[Federal Register Volume 65, Number 111 (Thursday, June 8, 2000)]
[Notices]
[Pages 36411-36416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14503]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Minority Business Development Agency

[Docket No. 000322079-0079-01]
RIN 0640-ZA06


Solicitation of Applications for the Minority Business Capital 
Access Policy Institute

AGENCY: Minority Business Development Agency, U.S. Department of 
Commerce.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: In accordance with Executive Order 11625 and 15 U.S.C. 1512, 
the Minority Business Development Agency (MBDA) is soliciting 
competitive applications from organizations seeking to establish a 
Minority Business Capital Access Policy Institute. All information 
required for submission of a grant application by eligible applicants 
is contained in this announcement.
    The MBDA provides business development services to minority 
entrepreneurs through different types of programs. Each program is 
designed to focus on the unique business problems of a specific market. 
MBDA's programs form a national business delivery network that 
addresses the needs of minority entrepreneurs throughout the United 
States. Currently, there is very limited information on the minority 
business community, especially with respect to capital demand and 
usage. To support the development of minority businesses and encourage 
informed decision-making by both the public and private sectors, it is 
critical to collect and analyze quantitative information on the capital 
needs of these businesses. MBDA will therefore provide seed funding for 
the planning, development and establishment of the Minority Business 
Capital Access Policy Institute (``MBCAPI'' or ``Institute''), a 
research and advocacy institute focused on

[[Page 36412]]

issues of capital access for minority businesses. For profit and non-
profit organizations, state or local government entities, American 
Indian Tribes, colleges and universities are eligible to operate the 
MBCAPI.

DATES: Completed applications for the MBCAPI program must be: (1) 
Postmarked by the USPS by July 10, 2000; or (2) received by MBDA at the 
address below no later than 5 p.m. Eastern Daylight Time on July 10, 
2000. Applications postmarked later than the closing date or received 
after the closing date will not be considered. The anticipated time for 
processing of applications is 90 days.

ADDRESSES: Applicants must submit one signed original plus two (2) 
copies of the application. Completed application packages must be 
submitted to: Office of Financial Access, Room 5600, Minority Business 
Development Agency, U.S. Department of Commerce, 14th & Constitution 
Avenues, NW, Washington, DC 20230.
    If the application is hand-delivered by the applicant or its 
representative, it must be delivered to Room 1874, which is located at 
Entrance #10, 15th Street, NW, between Pennsylvania and Constitution 
Avenues. Unsigned applications and those that do not include required 
forms will be considered non-responsive and will be returned to the 
applicant.

FOR FURTHER INFORMATION CONTACT: For further information, contact Jason 
Everett of the Office of Financial Access, at (202) 482-1940.
    Pre-Application Conference: A pre-application conference will be 
held for the MBCAPI program. Please contact Jason Everett of the Office 
of Financial Access, at (202) 482-1940, for the date, time and 
location. Please be aware that proper identification is required for 
entrance into any Federal building.

SUPPLEMENTARY INFORMATION:

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

(Catalogue of Federal Domestic Assistance (CFDA): 11.802)

