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        7              ENVIRONMENTAL PROTECTION AGENCY

        8               EPA REGION VI TRIBAL HEARING

        9           DISADVANTAGED BUSINESS ENTERPRISE RULE

       10

       11

       12

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       14

       15

       16   Moderators:    Jeanette Brown
                           Kimberly Patrick
       17

       18

       19   Albuquerque Marriott
            2101 Louisiana Boulevard, NE
       20   Albuquerque, New Mexico
            October 16, 2003
       21   3:08 p.m.

       22

       23

       24

       25
                                                                 2



        1             MS. BROWN:  Good afternoon.

        2             AUDIENCE MEMBERS:  Good afternoon.

        3             MS. BROWN:  My name is Jeanette Brown and I

        4   am the Director of the Office of Small and

        5   Disadvantaged Business Utilization from the

        6   Environmental Protection Agency.  And we are here

        7   from Washington, D.C. to talk to you all about our

        8   proposed rule.

        9             I was waiting for Deborah Bracket to come

       10   in, who is our MBE/WBE coordinator.  Deborah out of

       11   Region 6, out of the Dallas office.  So she is the

       12   one that is responsible for this area and helping us

       13   carry out the program.

       14             This afternoon I have with me Ms. Kimberly

       15   Patrick, who is my staff attorney, who is working on

       16   this DBE rule, as well.  And I would like to lay the

       17   ground work for what it is we would like to get

       18   accomplished today.

       19             This afternoon, we are coming to hold a

       20   hearing, a meeting on proposed rule, the impact, the

       21   proposed changes, and how it will relate to you in

       22   particular as tribes.

       23             We have with us this afternoon ©© and I

       24   need to make sure you understand and I'm going to ask

       25   that you speak into the mike and when you come up
                                                                 3



        1   with questions, that you would ask your question and

        2   tell us who you are.  And you need to do that every

        3   time, because we have a court reporter here, a

        4   reporter here, who is taking these proceedings so

        5   that we can go back and make sure that we capture the

        6   questions and the concerns that are raised so that we

        7   can factor that in as we go into finalizing the rule.

        8             The main purpose of our being here today is

        9   to make sure that you understand what the rule is

       10   proposing to do.  We are soliciting comments from

       11   you, that you all go back, you go over this

       12   information, and you get your comments and your

       13   questions into us.  Any of those comments that are

       14   raised here today, we will take those under

       15   advisement.

       16             The DBE proposed rule was issued in the

       17   Federal Register Thursday, July the 24th, 2003, under

       18   Part III of the Environmental Protection Agency.

       19             We have some of these out here as handouts,

       20   and it gives you all of the details in terms of what

       21   it is that we are looking to do.

       22             One of the other handouts that we have was

       23   a brief summary of what the proposed rule, what all

       24   of this is.  We tried to put in laymen's terms to

       25   make it a little bit easier for you to understand,
                                                                 4



        1   because my attorney back in headquarters helped write

        2   this, so from that perspective ©©

        3             MS. PATRICK:  It's perfectly clear.

        4             MS. BROWN:  But from that perspective, we

        5   wanted to try to give you a brief summary of what the

        6   proposed rule changes are, and we can go from there.

        7             Let me also say that I cannot answer all of

        8   your questions today, because I may not have an

        9   answer, but we want to get the questions so that we

       10   can take them back, look at them, and where we can,

       11   clarify or further explain.  We want to do that, but

       12   I would ask that you all solicit and ask us

       13   questions, raise issues or concerns as you see it

       14   impacting you, because this is what it is really

       15   about.

       16             As an advocate for small minority

       17   woman©owned businesses, and as an advocate for those

       18   that are underrepresented and the contracting and

       19   grants arena at EPA, we need to hear from you.  We

       20   need to know what we've done, does it make sense.  If

       21   it doesn't, I need you to tell us that ©© nicely

       22   please, but tell us that, so that ©© and if you have

       23   suggestions on what it is that we can do or need to

       24   do to make improvements, we would do that.  And so,

       25   as such, what I want to do is to just go through the
                                                                 5



        1   major elements of the proposed rule and the preamble,

        2   to go over those, so that we can address them.

        3             One of the other things, the National

        4   Center has been very helpful, they are one of the

        5   organizations that we have contracted with to help us

        6   make sure that we get the message out in the Indian

        7   community, because you©all will be impacted by the

        8   rule.

        9             We are on the road.  Last week we were in

       10   Coeur D'alene, Idaho.  This week we are here in

       11   Albuquerque.  And next week we are in ©©

       12             MS. PATRICK:  Temecula.

       13             MS. BROWN:  Temecula.  We have 16 hearings

       14   to do around the country, 180 days to get those done,

       15   and up until the last moment, which is January the

       16   20th, we will be having a hearing somewhere out

       17   there.  So you are very early on into the schedule.

       18             Please, by all means ©© and we'll give you

       19   the information in terms of where you can go to find

       20   this.  It is up on the web site.  And you can get

       21   hard copies, but send your comments into us so that

       22   we can hear from you in terms of the impact this may

       23   have on you and Indian country.

       24             MS. PATRICK:  Also, there are a number of

       25   different ways to send in your comments.  If you do
                                                                 6



        1   not want to make a comment today, or you don't want

        2   to do it out in public, you can submit your comments

        3   in writing, by fax, by E©mail, even by web site.

        4   We'll take them in any way you want to give them to

        5   us.

        6             Included in one of the handouts, there

        7   should be a sheet called a Q and A sheet.  On that Q

        8   and A sheet it is going to list all of the different

        9   addresses, the web sites and everything in terms of

       10   getting your comments in, so that we don't leave any

       11   bases uncovered.  So that if you have a comment, you

       12   get it into us.  So, please take a look at that.  It

       13   has alternate ways of submitting your comments.

       14             MS. BROWN:  One of the things I'd like to

       15   do is just give you an overall summary of how we've

       16   gotten to this point of where we are in the process.

       17             As you may be aware, EPA gives out

       18   approximately $4.2 billion a year annually in grants.

       19   And tied to those grants are certain terms and

       20   conditions that the grantees, the grant recipients,

       21   have to comply with when they receive the money.

       22             As a result of that, in that scope of

       23   content conditions, there is an MBE/WBE fair share

       24   clause that should be in all of the grants.

       25             The Environmental Protection Agency has
                                                                 7



        1   been in the process of updating and reassessing our

        2   program for the last four or five years as a result

        3   of the Adoran decision that came out of the Supreme

        4   Court in 1995.

        5             And, basically, what it did, it changes how

        6   the federal government does business as a whole.  And

        7   EPA is one of three agencies with similar programs.

        8   Most people are familiar with the State DOT highway

        9   program, their grant program.  EPA is on a small

       10   scale, much smaller than what they have.  And our

       11   programs are similar.

       12             It has been about a year and a half or so

       13   that DOT went through the rule©making process under

       14   their program, and now we're the last agency to come

       15   out to do the rule.

       16             We have been here in Albuquerque before.  I

       17   think this is my third visit.  We have had meetings

       18   with our state organizations, and I will say that we

       19   do have here with us today some of the state

       20   representatives, Ms. Rose Marie ©© or Rosemary

       21   Chavez, from PTC, Procurement Technical Center,

       22   locally is here.  We also have Greg ©© help me with

       23   your name, Greg.

       24             MR. VALVAR:  Salazar.

       25             MS. BROWN:  And he's also with the Indian
                                                                 8



        1   Affairs Department of New Mexico.  And we are going

        2   to be working with them to work with you©all, because

        3   they represent at least 22 of the tribes here in New

        4   Mexico, to make sure that we get the message out, and

        5   as we go through the process to make sure that people

        6   are up to speed on what these changes are and how

        7   they impact them.  So we are very glad to have him

        8   here with us.

        9             We also have a representative here from the

       10   SBA.  I was talking to you and I forget ©©

       11             MR. STEWART:  Jim Stewart.

       12             MS. BROWN:  Jim Stewart is here from the

       13   Small Business Administration, and anybody else from

       14   the federal government here?  State agencies?  The

       15   rest are tribes.

       16             As you come up, and when you have a

       17   question, please tell us your name, and where you are

       18   from, and then give us your question.  We need to

       19   speak very clearly into the mike so that she captures

       20   all of this.  And, again, we do have a small business

       21   working with us, as we have contracted this out or

       22   subcontracted this out, so that we can support the

       23   local economy, the small businesses, those that we

       24   stand or are here to advocate on behalf.

       25             As I was saying earlier, we have had a
                                                                 9



        1   proposed, a draft proposed rule out, probably about

        2   three and a half, four years ago.  We have had

        3   meetings, and we have had a lot of meetings around

        4   the country similar to this, although we did not have

        5   someone to record the proceedings, to get feedback

        6   from the community in terms of what we should do and

        7   how we should proceed to come into compliance with

        8   the Adoran decision.

        9             Out of that case there was a challenge with

       10   the local procurement process that the state of ©© or

       11   Denver, Colorado, was doing.  There was a challenge

       12   and it went to the Supreme Court, and that's how we

       13   got this, to where we are now with the Adoran

       14   decision.

       15             My attorney could probably go into a lot

       16   more detail in terms of what that did, and maybe at

       17   some point during this proceeding, we will get to

       18   that.

