HUBZone Program, 46698-46703 [E8-18441]
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Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices
Electronic Comments
SMALL BUSINESS ADMINISTRATION
• Use the Commission’s Internet
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rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–NASDAQ–2008–063 on the
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[Disaster Declaration #11353 and #11354]
The number assigned to this disaster
for physical damage is 113538 and for
economic injury is 113540.
Texas Disaster #TX–00297
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–18459 Filed 8–8–08; 8:45 am]
BILLING CODE 8010–01–P
13 17
CFR 200.30–3(a)(12).
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U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
SUMMARY: This is a Notice of the
Presidential declaration of a major
disaster for the State of Texas (FEMA–
1780–DR), dated 07/31/2008.
Incident: Hurricane Dolly.
Incident Period: 07/22/2008 and
continuing.
Effective Date: 07/31/2008.
Physical Loan Application Deadline
Date: 09/30/2008.
Economic Injury (Eidl) Loan
Application Deadline Date: 05/01/2009.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: M.
Mitravich, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street, SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
07/31/2008, applications for disaster
loans may be filed at the address listed
above or other locally announced
locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties (Physical Damage and
Economic Injury Loans):
Cameron, Hidalgo, Willacy.
Contiguous Counties (Economic Injury
Loans Only):
Texas: Brooks, Starr, Kenedy.
The Interest Rates are:
DATES:
For Physical Damage:
Homeowners With Credit Available Elsewhere ......................
Homeowners Without Credit
Available Elsewhere ..............
Businesses With Credit Available Elsewhere ......................
Other (Including Non-Profit Organizations)
With
Credit
Available Elsewhere ..............
Businesses and Non-Profit Organizations Without Credit
Available Elsewhere ..............
For Economic Injury:
Businesses & Small Agricultural
Cooperatives Without Credit
Available Elsewhere ..............
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Herbert L. Mitchell,
Associate Administrator for Disaster
Assistance.
[FR Doc. E8–18443 Filed 8–8–08; 8:45 am]
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
HUBZone Program
U.S. Small Business
Administration (SBA).
ACTION: Notice of methodology for
measuring the economic impact of the
HUBZone Program.
AGENCY:
SUMMARY: In June 2008, the Government
Accountability Office (GAO) issued its
findings on the U.S. Small Business
Administration (SBA) Historically
Underutilized Business Zone
(HUBZone) Program. One of GAO’s
findings is that the SBA does not assess
the Program’s economic impact. The
GAO noted the importance of this given
that the HUBZone Program is primarily
defined by economic factors (household
income, unemployment rate, and
poverty rate).
On June 6, 2008, the SBA responded
to GAO’s findings, and provided several
steps to address them. One of these
steps is to develop a methodology for
assessing the Program’s economic
impact.
This paper outlines the anticipated
methodology for this assessment. The
paper will provide a brief description of
the different methodological options
currently available for undertaking an
impact assessment. It will then provide
a basic description of the HUBZone
Program. Finally, it will detail the
specific methodology chosen for
measuring the Program’s economic
impact.
Percent
The complexity of assessing the
Program’s economic impact lies in that
there are multiple government agencies
5.375 using three relevant procurement
mechanisms, and five classes of
2.687
HUBZones. In addition, the required
8.000 data for this assessment will be derived
from four different databases. This
multiple database feature, as well as
5.250 other documented data issues of the
HUBZone Program, increases the
difficulty of correctly identifying the
4.000 assessment’s relevant data elements.
This methodology assumes that these
data issues will be addressed.
This methodology will trace Federal
4.000
contract dollars as they flow to the
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Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices
various HUBZone areas. It will then
estimate the impact of these contract
dollars on the HUBZone areas’
employment and household income. To
isolate the impact of the HUBZone
Program, the methodology differentiates
Federal contract dollar-flows in three
ways: (1) Via the HUBZone Direct
Mechanism, where Federal contract
dollar-flows are directly attributable to
the HUBZone Program; (2) Via the NonHUBZone SBA Contract Mechanisms,
where Federal contract dollar-flows are
directly attributable to SBA programs,
but exclude the HUBZone Program; (3)
Via the Non-SBA Federal Contract
Mechanisms, where Federal contract
dollar-flows are not associated with any
SBA program.
This differentiation addresses GAO’s
recommendation to develop measures
that take into account factors such as (1)
the economic characteristics of the
HUBZone areas and (2) Federal
contracts being counted under multiple
socioeconomic subcategories.
DATES: Comments must be received on
or before September 10, 2008.
ADDRESSES: You may submit comments
by Mail, Hand Delivery/Courier:
Giuseppe Gramigna, Office of Policy
and Strategic Planning, U.S. Small
Business Administration, 409 3rd Street,
SW., Washington, DC 20416.
FOR FURTHER INFORMATION CONTACT:
Giuseppe Gramigna, Office of Policy
and Strategic Planning, U.S. Small
Business Administration, 409 Third
Street, SW., Washington, DC 20416;
Telephone (202) 401–3227;
giuseppe.gramigna@sba.gov.
SUPPLEMENTARY INFORMATION:
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Introduction
In June 2008, the GAO issued its
findings on the SBA HUBZone
Program.1 One of GAO’s findings is that
the SBA does not assess the economic
impact of the HUBZone Program. The
GAO noted the importance of this given
that the HUBZone Program is primarily
defined by economic factors (household
income, unemployment rate, and
poverty rate).
On June 6, 2008, SBA responded to
GAO’s findings, and detailed several
reforms to address them. One of these
steps is to develop a methodology for
assessing the Program’s economic
impact. To a great extent, this
methodology will be restricted to
measuring the economic impact of the
HUBZone Program, and not judging the
1 U.S. GAO. June 2008. Additional Actions Are
Needed to Certify and Monitor HUBZone
Businesses and Assess Program Results.
Washington. Draft GAO–08–643.
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significance of the impact. The primary
reason for this restriction is that
Congress only provided a contracting
goal for the HUBZone Program: That as
of fiscal year 2003, 3 percent of all
Federal prime contract dollars should go
to small firms located in HUBZone
areas.2 However, this goal provides no
guidance on how to assess the
significance of the economic impact of
this 3 percent Federal contracting goal.
Lacking this guidance, the assessment
can only provide a measurement of the
Program’s economic impact.
This paper outlines the anticipated
methodology for this assessment. The
paper will provide a brief description of
the different methodological options
currently available for undertaking an
impact assessment. It will then provide
a basic description of the HUBZone
Program. Finally, it will detail the
specific methodology chosen for
measuring the Program’s economic
impact.
This methodology will trace Federal
contract dollars as they flow to the
various HUBZone areas. It will then
estimate the impact of these contract
dollars on the HUBZone areas’
employment and household income. To
isolate the impact of the HUBZone
Program, the methodology differentiates
Federal contract dollar flows in three
ways: (1) Via the HUBZone Direct
Mechanism, where Federal contract
dollar flows are directly attributable to
the HUBZone Program. (2) Via the NonHUBZone SBA Contract Mechanisms,
where Federal contract dollar flows are
directly attributable to SBA Programs,
but excluding the HUBZone Program.
(3) Via the Non-SBA Federal Contract
Mechanisms, where Federal contract
dollar flows are not associated with any
SBA programs.
This differentiation addresses GAO’s
recommendation to develop measures
that take into account factors such as (1)
the economic characteristics of the
HUBZone areas and (2) Federal
contracts being counted under multiple
socioeconomic subcategories.
The complexity of assessing the
economic impact of the HUBZone
Program lies in that there are multiple
government agencies, each using three
2 ‘‘The Government-wide goal for participation by
qualified HUBZone small business concerns shall
be established at not less than 1 percent of the total
value of all prime contract awards for fiscal year
1999, not less than 1.5 percent of the total value of
all prime contract awards for fiscal year 2000, not
less than 2 percent of the total value of all prime
contract awards for fiscal year 2001, not less than
2.5 percent of the total value of all prime contract
awards for fiscal year 2002, and not less than 3
percent of the total value of all prime contract
awards for fiscal year 2003 and each fiscal year
thereafter.’’ 15 U.S.C. 644(g)(1).
