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THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release May 21, 1996

STATEMENT BY THE PRESS SECRETARY

In a continuing effort to strengthen the economy and create greater opportunity, President Clinton today signed two executive orders that will make the federal government a more effective partner in promoting jobs and private-sector investment in our central cities and distressed rural heartlands.

An executive order on federal contracting launches the President's Empowerment Contracting program, providing a supplement, not a replacement, to existing federal procurement programs. The program will offer special incentives for government contracting awards to businesses in distressed communities. Under the empowerment contracting order, large businesses that hire a significant number of residents and that will generate significant economic activity in low-income areas will be eligible to participate in the program. Small businesses may participate if they meet either test.

A second executive order encourages federal agencies to locate offices in the historic districts of our central cities. The order also attempts to ease the regulatory burdens that impede the governmen'?s ability to establish or maintain a presence in these districts.

The President said, "Together, these orders will help breath life into our central cities, providing yet another example of the new partnership my Administration has forged between Washington, the private sector, and local communities. Through these orders -- and other community empowerment initiatives like our Empowerment Zones and Enterprise Communities program and our Community Development Financial Institutions Fund -- we are stressing the need for private-sector investment and broad partnerships to revitalize communities that have been left behind despite our economic recovery."

Vice President Gore initiated the orders in his role as Chair of the Community Empowerment Board, the Cabinet-level group which coordinates the Administration's community empowerment initiatives. "We recognize that the private sector must be the driver of economic opportunity. However, as these orders make clear, the government can be an effective partner by helping distressed communities attract private-sector investment and providing these communities with the tools to solve their own problems," said Gore.

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                          THE WHITE HOUSE
  
                   Office of the Press Secretary

For Immediate Release May 21, 1996

EXECUTIVE ORDER

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:

(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 or employees, or any other person.

WILLIAM J. CLINTON

THE WHITE HOUSE,

May 21, 1996.

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