Program Description

    MBDA promotes and encourages business opportunities for minority 
business enterprises. Although minority businesses are growing at 
approximately twice the rate of majority businesses, both in terms of 
the number of companies and revenues, minority businesses, according to 
the most recent Bureau of the Census data, currently account for only 
6% of U.S. businesses, while representing nearly 25% of the U.S. 
population. Lack of access to capital is a leading cause of the low 
participation rate of minorities in the U.S. marketplace.
    MBDA has determined that the lack of quantitative information 
regarding, and analysis of, the financing needs of minority businesses, 
strongly contributes to systemic difficulties in increasing the capital 
available to minority businesses. By providing seed capital for this 
project, MBDA will institute an effort to focus resources on issues of 
capital access for minority businesses. MBDA anticipates that the 
Institute will collect, analyze and disseminate information on the 
capital needs of minority businesses, review and assess new strategies 
and instruments for increasing financial access for minority 
businesses, and promote the importance of increased capital flows to 
minority business enterprises within the financial, general business 
and public sectors.
    Although research and advocacy materials developed by the MBCAPI 
may be available to the general public, the Institute's primary 
objectives are: (1) To research and educate financial institutions and 
the capital markets about the needs of and opportunities presented by 
minority businesses; and (2) to serve as a source of data and expertise 
for minority businesses. The successful applicant will be required to 
design and establish the Institute during the twelve-month grant 
period; however, other than as set forth in this Federal Register 
notice, the grantee will not be required to provide other research and 
advocacy services during the grant period.
    MBDA will provide funding for a twelve-month period for the 
development and implementation of the MBCAPI; however, after the 
initial grant, MBDA does not intend to fund the MBCAPI on an ongoing 
basis. As a result, a significant portion of MBDA's evaluation process 
will involve an assessment of the applicant's ability to develop 
sufficient resources to sustain the Institute on a continuing basis. 
However, it is not the intent of MBDA to have applicants use Federal 
funds from the award to solicit financial resources for the continued 
operation of the MBCAPI after the twelve-month award ends. Applicants 
should be aware that under applicable cost principles (OMB Circulars A-
122, A-121 and A-87), the costs of organized fund-raising, including 
financial campaigns, endowment drives, solicitation of gifts and 
bequests, and similar expenses incurred solely to raise capital or 
obtain contributions are unallowable under this award.
    However, even though these costs are unallowable for purposes of 
computing charges to Federal awards, they nonetheless may be treated as 
direct costs for purposes of determining indirect costs rates and be 
allocated their share of the organization's indirect costs if they 
represent activities which: (1) Include the salaries of personnel, (2) 
occupy space, and (3) benefit from the organization's indirect costs.

Work Requirements

Task 1
    Formation and establishment of the MBCAPI, including, by the end of 
the ninth month after the award start date, a strategic plan 
(``Strategic Plan'' or ``Plan'') describing the MBCAPI's strategy and 
methodology for becoming financially self-sustaining. The Strategic 
Plan must include an estimated budget and business plan for the first 
12 months of operation after MBDA funding ends.
    Work on the project must have commenced within 30 days after the 
start date of the award. By the end of the ninth month subsequent to 
the start date of the award, the grantee will submit to MBDA the 
Strategic Plan describing the approach the MBCAPI will use to become 
financially self-sustaining after the award period. In the Plan, the 
grantee must discuss strategies for funding MBCAPI's ongoing operations 
(i.e., whether the MBCAPI will be a membership organization, where 
membership dues will finance ongoing operations or whether other forms 
of fundraising will be required) and identify likely sources of public 
and private support sufficient to fund the MBCAPI's needs for the first 
year of operation.
    In particular, the Strategic Plan must discuss strategies for 
mobilizing the financial, investment and business communities, 
including the minority business community and minority business 
advocacy organizations, to obtain the necessary financial resources to 
continue the MBCAPI for the first twelve months after MBDA funding 
ends. The Strategic Plan also must include an estimated budget and 
business plan. The MBCAPI must be operational by the end of the award 
period and should be located in an office facility.
Task 2
    Conduct needs assessment of the minority business community.
    This assessment shall address the capital needs of the MBE 
community. The assessment should include a description of the existing 
sources and structures for financing minority businesses, particularly 
lending sources

[[Page 36413]]