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46699
relevant procurement mechanisms, and
five classes of HUBZones. In addition,
the required data for this assessment
will be derived from four different
databases. This multiple database
feature of the HUBZone Program
increases the difficulty of correctly
identifying the relevant data elements.
Finally, the GAO report as well as an
SBA Advocacy report found additional
data identification issues.3 Both reports
indicate that the various databases
provide inconsistent data on HUBZone
firms and HUBZone areas. These data
inconsistencies can lead to
misidentification of the contract dollarflows to HUBZone areas, and can thus
introduce errors in the assessment.
This methodology assumes that data
inconsistencies will be addressed. The
assessment will need to account for any
inconsistencies remaining in the data.
The criteria for this adjustment process
have not yet been developed, as they
will most likely be derived from a data
analysis of the HUBZone Program.
Currently Available Impact Assessment
Models
There are several theoretical models
for assessing the economic impact of a
particular Federal government
expenditures program at the national
level. However, when it comes to
assessing the economic impact of
Federal expenditures on a specific
geographic region—a state or a county
for example—the options quickly
narrow-down to a few variations of a
singular theoretical approach: The
Leontief Input-Output Model.4 The SBA
found that the specific aspects of the
HUBZone Program allow for a
successful implementation of this
methodological approach. Specifically,
the HUBZone Program eligibility is
largely defined by the economic
concepts of employment and income.
3 Henry Beale, (May 2008), The HUBZone
Program, U.S. SBA Advocacy, Washington, DC.
4 While the proliferation of methodologies for
impact studies has grown over the years, the
difference among them is primarily based on
terminology and focus. Indeed, most methodologies
for impact study can be traced to two theoretical
economic approaches. The first is the General
Equilibrium approach, and the other is the Static
Input-Output Model. These two theoretical
approaches have their common origins in the 1930’s
work of R. F. Kahn and John Maynard Keynes, and
the 1940’s–1950’s work of Wassily W. Leontief. For
more details see, R. F. Kahn. (June 1931). The
Relation of Home Investment to Employment. The
Economic Journal, Vol. 41. pp. 173–198. John
Maynard Keynes. (1936). The General Theory of
Employment, Interest and Money, Macmillan
Cambridge University Press, for Royal Economic
Society, Wassily W. Leontief. (1951). The Structure
of American Economy 1919–1939. 2d ed. Oxford
University Press, Fair Lawn, NJ. Ultimately these
works trace their origins to the 16th century French
economist Francis Quesnay. See Le Tableau
¸
Economique, 1758.
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Fortunately, nearly all commercially
available Input-Output models provide
employment and income data at very
detailed geographic and industry levels.
The SBA identified three sources that
provide software and data for the
practical application of this approach. A
cursory analysis of these models
indicates that, because they use the
same basic methodology and data, the
differences among them are not
significant enough to materially alter the
outcome of a particular assessment.
Hence, the SBA will base the final
choice among these applications on cost
and ease of usability.
These models include RIMS II
(developed by the Bureau of Economic
Analysis), IMPLAN (developed by the
Minnesota Implan Group, MIG Inc, in
Minnesota), and REMI (developed by
Regional Economic Models, Inc. in
Amherst, Massachusetts).
A Basic Description of the HUBZone
Program
The HUBZone Act of 1997 provides
for a new Federal program designed to
stimulate job creation and capital
investment in distressed urban, rural
and Native American areas. Through
this Act, Congress provided a
contracting goal for the HUBZone
Program: That as of fiscal year 2003, 3
percent of all Federal prime contract
dollars should go to small firms located
in HUBZone areas.
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HUBZone Areas
Currently, there are five different
definitions of HUBZone areas: 5
1. Qualified Census Tract (QCT): The
Internal Revenue Service and the U.S.
Department of Housing and Urban
Development (HUD) define a Qualified
Census Tract as having either 50 percent
or more of their households with
income below 60 percent of the median
gross income, or have a poverty rate of
at least 25 percent. There is a maximum
cap specifying that the population of all
of the census tracts that meet one or
both of these criteria cannot exceed 20
percent of the area population; 6
5 Please note that the original HUBZone
designations were based upon the 1990 census. As
a result of the 2000 census and OMB change in
definition of metropolitan areas some HUBZone
areas lost their eligibility. Consequently, Congress
passed legislation to restore the eligibility of these
areas, now referred to as Redesignated Areas.
6 The definition for Qualified Census Tract is
based on the Internal Revenue Service provision for
the Low Income Housing Tax Credit Program that
is developed in conjunction with the U.S.
Department of Housing and Urban Development
(HUD). The HUD Secretary designates Qualified
Census Tracts by public notice in the Federal
Register. Public Law 105–135, the HUBZone Act of
1997, was signed on Dec. 2, 1997 and is the source
for using this designation.
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2. Difficult Development Area (DDA):
The definition of Difficult Development
Area is similar to Qualified Census
Tract in that it is based on an Internal
Revenue Service provision for the Low
Income Housing Tax Credit Program
developed in conjunction with HUD. A
characteristic of a DDA is that the locale
has high construction, land and utility
costs relative to the area median
income; 7
3. Qualified County: The definition
for qualified county is any county that,
based on the most recent data available
from the U.S. Census Bureau, is not
located in a metropolitan statistical area,
and in which the median household
income is less than 80 percent of the
median household income for the entire
non-metropolitan area of its respective
state. Alternatively, a qualified county is
any non-metropolitan county that, based
on the most recent data available from
the Bureau of Labor Statistics (BLS), has
an unemployment rate that is not less
than 140 percent of the state average
unemployment rate or the national
average unemployment rate; 8
4. Qualified Indian Reservation: The
definitions for qualified Indian
reservations, which include lands
covered by the phrase ‘‘Indian
Country,’’ are those established and
used by the Bureau of Indian Affairs. A
more precise listing of properties
included in this classification, besides
reservations, is Indian trust lands (on
and off the reservation), Indian
dependant lands, and Indian service
areas. In the state of Oklahoma, the
HUBZone Program uses a determination
arrived at by the Internal Revenue
Service as the property is legally
classified as a ‘‘former Indian
reservations in Oklahoma’’; 9
5. Base Realignment and Closure
(BRAC): A military base closed under
the Defense Base Realignment and
Closure Act of 1990 (BRAC). Congress
determined that former military bases
closed because of BRAC qualify for
7 NOTE: By virtue of legislation, signed into law
on August 10, 2005, the application of the DDA
status for HUBZone consideration only applies to
non-metropolitan counties in Alaska, Hawaii, and
the U.S. territories and possessions, but not to the
48 contiguous states. The Secretary of HUD
designates Difficult Development Areas by public
notice in the Federal Register. Public Law 109–59,
the Safe, Accountable, Flexible, Efficient
Transportation Equity Act of the Department of
Transportation Reauthorization for 2005, was
signed on Aug. 10, 2005, and is the source for using
this designation.
8 Public Law 105–135, the HUBZone Act of 1997,
was signed on Dec. 2, 1997, and is the source for
using this designation.
9 Both Public Law 105–135, the HUBZone Act of
1997, signed on Dec. 2, 1997, and Public Law 106–
554, the HUBZone Act of 2000, signed on Dec. 12,
2000, are the sources for using this designation.
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HUBZone status for a five-year period
from the date of formal closure. For
those locations closed as of the date the
legislation was signed into law, the fiveyear period began on the date the law
became effective, Dec. 8, 2004.10
The selection criteria for each
HUBZone classification varies
somewhat, to account for the different
economic characteristic of the various
HUBZone classes. However, for this
specific methodological purpose, it is
sufficient to state that six elements go
into the criteria:
1. Household income level;
2. Unemployment rate;
3. Poverty rate;
4. BRAC;
5. DDA;
6. Classification as ‘‘Indian Country’’.
HUBZone Firms
The SBA HUBZone Program qualifies
and periodically recertifies firms
wishing to obtain or retain HUBZone
status. The qualifying criteria for a
HUBZone firm are based on having a
specific level of operational activities
within the geographic area of a
HUBZone. Specifically, the firm must
have its principal office located in a
HUBZone Area, and at least 35% of its
labor force must reside within a
HUBZone Area.
