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Executive Order 12928

Promoting Procurement With Small Businesses Owned and Controlled by Socially and Economically Disadvantaged Individuals, Historically Black Colleges and Universities, and Minority Institutions

This executive order directs federal departments and agencies to aggressively enforce existing laws promoting procurement contracts and subcontracts for small disadvantaged businesses (SDBs), historically Black colleges and universities (HBCUs), and minority institutions (MIs). It mandates strict adherence to statutory participation goals of at least 5%, requires OSDBU directors to report directly to agency heads, and calls for anti-fraud enforcement without diminishing outreach efforts.

Federal Register 59 FR 48377
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Impact dates

  1. Periodic reports to President on agency compliance progress

  2. Executive order effective immediately

Key directives

  • Department and agency heads must aggressively strive to fulfill statutorily-mandated procurement participation goals of not less than 5%
  • Agencies encouraged to set reasonable participation goals exceeding statutory requirements where permitted by law
  • Department and agency heads must aggressively enforce prime contractor obligations to maximize subcontract awards to eligible SDBs
  • Each department and agency must ensure OSDBU directors report directly to agency head or deputy, vigorously enforcing 15 U.S.C. 644(k)(3)
  • Agencies must comply with OFPP Letter 79-1 regarding OSDBU organizational placement and functions
  • Department and agency heads must ensure anti-fraud enforcement does not diminish vigor in achieving participation goals
  • SBA Administrator and OFPP Administrator shall report to President periodically on agency compliance progress

Who is ordered

Timeline

Immediate

  • EO effective immediately upon signing
  • all federal personnel directed to commit to letter and spirit of SDB/HBCU/MI procurement laws
  • department and agency heads directed to aggressively strive to fulfill statutorily-mandated procurement goals

Near term (90d)

  • OSDBU direct reporting requirements to be vigorously enforced
  • agencies to comply with OFPP Letter 79-1 on OSDBU placement and functions
  • prime contractor subcontracting plan enforcement to be intensified

Long term

  • periodic presidential reporting on agency compliance by SBA and OFPP administrators
  • potential establishment of agency goals exceeding statutory 5% minimum
  • ongoing anti-fraud enforcement balanced against participation goal attainment

Risks & tensions

  • Tension between anti-fraud enforcement and aggressive goal attainment explicitly acknowledged; order attempts to prevent 'compliance paralysis' but does not specify how to balance
  • No enforcement mechanism or consequences specified for agencies failing to meet goals beyond existing statutory requirements
  • 'To the extent not prohibited by law' qualifier on OSDBU reporting requirements may limit effectiveness in agencies with independent statutory structures
  • Self-certification requirements unchanged, leaving potential fraud vulnerability unaddressed
  • 'Periodically' undefined for presidential reporting; frequency and format left to administrator discretion
Executive Order 12928: Promoting Procurement With Small Businesses Owned and Controlled by Socially and Economically Disadvantaged Individuals, Historically Black Colleges and Universities, and Minority Institutions · Executive Orders