and evaluate the need for increased use of equity and mezzanine 
financing.
Task 3
    Conduct financial institutions needs assessment.
    This assessment shall include a review of the information, market 
research and other quantitative data that financial institutions need 
in order to serve the minority business community to a greater extent. 
This should include the information that financial institutions believe 
is currently unavailable, such as up-to-date demographic data on the 
MBE community, and the type of market research that would be likely to 
increase their marketing to and investment in the MBE community.
Task 4
    Develop a statement of policy focus and research strategy.
    Based on the foregoing assessments of minority businesses and 
financial institutions, the successful applicant must develop a 
statement of policy focus and research strategy to be used during its 
first two operational years. This statement must describe, in detail, 
the most critical issues for the minority business community and the 
strategies that the MBCAPI will use to address these issues. This 
should include an outline of the research that will be required and a 
description of the methodology that will be used to accomplish this 
work.
Task 5
    Develop a work plan (``MBCAPI Work Plan'') that will demonstrate 
how the MBCAPI, once operational, will complete the following:
    <bullet> Creation of a clearinghouse for information related to 
capital access for minority businesses. This would include reports, 
studies and academic work on investment in minority businesses and 
emerging domestic markets. The Institute also will develop and 
implement a strategy to disseminate this information to a number of 
constituencies, including but not limited to organizations focused on 
minority capital access; minority business groups; the Minority 
Business Roundtable; the general financial and investment community; 
and economic and policy think tanks. Methods of dissemination could 
include a newsletter, electronic newsletters, e-mail, the press and 
other media.
    <bullet> Development of research strategies and new instruments 
that can be utilized to increase capital access for minority 
businesses. The strategies include, but are not limited to, the 
creation of a secondary market for minority and small business loans; 
identification of new sources of equity, mezzanine and quasi-equity 
capital; and the development of new equity and debt products and 
instruments.
    <bullet> Collection of information on the equity needs of minority 
businesses, including estimates of the equity needs of minority 
businesses, current available sources, industries in which such equity 
investments are concentrated, etc. The MBCAPI also will assess the 
difficulties of minority businesses in obtaining equity capital, 
including lack of access to venture capital networks and other equity 
investors.
    <bullet> Creation and maintenance of a database of loans made to 
minority-owned businesses. The data to be gathered includes information 
on loans made by commercial banks, finance companies, community 
development lenders, Small Business Investment Companies and other 
lending institutions. This information would include asset size of each 
lender, average loan size and duration, borrower target groups, loan 
default and loan loss rates and other data generally used by rating 
agencies in assessing a securitization transaction. The data collected 
would also include general information about minority businesses, 
including but not limited to the primary industries where such 
businesses are concentrated, average gross revenues, primary sources of 
capital, average amount of bank or other financing, sources of equity 
financing, geographic location of businesses, numbers of employees, 
etc.
    <bullet> Assessment of the impact of minority financial services 
companies on providing capital to minority businesses and recommend 
ways to improve the provision of capital by such companies.
    <bullet> Implementation of an education strategy that includes an 
annual conference geared towards mainstream financial service companies 
and focused on the benefits of investing in minority businesses.
    <bullet> Monitoring and evaluation of federal and state programs 
that significantly impact or target increased capital for minority 
businesses.
    <bullet> Recommendation of minimum standards for loan documentation 
and servicing for community development lenders for purposes of 
promoting uniformity in evaluating new loans and performing due 
diligence.
    Use of Program Income: Applicants are advised that any program 
income generated by the proposed project is subject to special 
conditions. Anticipated program income must be documented appropriately 
in the project budget. In addition, should an application be funded, 
unanticipated program income must be reported to MBDA, and the budget 
for the project must be renegotiated to reflect receipt of this program 
income. Program income means gross income earned by the recipient that 
is either directly generated by a supported activity or earned as a 
result of the award.
    Performance Measures: In accordance with 15 CFR parts 14 and 24, 
the successful applicant must manage and monitor functions and 
activities supported by the financial award. Grantees will be required 
to use program performance measures in quarterly reports and to provide 
an end-of-the-year assessment of the accomplishments of the project 
using these measures. Applicants must include a detailed plan in their 
proposals which provides a timeline of proposed activities and 
milestones to implement each of the tasks set forth above.
    Funding Availability: MBDA anticipates that approximately $350,000 
will be available in FY 2000 for Federal assistance under this program. 
If MBDA receives sufficient funding for FY 2001, an additional $75,000 
may be available to the grantee to enhance the project. In no event 
will MBDA or the Department of Commerce be responsible for proposal 
preparation costs if this program fails to receive funding or is 
canceled because of other Agency priorities.
    Matching Requirements: Cost sharing of at least 15% is required. 
Additional cost sharing is encouraged. Cost sharing may be in the form 
of cash, third party in-kind contributions, non-cash applicant 
contributions or combinations thereof. The share may also be 
contributed by local, state, and private sector organizations or joint 
ventures between these organizations.
    Type of Funding Instrument: A financial assistance award in the 
form of a grant will be used to fund this program.
    Eligibility Criteria: State or local government entities, American 
Indian Tribes, colleges, universities, for-profit and non-profit 
organizations are eligible to operate the MBCAPI.
    Award Period: The award period shall be for approximately twelve 
calendar months from the award start date. Publication of this notice 
does not obligate the Department of Commerce or MBDA to award any 
specific grant or to obligate all or any part of available funds.
    Indirect Costs: The total dollar amount of the indirect costs 
proposed in