Federal Contract Mechanisms Federal
Contracting Officers have quite a few
mechanisms to channel funds to a
HUBZone Area. For example, some
Federal contracting mechanisms are
based on socioeconomic status such as
service disabled veteran, while others
are simply based on full and open
competition. Some of these mechanisms
are related to the HUBZone Program and
some are not. Understanding and tracing
the dollar flows of these specific
mechanisms will be crucial for assessing
the economic impact of the HUBZone
Program. To effectively trace these
contracting dollars, the model
differentiates among the following
contracting mechanisms:
1. HUBZone Direct Mechanism:
Federal contract mechanisms based on
HUBZone Program mechanisms (i.e.,
HUBZone set-aside, HUBZone sole
source, and HUBZone price preference
in a full and open competition); 11
10 Public Law 108–447, the HUBZone Act of 2004,
was signed on Dec. 8, 2004 and is the source for
using this designation.
11 Both the GAO and the Advocacy report
indicate that there are a certain number of
HUBZone contracts that have more than one
preference mechanism designation. Indeed, the
legislation defining these mechanisms is rather
complex. The current model does not account for
this additional contract mechanism. Addressing for
the existence of multiple contract mechanisms is
largely data driven. If the data indicate that the
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2. Non-HUBZone SBA Contract
Mechanisms: SBA contract mechanisms
solely based on Non-HUBZone
mechanisms (e.g., small business setaside, service disabled veteran-owned
small business set aside, 8(a) sole source
award, 8(a) set aside);
3. Non-SBA Federal Contract
Mechanisms: Competitive Federal
procurement mechanisms based on full
and open competition, and other
contracting mechanisms available to
small and ‘other than small’ firms.
These differentiations allow for the
incremental measurement of all Federal
contract dollars flowing to HUBZones
via the various kinds of Federal
procurement mechanisms. Specifically:
• Mechanism 1 measures the dollar
flow attributable the HUBZone Program;
• Mechanism 2 measures the dollar
flow attributable to Non-HUBZone SBA
programs on the HUBZone areas;
• Mechanism 3 measures the dollar
flow attributable to Non-SBA Federal
procurement contracts to HUBZone
areas;
• The summation of mechanisms 1,
and 2, allows for the measurement of all
the SBA’s procurement contracts
towards HUBZone areas;
• The summation of mechanisms 1
through 3 allows for the measurement of
all Federal contracts toward HUBZone
areas.
Statistical Characteristics of the
Economic Impact Assessment Model
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It is commonly the case that the final
analysis will include aspects not
anticipated in the original methodology
outline. This is a natural outcome of
going through the entire exercise, and
being able to identify subtleties not
perceivable from the onset of the study.
Hence, it may very well be the case that
the actual assessment may include
statistical and data elements not
mentioned in this methodology.
However, we anticipate using the
following statistical and data elements
to provide a quantitative description of
the HUBZone Program.12
1. The five HUBZone areas and their
HUBZone participation (i.e., the number
of HUBZone Business, Vendors, and
Contract Dollars);
occurrences of multiple mechanisms designation
are insignificant, then it is reasonable to included
them in the HUBZone Direct Mechanism. However,
if there are significant occurrences of multiple
mechanisms contracts, then the model will expand
to explicitly include this additional contract
mechanism, and will thus have four contract
mechanisms.
12 This section draws on the work of Henry Beale,
(May 2008), The HUBZone Program, U.S. SBA
Advocacy, Washington, DC.
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2. The flow of contract dollars via the
various HUBZone mechanisms over
time;
3. Industry concentration of HUBZone
contracts (i.e., the number and dollar
value of HUBZone contracts by NAICS
industry);
4. HUBZone participation by state
(i.e., the number of HUBZone
Businesses, Contractors, and Contract
Dollars);
5. Employment Level;
6. Unemployment Rate;
7. Median Household Income.
In addition, we anticipate utilizing
the following statistical and data
elements for each HUBZone Area:
A. The number of sub-areas (mostly
counties) in the HUBZone Area;
B. The number of HUBZone Firms in
the HUBZone Area;
C. The number of HUBZone
Contractors in the HUBZone Area;
D. The number of HUBZone Contracts
flowing into the HUBZone Area;
E. HUBZone Contract Dollars flowing
into HUBZone Area;
F. Population in the HUBZone Area.
• Ratio 1: The number of HUBZone
Firms divided by HUBZone Area
• Ratio 2: The number of HUBZone
Firms divided by HUBZone Area
Population
• Ratio 3: The number of HUBZone
Contractors divided by HUBZone Area
• Ratio 4: The number of HUBZone
Contractors divided by HUBZone Area
Population
• Ratio 5: The number of HUBZone
Contracts divided by HUBZone Area
• Ratio 6: The number of HUBZone
Contracts divided by HUBZone Area
Population
• Ratio 7: HUBZone Contract Dollars
divided by HUBZone Area
• Ratio 8: HUBZone Contract Dollars
divided by HUBZone Area Population.
Data elements B through E measure
the level of participation of a specific
HUBZone Area. Ratios 1, 3, 5, and 7
measure the comparative rate of
participation of a particular HUBZone
Area. In addition, the population ratios
(ratios 2, 4, 6, and 8) measure the
comparative rate of participation on a
per capita basis.
These statistics and data elements
will provide the basis for measuring the
absolute level and the comparative rate
of participation in each HUBZone Area.
For example, they will provide contract
data (i.e., the number of contracts, the
dollar value of these contracts, and the
types of mechanisms used to obtain
these contracts) for a specific HUBZone
Area. In addition, by dividing these
contract data, say by population in a
specific HUBZone Area, they provide a
comparative measure of the importance
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46701
of these contracts with respect to
population.
Other statistical analysis of the above
data should provide additional
quantitative understanding of the
HUBZone Program. For example, it may
be useful to derive some commonly
used central tendency measures (i.e.,
mean, median, mode.) as well as some
commonly used distribution measures
(e.g., quartile, decile, standard
deviation, etc.).
Estimating the Incremental and Total
Economic Impact of the HUBZone
Program
Having provided a sufficient
statistical description of the HUBZone
Program, the model will then estimate
the economic impact of the contract
dollar flows attributable to the three
contracting mechanisms. Specifically,
the model will provide the following
estimates:
1. The economic impact directly
attributable to the HUBZone Program;
2. The economic impact of the NonHUBZone SBA programs on HUBZone
areas;
3. The economic impact of other
related Federal procurement programs
affecting HUBZone areas.
Economic impact will be measured by
the estimated growth in median
household income and employment (or
a reduction in unemployment) in a
specific HUBZone Area.
The model will use a two-step process
to arrive at these estimated growth rates.
First it will apply a specific multiplier
to the contract dollars flowing to a
specific HUBZone Area via the three
contract mechanisms.13 In a second
step, the model will aggregate the
results to the appropriate analytical
level to measure the economic impact of
the various dollar flows.14
In order to accomplish these two
steps, the model will employ the
following types of equation:
13 These multipliers will be provided by the
specific Input-Output software chosen.
14 We expect that the ‘‘appropriate analytical
level’’ will capture the economic impact at the
HUBZone Area category. However, it may also
prove informative to analyze the HUBZone Program
economic impact at a more granular level. For
example, it may be useful to analyze the data at the
individual HUBZone Area level. This granularity,
for example, might shed light on how and why
some HUBZone areas are more successful than
others at attracting Federal contracts. Indeed, the
Advocacy report does this. See SBA Advocacy
(2000). Op. Cit. It may also be revealing to analyze
the data at the firm type level to see what
differentiates successful HUBZone contractors from
other HUBZone firms. Whether it is feasible to
analyze the data at this level of granularity will
largely be a question of resources and privacy
issues.
