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Solicitation of Applications for the Minority Business Capital Access Policy Institute

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Minority Business Development Agency, U.S. Department of Commerce.




In accordance with Executive Order 11625 and 15 U.S.C. 1512, the Minority Business Development Agency (MBDA) is soliciting competitive applications from organizations seeking to establish a Minority Business Capital Access Policy Institute. All information required for submission of a grant application by eligible applicants is contained in this announcement.

The MBDA provides business development services to minority entrepreneurs through different types of programs. Each program is designed to focus on the unique business problems of a specific market. MBDA's programs form a national business delivery network that addresses the needs of minority entrepreneurs throughout the United States. Currently, there is very limited information on the minority business community, especially with respect to capital demand and usage. To support the development of minority businesses and encourage informed decision-making by both the public and private sectors, it is critical to collect and analyze quantitative information on the capital needs of these businesses. MBDA will therefore provide seed funding for the planning, development and establishment of the Minority Business Capital Access Policy Institute (“MBCAPI” or “Institute”), a research and advocacy institute focused on Start Printed Page 36412issues of capital access for minority businesses. For profit and non-profit organizations, state or local government entities, American Indian Tribes, colleges and universities are eligible to operate the MBCAPI.


Completed applications for the MBCAPI program must be: (1) Postmarked by the USPS by July 10, 2000; or (2) received by MBDA at the address below no later than 5 p.m. Eastern Daylight Time on July 10, 2000. Applications postmarked later than the closing date or received after the closing date will not be considered. The anticipated time for processing of applications is 90 days.


Applicants must submit one signed original plus two (2) copies of the application. Completed application packages must be submitted to: Office of Financial Access, Room 5600, Minority Business Development Agency, U.S. Department of Commerce, 14th & Constitution Avenues, NW, Washington, DC 20230.

If the application is hand-delivered by the applicant or its representative, it must be delivered to Room 1874, which is located at Entrance #10, 15th Street, NW, between Pennsylvania and Constitution Avenues. Unsigned applications and those that do not include required forms will be considered non-responsive and will be returned to the applicant.

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For further information, contact Jason Everett of the Office of Financial Access, at (202) 482-1940.

Pre-Application Conference: A pre-application conference will be held for the MBCAPI program. Please contact Jason Everett of the Office of Financial Access, at (202) 482-1940, for the date, time and location. Please be aware that proper identification is required for entrance into any Federal building.

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Authority: Executive Order 11625 and 15 U.S.C. 1512.

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(Catalogue of Federal Domestic Assistance (CFDA): 11.802)

Program Description

MBDA promotes and encourages business opportunities for minority business enterprises. Although minority businesses are growing at approximately twice the rate of majority businesses, both in terms of the number of companies and revenues, minority businesses, according to the most recent Bureau of the Census data, currently account for only 6% of U.S. businesses, while representing nearly 25% of the U.S. population. Lack of access to capital is a leading cause of the low participation rate of minorities in the U.S. marketplace.

MBDA has determined that the lack of quantitative information regarding, and analysis of, the financing needs of minority businesses, strongly contributes to systemic difficulties in increasing the capital available to minority businesses. By providing seed capital for this project, MBDA will institute an effort to focus resources on issues of capital access for minority businesses. MBDA anticipates that the Institute will collect, analyze and disseminate information on the capital needs of minority businesses, review and assess new strategies and instruments for increasing financial access for minority businesses, and promote the importance of increased capital flows to minority business enterprises within the financial, general business and public sectors.

Although research and advocacy materials developed by the MBCAPI may be available to the general public, the Institute's primary objectives are: (1) To research and educate financial institutions and the capital markets about the needs of and opportunities presented by minority businesses; and (2) to serve as a source of data and expertise for minority businesses. The successful applicant will be required to design and establish the Institute during the twelve-month grant period; however, other than as set forth in this Federal Register notice, the grantee will not be required to provide other research and advocacy services during the grant period.

MBDA will provide funding for a twelve-month period for the development and implementation of the MBCAPI; however, after the initial grant, MBDA does not intend to fund the MBCAPI on an ongoing basis. As a result, a significant portion of MBDA's evaluation process will involve an assessment of the applicant's ability to develop sufficient resources to sustain the Institute on a continuing basis. However, it is not the intent of MBDA to have applicants use Federal funds from the award to solicit financial resources for the continued operation of the MBCAPI after the twelve-month award ends. Applicants should be aware that under applicable cost principles (OMB Circulars A-122, A-121 and A-87), the costs of organized fund-raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions are unallowable under this award.

