Procurement chief tells agencies to focus on small business set-asides

Agencies must report on their progress in steering federal contracting set-asides to specific types of small businesses, according to new direction from Joe Jordan, the recently installed White House chief procurement officer.


Joined by Small Business Administration chief Karen Mills, Jordan told agencies in a Wednesday memo to meet their statutory goal for contracting 23 percent with small businesses by considering the use of multiple award contracts with an eye toward “maximizing opportunities for small businesses when agencies make small dollar awards, and strengthening accountability for small business goal achievement.”

The White House is following up on an April interagency working group meeting on compliance with a key section of the 2010 Small Business Jobs Act and a November 2011 addition to the federal acquisition regulation. The set-asides target small disadvantaged businesses, women-owned small businesses, service-disabled veteran-owned small businesses, and contractors in Historically Underutilized Business Zones.

Under the memorandum, agencies are asked to use the threshold definition of a small business to consider requiring order set-asides under multiple award contracts if the agency is not currently meeting its small business goals. Procurement officers should review SBA’s proposed rule providing for consistent enforcement of policy on set-asides published in May in the Federal Register and make sure their acquisition workforce is trained in the topic.

Agencies are required to document success stories and deliver results to the Office of Management and Budget by July 9.

Jordan highlighted as a success story in a Thursday White House blog the Commerce Department’s use of a small contractor to lower its costs for desktops and laptops by 40 percent, saving an estimated $20 million to$25 million over the next five years. The arrangement eliminates hundreds of redundant contracts that meet the same requirements, avoiding “thousands of employee hours that would otherwise be required to maintain hundreds of narrowly tailored contracts,” he wrote.

Meanwhile, the Obama administration’s methods for defining small businesses came under fire from the American Small Business League, which on Thursday sent the White House and SBA a letter demanding more accuracy in the annual report card on agency use of small businesses, the latest version of which is due out soon. The league objects to a methodology it says uses wrong numbers for the overall acquisition budget, ignores subcontracting, and counts too many awards to foreign contractors and unqualified Alaska native corporations for set-asides.

The nonprofit Project on Government Oversight, which co-signed the league’s letter, also has reported that government exaggerates the number of small businesses under contract. “Seventy-two of the top 100 federal ‘small’ business contractors last year were actually large companies that snagged more than $16 billion in federal contracts,” POGO investigator Neil Gordon wrote.

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