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Administration opposes hike in small business contracting goals
The White House opposes a bill that would boost small business contracting and impose stricter standards on the combination of small orders into mega-contracts, an administration official said Tuesday.
The official, who spoke to reporters on condition of anonymity, said that while the administration opposes the Small Business Fairness in Contracting Act (H.R. 1873), it has not threatened a veto should the measure reach President Bush's desk.
The official said provisions in the bill, such as tougher governmentwide goals for agencies' small business spending and new limits and reporting requirements on contract bundling, would be difficult to implement and would have a chilling effect on agencies' use of small businesses.
"I'm a strong advocate for small business, and am constantly on the lookout for constructive things we can do to provide opportunities for small business," the official said, expressing hope that the administration could work with House lawmakers on the measure.
The original version as passed unanimously by the House Small Business Committee, set a governmentwide floor for agency small business purchasing at 30 percent of contract dollars, significantly higher than the current goal of 23 percent. The House Oversight and Government Reform Committee, which also has jurisdiction, passed a 25 percent goal.
The administration official said that setting such a high target without leaving room for agencies to make the case for a lower one would make agency officials resent and lose investment in the goal.
Last year, the Small Business Administration reported that agencies spent 25.4 percent of prime contract dollars with small businesses in fiscal 2005, while House Democrats said the more accurate figure was 21.6 percent.
In a statement released by the Office of Management and Budget, the administration also opposed provisions in both versions of the House bill that would make it harder for agencies to group several small contracts into one larger one. Small business advocates say that practice puts work out of the reach of small, specialized firms.
The administration official said a new analytical requirement that agencies would have to meet to justify bundled contracts was unnecessary given existing procedures. "Every contracting officer always thinks about what can be done for small business -- it's an automatic," the official said. "This is something that we don't need, especially ... when people are already alerted to and screening for small business opportunities."
The official said new reporting requirements related to subcontracts also would impose an undue burden because the information is not currently available systemwide.
Asked whether the reporting would be different from that required under a 2006 law that calls for transparency in federal contracts and grants, the official said the law's subcontract reporting requirement would be implemented through a pilot program. "After we assess it and the burden it places, then we'll determine whether it and the subcontracting part will continue," the official said.
The law, called the Federal Funding Accountability and Transparency Act, requires full implementation of sub-award reporting starting in January 2009, following the conclusion of the pilot.
The official said the administration supports elements of the proposed small business measure that are intended to reduce the impact of contract bundling on small businesses and expand useful reporting requirements.
Responding to the administration's statement of opposition, a spokeswoman for the House Small Business Committee questioned the White House's commitment to small business goals.
"The Bush Administration has said multiple times that they are opposed to contract bundling and large businesses getting small business contracts, yet they appear to oppose anything that actually helps small businesses fight contract bundling and prevents large companies from being counted as small," the spokeswoman said.
She said the measure is expected to be debated on the House floor Wednesday, with a vote scheduled for Thursday.
COMMENTS
- I have been blogging about this topic at: http://www.facingthesharks.com/ Contracting officers do not think about what they can do for small businesses. Robins Air Force Base, in fact, shows favoritism to big business. They hide requirements so small business can't bid, then lie to the GAO to get the protests dropped. I have three cases in three courts concerning these issues. I hope to get the laws changed for small businesses. Colleen Appleton Posted August 10, 2007 1:13 PM
- The SB growth industries are in the North American Industrial Code Series (NAICs) 541000, Professional, Scientific and Technical Services. The SBA Size Standards $2.5 M thresholds which have not been changed in years are obsolete. SB’s must have the capital infrastructure in order to sustain their effort on those larger contracts. An increase in the SB Size Standards would reduce their turnover in the costly annual SB re-certification. There are some Federal Agencies that met the SB goals based on the smaller gross contracts and whose mission my not be as technology complex. Conversely, those Departments that may have difficulty in sustaining the present Prime Contracting Goal tend to be in the more complex and larger contract procurements. A collateral issue of Contract Bundling may be symptomatic of Size Standard SB thresholds. SB’s will prematurely out grow their SB size usually within a year or two at the $2.5M threshold on the more complex 54000 series. It is particularly difficult for Departments to sustain a SB longevity in those long term technically complex procurements in systems engineering or information technology in large systems and platforms. I am not aware of any comprehensive study of SB Prime and/or Sub Contracting by the Administration or the Congress that has used expert industry economists in the Scientific /Technical Services, Manufacturing and Construction. Nor, has the Department of Commerce or academia been invited to analyze the gross Federal procurement data that exists to offer their views on the SB industrial base to meet the mandated goals by industry. Presently there is no scientific basis to predict SB performance except on estimates from raw past performance without product mix procurement considerations of each agency. The Administration and the Congress would be better served if the Federal goals be grouped by the larger Departments like the Department of Defense, the Department of Home Land Security, the National Air and Space Agency and the Department of Energy, engaged in the more complex technology and service industries. Frank M. Ramos Posted May 21, 2007 3:33 PM
- Let's face it - big business runs this country. The Bush Administration is just doing what the head honchos of those big corporations want so that they can continue to squeeze as many dollars out of the Federal budget as they can. If some of those insignificant little companies fall by the wayside because they can't compete - oh, well. Just survival of the fittest. Some call it market consolidation - I call it good old American greed at work. Dale Posted May 11, 2007 10:32 AM