However, even though these costs are unallowable for purposes of computing charges to Federal awards, they nonetheless may be treated as direct costs for purposes of determining indirect costs rates and be allocated their share of the organization's indirect costs if they represent activities which: (1) Include the salaries of personnel, (2) occupy space, and (3) benefit from the organization's indirect costs.

Work Requirements

Task 1

Formation and establishment of the MBCAPI, including, by the end of the ninth month after the award start date, a strategic plan (“Strategic Plan” or “Plan”) describing the MBCAPI's strategy and methodology for becoming financially self-sustaining. The Strategic Plan must include an estimated budget and business plan for the first 12 months of operation after MBDA funding ends.

Work on the project must have commenced within 30 days after the start date of the award. By the end of the ninth month subsequent to the start date of the award, the grantee will submit to MBDA the Strategic Plan describing the approach the MBCAPI will use to become financially self-sustaining after the award period. In the Plan, the grantee must discuss strategies for funding MBCAPI's ongoing operations (i.e., whether the MBCAPI will be a membership organization, where membership dues will finance ongoing operations or whether other forms of fundraising will be required) and identify likely sources of public and private support sufficient to fund the MBCAPI's needs for the first year of operation.

In particular, the Strategic Plan must discuss strategies for mobilizing the financial, investment and business communities, including the minority business community and minority business advocacy organizations, to obtain the necessary financial resources to continue the MBCAPI for the first twelve months after MBDA funding ends. The Strategic Plan also must include an estimated budget and business plan. The MBCAPI must be operational by the end of the award period and should be located in an office facility.

Task 2

Conduct needs assessment of the minority business community.

This assessment shall address the capital needs of the MBE community. The assessment should include a description of the existing sources and structures for financing minority businesses, particularly lending sources Start Printed Page 36413and evaluate the need for increased use of equity and mezzanine financing.

Task 3

Conduct financial institutions needs assessment.

This assessment shall include a review of the information, market research and other quantitative data that financial institutions need in order to serve the minority business community to a greater extent. This should include the information that financial institutions believe is currently unavailable, such as up-to-date demographic data on the MBE community, and the type of market research that would be likely to increase their marketing to and investment in the MBE community.

Task 4

Develop a statement of policy focus and research strategy.

Based on the foregoing assessments of minority businesses and financial institutions, the successful applicant must develop a statement of policy focus and research strategy to be used during its first two operational years. This statement must describe, in detail, the most critical issues for the minority business community and the strategies that the MBCAPI will use to address these issues. This should include an outline of the research that will be required and a description of the methodology that will be used to accomplish this work.

Task 5

Develop a work plan (“MBCAPI Work Plan”) that will demonstrate how the MBCAPI, once operational, will complete the following:

  • Creation of a clearinghouse for information related to capital access for minority businesses. This would include reports, studies and academic work on investment in minority businesses and emerging domestic markets. The Institute also will develop and implement a strategy to disseminate this information to a number of constituencies, including but not limited to organizations focused on minority capital access; minority business groups; the Minority Business Roundtable; the general financial and investment community; and economic and policy think tanks. Methods of dissemination could include a newsletter, electronic newsletters, e-mail, the press and other media.
  • Development of research strategies and new instruments that can be utilized to increase capital access for minority businesses. The strategies include, but are not limited to, the creation of a secondary market for minority and small business loans; identification of new sources of equity, mezzanine and quasi-equity capital; and the development of new equity and debt products and instruments.
  • Collection of information on the equity needs of minority businesses, including estimates of the equity needs of minority businesses, current available sources, industries in which such equity investments are concentrated, etc. The MBCAPI also will assess the difficulties of minority businesses in obtaining equity capital, including lack of access to venture capital networks and other equity investors.
  • Creation and maintenance of a database of loans made to minority-owned businesses. The data to be gathered includes information on loans made by commercial banks, finance companies, community development lenders, Small Business Investment Companies and other lending institutions. This information would include asset size of each lender, average loan size and duration, borrower target groups, loan default and loan loss rates and other data generally used by rating agencies in assessing a securitization transaction. The data collected would also include general information about minority businesses, including but not limited to the primary industries where such businesses are concentrated, average gross revenues, primary sources of capital, average amount of bank or other financing, sources of equity financing, geographic location of businesses, numbers of employees, etc.
  • Assessment of the impact of minority financial services companies on providing capital to minority businesses and recommend ways to improve the provision of capital by such companies.
  • Implementation of an education strategy that includes an annual conference geared towards mainstream financial service companies and focused on the benefits of investing in minority businesses.
  • Monitoring and evaluation of federal and state programs that significantly impact or target increased capital for minority businesses.
  • Recommendation of minimum standards for loan documentation and servicing for community development lenders for purposes of promoting uniformity in evaluating new loans and performing due diligence.

