damages provisions. In our view, this approach would be counterproductive to the Subcommittee's objective of encouraging subcontracting. QUESTION 8: How do you evaluate the performance of your contracting officers with respect to the implementation of the subcontracting program? Is this a critical performance standard for these individuals? ANSWER 8: Contracting Officers are evaluated in their annual performance appraisals on implementation of small and small disadvantaged business programs, including the use of set-asides in new procurements and small and small disadvantaged business subcontracting. We do not believe that implementation of the subcontracting program should be identified as a "critical" performance element. In our view, the extent of other contracting officer responsibilities which must also be evaluated and the difficulty in holding an individual accountable for performance not entirely within his/her control do not make it feasible to have subcontracting program implementation a critical performance standard. QUESTION 9: In 1980, JFK Space Center let contract #NAS10-9100 to Rockwell International. The present value of this contract is $580,524,000 and pertains to the Launch Operations and Landing Site for the Shuttle. Even though this contract is four years old we have not received one SF 294 pertaining to this award. Is this because your personnel did not receive the 294's from Rockwell or because NASA was negligent in responding to my request for all the 294's for each plan submitted to the Committee? ANSWER 9: Contract NAS10-9100 was awarded to Rockwell International Corporation on April 7, 1977, which was prior to enactment of Public Law 95-507. The contractor did not submit Standard Form 294's during fiscal years 1981-83; rather, the Contracting Officer received monthly procurement activity reports which included more detail than would be required on the semiannual Form 294. Mr. MITCHELL. Our next group consists of Robert F. Trimble, vice president of contracts, Martin Marietta Aerospace, and Robert C. Petersen, corporate director, subcontract and procurement management, Rockwell International Corp. Thank you. It is always so difficult to ask people to take time from their work schedules to be here, but I know of no other way to get information except taking testimony from the subcommittee. I would indicate to both of you that we have full copies of your testimony, and I want to commend you on your testimony. It is very complete in both instances. If you so desire, you can simply deal with the high points of your testimony. The entire testimony will be submitted for the record. TESTIMONY OF ROBERT F. TRIMBLE, VICE PRESIDENT OF CONTRACTS, MARTIN MARIETTA AEROSPACE, ACCOMPANIED BY HARRY NESTERUK, DIRECTOR OF CONTRACTS, AND HERBERT WATKINS, MANAGER, BUSINESS UTILIZATION AND SUPPORT SERVICES, DENVER AEROSPACE Mr. TRIMBLE. Mr. Chairman and committee members, I am Robert Trimble, of Martin Marietta Aerospace. I have with me on my right Herbert Watkins, manager of business utilization and support services in our Denver Aerospace organization. On my left is Harry Nesteruk, director of contracts on my staff in Bethesda, MD. It is a privilege for us to meet with you today and talk to you about our small business and small disadvantaged business utilization program. Mr. MITCHELL. May I interrupt you for just a moment. I don't know whether you have seen the press copies, the print media regarding my statements about a subsidiary of Martin Marietta. It is a very wise financial investment into a minority-owned company. I think that was a significant precedent-setting move for a subsidiary of your company to actually purchase stock in a good, strong minority business, and I want to commend everyone for that. Mr. TRIMBLE. Thank you, Mr. Mitchell. We appreciate your bringing this to the attention of the audience here today. It is a significant achievement. We are very proud of you for your very kind remarks involving Martin Marietta corporate involvement in this particular involvement. As you have already given me permission, we have a very detailed statement which is responsive to the questions in your letter, and that I understand will be entered into the record. With your permission I do have an abbreviated statement which I would like to go through very quickly here. Mr. MITCHELL. Please. Mr. TRIMBLE. We believe we have one of industry's truly outstanding small business and small disadvantaged business programs. The success of our efforts has become well known. Indeed, other aerospace companies have requested permission to use our Denver subcontracting program as a model for their own use. Our program in Denver has been the recipient of several highly competitive awards presented to winning prime contractors by Government agencies or minority organizations. These include: Air Force System Command Exception Program Award (1978); Air Force Con Award (1980); Air Force Contract Management Division High Technology and High Dollar Value Award-National Award (1981); Defense Logistics Agency's Outstanding Small Disadvantaged Program-National Award (1982); American Association of MESBIC's Private Sector Support-National Award (1982); Air Force Contract Management Division High Technology and High Dollar Value Award-National Award (1982), and Outstanding Minority Booth Display-National Award-National Minority Supplier Development Council Inc. Trade Fair (October 1983). We are the only company to have won the Air Force Contract Management Division High Technology and High Dollar Value Award 2 years in succession. This is clearly a record of accomplishment as we are rated against all other aerospace companies under