Clinton orders increase in small business contracts

President Clinton has ordered agencies to boost their contracts with small businesses.

Small firms "play a vital role in our nation's economy, but, historically, have been underutilized and, at times, shut out of federal procurement opportunities," Clinton said in an executive order issued last week.

Federal agencies must take actions to include disadvantaged and small businesses in federal contracts, the order stated, particularly for information technology and telecommunications contracts.

Earlier this year, officials from the Small Business Administration's Office of Advocacy told Congress that its electronic commerce efforts were hurting small businesses. E-commerce has enabled online posting of federal contract opportunities, electronic transmittal of invoices and the use of credit cards for contract payments, but small businesses often lack the technology to participate in the new environment, according to Advocacy Office officials.

One of the activities mandated by Clinton is aggressive use of the Small Business Administration Act's 8(a) program and statutory price credit programs to bring more disadvantaged businesses into the federal procurement process. The 8(a) program is an initiative to help socially and economically disadvantaged citizens, including racial minorities, get a foothold in the economic mainstream. For up to nine years, qualifying companies receive federal government contracting preferences in the form of set-asides and restricted competitions.

The order directs agencies to enforce commitments by prime contractors to use 8(a) businesses as subcontractors; to use all available media to inform disadvantaged businesses of federal contracting opportunities; to help disadvantaged businesses network through mentor-protege programs; and to establish goals for contracting with 8(a) businesses.

The order requires agencies to submit plans on meeting these goals to the Office of Management and Budget. Agencies must also include 8(a) contracting goals in annual reports and put an executive in charge of ensuring that the goals of the executive order are met.