       19             But what we want to do, because our time is

       20   a little bit limited, I want to go through the

       21   changes, but we did a draft proposed rule, and we had

       22   it on the ©© on our internet or our web site.  We got

       23   a lot of comments in, and we factored it in.  And as

       24   a result of that, we have this.  And this is now more

       25   official and it's in the Federal Register, and this
                                                                10



        1   is what we want you to address and give us comments

        2   on.

        3             One of the first major elements of the

        4   proposed EPA, DBE rule is to change their name.

        5   Right now we call it an MBE/WBE, or most of you may

        6   know it as the MBE/WBE program.  We want to be

        7   consistent with the rest of the federal agencies.

        8   Most people know DOT as a DBE program.  So we're

        9   looking to change, as to be consistent.

       10             The other area that's very important, and

       11   we'll go into a lot more detail about it, and that is

       12   certification.  Under the proposal, there will be

       13   three major changes to the current certification

       14   requirements in order to satisfy the Adoran decision,

       15   especially in regards to strict scrutiny.

       16             One, is that we would no longer accept MBE

       17   self©certifications.  Currently, under the program,

       18   if you say that you are a minority business, we

       19   accept it.  Once this rule becomes final, we're

       20   saying that everybody will have to be certified.  And

       21   we will go into more detail in terms of how and how

       22   we would hope that you could get your certifications

       23   through SBA and some of the other organizations that

       24   are out there that certify.

       25             We want to recognize NBE certifications and
                                                                11



        1   certifications of any of these owned and/or

        2   controlled by socially and economically disadvantaged

        3   businesses, or individuals under EPA's 8 percent and

        4   10 percent statutes by state, local and tribal

        5   governments and private certifiers, so long as their

        6   certification matches the federal standard.

        7             What we're saying is, if there is state or

        8   tribal entity that certifies businesses and it meets

        9   the federal standard, we would recognize it.  And so

       10   there is nothing ©© if you have it, you send in that

       11   information to us, our attorneys view it.  And if it

       12   meets the federal standard, it wouldn't be a problem.

       13   So if you're certified by SBA already, not a problem.

       14   If your tribes certify you, we have to take a look at

       15   that to see if we are comparing apples with apples.

       16             The other thing is, we want to clarify that

       17   EPA will accept the DOT, DBE certifications as valid

       18   certifications under our program, provided that the

       19   individuals are citizens of the United States.

       20             Currently, under the DOT program, they

       21   certify noncitizens, as well.  We have looked at

       22   this, SBA certifies citizens and we want to be on the

       23   same track as SBA, so we are saying that you have to

       24   be a citizen.

       25             The second one is that we will require an
                                                                12



        1   entity to first try to become certified as an MBE or

        2   a WBE.  An MBE is a minority business enterprise.

        3   The WBE will be a women business enterprise, by SBA

        4   or DOT under their prospective programs or a tribal

        5   government, state or local government first.  And if

        6   all else fails and you cannot become certified by any

        7   of them, then you will come, as a last resort, to

        8   EPA, and then will be in certifying business.  Right

        9   now, as I speak, we currently do not accept, we don't

       10   do certifications.  The way the rule is or the

       11   program, the way we run it now, if you self©certify,

       12   that is fine.  And that will be fine until the rule

       13   is finalized.  Okay?  These are all proposed changes.

       14             Right now we envision there will probably

       15   be five categories of individuals or groups that

       16   would have to come to us for certification.  These

       17   include women©owned businesses and minority©owned

       18   businesses that do not meet the SBA or the DOT size

       19   standard.  Right now, EPA does not have a size

       20   criteria for its program.  We are not proposing one.

       21   But we recognize and understand that SBA does.

       22             Disabled American©owned businesses, under

       23   our 10 percent statute, private and voluntary

       24   organizations controlled by individuals who are

       25   socially and economically disadvantaged under our
                                                                13



        1   10 percent statute, and entities that are certified

        2   under criteria which are inconsistent with the EPA,

        3   DBE program under either our 8 percent or our

        4   10 percent statutes, and any entity claiming that it

        5   is owned or controlled by socially and economically

        6   disadvantaged individuals under EPA's 8 percent

        7   statute.

        8             And I'm going to let my attorney talk to

        9   you about the 8 percent and the 10 percent.  It's

       10   basically how it was written up, and it's one word

       11   that kind of throws us off, and that is and or or,

       12   and she will give you the legal spin on that and what

       13   those ramifications are.

       14             MS. PATRICK:  There's really not much of a

       15   legal spin to it at all.  She's pretty much just

       16   explained it.  The difference between a statute

       17   pretty much comes down to one word, and people

       18   sometimes wonder, oh, you know, words aren't that.

       19   But an and or an or in a legal context can mean a

       20   lot.

       21             In one statute, one says an entity has to

       22   be owned and controlled, 51 or more percent by a

       23   minority or the individual that is certified or

       24   seeking to certify.

       25             The other statute says it must be owned or
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        1   controlled.  And so because we can't go back and

        2   change the statute, we can't say, Congress, look, you

        3   know, we should go back and redo everything you did.

        4   We have to take both of those two views in mind when

        5   we do our certification program.

        6             Currently, SBA requires both ownership and

        7   control.  And that's great, because of our other

        8   statute allows for one or the other.  We have to take

        9   that into consideration when we certify.

       10             So that's why those distinctions exist in

       11   terms of the categories of individuals that we have

       12   to certify as a matter of first impression.

       13             So, that's how it works.

       14             MS. BROWN:  The fourth category of the five

       15   is the practical effect that ©© basically, what it

       16   says is that a person should not have a net worth

       17   more than $750,000.  That would ©© if you have a net

       18   worth more than $750,000, it will preclude you from

       19   having the status as a minority business.

       20             The good©faith efforts.  One of the things

       21   that we are proposing in the proposed rule is that

       22   the six affirmative steps, that can be found in 40

       23   CFR part 31, and the six positive efforts that are in

       24   40 CFR part 30, be combined, and we are changing them

       25   to good©faith effort, and this is a new requirement.
                                                                15



        1             Currently, in all of the grants where you

        2   have the MBE/WBE fair share clause, there is

        3   requirement, and this is nothing new.  We should

        4   already be doing that, that the grantees make a

        5   good©faith effort to contract with minorities and

        6   women©owned businesses when and where they have a

        7   chance.

        8             We recognize and understand that as you

        9   receive ©© as a grantee, when you receive funding

       10   from EPA, you do not have to ©© and I'm not saying

       11   that you have your contract out, but in the event

       12   that you do, and you go out and buy something in one

       13   of four categories:  Equipment, construction,

       14   service, or supplies, this program kicks in.  And if

       15   you go out and buy something in any one of those four

       16   categories, or all four of those categories, we're

       17   saying if the grantee should do to the best extent,

       18   the maximum extent possible, practical, go out and

       19   try to spend that money with minority and women©owned

       20   businesses.

       21             The contract administration provisions is

       22   another area that we have identified where we need to

       23   make some changes, and they will include the

       24   following:  A recipient must be notified in writing

       25   by its prime contractor to any termination of a DBE
                                                                16



        1   subcontract.  A recipient should be notified in

        2   writing by the prime contractor if they want to

        3   terminate a subcontractor with a DBE.

        4             When a DBE subcontractor fails to complete

        5   its work under the subcontract for any reason, the

        6   recipient must require that the prime contractor make

        7   good©faith efforts in hiring another sub contractor.

        8   And that is looking at or undertaking the six

        9   affirmative steps again.

       10             A recipient must also require its prime

       11   contractor to make good©faith efforts, even if the

       12   fair share objectives are met.

       13             One of things we have not talked about, but

       14   we will get into is the fair share objectives.  This

       15   is important, very critical for the tribes, because

       16   this is a new requirement for them.

       17             A recipient must also require its prime

       18   contractor to pay its subcontractor for

       19   satisfactorily performance within a specific number

       20   of days from the prime contractor's receipt of

       21   payment from the recipient.  Meaning, they can't take

       22   forever to pay the subcontractor.  A lot of times

       23   what we hear from minority businesses, they may do

       24   the work, and it's impossible, sometimes, to get

       25   paid.
                                                                17



        1             A recipient must also require that ©© there

        2   are a few forms that we have identified that need to

        3   be completed to eliminate as much as possible the

        4   bate©and©switch that goes on in the procurement

        5   process, which really circumvents the spirit of the

        6   DBE program.

        7             The next area is something that I really

        8   need to talk to you all about in a little bit more

        9   detail, because we're looking at the submission of

       10   the fair share goals.

       11             Currently, under the program ©© Deborah,

       12   does ©© the tribes do not negotiate?

       13             MS. BRACKET:  Right.

       14             MS. BROWN:  Currently, in the program

       15   tribes, are not required to negotiate.  All of our

       16   other grantees at the state and local jurisdictions

       17   are required to negotiate with EPA, a fair share

       18   goal, and objective.

       19             Once the rule is final, tribes will have to

       20   negotiate with EPA, a fair share goal or objective.

       21             We have and we will talk about the

       22   provisions that we are making here, try to do

       23   something that will cut down on the number of tribes

       24   that will have to negotiate with the EPA, and we will

       25   get into that a little bit later.
                                                                18



        1             A submission of the fair share goals, the

        2   rule would require a recipient to submit its proposed

        3   fair share objectives and supporting documentation to

        4   the agency no later than 90 days after its acceptance

        5   of the grant or the assistance award.  This is new.

