House Small Business Committee Chairman Sam Graves, R-Mo., on Tuesday introduced legislation to encourage a higher percentage of federal contracts to go to small business, along with a separate bill to elevate agency Offices of Small and Disadvantaged Business Utilization.
Graves’ GET Small Business Contracting Act would raise the small business prime contracting goal from the current 23 percent to 25 percent, while withholding bonuses from agency managers who fail to meet the goal. He estimates the 2 percent increase would bring $11 billion in new federal contracts to small businesses. The government spent about $535 billion in contracting in fiscal 2010, according to the Office of Management and Budget.
“Because the federal government spends half a trillion dollars on contracted goods and services, we owe it to the taxpayers to make sure their money is used wisely and efficiently,” Graves said in a statement. “Government contracting offers a unique opportunity to invest in small businesses while also stimulating our economy, considering small businesses create the majority of jobs -- 65 percent over the last 17 years. Small businesses have proved time and time again that they can perform a service or produce goods for the government cheaper and often quicker than their larger counterparts; however, various bureaucratic impediments remain for small contractors.”
The Obama administration missed its small business contracting goal by 3 percent in 2010, according to Graves. His bill also would seek to use more small businesses as subcontractors, raising the goal from the current 35 percent of subcontracted dollars to 40 percent.
Graves is also offering a second bill, the Small Business Advocate Act, that would promote greater use of contractors, prime and sub, at each agency’s Office of Small and Disadvantaged Business Utilization.
OSDBUs were created in 1978 to reserve some federal contracts for for-profit small business concerns in which socially and economically disadvantaged individuals own at least a 51 percent interest and manage and control daily business operations. Their director’s place in the hierarchy has varied by agency.
The Graves bill would elevate those directors to senior acquisition leaders and prohibit them from holding any other position “so they can concentrate on their advocacy responsibilities,” a statement said. “This legislation makes it easier for the OSDBU to advocate for small business contracts, focus on acquisition assistance, and fight insourcing and unjustified contract bundling.”
This bill would require directors to be GS-15s or members of the Senior Executive Service and their performance reviews to be done by agency heads. “Acting as the OSDBU director,” Graves said, “is often simply another assigned duty for a senior official that lacks the authority to challenge decisions made by the chief acquisition officer or senior procurement executive.”
In April 2010, President Obama set up a task force to boost small business contracting opportunities.
The Graves bills come on a day when President Obama is releasing a package of proposed tax breaks for small businesses, including elimination of taxes on capital gains for investments in small businesses.