In 1998, Congress passed the HUBZone Empowerment Act in order to give a boost to small business located in Historically Underutilized Business Zones in bidding on contracts.
“The procurement system over many, many years — not just the mid-’90s, but well prior to that and since — has vacillated back and forth between a number of competing themes,” said William Woods, director of acquisition and sourcing management at the Government Accountability Office. “One theme is efficiency, that we need to do things to get the best value for the taxpayer and do it quickly. But another theme is fairness, that Congress believes that we ought to use the procurement system to promote certain socio-economic goals.”
Under the HUBZone Act, an agency must dedicate more than 3 percent of its contracting budget to small businesses located in certified HUBZones.
The HUBZone legislation is just one example of Congress using the procurement system to promote those socio-economic goals, Woods said.
Another example is legislation to help veteran-owned businesses.
“Congress has provided various preferences in the procurement system for these groups,” Woods said. “In other instances, the Small Business Administration has set specific goals for federal agencies in terms of the percentage of spending that must go to these socio-economic groups.”
“Certainly, for the groups involved, they can get some assurance that the significant sums of federal spending, we’re talking about $500 billion to $600 billion these days, will not just go to large companies, but will be spread around to various industries and various small business groups,” Woods said.