Use of Program Income: Applicants are advised that any program income generated by the proposed project is subject to special conditions. Anticipated program income must be documented appropriately in the project budget. In addition, should an application be funded, unanticipated program income must be reported to MBDA, and the budget for the project must be renegotiated to reflect receipt of this program income. Program income means gross income earned by the recipient that is either directly generated by a supported activity or earned as a result of the award.

Performance Measures: In accordance with 15 CFR parts 14 and 24, the successful applicant must manage and monitor functions and activities supported by the financial award. Grantees will be required to use program performance measures in quarterly reports and to provide an end-of-the-year assessment of the accomplishments of the project using these measures. Applicants must include a detailed plan in their proposals which provides a timeline of proposed activities and milestones to implement each of the tasks set forth above.

Funding Availability: MBDA anticipates that approximately $350,000 will be available in FY 2000 for Federal assistance under this program. If MBDA receives sufficient funding for FY 2001, an additional $75,000 may be available to the grantee to enhance the project. In no event will MBDA or the Department of Commerce be responsible for proposal preparation costs if this program fails to receive funding or is canceled because of other Agency priorities.

Matching Requirements: Cost sharing of at least 15% is required. Additional cost sharing is encouraged. Cost sharing may be in the form of cash, third party in-kind contributions, non-cash applicant contributions or combinations thereof. The share may also be contributed by local, state, and private sector organizations or joint ventures between these organizations.

Type of Funding Instrument: A financial assistance award in the form of a grant will be used to fund this program.

Eligibility Criteria: State or local government entities, American Indian Tribes, colleges, universities, for-profit and non-profit organizations are eligible to operate the MBCAPI.

Award Period: The award period shall be for approximately twelve calendar months from the award start date. Publication of this notice does not obligate the Department of Commerce or MBDA to award any specific grant or to obligate all or any part of available funds.

Indirect Costs: The total dollar amount of the indirect costs proposed in Start Printed Page 36414an application under this program must not exceed the indirect cost rate negotiated and approved by a cognizant Federal agency prior to the proposed effective date of the award.

Application Forms and Package: Standard Forms 424, Application for Federal Assistance; 424A, Budget Information—Non-Construction Programs; 424B, Assurances—Non-Construction Programs, (Rev 4-97); SF-LLL (1996), Disclosure of Lobbying Activities; and Department of Commerce Forms CD-346; CD-511; and CD-512 shall be used in applying for financial assistance. Standard Forms 424, 424A, 424B and LLL may be downloaded at​omb/​grants/​index and Department of Commerce Forms CD-346, CD-511 and CD-512 may be downloaded at​forms.

Evaluation Criteria

Proposals will be evaluated based on the following criteria:

I. Applicant Capability (45%)

The applicant's proposal will be evaluated with respect to the applicant firm's experience and expertise in providing the work requirements listed. Specifically, the proposals will be evaluated as follows:

  • Experience in and knowledge of issues related to capital access for minority businesses and innovative programs designed to increase such capital (10%);
  • Resources and professional relationships within the financial and investment community (10%);
  • Capacity to develop the resources to make the MBCAPI self-sustaining (10%);
  • Experience and expertise in advocating on behalf of minority businesses, including education and advocacy resources (10%); and
  • Assessment of the qualifications, experience and proposed roles of staff who will operate the MBCAPI (5%).

To assist MBDA in its evaluation process, the following types of information should be included in the proposal:

1. A brief Business Service History of the applicant firm or firms in addressing issues of capital access for minority businesses. This should address the organization's ability to perform work of the nature and level described in the work requirements of this Federal Register notice. If the applicant organization has an ISO 9000 Quality Assurance certification, then it should be expressed here. Knowledge possessed by individual staff members outside of the organization should not be provided here (see below).