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Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices
rmajette on PRODPC74 with NOTICES
The Employment Impact Equations
1. HUBZone Direct Employment
Impact = f (dollar flow to a HUBZone
Area via the HUBZone Direct
Mechanism multiplied by Employment
Multiplier) 15
2. Non-HUBZone SBA Employment
Impact = f (dollar flow to a HUBZone
Area via Other SBA Mechanisms
multiplied by the Employment
Multiplier)
3. Non-SBA Federal Employment
Impact = f (dollar flow to a HUBZone
Area via Non-SBA Federal contract
Mechanisms multiplied by the
Employment Multiplier)
equations (1 and 4) to the results of the
third set of equations (3 and 6) will
compare the economic impact of
HUBZone Program to the economic
impact of the Non-SBA Federal
procurement programs.
The Income Impact Equations
4. HUBZone Direct Income Impact =
f (dollar flow to a HUBZone Area via the
HUBZone Direct Mechanism multiplied
by the Income Multiplier)
5. Non-HUBZone SBA Income Impact
= f (dollar flow to a HUBZone Area via
Other SBA Mechanisms multiplied by
the Income Multiplier)
6. Non-SBA Federal Income Impact =
f (dollar flow to a HUBZone Area via
Non-SBA federal contract Mechanisms
multiplied by the Income Multiplier)
Equations 1 and 4 measure the
economic impact directly attributable to
the HUBZone Program. Equations 2 and
5 measure the economic impact
attributable to the Non-HUBZone
related SBA Federal procurement
programs. Finally, equations 3 and 6
measure the Non-HUBZone and NonSBA Federal procurement program on a
HUBZone Area.
Hence, the first set of equations (1 and
4) measure the economic impact of the
HUBZone Program. The second set of
equation (2 and 5) measure the
economic impact of the Non-HUBZone
related SBA procurement programs. The
third set of equations (3 and 6) measure
the economic impact of the NonHUBZone and Non SBA Federal
procurement program on a specific
HUBZone Area. Summing the result of
equations 1 through 6 will provide for
a measurement of the entire Federal
procurement program on a specific
HUBZone Area.
A comparison of these set of
equations can place the economic
impact of the HUBZone Program into
perspective. For example, comparing
the results of the first set of equations
(1 and 4) to the results of the second set
of equations (2 and 5) will compare the
economic impact of HUBZone Program
to the economic impact of the NonHUBZone SBA programs. Likewise,
comparing the results of the first set of
This database is maintained by the
SBA HUBZone Program. The data
contained in this database is generated
from the application, recertification and
program examination processes of the
HUBZone Program. The following
relevant data elements can be found in
this database:
• Firm Identification Elements (e.g.,
name, address, SBA Customer Number,
HUBZone Application Number);
• Firm Operational Elements (e.g.,
Employment, Revenue Size).
15 All the multipliers in this analysis are Final
Demand multipliers.
VerDate Aug<31>2005
15:22 Aug 08, 2008
Jkt 214001
Databases
Based on our understanding, there are
four databases necessary for the
resolution of the model. Following is a
basic description of each of these
databases:
HUBZone Certification Tracking System
(HCTS)
Central Contractor Registration (CCR)
The Central Contractor Registration
(CCR) is the primary registrant
procurement database for the U.S.
Federal Government. CCR collects,
validates, stores and disseminates data
in support of agency acquisition
missions. It is federally mandated that
anyone who wishes to do business with
the Federal government under a FARbased contract must be registered in
CCR before being awarded the contract.
The Federal Procurement Data System
(FPDS)
The Federal Procurement Data
System-Next Generation (FPDS–NG) is
maintained by the General Services
Administration under the direction of
the Office of Management and Budget.
This database contains key data on all
Federal appropriated procurement
actions. The following relevant data
elements can be found in this database:
• Contract Identification (e.g.,
contract value, and selection
mechanism)
• Firm Identification (e.g., DUNS
Number, socioeconomic status
[HUBZone, 8a, Open Competition])
Census 2000
While the HUBZone Program was
established by congress in 1997, it
became operational in 1999. Hence for
simplicity purposes, we anticipate using
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Frm 00121
Fmt 4703
Sfmt 4703
the 2000 Census data.16 The 2000
Census data provides the following data
elements:
• Population;
• Labor Force;
• Unemployment Rate;
• Poverty Rate;
• Household Income.
Defining the Data Elements
So far we have identified the
following data elements:
1. Contracting Federal Agencies;
2. Contracting Mechanisms;
3. HUBZone Areas;
4. HUBZone Firms;
5. HUBZone Contractors.
The next data element to be defined
is ‘‘Contract Value’’. To a certain extent
our choice is limited by the availability
of data found in FPDS. This database
only records obligated funds. However,
we have no information at which point
in time these obligated funds were
actually expended. Faced with this
restriction, we assume that all the funds
are spent in the year that they are
obligated.17
Given the above restrictions, we
deduce the final data element required
by our model:
6. Contract Value is defined as prime,
obligated dollars via any one of the
three contract mechanisms.
The final data elements to be
specified in this model are the type of
multipliers used for estimating
incremental and total economic impact.
As indicated in our basic description of
the I–O Model, this decision is
primarily based on the available data
elements. Hence, given the abovedescribed data elements, we anticipate
using the final demand multiplier for
output, income, and employment.
Hence, we have the following additional
data elements:
7. Final Demand Output Multiplier;
8. Final Demand Employment
Multiplier;
9. Final Demand Income Multiplier.
A common aspect of all I–O models
is that they provide final demand
multipliers for many industries. For
example, the RIMS II model provides
final demand multipliers for 386
industries. Hence, we expect that it will
be necessary to reduce the number of
industry-specific multipliers. There are
several options for narrowing this
choice. For example, one could take a
weighted average of the relevant
multipliers, or one could simply choose
a representative sample (say the largest
16 The Census decennial population survey is the
only source that provides socioeconomic data at the
level required for this impact study.
17 The extent that expenditures timing differ from
allocation timing will increase model’s error rate.
E:\FR\FM\11AUN1.SGM
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Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices
Fay E. Ott,
Associate Administrator for Government
Contracting and Business Development.
[FR Doc. E8–18441 Filed 8–8–08; 8:45 am]
Affairs at the Office of Management and
Budget (OMB), who may be reached at
202–395–4718. You may submit
comments by any of the following
methods:
• E-mail: kastrich@omb.eop.gov. You
must include the DS form number,
information collection title, and OMB
control number in the subject line of
your message.
• Mail (paper, disk, or CD–ROM
submissions): Office of Information and
Regulatory Affairs, Office of
Management and Budget, 725 17th
Street, NW., Washington, DC 20503.
• Fax: 202–395–6974
BILLING CODE 8025–01–P
FOR FURTHER INFORMATION CONTACT:
two or three) multipliers. This decision
will be based on weighing the effort
versus the additional accuracy gained
from employing additional multipliers.
Another common aspect of most I–O
models is that they provide final
demand multipliers at the county level.
Given that there are several thousand
counties, we expect to reduce the
regional specification of our multipliers.
Again we will weigh effort versus
accuracy in making this choice.
Authority: 13 CFR part 126.
DEPARTMENT OF STATE
[Public Notice 6312]
30-Day Notice of Proposed Information
Collection: DS–157, Supplemental
Nonimmigrant Visa Form, OMB Control
Number 1405–0134
Notice of request for public
comments.
rmajette on PRODPC74 with NOTICES
ACTION:
SUMMARY: The Department of State has
submitted the following information
collection request to the Office of
Management and Budget (OMB) for
approval in accordance with the
Paperwork Reduction Act of 1995.
• Title of Information Collection:
Supplemental Nonimmigrant Visa Form
• OMB Control Number: 1405–0134
• Type of Request: Extension of a
Currently Approved Collection
• Originating Office: Bureau of
Consular Affairs, Department of State
(CA/VO)
• Form Number: DS–157
• Respondents: Nonimmigrant visa
applicants legally required to provide
additional security and background
information.
• Estimated Number of Respondents:
4,000,000
• Estimated Number of Responses:
4,000,000
• Average Hours per Response: 1
hour
• Total Estimated Burden: 4,000,000
• Frequency: Once per respondent
• Obligation to Respond: Required to
Obtain or Retain a Benefit
DATES: Submit comments to the Office
of Management and Budget (OMB) for
up to 30 days from August 11, 2008.
