Watch list targets federal contracts unfair to small businesses
A House lawmaker Thursday released a watch list of the top 10 major government contracts that squeeze out small businesses in the federal procurement process.
The Defense Department, which accounts for 65 percent of all government purchases, administers or is soliciting bids on seven of the 10 major federal contracts highlighted in the report, "Federal Contract Watch List: How Big Contracts Hurt Small Businesses." The other three contracts on the list are managed by the Postal Service, the Agriculture Department and the Veterans Affairs Department.
"This is just a top-10 list," said Rep. Nydia Velázquez, D-N.Y., who released the report and is the ranking member of the House Small Business Committee. "Thousands of contracts are being systematically ripped away from capable small businesses every year."
The Democratic members of the House Small Business Committee compiled the list. Lawmakers, including Velázquez, have repeatedly criticized the Defense Department and other federal agencies for falling short of their small business procurement goals and for promoting contract bundling, a practice in which federal contracts are combined with others before being put out for bid.
Bundling often makes it more difficult for small firms, which have fewer resources than bigger businesses, to bid on federal contracts.
"Federal agencies now take many contracts that small businesses once performed well, and wrap them up into one big contract that only large corporations can bid on and perform," Velázquez said.
The report called on President Bush to direct federal agencies on the list to reconfigure their contracts to ensure small businesses are treated fairly in the bidding process. In March, Bush unveiled his small business agenda, which named "avoiding unnecessary contract bundling" as a top priority.
According to the report, the Defense Department "consistently maintains their contracts are both too large and too complex for small businesses." Pentagon spokesman Glenn Flood would not comment about individual Defense Department contracts.
The 10 current and potential "mega-contracts" on the watch list include:
- Navy: A construction project for several new barracks at the Naval Training Center in Great Lakes, Ill., estimated at a total cost of about $270 million over the next five years.
- Army: A $2.8 billion contract to provide engineering and support services at the Army's communications-electronics command.
- Marine Corps: A contract valued at over $800 million to operate mess halls at several Marine Corps facilities across the country.
- Army: The Army's Tank-Automotive and Armaments Command in Rock Island, Ill., is soliciting bids for a multimillion dollar contract for a carpenter's tool kit for mechanics, surveyors and other Army units. Another contract under consideration, estimated at $600 million over the next 10 years, would consolidate the purchase of all Army tool kits.
- Air Force: A proposal to create single contracts for consolidating support services at Air Force bases across the country.
- Air Force: A multimillion dollar contract to provide support services for the Air Force's communications, information technology and intelligence systems at the U.S. Space Command in Colorado Springs, Colo.
- Postal Service: A $25 million, five-year contract with Boise Cascade to provide office products.
- Veterans Affairs: A $2.3 million elevator maintenance contract in four states.
- Navy: A multi-year contract for ship maintenance and repairs in Portsmouth, Virginia.
- Agriculture: A contract with Boise Cascade and other large firms to provide the agency with office products.
Last week, the House Small Business Committee approved by voice vote a bill that would allow the Small Business Administration to contest the awarding of certain federal contracts.