the jurisdiction of AFCMD in Aubuquerque, NM. In addition, SBA reviews of our subcontracting plans have resulted in ratings indicating total compliance, and their reviews of our total program have given us ratings of excellent. In fact, the most recent Air Force review resulted in a numeric score for our Denver operation which was one of the highest ever given to an aerospace company. I believe that it would be of interest to you for me to provide for you in summary form what we believe are the essential elements of a successful program. Martin Marietta Aerospace subscribes to and supports, as one of its basic operational objectives, conduct as a good corporate citizen. One of its commitments is to deal with and meet the intent of Public Law 95-507. Our commitment starts at the highest level in the company and extends through our management structure to our operating levels. The responsibility for the implementation of our business utilization program has been assigned to the director of materiel at the operating locations. In Denver, the director is assisted in his function by an experienced full-time aerospace manager of business utilization and support services who is responsible for overall management of the program and is available to give on-the-spot guidance and assistance on small and small disadvantaged business subcontracting. Employee training is essential to a successful program. We provide three types: New buyer orientation; Government regulations and public law requirements, and individual subcontracting plan compliance. Annual performance goals or objectives are established within our operating units. In turn, goals are assigned to our Denver procurement personnel and are used to evaluate their overall performance. We have a special performance award program in Denver to provide special recognition and monetary awards for employees who have demonstrated special interest and good performance in this area. We actively seek sources of supply from small and small disadvantaged firms. Our source list in Denver exceeds 4,500 such firms. Additions to the list come from our participation in business opportunity and trade fairs, close rapport with, and assistance through, counseling for small firms, frequent referral to commercial and Government source listings, and responses to small firms who are actively pursuing business opportunities. We try to go beyond the more narrowly defined efforts to improve our own sources of supply by providing more generalized communitywide assistance for small firms. In Denver, we helped form and now support an Executive Task Force Committee for Minority Economic Development, now known as Minority Enterprise, Inc. We provide counseling services and assistance for minority firms regardless of their business affiliation with Martin Marietta. The small and small disadvantaged business program is an important part of the Federal acquisition process. It is important that the legislative and executive branches of the Government along with private sector firms involved in selling to the Government work cooperatively to insure that business firms within the small and disadvantaged category are given the best possible opportunity to compete for contracts and subcontracts which support Federal requirements. There are several additional facts beyond the information already provided that I wish to bring to your attention. First, the statistics compiled to show participation in this program do not portray actual opportunities that small firms have. We consistently solicit small business participation under competitive bidding procedures where the contracts are awarded not to small and disadvantaged firms but to large firms. We would like to think that some small firms would be more competitive than they are particularly with the technical, managerial, and financial assistance that we are willing to provide to these firms. Second, there are other governmental programs, objectives, and procedures that deter small firms from seeking or obtaining Government subcontracts. Among them are the complexity of rules and regulations of our contracts, requirements to obtain maximum competition, and increased emphasis on performance warranties and data rights. These all tend to deter the small firms from bidding with us. Third, we have a continual movement of firms from small business to large business categories which actually detract from the statistics that we have. Although many impediments exist, we at Martin Marietta are pleased to be able to participate in an active way in this very important and valuable Government program. PREPARED STATEMENT OF ROBERT F. TRIMBLE, VICE PRESIDENT OF CONTRACTS, MARTIN MARIETTA AEROSPACE We welcome this opportunity to present to the Committee information and views relating to Martin Marietta Aerospace's implementation of its subcontracting program as established under Public Law 95-507. I am Vice President of Contracts for Martin Marietta Aerospace and am located in the Corporate Headquarters in Bethesda, Maryland. I am responsible for both the contracts. and materiel functions, the organizations responsible for the preparation, negotiation and administration of our subcontracting plans required by P.L. 95-507. With me today is Harry Nesteruk, Director of Contracts, of my staff, and Herbert Watkins, Manager, Socioeconomic Programs, of our Denver Aerospace organization. In preparation for this testimony, and in coordination with Ms. Etheredge of your office, we compiled data that represents our entire Aerospace operation, which includes the Denver, Colorado; Orlando, Florida; and Baltimore, Maryland; operating units, for calendar years 1981, 1982, and 1983. Our |
