House defense bill’s contracting provision irks White House

House Small Business Chairman Sam Graves, R-Mo., called bundling the biggest obstacle contractors face in successfully competing for federal work. House Small Business Chairman Sam Graves, R-Mo., called bundling the biggest obstacle contractors face in successfully competing for federal work. Kelley McCall/AP file photo

This story has been updated.

In threatening a veto of the Defense authorization bill the House passed on Friday, the White House mentioned a host of budgetary reasons, but it also cited a little noticed provision on agency contracting to small businesses.

The fiscal 2013 National Defense Authorization Act faces an uncertain future in the Senate mostly because of its controversial provisions to restore cuts in weapons programs already accepted by the Pentagon.

But a package of eight contracting reform bills long sought by the House Small Business Committee also was included in the larger bill, which passed by a substantial majority, 299-120.

A key provision would raise the goal for agency contract awards to small businesses from 23 percent to 25 percent of contract dollars (and the goal for subcontractors from 35.9 percent to 40 percent), a change backers say will provide $11 billion in new work for small businesses. Another provision would toughen enforcement against the practice of “bundling” of contracts so that large companies can dominate the government market, which House Small Business Chairman Sam Graves, R-Mo., said is the practice that small business owners cite as their biggest obstacle to successfully competing for federal work.

The Pentagon accounts for some 70 percent of government contracts.

Still other reforms affecting the 350,000 small businesses registered to compete for federal contracts would elevate agency Small and Disadvantaged Business Utilization offices; crack down on large firms hiding behind small business fronts to win contracts; address contracting fraud by helping small businesses comply with complex contracting and size rules; and make mentor programs more portable.

But it was the provisions on percentage goals and bundling that the Office of Management and Budget criticized in its May 15 statement of administration policy. “The [Obama] administration strongly supports efforts to increase federal contracting with small businesses, but opposes Section 1631, which would establish a laudable but overly ambitious governmentwide small business procurement goal and unrealistic individual agency goals that could undermine the goals process and take away the government’s ability to focus its efforts where opportunities for small business contractors are greatest,” the White House said.

“In addition, the administration objects to the level of complexity that Section 1671 would add to the process for evaluating contract bundling, which will encourage a needless increase in litigation and place unnecessary constraints on agencies in making determinations that bundling is necessary and justified,” OMB noted

Graves said the language has broad support. “Despite the White House’s shocking objection to this effort to expand opportunities for small businesses, these provisions have been supported by more than 20 business groups and many colleagues across the aisle,” he said in a statement after passage of the defense bill. “This is further proof that both parties can work together to pass legislation that will boost the economy by helping our nation’s small businesses, and I encourage the Senate to support it.”

In the Senate, Sen. Ben Cardin, D-Md., is preparing to defy the White House and introduce his own bill to raise the agency small business contracting goal.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


When you download a report, your information may be shared with the underwriters of that document.