The 10 federal agencies with the largest procurement budgets can ignore small business set-aside rules in certain industries, the Office of Management and Budget said last week.
OMB announced the procurement policy guidance in the June 2 Federal Register. The guidance allows the 10 agencies to seek bids from all sources, large and small, for construction, architectural and engineering services, garbage systems and non-nuclear ship repair contracts. Normally, some of those contracts would have to be set aside for small businesses.
Under the guidance, the agencies must review their contract awards in the affected industries annually to make sure at least 40 percent of the contracts were awarded to small businesses. If not, the agencies must use set-asides to get up to the 40 percent mark.
OMB's Office of Federal Procurement Policy says the program is designed to get the lowest possible cost for agencies. Full competition with both small and large companies encourages lower prices, procurement experts say.
Instead of using set-asides, agencies can encourage small businesses through outreach to bid for government business.
A demonstration project testing whether agencies could meet small business goals without the use of set-asides has been in effect for the last 10 years. The 1997 Small Business Reauthorization Act made the project permanent. OMB's new rules implement that legislation.
The agencies freed from set-asides in the industries listed in the new guidance are the departments of Agriculture, Defense, Energy, Health and Human Services, Interior, Transportation, and Veterans Affairs, the Environmental Protection Agency, the General Services Administration and NASA.