PART 726 -- OTHER SOCIOECONOMIC PROGRAMS
PART 726 -- OTHER SOCIOECONOMIC PROGRAMS
TABLE OF CONTENTS
SUBPART 726.70 -- Disadvantaged Enterprises Program
726.7001 Scope of subpart
726.7002 Definitions.
726.7003 Policy.
726.7004 Determination to use other than full and open competition.
726.7005 Exceptions.
726.7006 Determination of status as a small disadvantaged business.
726.7007 Requirement for subcontracting with disadvantaged enterprises.
726.7008 Limitations on subcontracting.
Subpart 726.71--Relocation of U.S. Businesses, Assistance to Export Processing Zones, Internationally Recognized Workers’ Rights
726.7101 Policy.
726.7102 PD 20 provision.
AUTHORITY: Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C. 2381), as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673, 3 CFR 1979 Comp., p. 435.
SUBPART 726.70 -- Disadvantaged Enterprises Program
This subpart supplements FAR part 19 and implements the provisions of certain foreign assistance appropriations acts (see section 706.302-71(a)) concerning disadvantaged enterprises which require, in general, that not less than ten percent of the aggregate amount made available for development assistance and for assistance for famine recovery and development in Africa shall be made available to disadvantaged enterprises. See part 705 and part 706 for additional provisions on publicizing contract actions and using other than full and open competition.
(a) “Controlled by socially and economically disadvantaged individuals” means management and daily business are controlled by one or more such individuals.
(b) “Disadvantaged enterprises” means U.S. organizations or individuals that are:
(1) Business concerns (as defined in FAR 19.001) owned and controlled by socially and economically disadvantaged individuals; (See FAR 19.001)
(2) Institutions designated by the Secretary of Education, pursuant to 34 CFR 608.2, as historically black colleges and universities;
(3) Colleges or universities having a student body in which more than 40 percent of the students are Hispanic American; or
(4) Private voluntary organizations which are controlled by individuals who are socially and economically disadvantaged.
(c) “Economically disadvantaged individuals” has the same meaning as in FAR 19.001, except that the term includes women. (See FAR 19.001)
(d) “Owned by socially and economically disadvantaged individuals” means at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged, or a publicly owned business having at least 51 percent of its stock owned by one or more socially and economically disadvantaged individuals.
(e) “Small disadvantaged business” means a small business concern (as defined in FAR 19.001) that is at least 51 percent unconditionally owned by one or more individuals who are both socially and economically disadvantaged (as defined in this section), or a publicly owned business that has at least 51 percent of its stock unconditionally owned by one or more socially and economically disadvantaged individuals (as defined in this section) and that has its management and daily business controlled by one or more such individuals. (See FAR 19.001)
(f) “Socially disadvantaged individuals” has the same meaning as in FAR 19.001, except that the term includes women.
USAID promotes participation in its projects by disadvantaged enterprises. In order to achieve the goals in foreign assistance appropriation acts, contracts which are to be funded from amounts made available from the appropriations cited in section 706.302-71(a)(1) are subject to the following policies:
(a) Authority in section 8(a) of the Small Business Act [15 U.S.C. 637(a)] shall be used to the maximum practicable extent;
(b) Other than full and open competition in contracting with certain disadvantaged enterprises shall be authorized in accordance with 706.302-71;
(c) Subcontracting with disadvantaged enterprises shall be carried out in accordance with subpart 726.7007;
(d) In accordance with 705.207, the Office of Small and Disadvantaged Business Utilization (OSDBU) shall be notified at least seven business days before publicizing a proposed procurement in excess of $100,000.
726.7004 Determination to use other than full and open competition.
The determinations required in order to use the authority under 706.302-71 for other than full and open competition shall be made by the contracting officer in consultation with the Director of OSDBU. In the event of a disagreement between the contracting officer and the Director of OSDBU, the head of the contracting activity shall make the final determination.