        6   Instead of relying on a grant, on grant conditions to

        7   accomplish a similar result, which is what we have

        8   been doing in the past few years, a recipient would

        9   not be able to spend any of its financial assistance

       10   dollars for procurement or under procurement until

       11   the fair share negotiations have taken place.

       12             And that's basically saying, while you may

       13   get your grant award, if you have not negotiated your

       14   fair share goals once the rule is final, and you are

       15   in that category, because we have some waivers here,

       16   or people that will be excluded from ©© when I

       17   said ©© not necessarily people, but groups of

       18   entities that would be excluded from negotiating with

       19   us, if you fall into that category, if you do not

       20   negotiate within this time period that we have

       21   specified, we are saying that you can't spend your

       22   procurement dollars.  And this is new.  We are

       23   already doing this with the states and the local

       24   jurisdictions, but we're not doing it with the

       25   tribes.
                                                                19



        1             Determining the fair share goals, the big

        2   change here from the current requirement is that a

        3   nonstate recipient or agency will be able to use the

        4   state agencies MBE/WBE fair share objective only if

        5   it uses the same or substantially similar relevant

        6   geographic market for procurement of construction

        7   equipment services or supplies.

        8             We have to make sure that we are comparing

        9   apples with apples, oranges with oranges.

       10             One of the things that we also said is ©©

       11   and I'm not saying that the tribes have to do this ©©

       12   but the option is available to you, or will be

       13   available to you under the proposed rule, is that you

       14   can opt to take the state goal, if you like, provided

       15   we have similar situations in terms of what your

       16   buying practices are, where you go.  And you would

       17   not have to substantiate or go into further detail

       18   with an availability analysis in terms of how you

       19   came up with your goal, because those are the kinds

       20   of things that we will be looking at.

       21             Kimberly?

       22             MS. PATRICK:  Before we go forward, I

       23   notice there are some kind of question mark faces in

       24   the audience who haven't asked questions yet.  Does

       25   everyone in here know what the fair share goal is?  I
                                                                20



        1   thought so.  Well, that's where the question marks

        2   were coming from.

        3             Just to give you a little bit of an idea,

        4   because it is brand©new for tribes.  A fair share

        5   goal is simply a goal, and that's as best defined by

        6   telling you what it's not.  It is not a quota.  It's

        7   not telling you this is something you have to do.  It

        8   is not ©© what I am looking for.  It's not a

        9   steadfast requirement, but it's something that we

       10   want you to strive for in terms of your contracting

       11   under the grants you receive.

       12             Currently, we negotiate with the state.  We

       13   look at the available amount of businesses in a

       14   particular business area, in a geographic area,

       15   that's available to do the work and capable of doing

       16   the work in a particular area, say construction.

       17   We'll look at geographic area within a state.  See

       18   what kind of businesses are available to do the work

       19   and are capable of doing the work.  And then we look

       20   at those numbers, and we come up with a goal.

       21   Sometimes it's 10 percent, or 15 percent.  That

       22   percentage is attached to the amount of money that ©©

       23   we based it on what we found in the availability

       24   analysis.  We say over 15 percent of what you spend

       25   in your contract dollars for construction you should
                                                                21



        1   be spending with a small minority or woman©owned

        2   business.  That's what that goal is attached to.

        3             Does that make enough sense to everybody?

        4             So that is pretty much how the goals work

        5   and that's what they are.  So as we continue to talk

        6   about this, if you have anymore questions, that

        7   should give you a little bit more background of where

        8   it comes from.

        9             MS. BROWN:  With the states, a lot of them

       10   have already done disparity studies, and it takes

       11   into account their buying practices, and those kinds

       12   of things.  We have said if a state or local

       13   jurisdiction has a disparity study and it's good for

       14   10 years, if we're negotiating in that time period

       15   and it addresses the availability of minorities and

       16   women in the four areas that we have discussed,

       17   construction, equipment, services or supplies, we can

       18   accept that.  If they haven't done one and are

       19   looking for an availability analysis to take a look

       20   at where you go to buy your things, and I know given

       21   where many of the tribes are, you may be in remote

       22   locations.

       23             But the question I have is do you have

       24   businesses that are in your area that are small,

       25   maybe even on the reservation or in the area where
                                                                22



        1   the reservation is that you do business with?  Those

        2   are the kinds of things that you need to start

        3   thinking about.  We're not saying that you have to go

        4   to them.  If their prices are much enormously higher

        5   because depending on what it is that you are buying,

        6   it may not make good business sense to go to a small

        7   business and their products are three or four times

        8   that of a larger business further down the road.

        9   You've got to make good business sense.

       10             But what you need to do ©© the key to all

       11   of this is documenting your file.  Documentation of

       12   what you are doing, what your process is is going to

       13   be critical.  The reason we say that is this:  When

       14   you receive these funds, if there is a challenge to,

       15   just like they had a challenge in the Adoran

       16   decision, if there is a challenge to our procurement

       17   practice, we have to go back to the grantee to find

       18   out what you did.  You have to defend your process in

       19   court.

       20             So you need to make sure that you have ©©

       21   and if you don't have it, you start putting in the

       22   necessary infrastructure for filing documentation,

       23   maintaining.

       24             We recognize and understand that a lot of

       25   the larger tribes and maybe even some of the smaller
                                                                23



        1   tribes have a preference program where you will go

        2   tribal first.  That's a good thing.  But we just need

        3   to make sure you're documenting in your file what

        4   your process is.  And we also need to make sure we

        5   say that if you have that tribal preference, that is

        6   documented and you use that across the board.  It's

        7   not something that you use in this instance and in

        8   another one you don't.  We need consistency across

        9   the board.  But if you have those things, those are

       10   good things, and we need to ©© the key to all of this

       11   is documenting your file in terms of what are you

       12   doing with the federal dollars, because if there is a

       13   challenge, we will all have to go to court.  EPA will

       14   have to say, well, we gave the money to such and

       15   such, and this is what they did with it.  And you

       16   will have to say what you did with it.  We have been

       17   fortunate.  There has been a challenge to the

       18   program, but we have not lost the case and it wasn't

       19   based on what we are talking about now.

       20             We are seeing all over the country

       21   challenges to these kinds of programs are coming up.

       22   Right now the City of Chicago is going through a

       23   challenge under its program.  And I think there are

       24   probably three others that are out there.

       25             So it is imperative that you©all document
                                                                24



        1   what you do with the money.  So that we know what the

        2   process is and so that you are clear as the grant

        3   recipient, how you are spending it, okay?

        4             I'm not going to go into the specific

        5   details on calculating fair share goals, but that's a

        6   process, basically like I said, and I don't know if

        7   the tribes have disparity studies, but if you do, we

        8   can use those, provided it addresses the procurement

        9   for equipment, construction, services or supplies or

       10   we can talk about later how we can come up with an

       11   availability analysis.  We have some information on

       12   how to do one that we can share much further along in

       13   the process.

       14             The other thing that the rule is looking at

       15   is the fact that we recognize, to the extent that

       16   good©faith efforts prove to be inadequate to achieve

       17   the fair share goals for the NBE WBE, we encourage a

       18   recipient or a prime contractor to take a reasonable

       19   race or gender conscious effort or action to the

       20   extent necessary to meet the program or the intent of

       21   the program.

       22             Earlier on I talked about exemptions from

       23   negotiations, or exemptions.  We are proposing to

       24   exempt recipients of an EPA financial assistance

       25   agreement in the amount of $250,000 or less for any
                                                                25



        1   single assistance agreement or of more than one

        2   financial assistance agreement with a combined total

        3   of $250,000 or less in any one fiscal year from fair

        4   share negotiation requirements.

        5             We are also exempting ©©

        6             MS. PATRICK:  Specifically for tribes, we

        7   do realize that the negotiation is brand©new, and it

        8   can be a bit of a burden.  We got a lot of that the

        9   first time we went out on the road and got comments

       10   back.  And the exemptions that I am about to tell you

       11   about are a direct result of comments that we have

       12   received thus far.  Your comments are very much taken

       13   into consideration.  We're not just saying, oh, we'll

       14   take it under advisement and we just walk away.  We

       15   really look at the comments and it does result in

       16   changes.  And some of the changes that came out of

       17   our last round of comments that, number one, we're

       18   exempting all PPG©eligible grants to tribes.

       19             So, that effectively will exempt 17

       20   categories of grants from negotiation, because there

       21   is 17 grant categories that can be rolled into PPG

       22   and are eligible.

       23             We also are exempting TAG grants, as well,

       24   for tribes.  These exemptions only apply to tribal

       25   grant recipients.  Those two things are extremely
                                                                26



        1   important.  When we look at the numbers, specifically

        2   in Region 10, which is the EPA region that has the

        3   largest number of tribes in it.  Once we backed out

        4   the grants that were under $250,000, and we took out

        5   the ones that are EPA eligible, after having close to

        6   300 or so grantees in that region, the number we

        7   would have to negotiate was reduced to under 20.

        8             So we think that these particular

        9   exemptions are extremely effective for tribes in

       10   terms of negotiation requirements that would be in

       11   effect if the proposed rule goes through.

       12             MS. BROWN:  Now, here again, the tribes

       13   will be exempt from negotiations for fair share

       14   goals, but you're not exempt from the good©faith

       15   efforts, documenting your files, all of that still,

       16   and that's there now.  We should be doing that, and

       17   if we're not, we need to get up to speed to make sure

       18   we are.  And so you still will be required to do

       19   that.