[[Page 36414]]

an application under this program must not exceed the indirect cost 
rate negotiated and approved by a cognizant Federal agency prior to the 
proposed effective date of the award.
    Application Forms and Package: Standard Forms 424, Application for 
Federal Assistance; 424A, Budget Information--Non-Construction 
Programs; 424B, Assurances--Non-Construction Programs, (Rev 4-97); SF-
LLL (1996), Disclosure of Lobbying Activities; and Department of 
Commerce Forms CD-346; CD-511; and CD-512 shall be used in applying for 
financial assistance. Standard Forms 424, 424A, 424B and LLL may be 
downloaded at www.whitehouse.gov/omb/grants/index and Department of 
Commerce Forms CD-346, CD-511 and CD-512 may be downloaded at 
www.doc.gov/forms.

Evaluation Criteria

    Proposals will be evaluated based on the following criteria:

I. Applicant Capability (45%)

    The applicant's proposal will be evaluated with respect to the 
applicant firm's experience and expertise in providing the work 
requirements listed. Specifically, the proposals will be evaluated as 
follows:
    <bullet> Experience in and knowledge of issues related to capital 
access for minority businesses and innovative programs designed to 
increase such capital (10%);
    <bullet> Resources and professional relationships within the 
financial and investment community (10%);
    <bullet> Capacity to develop the resources to make the MBCAPI self-
sustaining (10%);
    <bullet> Experience and expertise in advocating on behalf of 
minority businesses, including education and advocacy resources (10%); 
and
    <bullet> Assessment of the qualifications, experience and proposed 
roles of staff who will operate the MBCAPI (5%).
    To assist MBDA in its evaluation process, the following types of 
information should be included in the proposal:
    1. A brief Business Service History of the applicant firm or firms 
in addressing issues of capital access for minority businesses. This 
should address the organization's ability to perform work of the nature 
and level described in the work requirements of this Federal Register 
notice. If the applicant organization has an ISO 9000 Quality Assurance 
certification, then it should be expressed here. Knowledge possessed by 
individual staff members outside of the organization should not be 
provided here (see below).
    2. A brief Subject Area Overview should demonstrate the applicant's 
knowledge and understanding of the subject of minority capital access. 
This should include knowledge of: (a) Minority business demographics; 
(b) the impediments within the capital markets to increased financing 
for minority businesses; (c) financial institutions, including non-
depository lenders, and non-traditional financing sources such as 
community development funds; (d) the venture capital community and 
other sources of equity capital; and (e) economic development issues 
and the risks to the economy of limited growth within the minority 
business sector. The applicant also should demonstrate its background 
in education and advocacy.
    3. A brief Business Relationships Overview which synopsizes the 
applicant's professional relationships which can be utilized to address 
issues of capital access. Particular emphasis should be placed on those 
relationships and/or partnerships within: (a) The financial and 
investment community and (b) the minority business development 
community that indicate applicant's ability to understand and address 
the concerns of the different ethnic groups (including African 
Americans, Native Americans, Puerto Ricans, Spanish speaking Americans, 
Eskimos, Aleuts, Asian Indians, Asian Pacific Americans and Hasidic 
Jews) served by MBDA. Information included in this overview should 
reflect business relationships of both the applicant firm(s) as an 
organization and those of individual proposed staff. This part should 
also include references (with telephone numbers) and letters of 
support, and should also answer the following questions:
    <bullet> Is the applicant firm(s) or proposed MBCAPI staff known in 
the financial, investment, business and minority business development 
communities?
    <bullet> Does the applicant enjoy solid working relationships in 
the financial investment, business and minority business development 
communities that verify its service quality and recommend it?
    4. A Minority Business Summary that discusses the applicant's 
knowledge of the unique problems facing a cross-section of minority 
entrepreneurs in obtaining capital.
    5. A Discussion of the Capabilities of Proposed Staff includes 
staff knowledge acquired both within the applicant firm and in previous 
work settings, and should specifically address knowledge in performing 
work of the nature and level described in the MBCAPI work requirements. 
The identification of key personnel, such as an executive director or 
program manager, to direct the MBCAPI on a day-to-day basis is 
important. Any change in the executive director or program manager 
requires grants officer approval.
    6. Overview of the MBCAPI Staff Structure includes an 
organizational chart, which provides a distinct delegation of authority 
and which identifies all positions, with position descriptions and 
qualifications (both in-house and consultant subcontractors, if any) 
for the MBCAPI. This overview should be directly tied into the work 
requirements for the MBCAPI.

