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