       20             We are also proposing with this proposed

       21   rule, a three©year phase©in period for the tribes and

       22   the insular areas, meaning the trust territories, the

       23   Commonwealth of Puerto Rico, and the tribes.  Because

       24   the states and the other grant recipients already

       25   have been doing for a long time, and we recognize
                                                                27



        1   that it is going to be something new for the tribes,

        2   so we're looking at a three©year phase©in period so

        3   that we can work with you as the tribes to come up to

        4   speed with where you need to be.

        5             Now, when I say that, that does not mean ©©

        6   we recognize we have a three©year period and we won't

        7   do anything until six years before that three©year

        8   period is up.

        9             What we want to see is some progress that

       10   the tribes are making over the three©year period.

       11   Some may be able to do this very early on.  And as we

       12   identify them as such, it is our hope that they will

       13   begin to do that.  But we are looking at a three©year

       14   phase©in period for the tribes in terms of this

       15   kicking in, in terms of compliance with the rules and

       16   the other requirements.

       17             We are also looking at developing guidance

       18   on specific factors that should be taken into place

       19   or account in determining the phase©in period for

       20   this.

       21             Record©keeping, again, is critical.  One of

       22   the things that under the prior administration, when

       23   the Adoran decision came out, there was an initial

       24   review done at EPA about the overall program by the

       25   department of justice.  And I don't know if you©all
                                                                28



        1   remember the term mended and not ended.  They were

        2   looking at programs like this.  And while we don't

        3   consider this to be an Affirmative Action program, we

        4   consider it outreach, because you talk about race and

        5   gender, the people at the Department of Justice and

        6   other places would say that it falls into that

        7   category to a certain extent.

        8             When they came in and did a review of our

        9   files, boy, were we opened up to a lot of scrutiny.

       10   And we found that the documentation that needed to be

       11   there is not always there.

       12             So I can't express enough the importance,

       13   as grant recipients, that you are doing everything

       14   that you can.  And that wasn't just on the looking at

       15   grants that went to the tribes.  It was the overall

       16   program.  So there was a lack of adequate

       17   documentation all around for everybody.  And we

       18   recognize that that is an area that we need to

       19   improve on.

       20             So we are asking that you be mindful of

       21   that now as new grants are being awarded, as you are

       22   receiving funding, that you are documenting your

       23   files so that it is clear what it is that we have

       24   done.

       25             Under the record©keeping and reporting
                                                                29



        1   provisions, a recipient of a continuing environmental

        2   program grant, or other annual grant, will be

        3   required to create and maintain a bidder's list.

        4             And that list must only be kept until the

        5   grant project period has expired and the recipient is

        6   no longer receiving funding under that grant.

        7             A bidder's list is a list to identify who

        8   came in, who did you get proposals from, what their

        9   prices were, their name, their address, location and

       10   phone number.

       11             In addition, a recipient of an EPA

       12   financial assistance agreement to capitalize a

       13   revolving loan fund also must require entities

       14   receiving identified loans to create and maintain a

       15   bidder's list.

       16             MS. PATRICK:  The co©worker grants, Browns

       17   Bill and SRF.

       18             MS. BROWN:  Okay, so if you get a Browns

       19   Bill grant or SRF, State Revolving ©©

       20             MS. PATRICK:  Loan.

       21             MS. BROWN:  ©© loans ©© state revolving

       22   loan, you still have to maintain a bidder's list.

       23   This is new.  And we are trying to look at what the

       24   competitive bidding requirements are and have been so

       25   that that's documented.
                                                                30



        1             The purpose of bidder's list is to provide

        2   the recipient and entities receiving identified loans

        3   who conduct competitive bidding, as an accurate

        4   database and possible to identify the universe of

        5   MBE/WBEs and prime and subcontractors.

        6             Such a list must only be kept until the

        7   project period for the identified loan has ended, and

        8   recipients are required to comply with these

        9   record©keeping requirements, even if they are exempt

       10   from applying the fair share objective requirements.

       11   You still have to do that, even if you don't have to

       12   negotiate fair share goals.

       13             We do have a provision for waivers.  The

       14   OSDBU director can grant waivers on a case©by©case

       15   basis, as identified in Part 33, that are not based

       16   on statute or executive order, and we will review

       17   those on a case©by©case basis.

       18             This is something that's new as well, and

       19   just as you©all have to get used to this, so do we.

       20             And so we are working on that process, and

       21   exactly how that is going to be done, but again ©©

       22   and this is after the rule has become final.  If

       23   somebody would like a waiver, they need to send it in

       24   and we will review it and work with you to see how we

       25   can resolve it.
                                                                31



        1             Any questions?  Any questions?

        2             Can you use the mike?  Somebody, come talk

        3   to me.

        4             MS. PATRICK:  Yes, we want any comments.

        5             MR. ERNESTO CHAVEZ:  My name is Ernesto

        6   Chavez.  I'm a minority business owner here in New

        7   Mexico.  I provide technical assistance to minority

        8   tribal entities, and I had a couple of questions in

        9   regards to the Federal Register notice.  And that

       10   would be, how does your agency determine what the

       11   geographical area is or will be for pulling this

       12   data.  I notice it references census data.  Does that

       13   mean regionally, from within your regional department

       14   or for that market assessment?

       15             And then the other question that I have,

       16   and I'm not sure if it's been broached just as yet,

       17   but it also mentions the breaking them down into

       18   smaller contracts or debundling.  There is also other

       19   legislation out there on debundling with Department

       20   of Defense, and I am wondering, is there more

       21   language expected to come down on the development of

       22   that debundling efforts, as well?

       23             MS. BROWN:  Good questions, and I think I

       24   can address those two.

       25             The first one in terms of how we would
                                                                32



        1   determine what the geographic market area is, the

        2   radius that we would use for the boundaries, we're

        3   saying whatever your current practices are in doing

        4   business, that is how that is defined.  How far do

        5   you go to get your contractors?  Do you go outside of

        6   the state that you are in, New Mexico?  Do you go to

        7   surrounding states, or do you go up north, or do you

        8   go down south?  You tell us what your current buying

        9   practices are, and where you generally get your

       10   contractors from.  And that will be ©© you determine

       11   it, based on what your current practices are.  We

       12   will look at that and assess it.

       13             Sometimes, and in many instances, you can

       14   rely on information that has come from the Census

       15   Bureau in terms of ©© because people sometimes ©©

       16   what we're seeing with the states, at least, those

       17   parallels that are drawn, a lot of them stay probably

       18   within what the census data is.  Did I answer your

       19   question?

       20             MR. ERNESTO CHAVEZ:  Yes.

       21             MS. BROWN:  The second one is a little bit

       22   more complicated, because when you start talking

       23   about contract bundling, I want to make sure ©© the

       24   two primary ways ©© and I'm getting away from the

       25   rule a little bit now, but I think I might need to
                                                                33



        1   digress a little to explain where we are.

        2             The two primary ways to do business with

        3   EPA, directly through contracts, or indirectly

        4   through grants, as a subcontractor, as a grant

        5   recipient goes out to contract.  That's what we are

        6   talking about here.  The contract bundling rules and

        7   regulations, for the most part, rely most heavily in

        8   the area of direct procurement, where you will

        9   contract as a subcontractor or prime ©© you will

       10   contract with us directly as a prime contractor, or

       11   you are a subcontractor to one of our prime

       12   contractors.  When I say "our," I mean EPA directly.

       13   There is a lot ©© you're right ©© legislation being

       14   considered and pending.  There are reviews that we

       15   have to do and respond back on a quarterly basis to

       16   OMB to identify what we're doing contract bundling,

       17   but that's on the direct procurement side.  That is

       18   not where we are here.  There may be a spillover from

       19   that once it's all finalized in the final

       20   legislation.  But right now, to a certain extent,

       21   it's not affected.

       22             Is that clear?

       23             MR. ERNESTO CHAVEZ:  Okay.

       24             MS. BROWN:  Any other questions?  Comments?

       25   Nothing?  So everybody is clear, and when the year
                                                                34



        1   end is over or thereabouts, when this is final,

        2   you©all will know what to do?  We are okay with that?

        3   Yes, sir?  Your name and where you are from.

        4             MR. ROD ARIWITE:  Rod Ariwite, Pueblo of

        5   Laguna.  We have an 8A firm.  We are a prime

        6   contractor on some EPA projects.  Do these laws

        7   apply ©© applicable to ©© because we're an 8A firm,

        8   or not, because an 8A firm is basically ©© we satisfy

        9   the provisions of the law itself.

       10             MS. BROWN:  Are you also a grant recipient?

       11             MR. ROD ARIWITE:  Yes.

       12             MS. BROWN:  Okay.  If, as a grant

       13   recipient, you use an 8A firm, your firm to do the

       14   work, then all you have to do is report that, and

       15   show that in your reporting, and you already have

       16   your certifications and all of that, because you have

       17   gone ©© so you've met that requirement?

       18             MR. ROD ARIWITE:  If we're going to

       19   subaccount a portion of the contract itself, does

       20   this law ©© applicable to my subcontract efforts?

