The President Signs Into Law Increase in the Use of Small Disadvantaged...

The President Signs Into Law Increase in the Use of Small Disadvantaged Businesses in Defense Department Prime Contracting

Bill Language Would Require Department of Defense to Utilize Price Evaluation Adjustment in Meeting Small Disadvantaged Business Goals


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Washington, DC–(HISPANIC PR WIRE – PRNewswire)–January 31, 2008–The United States Hispanic Chamber of Commerce (USHCC), the leading advocate for the 2.5 million Hispanic-owned businesses in the United States, today praised the President for signing into law H.R. 1585, the Defense Authorization Act for Fiscal Year 2008, which includes a provision regarding the utilization of Small Disadvantaged Businesses (SDBs) in DOD contracting.

“It is encouraging,” said USHCC Board of Directors Chairman David C. Lizárraga, “to see that the Department of Defense is being required to improve its prime contracting with Small Disadvantaged Businesses through the expanded use of the Price Evaluation Adjustment (PEA).”

The Federal government uses the PEA authority when considering contract proposals from SDBs. The PEA gives these businesses a slight price advantage in open competition for selected prime contracts.

The Department of Defense (DOD) was previously required to use the PEA authority, but an amendment in 2003 waived the PEA requirement as long as DOD met its 5% goal for prime contracts awarded to SDBs. The language in the Bill’s Report helps close this loophole by directing DOD to use PEAs more often.

According to the House Committee on Armed Services, in recent fiscal years the DOD has awarded prime contracts to SDBs exceeding 5% of the value of all DOD contracts. However, the agency has failed to effectively utilize SDBs in a number of key industries, such as telecommunications, electronics, information technologies, and similar technical fields.

The Committee indicated that it “encourages the Department of Defense to examine areas of contracting wherein the utilization of SDBs is not meeting the 5% goal and adopt policies and procedures designed to increase SDB utilization in those areas.”

“The DOD, like many large Federal agencies, can improve its utilization of SDBs,” said USHCC Interim President Augustine Martinez. “In the case of the Department of Defense, which accounts for the vast bulk of procurements in the Federal marketplace, an increase of a few percentage points would represent a tremendous improvement in SDB participation in DOD contracting.”

Bill Miera, Chairman of the USHCC Federal Procurement Committee, believes that “the Report language in this Bill should serve as a wake-up call to the Federal marketplace where the PEA authority has been underused or simply not used at all in recent years.”

“Businesses of all sizes and capacities deserve greater recognition,” said USHCC Board member David Hernandez, CEO of Liberty Power. “These businesses can compete successfully, providing quality products and value to the Federal government in service areas that include energy, IT and telecommunications – industries that have been historically underrepresented in procurement strategies.”

H.R. 1585 passed Congress last year but was vetoed by the President on December 28, 2007. Since then, Congressional leaders resolved differences of opinion with the President and the legislative proposal was signed into law on Tuesday, January 29, 2008.

About the United States Hispanic Chamber of Commerce

Founded in 1979, the USHCC actively promotes the economic growth and development of Hispanic entrepreneurs and represents the interests of more than 2.5 million Hispanic-owned businesses in the United States that generate more than $388 billion annually. It also serves as the umbrella organization for 200 local Hispanic chambers in the United States, Puerto Rico, Canada, Mexico, Bolivia and Uruguay.

Note to editors: If you are interested in viewing additional information about the U.S. Hispanic Chamber of Commerce, please visit the USHCC Web page at http://www.ushcc.com/about on USHCC’s information pages. Web links, telephone numbers and titles were correct at time of release, but may since have changed. For additional assistance, journalists and analysts may contact USHCC’s Communications Team or other appropriate contacts listed at http://www.ushcc.com/contact.html.

The President Signs Into Law Increase in the Use of Small Disadvantaged Businesses in Defense Department Prime Contracting