II. Techniques and Methodologies (40%)

    The applicant will be evaluated according to the following sub-
criteria:
    <bullet> Applicant's specific plan on how to carry out each of the 
five MBCAPI work requirements, including proposed activities and 
milestones (timeline). For example, with regard to Task 1, in addition 
to discussing the development of the Strategic Plan, the applicant 
should describe how it intends to establish a detailed organizational 
and functional framework for the management of the MBCAPI, with a 
schedule of proposed activities and milestones for doing so. The 
evaluation of each task will be worth 5%.
    <bullet> Applicant must provide a detailed discussion relating its 
plan for carrying out each of the five MBCAPI work requirements to the 
particular resources and business capabilities of its organization, 
including staff and networks, thus indicating how its organization will 
research, analyze and disseminate information on the capital needs of 
the minority business community. The evaluation of this sub-criteria 
will be worth 15%.

III. Proposed Budget and Supporting Budget Narrative (15%)

    The applicant's proposal will be evaluated on the following sub-
criteria:
    <bullet> Reasonableness, allowability and allocability of costs 
(10%).
    <bullet> Proposed cost sharing of 15% is required. The non-Federal 
share must be adequately documented (5%).
    <bullet> Cost sharing which exceeds 15% will be awarded bonus 
points on the following scale: 16-20%  1 point; 21-25%  2 points; 26-
30%  3 points; 31-35%  4 points; and over 36%  5 points.
    An application must receive an average of at least a 70% of the 
total points available for all three evaluation criteria in order for 
the application to be considered for funding.

[[Page 36415]]

    Selection Procedures: Each application will receive an independent, 
objective review by a panel qualified to evaluate the applications 
submitted. The independent review panel, consisting of at least three 
individuals, two of whom are reviewers who are not employees of MBDA, 
will review all applications based on the criteria above. The 
independent review panel will evaluate and rank the proposals. The 
Director of MBDA makes the final recommendations to the Department of 
Commerce Grants Officer regarding the funding of applications, taking 
into account the following selection criteria:
    (1) The evaluations and rankings of the independent review panel;
    (2) The extent to which the applicant demonstrates ongoing 
partnerships and relationships with organizations that have expertise 
and knowledge regarding the unique business development issues faced by 
the range of ethnic groups supported by MBDA; and
    (3) The availability of funding.
    The amount of funds awarded to the grantee, the scope of 
programmatic activities, and clarifications and/or correction of errors 
will be determined and/or conducted in pre-award negotiations between 
the applicant, the Grants Officer, and the MBDA Program Officer.

Other Requirements

(1) Purchase of American-Made Equipment and Products

    Applicants are hereby notified that they are encouraged, to the 
greatest extent practicable, to purchase American-made equipment and 
products with funding provided under this program.

(2) Paperwork Reduction Act

    This notice involves collections of information subject to the 
Paperwork Reduction Act, which have been approved by OMB under OMB 
control numbers 0348-0043, 0348-0044, 0348-0040, and 0348-0046. 
Notwithstanding any other provision of law, no person is required to 
respond to nor shall a person be subject to a penalty for failure to 
comply with a collection of information subject to the requirements of 
the Paperwork Reduction Act unless that collection of information 
displays a current valid OMB control number.

(3) Federal Policies and Procedures

    Recipients and sub-recipients are subject to all Federal laws and 
Federal and Department of Commerce policies, regulations, and 
procedures applicable to Federal financial assistance awards.

(4) Past Performance

    Unsatisfactory performance under prior Federal awards may result in 
an application not being considered for funding.

