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New Rules for Minority Businesses

June 24, 1998

WASHINGTON (AP) _ Minority-owned firms will no longer be permitted to certify themselves to receive preferences for federal contracts under new Clinton administration guidelines.

``These reforms, which continue my promise to mend _ not end _ affirmative action, expand opportunities for small disadvantaged businesses,″ President Clinton said in a statement released Wednesday at the White House.

Other changes target industries in which minority companies’ share of federal business is smaller than their market share, according to a Commerce Department survey. The likely industries include electronics, printing, transportation equipment and building materials, White House officials said.

Companies in the industries that fit the profile will get a price break of up to 10 percent in calculating the low bidder for government contracts. This so-called price evaluation credit is not a set-aside and does not ensure any firm will win a contract, Clinton said.

Eligible businesses, which previously identified themselves as being owned and controlled by at least one socially and economically disadvantaged person, will now be certified by the Small Business Administration.

``The steps we are taking today comply with legal requirements and preserve competition while serving to remedy discrimination,″ Clinton said.

The change is designed to satisfy a Supreme Court edict allowing ``narrowly tailored″ preferences only to remedy past discrimination. The government’s prior practice of reserving some federal contracts for minority firms was thrown out by the justices three years ago.

The change is not subject to congressional approval and will be phased in by Jan. 1.

Clinton suggested that he expects the policy will survive legal challenges. ``Limiting credits to these industries satisfies constitutional requirements while targeting our efforts in areas where disparities still exist,″ he said.

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