ADDRESSES: Direct comments and
questions to Katherine Astrich, the
Department of State Desk Officer in the
Office of Information and Regulatory
VerDate Aug<31>2005
15:22 Aug 08, 2008
Jkt 214001
You
may obtain copies of the proposed
information collection and supporting
documents from David Serna of the
Office of Visa Services, U.S. Department
of State, 2401 E. Street, NW., L–603,
Washington, DC 20522, who may be
reached at (202) 663–2874.
We are
soliciting public comments to permit
the Department to:
• Evaluate whether the proposed
information collection is necessary for
the proper performance of our
functions.
• Evaluate the accuracy of our
estimate of the burden of the proposed
collection, including the validity of the
methodology and assumptions used.
• Enhance the quality, utility, and
clarity of the information to be
collected.
• Minimize the reporting burden on
those who are to respond, including the
use of automated collection techniques
or other forms of technology.
Abstract of proposed collection:
Applicants will use this form to apply
for a nonimmigrant visa to enter the
United States. U.S. embassies and
consulates will use the data provided in
conjunction with the DS–157 to help
determine whether aliens are eligible to
receive nonimmigrant visas.
Methodology: Applicants may fill out
the DS–157 online or print the page and
fill it out by hand, and submit it in
person at the time of interview.
SUPPLEMENTARY INFORMATION:
DEPARTMENT OF STATE
[Public Notice 6313]
Culturally Significant Objects Imported
for Exhibition Determinations: ‘‘Art &
Empire: Treasures From Assyria in the
British Museum’’
SUMMARY: Notice is hereby given of the
following determinations: Pursuant to
the authority vested in me by the Act of
October 19, 1965 (79 Stat. 985; 22 U.S.C.
2459), Executive Order 12047 of March
27, 1978, the Foreign Affairs Reform and
Restructuring Act of 1998 (112 Stat.
2681, et seq.; 22 U.S.C. 6501 note, et
seq.), Delegation of Authority No. 234 of
October 1, 1999, Delegation of Authority
No. 236 of October 19, 1999, as
amended, and Delegation of Authority
No. 257 of April 15, 2003 [68 FR 19875],
I hereby determine that the objects in
the exhibition ‘‘Art & Empire: Treasures
from Assyria in the British Museum,’’
imported from abroad for temporary
exhibition within the United States, are
of cultural significance. The objects are
imported pursuant to a loan agreement
with the foreign owner or custodian. I
also determine that the exhibition or
display of the exhibit objects at the
Museum of Fine Arts, Boston, MA, from
on or about September 21, 2008, until
on or about January 4, 2009, and at
possible additional exhibitions or
venues yet to be determined, is in the
national interest. Public Notice of these
Determinations is ordered to be
published in the Federal Register.
For
further information, including a list of
the exhibit objects, contact Julie
Simpson, Attorney-Adviser, Office of
the Legal Adviser, U.S. Department of
State (telephone: (202–453–8050). The
address is U.S. Department of State, SA–
44, 301 4th Street, SW., Room 700,
Washington, DC 20547–0001.
FOR FURTHER INFORMATION CONTACT:
Dated: August 4, 2008.
C. Miller Crouch,
Principal Deputy Assistant Secretary for
Educational and Cultural Affairs, Department
of State.
[FR Doc. E8–18476 Filed 8–8–08; 8:45 am]
BILLING CODE 4710–05–P
Dated: July 31, 2008.
Stephen A. Edson,
Deputy Assistant Secretary, Bureau of
Consular Affairs, Department of State.
[FR Doc. E8–18475 Filed 8–8–08; 8:45 am]
BILLING CODE 4710–06–P
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46703
E:\FR\FM\11AUN1.SGM
11AUN1
]]>Agencies
[Federal Register Volume 73, Number 155 (Monday, August 11, 2008)]
[Notices]
[Pages 46698-46703]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-18441]
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
HUBZone Program
AGENCY: U.S. Small Business Administration (SBA).
ACTION: Notice of methodology for measuring the economic impact of the
HUBZone Program.
-----------------------------------------------------------------------
SUMMARY: In June 2008, the Government Accountability Office (GAO)
issued its findings on the U.S. Small Business Administration (SBA)
Historically Underutilized Business Zone (HUBZone) Program. One of
GAO's findings is that the SBA does not assess the Program's economic
impact. The GAO noted the importance of this given that the HUBZone
Program is primarily defined by economic factors (household income,
unemployment rate, and poverty rate).
On June 6, 2008, the SBA responded to GAO's findings, and provided
several steps to address them. One of these steps is to develop a
methodology for assessing the Program's economic impact.
This paper outlines the anticipated methodology for this
assessment. The paper will provide a brief description of the different
methodological options currently available for undertaking an impact
assessment. It will then provide a basic description of the HUBZone
Program. Finally, it will detail the specific methodology chosen for
measuring the Program's economic impact.
The complexity of assessing the Program's economic impact lies in
that there are multiple government agencies using three relevant
procurement mechanisms, and five classes of HUBZones. In addition, the
required data for this assessment will be derived from four different
databases. This multiple database feature, as well as other documented
data issues of the HUBZone Program, increases the difficulty of
correctly identifying the assessment's relevant data elements. This
methodology assumes that these data issues will be addressed.
This methodology will trace Federal contract dollars as they flow
to the
[[Page 46699]]
various HUBZone areas. It will then estimate the impact of these
contract dollars on the HUBZone areas' employment and household income.
To isolate the impact of the HUBZone Program, the methodology
differentiates Federal contract dollar-flows in three ways: (1) Via the
HUBZone Direct Mechanism, where Federal contract dollar-flows are
directly attributable to the HUBZone Program; (2) Via the Non-HUBZone
SBA Contract Mechanisms, where Federal contract dollar-flows are
directly attributable to SBA programs, but exclude the HUBZone Program;
(3) Via the Non-SBA Federal Contract Mechanisms, where Federal contract
dollar-flows are not associated with any SBA program.
This differentiation addresses GAO's recommendation to develop
measures that take into account factors such as (1) the economic
characteristics of the HUBZone areas and (2) Federal contracts being
counted under multiple socioeconomic subcategories.
DATES: Comments must be received on or before September 10, 2008.
ADDRESSES: You may submit comments by Mail, Hand Delivery/Courier:
Giuseppe Gramigna, Office of Policy and Strategic Planning, U.S. Small
Business Administration, 409 3rd Street, SW., Washington, DC 20416.
FOR FURTHER INFORMATION CONTACT: Giuseppe Gramigna, Office of Policy
and Strategic Planning, U.S. Small Business Administration, 409 Third
Street, SW., Washington, DC 20416; Telephone (202) 401-3227;
giuseppe.gramigna@sba.gov.
SUPPLEMENTARY INFORMATION:
Introduction
In June 2008, the GAO issued its findings on the SBA HUBZone
Program.\1\ One of GAO's findings is that the SBA does not assess the
economic impact of the HUBZone Program. The GAO noted the importance of
this given that the HUBZone Program is primarily defined by economic
factors (household income, unemployment rate, and poverty rate).
---------------------------------------------------------------------------
\1\ U.S. GAO. June 2008. Additional Actions Are Needed to
Certify and Monitor HUBZone Businesses and Assess Program Results.
Washington. Draft GAO-08-643.
---------------------------------------------------------------------------
On June 6, 2008, SBA responded to GAO's findings, and detailed
several reforms to address them. One of these steps is to develop a
methodology for assessing the Program's economic impact. To a great
extent, this methodology will be restricted to measuring the economic
impact of the HUBZone Program, and not judging the significance of the
impact. The primary reason for this restriction is that Congress only
provided a contracting goal for the HUBZone Program: That as of fiscal
year 2003, 3 percent of all Federal prime contract dollars should go to
small firms located in HUBZone areas.\2\ However, this goal provides no
guidance on how to assess the significance of the economic impact of
this 3 percent Federal contracting goal. Lacking this guidance, the
assessment can only provide a measurement of the Program's economic
impact.
