Opinion ID: 2002136
Heading Depth: 1
Heading Rank: 1

Heading: the proceedings before the commission

Text: In 1978, Congress passed amendments to the Small Business Act which are now codified in 15 U.S.C. § 637(c). [1] These amendments were predicated on Congressional recognition that members of certain racial and ethnic minorities were socially and economically disadvantaged because they had been subjected to racial or ethnic prejudice or to cultural bias, without regard to their individual qualities. § 637(a)(5) and (6). The category of socially or economically disadvantaged individuals was presumed to include Black Americans and Hispanic Americans, as well as members of other minority groups. § 637(c)(3). Congress declared it to be the policy of the United States that small business concerns, and small business concerns owned and controlled by socially and economically disadvantaged individuals, shall have the maximum practical opportunity to participate in the performance of contracts let by any Federal agency. § 637(c)(1). To promote this policy, Congress required federal agencies to include in their contracts various provisions designed to improve the opportunities of members of racial and ethnic minorities and other disadvantaged persons to participate as subcontractors. See, e.g., § 637(c)(2) and (3). Much of the legislation was aimed at the conduct of federal agencies. The Small Business Act also imposes direct obligations upon prospective prime contractors. Section 637(c)(4)(B) provides that, before a contract is awarded, the apparent successful offeror shall negotiate with the procurement authority a subcontracting plan which incorporates the information prescribed in paragraph (6). The subcontracting plan shall be included in and made a material part of the contract. The subcontracting plan must include, among other things, percentage goals for use as subcontractor of small business concerns, including enterprises owned and controlled by socially and economically disadvantaged individuals. See, e.g., § 637(c)(6)(A). In his complaint to the PSC, filed on May 25, 1989, Jordan claimed that PEPCO, a federal contractor, had violated the Act because it had failed to negotiate and to institute the required subcontracting plan. In his submissions to the Commission, Jordan alleged that, beginning approximately in 1980, the General Services Administration (GSA) had sought compliance by PEPCO, but that PEPCO had contended that its activities were not covered by the Act and had refused to comply with its provisions. In 1985, according to Jordan, GSA requested an opinion from the Department of Justice (DOJ) regarding PEPCO's claims of lack of coverage. In March, 1987, DOJ issued an opinion in which it concluded that the Act applies to PEPCO. Jordan alleged that in spite of the DOJ ruling, it was not until August 29, 1989, three months after he had filed his complaint with the Commission, that PEPCO signed a subcontracting plan as required by the Act. [2] The legal basis for Jordan's submission was D.C.Code § 43-503 (1990), which provides in pertinent part that [t]he Commission shall have power, after hearing and notice by order in writing, to require and compel every public utility to comply with the provisions of Chapters 1-10 of this title, and with all other laws of the United States applicable, and any municipal ordinance or regulation relating to said public utility.... Jordan contends that § 637(c) is a law of the United States applicable to PEPCO, and that the Commission therefore has the authority to compel PEPCO to comply with it. In his initial complaint, Jordan alleged that PEPCO's violation of § 637(c) had subjected the utility to potential liabilities, and he asked the Commission to require PEPCO to disclose these liabilities and to make appropriate changes to PEPCO's rate base. In subsequent submissions, Jordan and MBELDEF requested additional affirmative relief. Specifically, they asked that the Commission require PEPCO, among other things: 1. to comply with § 637(c) by having an appropriate share of its business with minority contractors; 2. to fund a study to determine the harm suffered by minority contractors as a result of PEPCO's noncompliance, and to determine the current availability of minority businesses capable of providing satisfactory services under a valid subcontracting plan; 3. to advertise in local media its intent to comply with the Small Business Act; 4. to hire a minority consulting firm to review PEPCO's management structure; and 5. to pay Jordan's counsel fees. [3] PEPCO responded to Jordan's complaint by denying any violation of § 637(c). Initially, PEPCO contested Jordan's contention that it was covered by the Act. [4] PEPCO further represented that, despite the asserted lack of coverage, it had pursued an aggressive program of affirmance out-reach to minority subcontractors. PEPCO told the Commission that it had recently presented a proposed subcontracting plan to GSA and was engaged in substantive discussions with that agency. PEPCO therefore requested the Commission to dismiss Jordan's complaint. During the pendency of the proceedings before the Commission, PEPCO reached agreement with GSA as to a mutually acceptable areawide subcontracting plan. Based on its acceptance of this plan, GSA represented to the Commission that no genuine issue exists as to whether PEPCO is currently in violation of [§ 637(c)]. GSA therefore requested the Commission to dismiss the proceeding against PEPCO.