2. A brief Subject Area Overview should demonstrate the applicant's knowledge and understanding of the subject of minority capital access. This should include knowledge of: (a) Minority business demographics; (b) the impediments within the capital markets to increased financing for minority businesses; (c) financial institutions, including non-depository lenders, and non-traditional financing sources such as community development funds; (d) the venture capital community and other sources of equity capital; and (e) economic development issues and the risks to the economy of limited growth within the minority business sector. The applicant also should demonstrate its background in education and advocacy.

3. A brief Business Relationships Overview which synopsizes the applicant's professional relationships which can be utilized to address issues of capital access. Particular emphasis should be placed on those relationships and/or partnerships within: (a) The financial and investment community and (b) the minority business development community that indicate applicant's ability to understand and address the concerns of the different ethnic groups (including African Americans, Native Americans, Puerto Ricans, Spanish speaking Americans, Eskimos, Aleuts, Asian Indians, Asian Pacific Americans and Hasidic Jews) served by MBDA. Information included in this overview should reflect business relationships of both the applicant firm(s) as an organization and those of individual proposed staff. This part should also include references (with telephone numbers) and letters of support, and should also answer the following questions:

  • Is the applicant firm(s) or proposed MBCAPI staff known in the financial, investment, business and minority business development communities?
  • Does the applicant enjoy solid working relationships in the financial investment, business and minority business development communities that verify its service quality and recommend it?

4. A Minority Business Summary that discusses the applicant's knowledge of the unique problems facing a cross-section of minority entrepreneurs in obtaining capital.

5. A Discussion of the Capabilities of Proposed Staff includes staff knowledge acquired both within the applicant firm and in previous work settings, and should specifically address knowledge in performing work of the nature and level described in the MBCAPI work requirements. The identification of key personnel, such as an executive director or program manager, to direct the MBCAPI on a day-to-day basis is important. Any change in the executive director or program manager requires grants officer approval.

6. Overview of the MBCAPI Staff Structure includes an organizational chart, which provides a distinct delegation of authority and which identifies all positions, with position descriptions and qualifications (both in-house and consultant subcontractors, if any) for the MBCAPI. This overview should be directly tied into the work requirements for the MBCAPI.

II. Techniques and Methodologies (40%)

The applicant will be evaluated according to the following sub-criteria:

  • Applicant's specific plan on how to carry out each of the five MBCAPI work requirements, including proposed activities and milestones (timeline). For example, with regard to Task 1, in addition to discussing the development of the Strategic Plan, the applicant should describe how it intends to establish a detailed organizational and functional framework for the management of the MBCAPI, with a schedule of proposed activities and milestones for doing so. The evaluation of each task will be worth 5%.
  • Applicant must provide a detailed discussion relating its plan for carrying out each of the five MBCAPI work requirements to the particular resources and business capabilities of its organization, including staff and networks, thus indicating how its organization will research, analyze and disseminate information on the capital needs of the minority business community. The evaluation of this sub-criteria will be worth 15%.

III. Proposed Budget and Supporting Budget Narrative (15%)

The applicant's proposal will be evaluated on the following sub-criteria:

  • Reasonableness, allowability and allocability of costs (10%).
  • Proposed cost sharing of 15% is required. The non-Federal share must be adequately documented (5%).
  • Cost sharing which exceeds 15% will be awarded bonus points on the following scale: 16-20% 1 point; 21-25% 2 points; 26-30% 3 points; 31-35% 4 points; and over 36% 5 points.

An application must receive an average of at least a 70% of the total points available for all three evaluation criteria in order for the application to be considered for funding. Start Printed Page 36415

Selection Procedures: Each application will receive an independent, objective review by a panel qualified to evaluate the applications submitted. The independent review panel, consisting of at least three individuals, two of whom are reviewers who are not employees of MBDA, will review all applications based on the criteria above. The independent review panel will evaluate and rank the proposals. The Director of MBDA makes the final recommendations to the Department of Commerce Grants Officer regarding the funding of applications, taking into account the following selection criteria:

(1) The evaluations and rankings of the independent review panel;

(2) The extent to which the applicant demonstrates ongoing partnerships and relationships with organizations that have expertise and knowledge regarding the unique business development issues faced by the range of ethnic groups supported by MBDA; and

(3) The availability of funding.

The amount of funds awarded to the grantee, the scope of programmatic activities, and clarifications and/or correction of errors will be determined and/or conducted in pre-award negotiations between the applicant, the Grants Officer, and the MBDA Program Officer.

