Small Business Contractors Get Boost in Defense Authorization

Flickr user HouseGOP Flickr user HouseGOP Rep. Sam Graves, R-Mo.

The defense authorization bill President Obama signed on Dec. 26 includes two sections designed to help small business contractors.

Both measures were hailed by Republicans on the House Small Business Committee but critiqued by the American Small Business Coalition, a McLean, Va.-based membership group for federal contractors.

The massive fiscal 2014 National Defense Authorization Act contains provisions to crack down on re-routing agency contract work set aside for small businesses to large companies, as well as new incentives for prime contractors to consider small firms for subcontracts.

Given the opportunity, small businesses can often do excellent work for less money,” said Small Business Committee Chairman Rep. Sam Graves, R-Mo., in a statement welcoming the bill’s enactment. “Our priority is to ensure the door is open so that small firms can participate. Clarifying complex subcontracting rules will help small companies navigate the procurement process. In turn, helping small businesses compete strengthens the industrial base, keeps costs down and creates jobs.”

Rep. Richard Hanna, R-N.Y, a subcommittee chairman who worked during the year to push the provisions through the House, said “small firms want to compete, taxpayers want efficiency and the federal government needs the work done well. This legislation is a win for all three and will lead to opportunities for small businesses to create more jobs in the United States.”

In 2012, the Pentagon adopted similar limits on subcontracting by prime contractors to the Defense Department, but the new law makes it clear that firms should follow rules set under the Small Business Act no matter which agency has issued a contract.

But another section, based on the House committee’s original Make Every Small Business Count Act (HR 2232), would benefit corporate “affiliates and subsidiaries” more than “independently owned small businesses,” according to a blog post from Guy Timberlake, the CEO and “chief visionary” of the American Small Business Coalition.

“Don't we have enough challenges with entities that are not legit small businesses being awarded work directly (or indirectly) by federal agencies?” he asked. “Now we create an unmonitored means for organizations to boost their numbers.”

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