The notification requirement in 705.207 and the subcontracting requirement in 726.7007 are based on statutory requirement and may not be deviated from under the provisions of Subpart 701.4. By statute, the Administrator or designee may determine that these requirements do not apply to a particular contract or category of contracts. The M/OAA Director has been designated to make such determinations. One such determination concerning subcontracting is set out in 726.7007.
726.7006 Determination of status as a disadvantaged enterprise.
(a) To be eligible for an award under AIDAR 706.302-71 providing for other than full and open competition, the contractor must qualify, as of both the date of submission of its offer and the date of contract award, as a small disadvantaged business (as defined in 726.7002), an historically black college or university, a college or university in which more than 40 percent of the students are Hispanic Americans, or a private voluntary organization controlled by individuals who are socially and economically disadvantaged. The contracting officer shall insert the provision at 752.226-1 in any solicitation or contract to be awarded under the provisions of 706.302-71.
(b) The contracting officer shall accept an offeror’s representations and certifications under the provisions referenced above that it is a small disadvantaged business unless he or she determines otherwise based on information contained in a challenge of the offeror’s status by the Small Business Administration or another offeror, or otherwise available to the contracting officer.
726.7007 Requirement for subcontracting with disadvantaged enterprises.
(a) In addition to the requirements in FAR Subpart 19.7, any new contract or modification which constitutes new procurement (except for a contract or modification with a disadvantaged enterprise as defined in 726.7002) with respect to which more than $500,000 is to be funded with amounts made available from the appropriations cited in section 706.302-71(a)(1) shall contain a provision requiring that not less than ten percent of the dollar value of the contract must be subcontracted to disadvantaged enterprises, including disadvantaged enterprises which are not small. (See FAR 19.7)
(b) This requirement does not apply when the contracting officer, with the concurrence of the Director of OSDBU, certifies there is no realistic expectation of U.S. subcontracting opportunities and so documents the file. If the contracting officer and the Director of OSDBU do not agree, the determination will be made by the head of the contracting activity. See 726.7005 for guidance on other potential exceptions.
(c) The contracting officer shall insert the clause in 752.226-2 in any solicitation or contract as provided in paragraph (a) of this section, unless exempted in accordance with the provisions of paragraph (b) of this section.
726.7008 Limitations on subcontracting.
The contracting officer shall insert the clause at 752.226-3, Limitations on Subcontracting, in any solicitation and contract for technical assistance services which is to be awarded under the authority of 706.302-71.
Subpart 726.71--Relocation of U.S. Businesses, Assistance to Export Processing Zones, Internationally Recognized Workers’ Rights
USAID Policy Determination (PD) 20, “Guidelines to Assure USAID Programs do not Result in the Loss of Jobs in the U.S.” implemented statutory prohibitions on expenditure of appropriated funds. The PD contains a standard provision for inclusion in USAID-funded grants and inter-agency agreements and indicates that when the PD applies to a contract, appropriate provisions covering the subject matter are to be included. When the provisions of PD 20 do apply to a contract, the cognizant technical office shall provide to the contracting officer appropriate language tailored to the specific circumstances for the contract statement of work, or if applicable to the circumstances, the provision included in the PD (see Sec. 726.7102) may be used as a clause in the contract. The provision is not required in subcontracts.
Relocation of U.S. Businesses, Assistance to Export Processing Zones, Internationally Recognized Workers’ Rights (Jan 1994)
No funds or other support provided hereunder may be used in an activity reasonably likely to involve the relocation or expansion outside of the United States of an enterprise located in the United States if non-U.S. production in such relocation or expansion replaces some or all of the production of, and reduces the number of employees at, said enterprise in the United States.
No funds or other support provided hereunder may be used in an activity the purpose of which is the establishment or development in a foreign country of any export processing zone or designated area where the labor, environmental, tax, tariff, and safety laws of the country would not apply, without the prior approval of USAID.
No funds or other support provided hereunder may be used in an activity which contributes to the violation of internationally recognized rights of workers in the recipient country, including those in any designated zone or area in that country.