Other Requirements

(1) Purchase of American-Made Equipment and Products

Applicants are hereby notified that they are encouraged, to the greatest extent practicable, to purchase American-made equipment and products with funding provided under this program.

(2) Paperwork Reduction Act

This notice involves collections of information subject to the Paperwork Reduction Act, which have been approved by OMB under OMB control numbers 0348-0043, 0348-0044, 0348-0040, and 0348-0046. Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number.

(3) Federal Policies and Procedures

Recipients and sub-recipients are subject to all Federal laws and Federal and Department of Commerce policies, regulations, and procedures applicable to Federal financial assistance awards.

(4) Past Performance

Unsatisfactory performance under prior Federal awards may result in an application not being considered for funding.

(5) Pre-Award Activities

If applicants incur any costs prior to an award being made, they do so solely at their own risk of not being reimbursed by the Government. Notwithstanding any verbal or written assurance that may have been received, there is no obligation on the part of the Department of Commerce to cover pre-award costs.

(6) No Obligation for Future Funding

If an application is selected for funding, the Department of Commerce has no obligation to provide any additional future funding in connection with that award. Renewal of an award to increase funding or extend the period of performance is at the total discretion of the Department.

(7) Delinquent Federal Debts

No award of Federal funds shall be made to an applicant who has an outstanding delinquent Federal debt until either:

i. The delinquent account is paid in full,

ii. A negotiated repayment schedule is established and at least one payment is received, or

iii. Other arrangements satisfactory to the Department of Commerce are made.

(8) Name Check Review

All non-profit and for-profit applicants are subject to a name check review process. Name checks are intended to reveal if any key individuals associated with the applicant have been convicted of or are presently facing criminal charges such as fraud, theft, perjury, or other matters which significantly reflect on the applicant's management honesty or financial integrity.

(9) Primary Applicant Certifications

All primary applicants must submit a completed Form CD-511, “Certifications Regarding Debarment, Suspension and Other Responsibility Matters; Drug-Free Workplace Requirements and Lobbying,” and the following explanations are hereby provided:

i. Non-procurement, Debarment and Suspension. Prospective participants (as defined at 15 CFR part 26, section 105) are subject to 15 CFR part 26, “Non-Procurement Debarment and Suspension” and the related section of the certification form prescribed above applies;

ii. Drug-Free Workplace. Grantees (as defined at 15 CFR part 26, section 605) are subject to 15 CFR part 26, subpart F, “Government wide Requirements for Drug-Free Workplace (Grants)” and the related section of the certification form prescribed above applies;

iii. Anti-Lobbying. Persons (as defined at 15 CFR part 28, section 105) are subject to the lobbying provisions of 31 U.S.C. 1352, “Limitation on use of appropriated funds to influence certain Federal contracting and financial transactions,” and the lobbying section of the certification form prescribed above applies to applications/bids for grants, cooperative agreements, and contracts for more than $100,000, and loans and loan guarantees for more than $150,000, or the single family maximum mortgage limit for affected programs, whichever is greater; and

iv. Anti-Lobbying Disclosures. Any applicant that has paid or will pay for lobbying using any funds must submit an SF-LLL, “Disclosure of Lobbying Activities,” as required under 15 CFR part 28, appendix B.

(10) Lower Tier Certifications

Recipients shall require applicants/bidders for sub-grants, contracts, subcontracts, or other lower tier covered transactions at any tier under the award to submit, if applicable, a completed Form CD-512, “Certifications Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transactions and Lobbying” and disclosure form, SF-LLL, “Disclosure of Lobbying Activities.” Form CD-512 is intended for the use of recipients and should not be transmitted to DOC. SF-LLL submitted by any tier recipient or sub-recipient should be submitted to DOC in accordance with the instructions contained in the award document.

(11) False Statements

A false statement on an application is grounds for denial or termination of funds and grounds for possible punishment by a fine or imprisonment as provided in 18 U.S.C. 1001.

(12) Intergovernmental Review

Applications under this program are not subject to Executive Order 12372, “Intergovernmental Review of Federal Programs.” Start Printed Page 36416

(13) Executive Order 12866

It has been determined that this notice is not significant for purposes of Executive Order 12866.

Start Signature

Courtland Cox,

Director, Minority Business Development Agency.

Juanita E. Berry,

Federal Register Liaison Officer, Minority Business Development Agency.

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[FR Doc. 00-14503 Filed 6-7-00; 8:45 am]