       21             MS. PATRICK:  If you are operating on a

       22   project using EPA grant money, and you have a prime

       23   contractor, so you are going out ©© I don't know what

       24   you are doing, say it's construction.  So you have a

       25   prime contractor for the construction, and if that
                                                                35



        1   prime contractor under that grant goes out and gets a

        2   subcontractor, yes, this would still apply, it would

        3   still be applicable for that.

        4             MS. BROWN:  Yes, sir, your name?

        5             MR. TIM CHAVEZ:  Yes, my name is Tim

        6   Chavez.  I'm the owner of Keres Consulting.  What are

        7   the benefits of the 10 percent statute, and, say,

        8   once a company has received an SBD an 8A hub zone, is

        9   it going to be much easier for a business to proceed

       10   with EPA's rule?

       11             MS. BROWN:  It is our hope that it will be

       12   a lot easier, because EPA does not want to be in the

       13   certification business.  This is a new requirement

       14   for us just as much as it will be for all of our

       15   other grantees.

       16             So that's why we're saying ©© the way that

       17   we've written this, and the way that we've come up

       18   with the rule, it is our preference that you try to

       19   get certification from SBA or DOT, from a tribe or a

       20   state first, provided they meet the federal standard.

       21   And we know, for the most part, SBA does, because our

       22   rules are in line with what SBA says.

       23             DOT, provided you are a citizen of the

       24   United States, that's the only difference there.  And

       25   we have to look at the other areas on a case©by©case
                                                                36



        1   basis to make sure that they meet the federal

        2   standards.  So we don't want to be in the

        3   certification business, but we recognize, because of

        4   the way of the language of 10 percent and the

        5   8 percent statutes, we have to be, because there's

        6   going to be some people that don't ©© aren't covered,

        7   which are those five categories that I addressed.

        8   Now, Kimberly can talk to you about the 10 percent.

        9             MS. PATRICK:  The 10 percent applies ©©

       10   actually, I can't remember in my mind whether it

       11   applies to the clean air or clean water regulations.

       12   I want to say it's under the clean water, is the

       13   10 percent in the statute.  That is an internal EPA

       14   10 percent type of standard or a goal that we are

       15   going to go after 10 percent in terms of how we spend

       16   our money as an agency.  That really does not

       17   necessarily apply to the grant recipient.  That's an

       18   internal EPA type of thing, but a statute is listed

       19   and how it operates.

       20             One good thing about ©© you mentioned you

       21   had the SBA certifications.  One good thing about

       22   that is if you have a certification, because SBA

       23   requires both ownership and control, you are going to

       24   be fine with EPA certification under 10 percent or

       25   the 8 percent statute.  Either one, you're going to
                                                                37



        1   be good, because you have both.  So, you meet both

        2   standards.

        3             MS. BROWN:  The other thing I think it's

        4   good for me to say is we do a report and we give it

        5   to Congress in terms of how EPA spends its money

        6   overall for direct procurement, as well as indirect.

        7             Congress has established a national goal of

        8   8 percent, of EPA funding going to minority

        9   women©owned businesses, and that's tied to our

       10   appropriations.  So we have to show how and where the

       11   money is going.  And the case or the time may come

       12   when they say, okay, EPA, show us who got it.  And

       13   so, what we do is for you©all that are grant

       14   recipients, you are sending reports to Deborah.

       15   Deborah is compiling all of that and forwarding her

       16   report to me, or to headquarters, and then we in turn

       17   get that from all of our other nine regions, and do a

       18   composite report of what EPA is doing and how we are

       19   spending our money.  And on average, for the last

       20   couple of years we've been averaging about 25 percent

       21   of our dollars, both direct and indirect, combined

       22   going to minority and women©owned business.

       23             MS. PATRICK:  And one more thing before we

       24   get to your question.  I had it backwards.  It is the

       25   clear air actually that the 10 percent applies to.
                                                                38



        1   And just to read you that provision so that everyone

        2   sort of knows how it actually works.

        3             It says:  Provided for any resource

        4   relating to the requirements of the amendments made

        5   by the Clear Air Act amendments, which used funds for

        6   the Environmental Protection Agency.  The

        7   administrator of EPA shall to the extent practical

        8   require that not less than 10 percent of the total

        9   federal funding for such research will be made

       10   available to disadvantaged business concerns.

       11   Nothing will permit or the use of quotas or

       12   requirement that has the effect of a quota in

       13   determining eligibility.  That's how it reads.

       14             MS. BROWN:  Sir, I'm sorry, we had you

       15   standing there for a while.

       16             MR. HENRY HARJO:  Oh, that's fine.  My name

       17   is Henry Harjo.  I'm with Kialegee Tribal Town in

       18   Wetumka.  Have you heard of it?

       19             MS. BROWN:  No.

       20             MS. PATRICK:  No.

       21             MR. HENRY HARJO:  Have you heard of

       22   Wetumka?

       23             MS. PATRICK:  No.

       24             MS. BROWN:  No.  Well, I'm sure Deborah

       25   has.
                                                                39



        1             MR. HENRY HARJO:  How do you see that we

        2   are going to be able to get a list of certified or

        3   eligible vendors or contractors?

        4             MS. PATRICK:  Actually, do you©all have

        5   access to a computer or Internet type of thing?

        6             MR. HENRY HARJO:  Yes.

        7             MS. PATRICK:  Okay.  Then that's easy.

        8   There are many resources.  First you can go to your

        9   wonderful ©© our wonderful Deborah Bracket back

       10   there.  She's a resource for you in the region,

       11   Region 6, which is where you are located, to give you

       12   that information.  You can also go to SBA's web site.

       13   You can also go to Pronet.com, which provides ©© it's

       14   a database of available vendors.  When you go to

       15   Pronet, you can do a search for your locality, what

       16   is closest to you in a particular area, and it will

       17   come back to you with a list of businesses that fit

       18   that requirement.

       19             MS. BROWN:  And it's called ©© it's SBA's

       20   database.  It is www.sba.gov, and you can go into

       21   pronet.

       22             There is another database ©©

       23             MR. HENRY HARJO:  I'm trying to get some

       24   information from SBA on MBE/WBE for compliance, and

       25   they've never been able to help me out.  I've gone to
                                                                40



        1   several of the tribes, and just getting a list of

        2   names, just as we were looking to purchase a vehicle

        3   for one of our programs, and just trying to find a

        4   vehicle from minority business women, business, it

        5   took two days of my effort just trying to locate

        6   someone, and then I couldn't get any information

        7   back.  But if we can get just a list of eligible

        8   vendors, that will be fine.  And you can be sure that

        9   it's within our 10 percent guidelines.

       10             MS. BROWN:  Another database that's out

       11   there, it's through the Department of Commerce.  It's

       12   the Phoenix database.  And what they will do is, they

       13   take it a step further.  If you register with them ©©

       14   you must be a minority business.  If you register

       15   with them, and you put in what your core

       16   competencies, the areas that you are looking for work

       17   in, et cetera, your max codes, they will send you by

       18   fax or E©Mail, solicitations that you might be

       19   interested in that have come out throughout the

       20   federal government.  And then you have a choice of

       21   whether or not you want to bid on that.

       22             So for those that are business owners or

       23   tribes that have businesses, you may want to register

       24   with pronet so that you can get that.  I mean ©© not

       25   pronet.  Phoenix, as well, so that you can get that
                                                                41



        1   information.  And that is under the Department of

        2   Commerce.

        3             Internally to EPA, we also have a listing

        4   and a database that is being devised of firms that

        5   have come to us specifically to do work in the

        6   environment field.

        7             As good as pronet is and our friends and

        8   our colleagues from SBA are, we recognize that

        9   everybody is not registered there.  And so there's

       10   some people that may fall in that way, as well.

       11             And so we can work with you through

       12   Deborah, and I think this is one of the things, sir,

       13   that we can work on over our three©year phase©in

       14   period to get that more solidified so that you©all

       15   will know where to go, or make those things easily

       16   accessible.

       17             If you go into our web site, my web site at

       18   EPA, OSDBU web site, there are links to Commerce, to

       19   SBA, and it will also get you in contact, or you can

       20   make contact to links to GSA, as well.

       21             MS. PATRICK:  I also want to point out one

       22   other thing in direct response to the situation you

       23   just described.  You have a situation looking for a

       24   vehicle.  You've gone out, you sought out the small

       25   business.  You could not find one, or none responded
                                                                42



        1   to you.

        2             In that instance, when you're working with

        3   a goal or objective that you have and you're dealing

        4   with doing this good©faith effort, you've made the

        5   effort.  If you make the effort and you come up with

        6   zero, that's fine.  We just want to make sure that

        7   you are looking, because there just may be ©© the

        8   time you say, I'm not going to look, that would be

        9   the time when there's a small minority business

       10   that's out there that's capable and willing to do the

       11   work.

       12             So that type of effort is that we would

       13   applaud, as well, as an agency.  So when you do your

       14   reports back, when you document your files, that kind

       15   of effort is what we want to see documented, saying,

       16   this is where I looked.  This is who I sought out,

       17   and this is what I got back.  That's important.

       18             MS. BROWN:  Yes, sir.

       19             MR. STEVE ROMERO:  Steve Romero, Pueblo of

       20   Nambe.  Letter H exemptions.  If a recipient has

       21   multiple EPA grants that total more $250,000 in any

       22   fiscal year, at that point they will lose their

       23   exemption status and be required to go through the

       24   fair©share negotiating requirements?

