the objective of increasing subcontract-
ing with small and minority businesses; and that each agency esta-
blish a minimum of one Critical Performance Standard under which
the Contracting Officers and Procurement Directors will be eval-
uated according to the amount of small and minority business they

approve.

A special P. L. 95-507 Minority Business Enterprise (MBE) Task
Force should be established at SBA to monitor the MBE subcon-
tracting activity of the top 100 Department of Defense (DOD)
prime contractors, and to aggressively promote the expanded
utilization of qualified MB ES by these major prime contractors.
The SBA should recommend that the Director of the Office of
Federal Procurement Policy, Office of Management and Budget,
issue regulations prescribing the inclusion of a clause, in
contracts let by federal agencies where Section 211 of P. L.
25-507 is applicable, under which the contractor certifies a 35
percent dollar volume of subcontracting to small businesses and
15 percent to minority businesses, or specifies reasons for not
meeting this goal.

The SBA should recommend that an Executive Order be issued by the
President, which includes the following:

a.

b.

C.

d.

e.

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A clear statement that it is a goal of the Reagan
Administration to achieve an annual level of 15% minority
business in federal procurement subcontracting within the
next six years to be achieved through an increase of 2% per
year beginning in 1983.

A directive to the heads of all federal agencies and
departments requiring that they establish agency program and
performance goals, an evaluation points system, a monetary
incentives system, and Critical Performance Standards in
matters involving subcontracting under federal procurement.
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 sixty 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 achievements to OMB and the SBA.

A directive to OMB and the SBA to evaluate the plans and
comment thereon; and a directive 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 departments and the SBA.

A directive to SBA to establish a special P. L. 95-507 MBE
Task Force which will work to improve and promote small and
minority business, and which will issue to the President and

f.

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the SBA Administrator an annual report on its monitoring

efforts and its promotion of small and minority

subcontracting under P. L. 95-507.

A directive on OF PP-OMB to issue regulations prescribing the inclusion of a clause, in contracts let by federal agencies where Section 211 of P. L. 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.

CONCLUSIONS

This concludes the recommendations of the SBA Task Force. The cornerstone is a Federal goal of 15% MBE participation in 95-507 subcontract activity to be achieved gradually over a six year period.

There is a clear need for legislated improvements in the P. L. 95-507 program. I urge this Subcommittee to carefully review the work of the SBA Task Force on P. L. 95-507. The recommendations are well conceived, achievable and, if implemented, could result in a substantially improved program. This concludes my testimony Mr. Chairman. I will be pleased to respond to any questions you or other members of the Subcommittee may have.