Presidential Documents

26069

Federal Register

Vol. 61, No. 102

Friday, May 24, 1996

Title 3—

The President

Executive Order 13005 of May 21, 1996

Empowerment Contracting

In order to promote economy and efficiency in Federal procurement, it

is necessary to secure broad-based competition for Federal contracts. This

broad competition is best achieved where there is an expansive pool of

potential contractors capable of producing quality goods and services at

competitive prices. A great and largely untapped opportunity for expanding

the pool of such contractors can be found in this Nation’s economically

distressed communities.

Fostering growth of Federal contractors in economically distressed communities and ensuring that those contractors become viable businesses for the

long term will promote economy and efficiency in Federal procurement

and help to empower those communities. Fostering growth of long-term

viable contractors will be promoted by offering appropriate incentives to

qualified businesses.

Accordingly, by the authority vested in me as President by the Constitution

and the laws of the United States, including section 486(a) of title 40,

United States Code, and section 301 of title 3, United States Code, it is

hereby ordered as follows:

Section 1. Policy. The purpose of this order is to strengthen the economy

and to improve the efficiency of the Federal procurement system by encouraging business development that expands the industrial base and increases

competition.

Sec. 2. Empowerment Contracting Program. In consultation with the Secretaries of the Departments of Housing and Urban Development, Labor, and

Defense; the Administrator of General Services; the Administrator of the

National Aeronautics and Space Administration; the Administrator of the

Small Business Administration; and the Administrator for Federal Procurement Policy, the Secretary of the Department of Commerce shall develop

policies and procedures to ensure that agencies, to the extent permitted

by law, grant qualified large businesses and qualified small businesses appropriate incentives to encourage business activity in areas of general economic

distress, including a price or an evaluation credit, when assessing offers

for government contracts in unrestricted competitions, where the incentives

would promote the policy set forth in this order. In developing such policies

and procedures, the Secretary shall consider the size of the qualified businesses.

Sec. 3. Monitoring and Evaluation. The Secretary shall:

(a) monitor the implementation and operation of the policies and procedures developed in accordance with this order;

(b) develop a process to ensure the proper administration of the program

and to reduce the potential for fraud by the intended beneficiaries of the

program;

(c) develop principles and a process to evaluate the effectiveness of the

policies and procedures developed in accordance with this order; and

(d) by December 1 of each year, issue a report to the President on the

status and effectiveness of the program.

Sec. 4. Implementation Guidelines. In implementing this order, the Secretary

shall:
26070 Federal Register / Vol. 61, No. 102 / Friday, May 24, 1996 / Presidential Documents

(a) issue rules, regulations, and guidelines necessary to implement this

order, including a requirement for the periodic review of the eligibility

of qualified businesses and distressed areas;

(b) draft all rules, regulations, and guidelines necessary to implement

this order within 90 days of the date of this order; and

(c) ensure that all policies and procedures and all rules, regulations,

and guidelines adopted and implemented in accordance with this order

minimize the administrative burden on affected agencies and the procurement

process.

Sec. 5. Definitions. For purposes of this Executive order:

(a) ‘‘Agency’’ means any authority of the United States that is an ‘‘agency’’

under 44 U.S.C. 3502(1), other than those considered to be independent

regulatory agencies, as defined in 44 U.S.C. 3502(10).

(b) ‘‘Area of general economic distress’’ shall be defined, for all urban

and rural communities, as any census tract that has a poverty rate of at

least 20 percent or any designated Federal Empowerment Zone, Supplemental

Empowerment Zone, Enhanced Enterprise Community, or Enterprise Community. In addition, the Secretary may designate as an area of general economic

distress any additional rural or Indian reservation area after considering

the following factors:

(1) Unemployment rate;

(2) Degree of poverty;

(3) Extent of outmigration; and

(4) Rate of business formation and rate of business growth.

(c) ‘‘Qualified large business’’ means a large for-profit or not-for-profit

trade or business that (1) employs a significant number of residents from

the area of general economic distress; and (2) either has a significant physical

presence in the area of general economic distress or has a direct impact

on generating significant economic activity in the area of general economic

distress.

(d) ‘‘Qualified small business’’ means a small for-profit or not-for-profit

trade or business that (1) employs a significant number of residents from

the area of general economic distress; (2) has a significant physical presence

in the area of general economic distress; or (3) has a direct impact on

generating significant economic activity in the area of general economic

distress.

(e) ‘‘Secretary’’ means the Secretary of Commerce.

Sec. 6. Agency Authority. Nothing in this Executive order shall be construed

as displacing the agencies’ authority or responsibilities, as authorized by

law, including specifically other programs designed to promote the development of small or disadvantaged businesses.

Sec. 7. Judicial Review. This Executive order does not create any right

or benefit, substantive or procedural, enforceable at law or equity by a

party against the United States, its agencies or instrumentalities, its officers

[FR Doc. 96–13306

THE WHITE HOUSE,

May 21, 1996.

or employees, or any other person.

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Filed 5–23–96; 8:45 am]

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