       25             MS. PATRICK:  Yes, they would.  So in an
                                                                43



        1   aggregate in a year if you reached upwards of the

        2   $250,000 mark, you would have to negotiate a goal,

        3   because you would fall into that category.

        4             Now, if the grants we're talking about are

        5   grants that are PPG eligible, then they will be

        6   exempt in that way.  So you need to check to see

        7   through both means whether or not after the total

        8   shake©down, if you have to negotiate at the very end.

        9             But on the face of the question you just

       10   asked, yes, they would have to negotiate at that

       11   point if they were non©PPG eligible grants, or tech

       12   grants.

       13             MR. STEVE ROMERO:  Okay.  I have a second

       14   question.  In here you state that at that point the

       15   recipient will not be able to spend any of its

       16   financial assistance award for procurement until the

       17   negotiating process is completed.  Is that any

       18   procurement, or is that just contractual services

       19   only?

       20             MS. BROWN:  That procurement means anything

       21   that would fall into any one of those four

       22   categories:  Equipment, construct, services,

       23   engineering services, contractual services or

       24   supplies.  You wouldn't be able ©© in some instances

       25   what we see is, a lot of times, the grantees use the
                                                                44



        1   funding from EPA to pay their employees.  You can

        2   still do that, but you couldn't go out and buy

        3   anything without completing your fair©share

        4   negotiations in any one of those four categories.

        5   And when you add them all up ©©

        6             MS. PATRICK:  That covers it.

        7             MS. BROWN:  ©© that covers it.  I can't

        8   think of anything, or maybe you need to tell me what

        9   we didn't think of.  But we think that covers

       10   everything.  You can't go out and buy anything until

       11   you've completed your fair©share negotiations.

       12             MR. STEVE ROMERO:  Thank you.

       13             MS. BROWN:  Any more questions?

       14             MR. JIM STEWART:  Yes, I'm Jim Stewart with

       15   the Small Business Administration, also government

       16   contracting.  I'm a procurement center representative

       17   and a commercial market representative for the state

       18   of New Mexico, and El Paso, Texas.

       19             And the point I want to make ©© and it may

       20   be a point of semantics ©© but in your proposal in

       21   the Federal Register on page, I think 833, you refer

       22   to the SIC code, and almost all federal agencies have

       23   not converted to the Mace (phonetics) code.  Is that

       24   a misprint, or is that going to be corrected, or is

       25   there going to be more clarity?
                                                                45



        1             MS. PATRICK:  You just told us.  And so

        2   that will be corrected.  Those are things, like as we

        3   go along the way in the process, even if something

        4   that small, let us know, because sometimes we don't

        5   catch everything, but that is something that will

        6   need to be changed.

        7             MR. JIM STEWART:  One other point I want to

        8   make.  You've already identified and introduced one

        9   of the parties here that is an excellent resource, is

       10   Rosemary Chavez, and as well as the small business

       11   development centers.  If you haven't associated

       12   yourself with your local, small business development

       13   center, then more information can be provided to you

       14   regarding that, and they can be a great resource to

       15   you.  Please consider that.

       16             MS. BROWN:  Thank you.  One of the other

       17   things that we're finding out, is a lot of the local

       18   colleges and universities have a lot of this

       19   information that is readily available.  And they have

       20   been working with our colleges from other states to

       21   help them come up with their availability analysis.

       22             The thing with the availability analysis is

       23   this:  The time and cost that it takes you to do

       24   those, they may be grant©eligible, depending on how

       25   you write that up.  That means, the funding, you may
                                                                46



        1   be able to recoup the costs of one of those again.

        2             MS. PATRICK:  It will pretty much be on a

        3   case©by©case basis whether or not that type of thing

        4   would be grant eligible.  You have to review it with

        5   your grant specialist to make sure it fits within

        6   whatever the grant's purposes are for, or so forth

        7   and so on.  But we let our grants people handle that

        8   determination as to what is eligible under the grant.

        9             MS. BROWN:  Yes.

       10             MS. ROSEMARY CHAVEZ:  Hi.  My name is

       11   Rosemary Chavez.  I am with the Procurement

       12   Assistance Program here in Albuquerque.  And I would

       13   just like to let the gentleman know that if you are

       14   ever looking for a database that actually has

       15   individuals that might sell the type of service you

       16   are looking for, you can go to www.ptc.  We have PTC

       17   centers throughout the country that actually have

       18   databases, when you can't find that particular

       19   individual you are looking for, we might have them in

       20   our database.  And we work very closely with SBA.

       21             And the other thing that I assist with is,

       22   that if you are a small business and you want to get

       23   8A certified hub zone, you will want to come visit

       24   with me and I will help through the process, help you

       25   put together your package and then, you know, you
                                                                47



        1   will send it off to the SBA and hopefully get

        2   certified.

        3             So if anyone needs assistance, again, my

        4   name is Rosemary Chavez.  I don't have any cards with

        5   me, but my number is 243©2127.

        6             And, again, if you need to go out to a

        7   different center throughout the country, just go to

        8   www.ptc centers, and Elaine here can help with that,

        9   as well, right, Elaine?

       10             MS. BROWN:  And those services are free; is

       11   that right?

       12             MS. ROSEMARY CHAVEZ:  Yes.

       13             MS. BROWN:  Everything is free.

       14             MS. ROSEMARY CHAVEZ:  Yes, because we're

       15   also under a grant.  So the service is free to

       16   everyone.

       17             MS. BROWN:  That's good to know.  There are

       18   a lot of people out there that would charge you ©© we

       19   have heard up to $15,000 to get certified to get into

       20   the 8A program, and that application goes into the

       21   same pile as the one that went to a PTC center.  And

       22   it did not cost them anything.  So that's just a word

       23   of advice.

       24             Yes, ma'am.

       25             MS. TABITHA WORLEY:  I'm Tabitha Worley,
                                                                48



        1   with the Quapaw Tribe in Oklahoma.  I just want a

        2   little more clarification on the exemptions.  If your

        3   grants total over $250,000, then you're not exempt.

        4   But if they ©© say all but one of them is PPG, you

        5   know, so you have one that wouldn't be exempt, and

        6   it's a small one, do you still have to negotiate?

        7   Does that make sense?

        8             MS. PATRICK:  It would be ©© okay, let's

        9   say you had ten grants, and all of them together

       10   total $251,000, which would put you in that amount to

       11   negotiate.  Let's say, out of those ten grants one of

       12   them is a PPG.  And that PPG is for ©© look at that,

       13   $2,000, okay?  That grant alone would be exempt from

       14   negotiations.  Once we take that amount out, you are

       15   good at $249,000 in terms of grants that are, you

       16   know, an aggravate amount for that year.  That would

       17   take you into the state of being exempt.

       18             MS. TABITHA WORLEY:  So those dollar

       19   figures would be subtracted, basically?

       20             MS. PATRICK:  Yes.

       21             MS. TABITHA WORLEY:  So if I had ©© the

       22   tribe had one grant that wasn't eligible for PPG for

       23   50,000, we would not have to negotiate?

       24             MS. PATRICK:  If I heard you correctly.

       25             MS. TABITHA WORLEY:  I think a lot of our
                                                                49



        1   grants are eligible for the PPG program, but one or

        2   two may not be.  And ©© I mean, our grants, all of

        3   them, will go over 10 or 50,000, but one ©© you know,

        4   most of those are PPG, so in that hundreds of dollars

        5   figure, and we can back out, right?

        6             MS. PATRICK:  Yes.

        7             MS. TABITHA WORLEY:  Just one grant would

        8   be exempt just based on the dollar figure, whether

        9   it's PPG or not.

       10             MS. PATRICK:  And that's where you probably

       11   need to explain more, and it's within the preamble,

       12   which would explain the whole thing, that how that

       13   works, because some think that those two things would

       14   be in conflict with each other at some point.  But

       15   there's no way to count to what's an aggregate total,

       16   an amount that's been exempted.  So, we need to

       17   explain that.

       18             MS. TABITHA WORLEY:  Right.  And the other

       19   thing ©© I mean, we report every quarter on our

       20   activity based on good©faith efforts.  And so you are

       21   setting a goal.  And if you don't meet that goal

       22   for ©© you can locate a business or that the prices

       23   were higher or whatever, is there going to be any

       24   additional reporting requirements on why ©© which we

       25   don't have to do necessarily now ©© I know if there's
                                                                50



        1   a challenge or something like that, of course, there

        2   would be, but unless you ask, we don't provide

        3   anything.

        4             MS. PATRICK:  There is no specific report

        5   that says you have to report saying why you didn't

        6   meet goal.  However the process of your

        7   record©keeping, if you are documenting, say, each

        8   time you have gone out and done your good©faith

        9   efforts, and this is what our process was, and this

       10   is what we ended up with.  Those types of things will

       11   speak for itself.

       12             Now, on the performance, you do have to

       13   report, which on the form 5700©52 A, procurement

       14   dollars under your grant.  Let's say you have zero,

       15   and that MBE/WBE category.  Let's say you have no

       16   procurements at all under that grant.  There's a box

       17   on that form where you check, we have not had any

       18   procurements.  And you send it in.

       19             MS. BROWN:  You still have to report.

       20             MS. PATRICK:  You still have to do that

       21   reporting part.  You still have to say it, even if

       22   it's zero.  But in terms of the ©© whether or not

       23   you've met your goals type of analysis, if we look at

       24   a recipient, and we say, wait a minute, this area,

       25   this particular recipient's goal is like 12 percent,
                                                                51



        1   but they're consistently coming in at 2 percent.

