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

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.

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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. 98-15869 Filed 6-15-98; 8:45 am]

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