(5) Pre-Award Activities

    If applicants incur any costs prior to an award being made, they do 
so solely at their own risk of not being reimbursed by the Government. 
Notwithstanding any verbal or written assurance that may have been 
received, there is no obligation on the part of the Department of 
Commerce to cover pre-award costs.

(6) No Obligation for Future Funding

    If an application is selected for funding, the Department of 
Commerce has no obligation to provide any additional future funding in 
connection with that award. Renewal of an award to increase funding or 
extend the period of performance is at the total discretion of the 
Department.

(7) Delinquent Federal Debts

    No award of Federal funds shall be made to an applicant who has an 
outstanding delinquent Federal debt until either:
    i. The delinquent account is paid in full,
    ii. A negotiated repayment schedule is established and at least one 
payment is received, or
    iii. Other arrangements satisfactory to the Department of Commerce 
are made.

(8) Name Check Review

    All non-profit and for-profit applicants are subject to a name 
check review process. Name checks are intended to reveal if any key 
individuals associated with the applicant have been convicted of or are 
presently facing criminal charges such as fraud, theft, perjury, or 
other matters which significantly reflect on the applicant's management 
honesty or financial integrity.

(9) Primary Applicant Certifications

    All primary applicants must submit a completed Form CD-511, 
``Certifications Regarding Debarment, Suspension and Other 
Responsibility Matters; Drug-Free Workplace Requirements and 
Lobbying,'' and the following explanations are hereby provided:
    i.  Non-procurement, Debarment and Suspension. Prospective 
participants (as defined at 15 CFR part 26, section 105) are subject to 
15 CFR part 26, ``Non-Procurement Debarment and Suspension'' and the 
related section of the certification form prescribed above applies;
    ii. Drug-Free Workplace. Grantees (as defined at 15 CFR part 26, 
section 605) are subject to 15 CFR part 26, subpart F, ``Government 
wide Requirements for Drug-Free Workplace (Grants)'' and the related 
section of the certification form prescribed above applies;
    iii. Anti-Lobbying. Persons (as defined at 15 CFR part 28, section 
105) are subject to the lobbying provisions of 31 U.S.C. 1352, 
``Limitation on use of appropriated funds to influence certain Federal 
contracting and financial transactions,'' and the lobbying section of 
the certification form prescribed above applies to applications/bids 
for grants, cooperative agreements, and contracts for more than 
$100,000, and loans and loan guarantees for more than $150,000, or the 
single family maximum mortgage limit for affected programs, whichever 
is greater; and
    iv. Anti-Lobbying Disclosures. Any applicant that has paid or will 
pay for lobbying using any funds must submit an SF-LLL, ``Disclosure of 
Lobbying Activities,'' as required under 15 CFR part 28, appendix B.

(10) Lower Tier Certifications

    Recipients shall require applicants/bidders for sub-grants, 
contracts, subcontracts, or other lower tier covered transactions at 
any tier under the award to submit, if applicable, a completed Form CD-
512, ``Certifications Regarding Debarment, Suspension, Ineligibility 
and Voluntary Exclusion-Lower Tier Covered Transactions and Lobbying'' 
and disclosure form, SF-LLL, ``Disclosure of Lobbying Activities.'' 
Form CD-512 is intended for the use of recipients and should not be 
transmitted to DOC. SF-LLL submitted by any tier recipient or sub-
recipient should be submitted to DOC in accordance with the 
instructions contained in the award document.

(11) False Statements

    A false statement on an application is grounds for denial or 
termination of funds and grounds for possible punishment by a fine or 
imprisonment as provided in 18 U.S.C. 1001.

(12) Intergovernmental Review

    Applications under this program are not subject to Executive Order 
12372, ``Intergovernmental Review of Federal Programs.''

[[Page 36416]]

(13) Executive Order 12866

    It has been determined that this notice is not significant for 
purposes of Executive Order 12866.

Courtland Cox,
Director, Minority Business Development Agency.
Juanita E. Berry,
Federal Register Liaison Officer, Minority Business Development Agency.
[FR Doc. 00-14503 Filed 6-7-00; 8:45 am]
BILLING CODE 3510-21-P