        2   Over time, we're going to say, there is a problem

        3   here.  They need to renegotiate.  They need to take a

        4   look at what they are doing, what that is.  Sometimes

        5   they are not doing them at all.  That is why it's a

        6   2 percent.  But it is your record©keeping that will

        7   be your backup for that in that instance.  It's not

        8   that we are going to come after you and say you are

        9   just horrible, horrible, horrible, but you have

       10   documentation supporting what you have done.

       11             MS. TABITHA WORLEY:  But there's not really

       12   any additional reporting requirements unless there's

       13   any problems in the long run, or something like that?

       14             MS. PATRICK:  No.

       15             MS. BROWN:  The key, though, is

       16   documentation and making sure you have an adequate

       17   record of what it is you are doing so that in the

       18   event we need ©© or even if we come out and do a

       19   review, we are looking to do ©© be more proactive in

       20   our reviews and working with our grants office in

       21   getting people internally to EPA on this as well, so

       22   we can take a look at what is actually going on,

       23   because that was one of the things that they found

       24   when the Department of Justice came out and did a

       25   review of the program.  We had very little
                                                                52



        1   documentation.

        2             So we are saying we know we have to do a

        3   better job, and we are asking that our grant

        4   recipients do likewise.

        5             Now, when we were in Region 9 last week, we

        6   ran into some people ©© that's not the region.

        7             MS. PATRICK:  10.

        8             MS. BROWN:  10, last week, to some people

        9   who were not reporting.  Don't tell me you are not

       10   reporting.  If are you not reporting, my eyes are

       11   closed, and you need to go back and talk to Deborah

       12   so we can make sure that you begin to report and that

       13   she has all of the documents that she needs so that

       14   we are making an accurate account as I go forward to

       15   Congress.

       16             MS. TABITHA WORLEY:  Just one more.

       17             MS. BROWN:  Sure.

       18             MS. TABITHA WORLEY:  As far as the types ©©

       19   and you say you can't go buy anything.  I guess, is

       20   there any additional information on exactly what

       21   types of things need to be reported, or could be

       22   reported.  There's things that you may not have a

       23   choice on that fall under our budget under supplies,

       24   like telephone service or electricity.  I'd like you

       25   guys to maybe touch on that, because if you don't
                                                                53



        1   have a choice of who that is, then you have to report

        2   that?

        3             MS. BROWN:  Well, you still need to report

        4   why you bought something.  You couldn't find a

        5   minority business because this is the only contractor

        6   out there or service that is out there, and they are

        7   large, but your documentation is there in the file

        8   and there's no question.

        9             MS. TABITHA WORLEY:  So when you're paying

       10   your telephone bill, that's included in procurement,

       11   but it would make your goal be less, I guess.

       12             MS. BROWN:  We understand that.  Again, if

       13   that's the only source that's available, then that's

       14   all you can do.  Document your file.

       15             MS. TABITHA WORLEY:  I mean, basically,

       16   your grant is over, your report should equal all of

       17   those major budget categories, right?  I mean, every

       18   dollar you spent should eventually equal those major

       19   budget categories when you're reporting procurement.

       20             MS. PATRICK:  That would be the hope.  You

       21   know, with the exclusion of things like salaries,

       22   which we don't ask you to necessarily report on, but

       23   let's say spending money ©© okay, let's say you're

       24   spending money on ©© what's something you just can't

       25   get around?  Let's say you're spending money on
                                                                54



        1   travel, and you were talking about traveling

        2   thousands of miles a day.  There's no way you're

        3   going to get around going on a major carrier.  I

        4   mean, we're reasonable people.  I don't know of a

        5   minority business that's going to take you from here

        6   to DC on a major aircraft.  If you do know of one,

        7   please let us know.  It's just not something that we

        8   know is not out there.

        9             We know that in terms of telephone services

       10   there aren't very many, if any that I know of, small

       11   businesses that provide local telephone service.

       12             So those types of things, we know that if

       13   you are using your grant money to pay for those types

       14   of services, or whatever, grant it, you can't use

       15   that to count towards your goal.  But it's just

       16   something you have to report.  It's not a bad thing

       17   to say that this is what we are using the money for.

       18   We just need the documentation to make sure that you

       19   are reporting.

       20             MS. BROWN:  One of the things that we saw

       21   when we did a review is that even with the tribes,

       22   the tribes didn't always spend their moneys with

       23   minority businesses.  They were going outside of the

       24   minority business community to get goods and

       25   services.  And we are saying everybody, regardless of
                                                                55



        1   who you are, as a recipient of these federal funds,

        2   that you would do everything that you can, where

        3   possible, to ©© and if it makes good business sense,

        4   that's the key.  It has got to make sense, too.  I

        5   mean, you can't go out and spend four times the

        6   amount just to get to a woman©owned or minority

        7   business.  I'm not saying do that.

        8             But where we can, and where we recognize

        9   that there are tribal governments that own and have

       10   businesses, are we using them?  Because that's what

       11   this program really ©© that's the spirit of this

       12   program, that we keep the moneys in these local

       13   communities, so it provides economic development and

       14   stimuli for the minority and women©owned businesses

       15   in our geographic area.  And for you©all who are

       16   looking at that.  There may be other businesses that

       17   are there that may not be owned by the tribe, but may

       18   be small, are we using them?  Do they have goods and

       19   services?  Or are we going someplace else to get

       20   them?

       21             MS. TABITHA WORLEY:  I just have one more I

       22   would like ©© I have one more again.  Is it going to

       23   be ©© I mean, do the tribes need to self©determine

       24   this, or will Deborah be contacting us and letting us

       25   know that we need to be negotiating?  I mean, there's
                                                                56



        1   a lot of tribes.  There's 66 tribes in our region,

        2   but definitely all of them are not here, and so, you

        3   know, they ©© are they going to have to come to you,

        4   and if they don't, then they are in violation?

        5             MS. PATRICK:  Well, from a practical

        6   standpoint because we have databases that has all of

        7   our grant information, we know how much money is

        8   going where.  We know if it's a PPG©eligible grant.

        9   Those types of things, we can pull out of our

       10   database and find out.  So, from an internal

       11   perspective, that is something that we will probably

       12   determine in looking at who meets that guideline, who

       13   needs ©© in the tribal perspective, who needs to

       14   renegotiate goals.

       15             So that is something that Deborah would

       16   have to ©© another, I guess, added responsibility

       17   that she would have to be looking at in her region

       18   for tribal grantees, sort of monitor who it is that

       19   would be reporting.

       20             MS. TABITHA WORLEY:  If I had a comment,

       21   that would be my only suggestion is that ©©

       22   especially since it's new ©© there's a three©year

       23   period, but to walk the tribes through it a little

       24   bit and make sure they're ready to do it, before

       25   there is trouble.
                                                                57



        1             MS. PATRICK:  Well, that's the comment.

        2   That's not something we really looked at logistically

        3   on the internal side, on how to do that, but I think

        4   now that you've brought it up, I think it would be

        5   kind of difficult to ask individual tribes to sort of

        6   determine, okay, well this is where we are, you know,

        7   we need to negotiate.  That is something EPA needs to

        8   do, since it is our requirement in terms of the

        9   negotiation part.

       10             MS. TABITHA WORLEY:  Thank you very much.

       11             MS. BROWN:  Thank you.

       12             One of the questions I have of you©all, and

       13   I know we work with the national center to get the

       14   word out, and I know Deborah did some mailings of her

       15   own, but one of the things that we heard is, when we

       16   send information, possibly to the tribes, you©all

       17   have one person who is managing all of your

       18   contracts, and all managing all of your grants.  So

       19   the information may not have necessarily even come in

       20   to that person.

       21             My question is, what's the best way to

       22   communicate to you when we get ready to do that?  We

       23   recognize and understand, too, that there's a lot of

       24   turnover a lot of times.  People, at least on the

       25   state and the local areas, they move out of these
                                                                58



        1   positions.  And so we want to make sure we talked

        2   about possibly on our envelope saying, "this will

        3   affect your money from EPA.  Open this envelope," to

        4   try to make it as plain and simple as possible so

        5   that you know I need to open this and read it,

        6   because you get so much coming in and then you know

        7   who to direct it to, or how is it best for us to

        8   communicate with you?  That will be good for us to

        9   know.  So that's something for you to think about and

       10   let us know.

       11             Deborah, you have a comment or question?

       12             MS. DEBORAH BRACKET:  My name is Deborah

       13   Bracket.  I am the small disadvantaged business

       14   coordinator for EPA, Region 6.  I do have two

       15   questions.  One of them ©© the question that was just

       16   asked about travel and phone, and the like.  Are

       17   those not indirect calls?  Are they not indirect

       18   calls?

       19             MS. TABITHA WORLEY:  They are.

       20             MS. DEBORAH BRACKET:  So if they're

       21   indirect calls, they're not subject to MBW, right?

       22             MS. PATRICK:  Probably, you're right.  But

       23   we don't really deal with what is actually allowable

       24   costs under the grant.  The grants people decide what

       25   can be paid for, what is, you know, direct and what
                                                                59



        1   is indirect.  But once that determination is made and

        2   it's considered to be in those four categories,

        3   that's when you can step in.