---------------------------------------------------------------------------
\2\ ``The Government-wide goal for participation by qualified
HUBZone small business concerns shall be established at not less
than 1 percent of the total value of all prime contract awards for
fiscal year 1999, not less than 1.5 percent of the total value of
all prime contract awards for fiscal year 2000, not less than 2
percent of the total value of all prime contract awards for fiscal
year 2001, not less than 2.5 percent of the total value of all prime
contract awards for fiscal year 2002, and not less than 3 percent of
the total value of all prime contract awards for fiscal year 2003
and each fiscal year thereafter.'' 15 U.S.C. 644(g)(1).
---------------------------------------------------------------------------
This paper outlines the anticipated methodology for this
assessment. The paper will provide a brief description of the different
methodological options currently available for undertaking an impact
assessment. It will then provide a basic description of the HUBZone
Program. Finally, it will detail the specific methodology chosen for
measuring the Program's economic impact.
This methodology will trace Federal contract dollars as they flow
to the various HUBZone areas. It will then estimate the impact of these
contract dollars on the HUBZone areas' employment and household income.
To isolate the impact of the HUBZone Program, the methodology
differentiates Federal contract dollar flows in three ways: (1) Via the
HUBZone Direct Mechanism, where Federal contract dollar flows are
directly attributable to the HUBZone Program. (2) Via the Non-HUBZone
SBA Contract Mechanisms, where Federal contract dollar flows are
directly attributable to SBA Programs, but excluding the HUBZone
Program. (3) Via the Non-SBA Federal Contract Mechanisms, where Federal
contract dollar flows are not associated with any SBA programs.
This differentiation addresses GAO's recommendation to develop
measures that take into account factors such as (1) the economic
characteristics of the HUBZone areas and (2) Federal contracts being
counted under multiple socioeconomic subcategories.
The complexity of assessing the economic impact of the HUBZone
Program lies in that there are multiple government agencies, each using
three relevant procurement mechanisms, and five classes of HUBZones. In
addition, the required data for this assessment will be derived from
four different databases. This multiple database feature of the HUBZone
Program increases the difficulty of correctly identifying the relevant
data elements.
Finally, the GAO report as well as an SBA Advocacy report found
additional data identification issues.\3\ Both reports indicate that
the various databases provide inconsistent data on HUBZone firms and
HUBZone areas. These data inconsistencies can lead to misidentification
of the contract dollar-flows to HUBZone areas, and can thus introduce
errors in the assessment.
---------------------------------------------------------------------------
\3\ Henry Beale, (May 2008), The HUBZone Program, U.S. SBA
Advocacy, Washington, DC.
---------------------------------------------------------------------------
This methodology assumes that data inconsistencies will be
addressed. The assessment will need to account for any inconsistencies
remaining in the data. The criteria for this adjustment process have
not yet been developed, as they will most likely be derived from a data
analysis of the HUBZone Program.
Currently Available Impact Assessment Models
There are several theoretical models for assessing the economic
impact of a particular Federal government expenditures program at the
national level. However, when it comes to assessing the economic impact
of Federal expenditures on a specific geographic region--a state or a
county for example--the options quickly narrow-down to a few variations
of a singular theoretical approach: The Leontief Input-Output Model.\4\
The SBA found that the specific aspects of the HUBZone Program allow
for a successful implementation of this methodological approach.
Specifically, the HUBZone Program eligibility is largely defined by the
economic concepts of employment and income.
[[Page 46700]]
Fortunately, nearly all commercially available Input-Output models
provide employment and income data at very detailed geographic and
industry levels.
---------------------------------------------------------------------------
\4\ While the proliferation of methodologies for impact studies
has grown over the years, the difference among them is primarily
based on terminology and focus. Indeed, most methodologies for
impact study can be traced to two theoretical economic approaches.
The first is the General Equilibrium approach, and the other is the
Static Input-Output Model. These two theoretical approaches have
their common origins in the 1930's work of R. F. Kahn and John
Maynard Keynes, and the 1940's-1950's work of Wassily W. Leontief.
For more details see, R. F. Kahn. (June 1931). The Relation of Home
Investment to Employment. The Economic Journal, Vol. 41. pp. 173-
198. John Maynard Keynes. (1936). The General Theory of Employment,
Interest and Money, Macmillan Cambridge University Press, for Royal
Economic Society, Wassily W. Leontief. (1951). The Structure of
American Economy 1919-1939. 2d ed. Oxford University Press, Fair
Lawn, NJ. Ultimately these works trace their origins to the 16th
century French economist Fran[ccedil]is Quesnay. See Le Tableau
Economique, 1758.
---------------------------------------------------------------------------
The SBA identified three sources that provide software and data for
the practical application of this approach. A cursory analysis of these
models indicates that, because they use the same basic methodology and
data, the differences among them are not significant enough to
materially alter the outcome of a particular assessment. Hence, the SBA
will base the final choice among these applications on cost and ease of
usability.
These models include RIMS II (developed by the Bureau of Economic
Analysis), IMPLAN (developed by the Minnesota Implan Group, MIG Inc, in
Minnesota), and REMI (developed by Regional Economic Models, Inc. in
Amherst, Massachusetts).
A Basic Description of the HUBZone Program
The HUBZone Act of 1997 provides for a new Federal program designed
to stimulate job creation and capital investment in distressed urban,
rural and Native American areas. Through this Act, Congress provided a
contracting goal for the HUBZone Program: That as of fiscal year 2003,
3 percent of all Federal prime contract dollars should go to small
firms located in HUBZone areas.
HUBZone Areas
Currently, there are five different definitions of HUBZone areas:
\5\
---------------------------------------------------------------------------
\5\ Please note that the original HUBZone designations were
based upon the 1990 census. As a result of the 2000 census and OMB
change in definition of metropolitan areas some HUBZone areas lost
their eligibility. Consequently, Congress passed legislation to
restore the eligibility of these areas, now referred to as
Redesignated Areas.
---------------------------------------------------------------------------
1. Qualified Census Tract (QCT): The Internal Revenue Service and
the U.S. Department of Housing and Urban Development (HUD) define a
Qualified Census Tract as having either 50 percent or more of their
households with income below 60 percent of the median gross income, or
have a poverty rate of at least 25 percent. There is a maximum cap
specifying that the population of all of the census tracts that meet
one or both of these criteria cannot exceed 20 percent of the area
population; \6\
---------------------------------------------------------------------------
\6\ The definition for Qualified Census Tract is based on the
Internal Revenue Service provision for the Low Income Housing Tax
Credit Program that is developed in conjunction with the U.S.
Department of Housing and Urban Development (HUD). The HUD Secretary
designates Qualified Census Tracts by public notice in the Federal
Register. Public Law 105-135, the HUBZone Act of 1997, was signed on
Dec. 2, 1997 and is the source for using this designation.
---------------------------------------------------------------------------
2. Difficult Development Area (DDA): The definition of Difficult
Development Area is similar to Qualified Census Tract in that it is
based on an Internal Revenue Service provision for the Low Income
Housing Tax Credit Program developed in conjunction with HUD. A
characteristic of a DDA is that the locale has high construction, land
and utility costs relative to the area median income; \7\
---------------------------------------------------------------------------
\7\ NOTE: By virtue of legislation, signed into law on August
10, 2005, the application of the DDA status for HUBZone
consideration only applies to non-metropolitan counties in Alaska,
Hawaii, and the U.S. territories and possessions, but not to the 48
contiguous states. The Secretary of HUD designates Difficult
Development Areas by public notice in the Federal Register. Public
Law 109-59, the Safe, Accountable, Flexible, Efficient
Transportation Equity Act of the Department of Transportation
Reauthorization for 2005, was signed on Aug. 10, 2005, and is the
source for using this designation.
---------------------------------------------------------------------------
3. Qualified County: The definition for qualified county is any
county that, based on the most recent data available from the U.S.
