4

contracts awarded to MWOBs rose from 35 percent in 1992 to 43 percent in 1993. Over the

same period, the proportion of fees going to MWOBs rose from 22 to 31 percent.

The RTC also has continued efforts to encourage the use of minority- and women-owned law

firms (MWOLFS). Between January and May of 1993, the RTC conducted a symposium in

each region to identify new MWOLFs and to increase the fees and referrals to MWOLFs. In

an effort to get MWOLFs and minority and women attorneys involved in more complex legal

matters, three additional symposiums were held during the last half of 1993, the objectives of

which were:

to facilitate the assignment of work to RTC-approved MWOLFS and minority and

women attorneys;

to provide educational sessions for MWOLFs and minority and women attomeys

on procedural and substantive issues applicable to the representation of the RTC

in complex legal matters such as professional liability cases, securities, real

estate, litigation and affordable housing;

to provide instruction and guidance on the formation of acceptable joint-referral

arrangements; and

5

to facilitate communication and interaction between MWOLFs and non

MWOLFs, minority and women attorneys and RTC legal staff.

As a result of these activities, MWOLF and minority and women attorney participation levels

have increased.

As of December 31, 1993, 1,083 MWOLFs were on the RTC's List of Counsel, comprising 35

percent of the total number of firms, including 633 minority-owned firms and 450 women-owned

firms, compared to only 771 MWOLFs (or 34 percent of all firms) in 1992, including 458

minority-owned firms and 313 women-owned firms.

Last year, MWOLFS received $53.8 million (or 13 percent) of all legal fees from the RTC, a

significant increase over the $37.6 million (or 10 percent) paid in 1992 (Exhibit 2). Minority

owned law firms received $35.7 million (or 9 percent) in 1993, above the $23.1 million (or 6

percent) in 1992. Women-owned law firms received $18.1 million (or 5 percent) in fees in

1993, up from $14.5 million (or 4 percent) received in 1992.

The RTC has worked to improve asset acquisition opportunities for minorities, women, and

small investors. The Small Investor Program (SIP) was established a year ago to ensure that

assets are available for sale individually to small investors with moderate levels of capital. This

program has aggressively sought to expand the participation of small investors in virtually all

of the agency's asset offerings. The investor database that is used for direct mail marketing of

6

RTC sales initiatives has been expanded, and of the 4,000 investors registered in the Small

Investor Database, 969 investors identified themselves as minorities and 799 as women.

Significant minority participation has occurred in the RTC's major sales initiatives over the past

year. In August of last year, 14 percent of the registered bidders identified their firms as either

minority- or women-owned at the RTC's nonperforming loan auction. In its Judgments,

Delinquencies, and Chargeoffs (JDC) initiative, about 80 percent of the bidders had MWOB

equity or MWOB subcontracting participation.

In the Affordable Housing Disposition Program, the RTC uses a network of 66 community-based

nonprofit housing organizations to provide an array of marketing strategies to reach low-income

families and minorities. Approximately 40 percent of buyers at recent sales events were

minorities and 74 percent were first time buyers.

Mr. Chairman, let me now turn to the newly-enacted RTC Completion Act and its provision to

provide enhanced opportunities for MWOBs and MWOLFs. I want to be clear about the

approach we are taking. We fully support the inclusion of minorities and women in all aspects

of RTC work, from contracting, to asset sales, to resolutions. Whenever possible, we have and

will interpret minority preference provisions as expansively as possible within both the letter and

the spirit of the law, while at the same time balancing the mandate to do our job at the least

possible cost to the taxpayers.

7

MWOB and MWOLF Contract Parity Guidelines

The RTC Completion Act requires the RTC to establish guidelines for achieving the goal of a

reasonably even distribution of contracts awarded to the various subgroups of minority- and

women-owned businesses and minority- and women-owned law firms that comprise five percent

or more of all certified MWOBs and MWOLFs. These subgroups include such minority groups

as blacks, Hispanics, Asians, and non-minority women.

These guidelines will, of course, be applied prospectively. As the first step to developing such

guidelines, the RTC is conducting an analysis comparing contracts and fees awarded to various

MWOB subgroups in each RTC region and the Washington Office, so that under-represented

subgroups can be identified.

The RTC's Interim Final Rule on Minority and Women Outreach and Contracting Programs was

published in the Federal Register, on August 10, 1992 and is currently in effect. To incorporate

the RTC Completion Act requirements, the RTC is in the process of preparing a new Interim

Final Rule. The new Interim Final Rule will incorporate parity guidelines for all future

contracts, including legal contracting. These guidelines will also be reflected in an upcoming

revision to the Contract Policy and Procedures Manual (CPPM).

8

MWOB Subcontracting Goals

In accordance with the RTC Refinancing, Restructuring and Improvement Act of 1991

(RTCRRIA), the RTC currently awards bonus points on both the technical portion and cost

portion of contract evaluations to MWOBs or to firms that commit to substantial MWOB

participation. Full bonus points are awarded when MWOBs will receive 40 percent or more of

estimated fees, and partial bonus points are awarded when MWOBs will receive 25 percent to

40 percent of estimated fees. To augment this policy, the RTC Completion Act requires that

the RTC establish a goal for mandatory MWOB subcontracting for all contracts equal to or

greater than $500,000, with certain exceptions.

The new Interim Final Rule on Minority and Women Outreach and Contracting Programs will

provide these guidelines.

The RTC's policy implementing this law requires MWOB

subcontracting of:

10 percent for non-MWOB prime contractors and MWOB joint ventures with less

than 50 percent MWOB prime contracting participation;

5 percent for MWOB firms or joint ventures with 50 percent or more MWOB

prime contracting participation.