        4             So that would be pretty much between you

        5   guys and your grants specialist in the region in

        6   terms of what is going to come out of that.

        7             THE REPORTER:  I can't hear her.

        8             MS. BROWN:  You need to come to the mike.

        9   I understand.

       10             UNIDENTIFIED SPEAKER:  The question, when

       11   you have given that example like when you submit your

       12   reports, and it's zero dollars, but if they have sent

       13   procurements, but they have no MBE/WBE activities, do

       14   we not require them to least at explain that?

       15             MS. PATRICK:  In that example that I was

       16   talking about, that they check that box.  If that box

       17   says you have made no procurements at all, MBE, no

       18   WBE, nothing.  Unless you've done ©© if you have done

       19   salaries, that doesn't report anyway.  But that box

       20   applies to actually no procurements.

       21             Now, Deborah is exactly right, if you make

       22   procurements, but you had no MBE/BWE, then there's

       23   more stuff on the form that you need to read and fill

       24   out.

       25             UNIDENTIFIED SPEAKER:  And, then, also, the
                                                                60



        1   dollar threshold?  Is there a dollar threshold for

        2   reporting?

        3             MS. PATRICK:  No.

        4             UNIDENTIFIED SPEAKER:  So my $2.10 ©©

        5             MS. PATRICK:  Let me make it very, very

        6   clear.  The exemptions only apply to negotiations.

        7   Reporting will never, ever go away.  No matter what

        8   you do, the reporter requirement will be there, along

        9   with good©faith efforts.  Those are etched in stone.

       10             MS. BROWN:  Not by us.

       11             MS. PATRICK:  Not by us, but it is by

       12   statute.  So those, we can't even exempt if we wanted

       13   to.  The only thing that you're exempt from under

       14   those exemptions that we talked about, will be

       15   negotiations.

       16             UNIDENTIFIED SPEAKER:  So anything, no

       17   matter how much it costs?

       18             MS. PATRICK:  Anything.

       19             MS. BROWN:  If you want to buy a pen, you

       20   do a procurement.  It's a supply and you need to

       21   address it.

       22             MS. PATRICK:  Right, if you have a report

       23   for 72 cents for your pens.

       24             MS. BROWN:  Okay.  Yes, sir.

       25             MR. ERNESTO CHAVEZ:  Again, I'm with NM Biz
                                                                61



        1   Outlook.  We are a technical assistance provider

        2   recognized by both SBA, Department of Congress and

        3   have been contractors for the Native American

        4   Business Development Center.

        5             Each state, I presume, has a Native

        6   American Business Development Center, except for some

        7   of those that have not secured the appropriations for

        8   those programs.  New Mexico is such a state.  It's

        9   currently put its budget forth for this fiscal year

       10   upcoming.  However, as the contractor for the Native

       11   American Business Development Centers, I can let your

       12   audience know that in regards to the Phoenix database

       13   which you made reference to for minority registered

       14   businesses, some of those tools are still available

       15   by our organization and available at no cost to

       16   tribal entities in the New Mexico area.

       17             I just wanted to bring that to your

       18   attention, as they can be part of the resources to

       19   locate; however, they are available.

       20             MS. PATRICK:  Thank you, sir.

       21             MS. BROWN:  Thank you, sir.  That's good to

       22   know.

       23             Any other comments or questions?  That's

       24   it?  Okay.

       25             Well, Kimberly, do you want to tell them
                                                                62



        1   where we are in the process and what is next?

        2             MS. PATRICK:  There being no further

        3   questions, at this point once we're done with all of

        4   the hearings, all of the comments that are received

        5   will have to come to us, and I'm going to have the

        6   wonderful task of going through each of them,

        7   categorizing them, classifying them, and then we

        8   actually have to ©© when we go back out again, with

        9   the final version of the rule, a part of that is we

       10   have to state what the public comments were, how we

       11   handled them, what our disposition was, what our

       12   response was.

       13             So those things will be published, as well,

       14   in the Federal Register, along with the final version

       15   of the rule.  It just shows to the public that we are

       16   taking comments and everything into consideration in

       17   a serious way.

       18             At that point, it is a process which we

       19   expect to take about another year.  It goes back into

       20   the EPA's internal process, just getting everybody

       21   who's been on the work group on the EPA side to agree

       22   on and concur, and blah, blah, blah, blah, blah.

       23   Sometimes the internal stuff takes longer than

       24   anything else you could ever imagine.

       25             So with reasonable expectations, once the
                                                                63



        1   comment period is over ©© we're expecting it to be

        2   between another year and year and a half before this

        3   rule goes final.

        4             So it is at that point, when the rule goes

        5   final, that the three©year phase©in period for tribes

        6   begins.  So that's where we are in terms of time

        7   schedule.

        8             Once again, in terms of getting your

        9   comments in ©© and this is very important to us ©©

       10   just you quick ©© right off of the top of my head,

       11   you can go to the OSDBU's web site.  There's a link

       12   there to our Federal Register people, where you can

       13   go in and comment on anything, and also a copy of the

       14   rule is there.

       15             Once you get a copy of the rule, it also

       16   lists the different ways you can comment.  OSDBU's

       17   web site is www.epa.gov/OSDBU.  And that's also

       18   listed in all of the documentation you have.  Please

       19   take time to go back and consider this further.  You

       20   go back and read it.  I know it's not fun reading, it

       21   really isn't.  It's boring.  But if you ever just

       22   want to go to sleep at night and need a little help,

       23   pick it up, and read it, and have a pen in your hand

       24   and make little comments in the margin.  And when you

       25   get a chance, just send those comments into us.  We
                                                                64



        1   don't need 10, 12 pages of comments.  If you just

        2   have one sentence that you want to say, please

        3   provide it to us because we need those to make sure

        4   that when we come back with the final product it's

        5   inclusive of as many of the comments as we can

        6   probably get.

        7             Yes, Elaine.

        8             MS. ELAINE YOUNG:  Elaine Young with the

        9   National Center for American Indian Enterprise

       10   Development.

       11             I just want to say that some of you have

       12   brought up, or it has been brought up that if you are

       13   looking for a Native American Indian©owned business,

       14   we do have a directory of over 300 businesses.  For

       15   those tribes here, we do have a list of them, and

       16   just get my card when you go out, and we will provide

       17   you those lists of over 300.  And we have some on the

       18   East Coast and then some in the southwest, and then

       19   as well as in the area of procurement technical

       20   assistance.  We are a Native American PTC, similar to

       21   the PTC office here, and so forth.  And then also

       22   provided any areas of certifications, and so forth

       23   and provide, you know, one©on©one training.  How to

       24   search for those opportunities, where those

       25   opportunities are at.
                                                                65



        1             And I just want to say, thank you, Jeanette

        2   and Kimberly.  And before anyone leaves, we need to

        3   get these surveys back, these green forms.

        4             MS. BROWN:  Fill out the green forms.

        5             MS. ELAINE YOUNG:   Fill these out and then

        6   just go ahead and turn them in to us at the

        7   registration table.  Thank you.

        8             MS. BROWN:  And the National Center is one

        9   of our contractors.  We are working with them to make

       10   sure, and to help us do the outreach and the

       11   in©reaches needed to communicate with the tribes,

       12   because of the expertise that they bring.

       13             So, we recognize that there is a need to

       14   get the word out to the tribal community in

       15   particular.  We heard that very clearly, very early

       16   on, so we contracted with the National Center to work

       17   with us in doing that.

       18             So if you have any questions, you can,

       19   indeed, get them to us, but you can also call the

       20   National Center, as well.  And they have a number of

       21   resources that are available to you, and you're

       22   welcome to work with them in making and getting a lot

       23   of the things that you might need as potential

       24   contractors, or as contractors have done.

       25             Again, I would like to thank you for your
                                                                66



        1   comments.  Some good things came out of this, because

        2   nobody mentioned to us about the ©© and I know that

        3   it's the MAC code instead of the SIC code.  But,

        4   those are of the kinds of things.

        5             And the young lady who mentioned ©© and we

        6   got a lot of good comments, but looking at how we add

        7   up and will it be subtracted out, how do you come up

        8   with that waiver.  I mean, those are the kinds of

        9   things that we want to make sure that we capture and

       10   make sure they are as clear as possible in laymen's

       11   terms, so that everybody can understand it.

       12             So, again, I thank you, and although we are

       13   on the road, we still look at our E©mails.  But go to

       14   the places that we have identified in the rule to get

       15   your comments in.

       16             Thanks again.

       17             (This Public Hearing was concluded at 4:35

       18   p.m.)

       19

       20

       21

       22

       23

       24

       25
                                                                67



        1   STATE OF NEW MEXICO
                                  ss.
        2   COUNTY OF BERNALILLO

        3

        4                   REPORTER'S CERTIFICATE

        5        I, BEVERLY ANN SCHLEIMER, New Mexico Certified

        6   Court Reporter, DO HEREBY CERTIFY that I did report

        7   in stenographic shorthand the proceedings set forth

        8   herein, and the foregoing is a true and correct

        9   transcript of the proceedings.

       10        In testimony whereof, I have hereunto set my

       11   hand on this 5th day of November, 2003.

       12

       13                       ___________________________

       14                       Beverly Ann Schleimer, RDR
                                Certified Court Reporter #66
       15                       License expires:  12©31©03

       16

       17

       18

       19

       20

       21

       22

       23

       24

       25
