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B-192920 1 (1978-11-03)

handle is hein.gao/gaobachmf0001 and id is 1 raw text is: - RELEASED' ~124 UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 og'IC Or GENE.AL COUNSI. B-192920 NOV 31978 Mr. T% Go Casuidy Acting Deputy Director Defense Acquisition Regulatory System Washington, D.C. 20301 Dear Mr. Read% By letter dated September 13, 1978 you transmitted for our comment proposed changes to the DAR to encourage prime contractors to place subcontracts in urban areas. We are informed that the intent of the coverage is to encourage the placement of subcontracts in urban areas listed in the proposed clause Urban Area Sub- contracting Incentive through normal competitive con- tracting techniques. An Urban Area Subcontract Incentive Base will be established and prime contractors exceeding that base will be rewarded for their accomplishments. You indicate that it is planned to use DOD contract administration activities to assist prime contractors in locating urban area subcontractors and to assist urban area firms by identifying DOD prime contractors with urban area assistance requirements. We understand that this incentive clause was devel- oped as a method of rewarding contractors for doing busi- ness in urban areas, where there is high unemployment, in a manner which would not conflict with the Maybank Amend- ment. The Maybank Amendment which has been enacted in each Department of Defense (DOD) appropriation act since 1954 provides that no appropriated funds may be used for the payment of a price differential on con- tracts for the purpose of relieving economic dislocation. This Office has construed the Maybank Amendment* as prohibiting DOD from making awards on a total set-aside basis to firms performing substantially in labor surplus areas or areas of concentrated unemployment or under- employment. See 40 Comp. Gen. 489 (1961) and 57 Comp. Gen. 34 (1977), 77-2 CPD 333.

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