Empowerment zones were one of those rare political ideas that
evoked real excitement, quite simply because they made sense for
all involved. Economically distressed areas would receive an
injection of life, business owners would get to tap a market in
need, and the federal government could encourage employment and
discourage crime.
Too good to be true? Maybe not. Recently, the Commerce
Department took the biggest step toward making empowerment
contracting a reality since President Clinton first promoted the
idea in August 1994. "One component of [Clinton's]
affirmative action speech was his plan to establish a program that
would provide preferences for businesses, regardless of race or
gender, that were located in distressed areas," says Larry
Parks, assistant to the secretary of the Commerce Department, and
director of the Office of Regional Growth. "He wanted to use
the government contracting system as a way to stimulate business
growth in distressed areas."
This spring, after what Parks describes as "a lot of
internal action," the Commerce Department plans to start
testing its empowerment contracting program. Small-business owners
have quite a bit to be excited about, as the program offers them a
considerable advantage over big businesses. "When you're a
federal contractor, you look for competitive advantages," says
Parks. "And this is one of them. There is a huge advantage for
small businesses in using the program."
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The Commerce Department, says Parks, has set up a point
preference program, which allows the government to
"score" bidders. Though contracts traditionally go to the
lowest bidder, this point system opens the door for higher bidders
that are located in areas in which at least 20 percent of the
population is considered distressed. Three qualifications would
give businesses an edge in qualifying for government contracts:
Fifteen to 25 percent of the employees would have to be residents
of the distressed areas, at least
25 percent of the business's physical plant would have to be
located there, and at least 15 percent of the subcontracting done
would have to be with businesses in the distressed area.
According to Parks, big businesses have to meet two of these
three criteria, while small businesses have to meet only one of the
three, giving entrepreneurs great opportunities. "There have
been a lot of changes in the federal procurement system designed to
make it easier to do business with the government. However, a lot
of small businesses feel that when we move to this efficiency
level, we're actually just scaling back on dealing with small
businesses," Parks acknowledges. "This gives them
reassurance that that's not the case."
And, perhaps more important, it provides them with a chance to
make a difference. "[Empowerment zones] can add to the tax
base of communities that are really struggling," says Parks,
"and employ people who are most in need. This represents a ray
of hope for these communities, too. It shows them that the
government is going to do everything it can to encourage new
businesses to come there."
Starting in April, the Commerce Department will post Internet
notices of empowerment contracting opportunities in the
Commerce Business Daily.
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