Census Bureau, is not located in a metropolitan statistical area, and
in which the median household income is less than 80 percent of the
median household income for the entire non-metropolitan area of its
respective state. Alternatively, a qualified county is any non-
metropolitan county that, based on the most recent data available from
the Bureau of Labor Statistics (BLS), has an unemployment rate that is
not less than 140 percent of the state average unemployment rate or the
national average unemployment rate; \8\
---------------------------------------------------------------------------
\8\ Public Law 105-135, the HUBZone Act of 1997, was signed on
Dec. 2, 1997, and is the source for using this designation.
---------------------------------------------------------------------------
4. Qualified Indian Reservation: The definitions for qualified
Indian reservations, which include lands covered by the phrase ``Indian
Country,'' are those established and used by the Bureau of Indian
Affairs. A more precise listing of properties included in this
classification, besides reservations, is Indian trust lands (on and off
the reservation), Indian dependant lands, and Indian service areas. In
the state of Oklahoma, the HUBZone Program uses a determination arrived
at by the Internal Revenue Service as the property is legally
classified as a ``former Indian reservations in Oklahoma''; \9\
---------------------------------------------------------------------------
\9\ Both Public Law 105-135, the HUBZone Act of 1997, signed on
Dec. 2, 1997, and Public Law 106-554, the HUBZone Act of 2000,
signed on Dec. 12, 2000, are the sources for using this designation.
---------------------------------------------------------------------------
5. Base Realignment and Closure (BRAC): A military base closed
under the Defense Base Realignment and Closure Act of 1990 (BRAC).
Congress determined that former military bases closed because of BRAC
qualify for HUBZone status for a five-year period from the date of
formal closure. For those locations closed as of the date the
legislation was signed into law, the five-year period began on the date
the law became effective, Dec. 8, 2004.\10\
---------------------------------------------------------------------------
\10\ Public Law 108-447, the HUBZone Act of 2004, was signed on
Dec. 8, 2004 and is the source for using this designation.
---------------------------------------------------------------------------
The selection criteria for each HUBZone classification varies
somewhat, to account for the different economic characteristic of the
various HUBZone classes. However, for this specific methodological
purpose, it is sufficient to state that six elements go into the
criteria:
1. Household income level;
2. Unemployment rate;
3. Poverty rate;
4. BRAC;
5. DDA;
6. Classification as ``Indian Country''.
HUBZone Firms
The SBA HUBZone Program qualifies and periodically recertifies
firms wishing to obtain or retain HUBZone status. The qualifying
criteria for a HUBZone firm are based on having a specific level of
operational activities within the geographic area of a HUBZone.
Specifically, the firm must have its principal office located in a
HUBZone Area, and at least 35% of its labor force must reside within a
HUBZone Area.
Federal Contract Mechanisms Federal Contracting Officers have quite
a few mechanisms to channel funds to a HUBZone Area. For example, some
Federal contracting mechanisms are based on socioeconomic status such
as service disabled veteran, while others are simply based on full and
open competition. Some of these mechanisms are related to the HUBZone
Program and some are not. Understanding and tracing the dollar flows of
these specific mechanisms will be crucial for assessing the economic
impact of the HUBZone Program. To effectively trace these contracting
dollars, the model differentiates among the following contracting
mechanisms:
1. HUBZone Direct Mechanism: Federal contract mechanisms based on
HUBZone Program mechanisms (i.e., HUBZone set-aside, HUBZone sole
source, and HUBZone price preference in a full and open competition);
\11\
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\11\ Both the GAO and the Advocacy report indicate that there
are a certain number of HUBZone contracts that have more than one
preference mechanism designation. Indeed, the legislation defining
these mechanisms is rather complex. The current model does not
account for this additional contract mechanism. Addressing for the
existence of multiple contract mechanisms is largely data driven. If
the data indicate that the occurrences of multiple mechanisms
designation are insignificant, then it is reasonable to included
them in the HUBZone Direct Mechanism. However, if there are
significant occurrences of multiple mechanisms contracts, then the
model will expand to explicitly include this additional contract
mechanism, and will thus have four contract mechanisms.
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[[Page 46701]]
2. Non-HUBZone SBA Contract Mechanisms: SBA contract mechanisms
solely based on Non-HUBZone mechanisms (e.g., small business set-aside,
service disabled veteran-owned small business set aside, 8(a) sole
source award, 8(a) set aside);
3. Non-SBA Federal Contract Mechanisms: Competitive Federal
procurement mechanisms based on full and open competition, and other
contracting mechanisms available to small and `other than small' firms.
These differentiations allow for the incremental measurement of all
Federal contract dollars flowing to HUBZones via the various kinds of
Federal procurement mechanisms. Specifically:
Mechanism 1 measures the dollar flow attributable the
HUBZone Program;
Mechanism 2 measures the dollar flow attributable to Non-
HUBZone SBA programs on the HUBZone areas;
Mechanism 3 measures the dollar flow attributable to Non-
SBA Federal procurement contracts to HUBZone areas;
The summation of mechanisms 1, and 2, allows for the
measurement of all the SBA's procurement contracts towards HUBZone
areas;
The summation of mechanisms 1 through 3 allows for the
measurement of all Federal contracts toward HUBZone areas.
Statistical Characteristics of the Economic Impact Assessment Model
It is commonly the case that the final analysis will include
aspects not anticipated in the original methodology outline. This is a
natural outcome of going through the entire exercise, and being able to
identify subtleties not perceivable from the onset of the study. Hence,
it may very well be the case that the actual assessment may include
statistical and data elements not mentioned in this methodology.
However, we anticipate using the following statistical and data
elements to provide a quantitative description of the HUBZone
Program.\12\
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\12\ This section draws on the work of Henry Beale, (May 2008),
The HUBZone Program, U.S. SBA Advocacy, Washington, DC.
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1. The five HUBZone areas and their HUBZone participation (i.e.,
the number of HUBZone Business, Vendors, and Contract Dollars);
2. The flow of contract dollars via the various HUBZone mechanisms
over time;
3. Industry concentration of HUBZone contracts (i.e., the number
and dollar value of HUBZone contracts by NAICS industry);
4. HUBZone participation by state (i.e., the number of HUBZone
Businesses, Contractors, and Contract Dollars);
5. Employment Level;
6. Unemployment Rate;
7. Median Household Income.
In addition, we anticipate utilizing the following statistical and
data elements for each HUBZone Area:
A. The number of sub-areas (mostly counties) in the HUBZone Area;
B. The number of HUBZone Firms in the HUBZone Area;
C. The number of HUBZone Contractors in the HUBZone Area;
D. The number of HUBZone Contracts flowing into the HUBZone Area;
E. HUBZone Contract Dollars flowing into HUBZone Area;
F. Population in the HUBZone Area.
Ratio 1: The number of HUBZone Firms divided by HUBZone
Area
Ratio 2: The number of HUBZone Firms divided by HUBZone
Area Population
Ratio 3: The number of HUBZone Contractors divided by
HUBZone Area
Ratio 4: The number of HUBZone Contractors divided by
HUBZone Area Population
Ratio 5: The number of HUBZone Contracts divided by
HUBZone Area
Ratio 6: The number of HUBZone Contracts divided by
HUBZone Area Population
Ratio 7: HUBZone Contract Dollars divided by HUBZone Area
Ratio 8: HUBZone Contract Dollars divided by HUBZone Area
Population.
Data elements B through E measure the level of participation of a
specific HUBZone Area. Ratios 1, 3, 5, and 7 measure the comparative
rate of participation of a particular HUBZone Area. In addition, the
population ratios (ratios 2, 4, 6, and 8) measure the comparative rate
of participation on a per capita basis.
These statistics and data elements will provide the basis for
measuring the absolute level and the comparative rate of participation
in each HUBZone Area. For example, they will provide contract data
(i.e., the number of contracts, the dollar value of these contracts,
and the types of mechanisms used to obtain these contracts) for a
specific HUBZone Area. In addition, by dividing these contract data,
say by population in a specific HUBZone Area, they provide a
comparative measure of the importance of these contracts with respect
to population.
Other statistical analysis of the above data should provide
additional quantitative understanding of the HUBZone Program. For
example, it may be useful to derive some commonly used central tendency
measures (i.e., mean, median, mode.) as well as some commonly used
distribution measures (e.g., quartile, decile, standard deviation,
etc.).
