ExecutiveOrdersEO
EO 13005Executive OrderClinton · D

Executive Order 13005

Empowerment Contracting

This executive order establishes an "Empowerment Contracting Program" to expand federal competition by offering price or evaluation credits to businesses operating in economically distressed communities. The Secretary of Commerce must develop policies and procedures to incentivize qualified large and small businesses to locate in or hire from areas with high poverty rates, designated empowerment zones, or other distressed areas, with annual reporting requirements and implementation rules due within 90 days.

Federal Register Open PDF 61 FR 26069

Impact dates

  1. Subsequent annual reports to President (December 1 each year)

  2. First annual report to President on program status and effectiveness

  3. Draft all rules, regulations, and guidelines to implement the order

Key directives

  • Secretary of Commerce to develop policies/procedures for price or evaluation credits for qualified businesses in distressed areas
  • Consultation with HUD, Labor, Defense, GSA, NASA, SBA, and Federal Procurement Policy Administrator
  • Consider business size when developing incentives
  • Monitor implementation and operation of policies
  • Develop anti-fraud process for program beneficiaries
  • Develop principles and process to evaluate effectiveness
  • Annual report to President by December 1 each year
  • Issue implementing rules, regulations, and guidelines within 90 days
  • Require periodic review of eligibility for qualified businesses and distressed areas
  • Minimize administrative burden on agencies and procurement process

Who is ordered

Timeline

Immediate

  • EO takes effect upon signing
  • interagency consultation begins

Near term (90d)

  • Secretary of Commerce must draft all implementing rules, regulations, and guidelines
  • Secretary must consult with HUD, Labor, Defense, GSA, NASA, SBA, and Federal Procurement Policy Administrator

Long term

  • Annual reports to President due each December 1
  • ongoing monitoring and evaluation of program effectiveness
  • periodic review of business and area eligibility

Risks & tensions

  • Anti-fraud provisions (Sec. 3(b)) suggest concern about program integrity, but specific mechanisms are left to Secretary's discretion
  • Definition of 'significant' in qualified business criteria (employment, physical presence, economic impact) is undefined, creating implementation uncertainty
  • Price/evaluation credits in unrestricted competitions may create tension with standard competitive procurement principles
  • Sec. 7 explicitly bars judicial enforcement, limiting recourse for businesses or communities
  • Sec. 6 preserves existing small/disadvantaged business programs, potentially creating overlapping or conflicting incentives
Executive Order 13005: Empowerment Contracting · Executive Orders