share requirement for financial award recipients; decrease,

[Federal Register: June 16, 1998 (Volume 63, Number 115)]

[Notices]

[Page 32857-32858]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr16jn98-56]

DEPARTMENT OF COMMERCE

Minority Business Development Agency

[Docket No. 980608150-8150-01]

RIN 0640-ZA03

Revision of the Cost-Share Requirement and Applicability of the Ten Bonus Points to All Future Solicitations To Operate Minority Business Development Centers (MBDC)

AGENCY: Minority Business Development Agency, Commerce.

ACTION: Interim final policy request for comments.

SUMMARY: In order to attract and retain a greater number of qualified firms to operate its MBDC program, MBDA is revising its cost-share requirement for financial award recipients from forty percent (40%) to fifteen percent (15%) to be applied to all future competitions for MBDCs, as well as to all prospective renewals and/or extensions of awards originally competed at the 40% cost-share level. MBDA is also extending its policy to give an additional ten (10) bonus points to the applications of community-based organizations in all future MBDC solicitations. Previously, the 40% cost-share requirement and the 10 bonus points were applied to awards in certain designated geographic service areas only. The initial policies regarding these requirements were published in the Federal Register Notice of May 31, 1996, Vol. 51, page 27336 and continued on page 27337.

DATES: This interim policy is effective June 16, 1998. Comments on this interim policy must be submitted on or before July 16, 1998.

ADDRESSES: Comments should be sent to Mr. Paul R. Webber IV, Assistant Director, Minority Business Development Agency, U.S. Department of Commerce, Room 5073, 14th and Constitution Avenue, NW, Washington, D.C. 20230.

FOR FURTHER INFORMATION CONTACT: Mr. Paul R. Webber IV at (202) 482- 5061.

SUPPLEMENTARY INFORMATION: Under Executive Order 11625, MBDA provides business development assistance to persons who are members of groups determined by MBDA to be socially or economically disadvantaged, and to business concerns owned and controlled by such individuals. To deliver this assistance, MBDA funds MBDCs that offer a full range of management and technical assistance services, coordinate public and private resources on behalf of clients, and serve as a conduit for information concerning business development.

MBDA selects applicants to operate its MBDCs through a competitive solicitation process. The guidelines for operation of an MBDC are set forth in a detailed Competitive Application Package (CAP). The funding instrument for the MBDCs is a cooperative agreement, which, in addition to the CAP and the competitive solicitation published in the Federal Register, sets forth the applicable requirements which must be met by an MBDC operator (collectively, the ``program guidelines'').

Under the program guidelines, selected geographic service areas were designated in the May 31, 1996, Federal Register, in which the Department of Commerce currently funds up to 60% of the total budgeted cost of operating an MBDC on an annual basis. The MBDC operator has been required to contribute at least 40% of the total project cost (the ``cost-share requirement''). Prior to the Notice, MBDC operators were required to contribute only 15% of the total project costs. Contributions, which may be utilized in satisfying the cost-share requirement, include cash contributions, non-cash application contributions, third party in-kind contribution and client fees. In addition, the applications from those designated service areas were given an additional ten (10) bonus points for being community-based organizations that had received a programmatically acceptable and responsive score. In order to attract a greater number of qualified firms to compete in the MBDC program, all future MBDC solicitations, regardless of geographic service area, will be competed, with the Department of Commerce funding up to 85% of the total project cost. The operator will be required to contribute at least 15% of the total project cost in order to satisfy the cost-share requirement.

In addition, under existing program guidelines, continued funding of an award is at the total discretion of MBDA based on such factors as the MBDC's performance, changes in availability of funds, and shifts in agency priorities. MBDA has determined that it is an agency priority to retain existing MBDC operators by easing the burden caused by a 40% cost-share requirement. It is also an agency priority to establish consistency and equity with regard to the cost-share requirement between existing MBDC operators and future operators. Accordingly, the cost-share requirement of existing MBDC operators will be decreased from 40% and will revert to MBDA's prior policy of 15% at the time of renewal and/or extension of

[[Page 32858]]

awards. However, the decrease in cost sharing will not be applied retroactively.

Finally, based on prior experience with community-based organizations, MBDA has determined that it is in the interest of the MBDC program to encourage the participation of such organizations in the competition to operate MBDCs. Therefore, MBDA has determined that it is an agency priority to extend the policy of allowing 10 bonus points during the evaluation process to community-based organizations, which was limited to certain designated locations in the Federal Register notice of May 31, 1996, to all future MBDC solicitations. The MBDC evaluation scoring system will add 10 bonus points to the applications of community-based organizations which receive a programmatically acceptable and responsive score. Each qualifying application will receive the full 10 points. Community-based applicant organizations are those organizations currently located within the geographic service area designated in the solicitation for the award, and whose headquarters and/or principal place of business have been located within the geographic service area during the last five years. Where an applicant organization has been in existence for fewer than five years or has been present in the geographic service area for fewer than five years, the individual years of experience of the applicant organization's principals may be applied toward the requirement of five years of organization experience. The individual years of experience must have been acquired in the geographic service area which is the subject of the solicitation.

Statement of Policy

In order to implement its revised program in support of the minority business sector, MBDA hereby revises its policy of requiring a 40% cost-share requirement for MBDC awards in certain locations and establishes a cost-share requirement for all prospective MBDC awards of at least 15% of total project cost for financial assistance recipients. In addition, the cost-share requirement of existing MBDC operators will be decreased from 40% to 15% at the time of renewal and/or extension of awards. However, this decrease in cost sharing will not be applied retroactively. MBDA will also extend the policy of allowing 10 bonus points during the evaluation process to community-based organizations, which was limited to certain designated locations in the Federal Register notice of May 31, 1996, to all future MBDC solicitations.

Executive Order 12866

This policy revision was determined to be not significant for purposes of E.O. 12866.

Administrative Procedure Act

Since this notice of policy revision is a matter relating to public property, loans, grants, benefits, or contracts under 5 U.S.C. 553(a)(2), the requirements of section 553 do not apply.

Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this notice of policy change because the notice was not required to be promulgated as a proposed rule before issuance in final form by 5 U.S.C. Sec. 553 or by any other law, As a result, neither an initial nor final Regulatory Analysis was required, and none has been prepared.

Executive Order 12612

This policy statement does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under Executive Order 12612.

Authority: 15 U.S.C. 1512 and Executive Order 11625.

Dated: June 4, 1998. Juanita E. Berry, Federal Register Liaison Officer, Minority Business Development Agency. Courtland Cox, Director, Minority Business Development Agency.

[FR Doc. 98-15869Filed6-15-98; 8:45 am]

BILLING CODE 3510-21-M