Estimating the Incremental and Total Economic Impact of the HUBZone
Program
Having provided a sufficient statistical description of the HUBZone
Program, the model will then estimate the economic impact of the
contract dollar flows attributable to the three contracting mechanisms.
Specifically, the model will provide the following estimates:
1. The economic impact directly attributable to the HUBZone
Program;
2. The economic impact of the Non-HUBZone SBA programs on HUBZone
areas;
3. The economic impact of other related Federal procurement
programs affecting HUBZone areas.
Economic impact will be measured by the estimated growth in median
household income and employment (or a reduction in unemployment) in a
specific HUBZone Area.
The model will use a two-step process to arrive at these estimated
growth rates. First it will apply a specific multiplier to the contract
dollars flowing to a specific HUBZone Area via the three contract
mechanisms.\13\ In a second step, the model will aggregate the results
to the appropriate analytical level to measure the economic impact of
the various dollar flows.\14\
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\13\ These multipliers will be provided by the specific Input-
Output software chosen.
\14\ We expect that the ``appropriate analytical level'' will
capture the economic impact at the HUBZone Area category. However,
it may also prove informative to analyze the HUBZone Program
economic impact at a more granular level. For example, it may be
useful to analyze the data at the individual HUBZone Area level.
This granularity, for example, might shed light on how and why some
HUBZone areas are more successful than others at attracting Federal
contracts. Indeed, the Advocacy report does this. See SBA Advocacy
(2000). Op. Cit. It may also be revealing to analyze the data at the
firm type level to see what differentiates successful HUBZone
contractors from other HUBZone firms. Whether it is feasible to
analyze the data at this level of granularity will largely be a
question of resources and privacy issues.
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In order to accomplish these two steps, the model will employ the
following types of equation:
[[Page 46702]]
The Employment Impact Equations
1. HUBZone Direct Employment Impact = f (dollar flow to a HUBZone
Area via the HUBZone Direct Mechanism multiplied by Employment
Multiplier) \15\
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\15\ All the multipliers in this analysis are Final Demand
multipliers.
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2. Non-HUBZone SBA Employment Impact = f (dollar flow to a HUBZone
Area via Other SBA Mechanisms multiplied by the Employment Multiplier)
3. Non-SBA Federal Employment Impact = f (dollar flow to a HUBZone
Area via Non-SBA Federal contract Mechanisms multiplied by the
Employment Multiplier)
The Income Impact Equations
4. HUBZone Direct Income Impact = f (dollar flow to a HUBZone Area
via the HUBZone Direct Mechanism multiplied by the Income Multiplier)
5. Non-HUBZone SBA Income Impact = f (dollar flow to a HUBZone Area
via Other SBA Mechanisms multiplied by the Income Multiplier)
6. Non-SBA Federal Income Impact = f (dollar flow to a HUBZone Area
via Non-SBA federal contract Mechanisms multiplied by the Income
Multiplier)
Equations 1 and 4 measure the economic impact directly attributable
to the HUBZone Program. Equations 2 and 5 measure the economic impact
attributable to the Non-HUBZone related SBA Federal procurement
programs. Finally, equations 3 and 6 measure the Non-HUBZone and Non-
SBA Federal procurement program on a HUBZone Area.
Hence, the first set of equations (1 and 4) measure the economic
impact of the HUBZone Program. The second set of equation (2 and 5)
measure the economic impact of the Non-HUBZone related SBA procurement
programs. The third set of equations (3 and 6) measure the economic
impact of the Non-HUBZone and Non SBA Federal procurement program on a
specific HUBZone Area. Summing the result of equations 1 through 6 will
provide for a measurement of the entire Federal procurement program on
a specific HUBZone Area.
A comparison of these set of equations can place the economic
impact of the HUBZone Program into perspective. For example, comparing
the results of the first set of equations (1 and 4) to the results of
the second set of equations (2 and 5) will compare the economic impact
of HUBZone Program to the economic impact of the Non-HUBZone SBA
programs. Likewise, comparing the results of the first set of equations
(1 and 4) to the results of the third set of equations (3 and 6) will
compare the economic impact of HUBZone Program to the economic impact
of the Non-SBA Federal procurement programs.
Databases
Based on our understanding, there are four databases necessary for
the resolution of the model. Following is a basic description of each
of these databases:
HUBZone Certification Tracking System (HCTS)
This database is maintained by the SBA HUBZone Program. The data
contained in this database is generated from the application,
recertification and program examination processes of the HUBZone
Program. The following relevant data elements can be found in this
database:
Firm Identification Elements (e.g., name, address, SBA
Customer Number, HUBZone Application Number);
Firm Operational Elements (e.g., Employment, Revenue
Size).
Central Contractor Registration (CCR)
The Central Contractor Registration (CCR) is the primary registrant
procurement database for the U.S. Federal Government. CCR collects,
validates, stores and disseminates data in support of agency
acquisition missions. It is federally mandated that anyone who wishes
to do business with the Federal government under a FAR-based contract
must be registered in CCR before being awarded the contract.
The Federal Procurement Data System (FPDS)
The Federal Procurement Data System-Next Generation (FPDS-NG) is
maintained by the General Services Administration under the direction
of the Office of Management and Budget. This database contains key data
on all Federal appropriated procurement actions. The following relevant
data elements can be found in this database:
Contract Identification (e.g., contract value, and
selection mechanism)
Firm Identification (e.g., DUNS Number, socioeconomic
status [HUBZone, 8a, Open Competition])
Census 2000
While the HUBZone Program was established by congress in 1997, it
became operational in 1999. Hence for simplicity purposes, we
anticipate using the 2000 Census data.\16\ The 2000 Census data
provides the following data elements:
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\16\ The Census decennial population survey is the only source
that provides socioeconomic data at the level required for this
impact study.
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Population;
Labor Force;
Unemployment Rate;
Poverty Rate;
Household Income.
Defining the Data Elements
So far we have identified the following data elements:
1. Contracting Federal Agencies;
2. Contracting Mechanisms;
3. HUBZone Areas;
4. HUBZone Firms;
5. HUBZone Contractors.
The next data element to be defined is ``Contract Value''. To a
certain extent our choice is limited by the availability of data found
in FPDS. This database only records obligated funds. However, we have
no information at which point in time these obligated funds were
actually expended. Faced with this restriction, we assume that all the
funds are spent in the year that they are obligated.\17\
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\17\ The extent that expenditures timing differ from allocation
timing will increase model's error rate.
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Given the above restrictions, we deduce the final data element
required by our model:
6. Contract Value is defined as prime, obligated dollars via any
one of the three contract mechanisms.
The final data elements to be specified in this model are the type
of multipliers used for estimating incremental and total economic
impact. As indicated in our basic description of the I-O Model, this
decision is primarily based on the available data elements. Hence,
given the above-described data elements, we anticipate using the final
demand multiplier for output, income, and employment. Hence, we have
the following additional data elements:
7. Final Demand Output Multiplier;
8. Final Demand Employment Multiplier;
9. Final Demand Income Multiplier.
A common aspect of all I-O models is that they provide final demand
multipliers for many industries. For example, the RIMS II model
provides final demand multipliers for 386 industries. Hence, we expect
that it will be necessary to reduce the number of industry-specific
multipliers. There are several options for narrowing this choice. For
example, one could take a weighted average of the relevant multipliers,
or one could simply choose a representative sample (say the largest
[[Page 46703]]
two or three) multipliers. This decision will be based on weighing the
effort versus the additional accuracy gained from employing additional
multipliers.
Another common aspect of most I-O models is that they provide final
demand multipliers at the county level. Given that there are several
thousand counties, we expect to reduce the regional specification of
our multipliers. Again we will weigh effort versus accuracy in making
this choice.
Authority: 13 CFR part 126.
Fay E. Ott,
Associate Administrator for Government Contracting and Business
Development.
[FR Doc. E8-18441 Filed 8-8-08; 8:45 am]
BILLING CODE 8025-01-P
