Agencies have not met the governmentwide goal of awarding at least 23 percent of all prime contracts to small businesses since 2006.
Despite that, Rep. Sam Graves (R-Mo.), chairman of the Small Business Committee, believes it’s time to raise the goal.
Graves plans to introduce legislation today to increase the percentage of contracts that are mandated to go to small firms to 25 percent, which equates to about $10 billion more a year for these companies.
The Greater Opportunities for Small Business Act of 2014 would create a goal for agencies to ensure 40 percent of all subcontract awards go to small businesses, increasing from 35.9 percent. The bill also would require that only prime contract awards can count toward the prime contract goal.
This bill will try to bring more data and transparency to how agencies bundle contracts.
The legislation would “require the Small Business Administration to work with other agencies to create and implement a data quality improvement plan to promote greater accuracy, transparency and accountability in the reporting of contract bundling and consolidation. It then requires the Government Accountability Office to assess the agencies’ success, and offer suggestions for further improvement.”
Graves said both of these bills go toward ensuring small businesses have opportunities to win contracts and therefore create jobs.
“By increasing the federal-wide goal for contracts to small businesses, and requiring greater accuracy, transparency and accountability in contract bundling and consolidation, we make it easier for small businesses to enter this marketplace and compete for contracts,” Graves said in a statement. “The federal government spends nearly $0.5 trillion on contracted goods and services; therefore, we must ensure that the money is being spent efficiently, and small businesses have proven that they can do quality work cheaper and often faster.”
Graves introduced a similar bill in January 2012 to increase the small business contracting goal to 25 percent. The bill made it through the Small Business and Oversight and Government Reform committees but never received a vote on the House floor.
The Contracting Data and Bundling Accountability Act of 2014 follows an October hearing held by Rep. Richard Hanna (R-N.Y.), chairman of the Small Business Subcommittee on Contracting and Workforce. During that hearing, Hanna found that agencies are not following the contract bundling laws, and small businesses are losing out on opportunities to compete for contracts.
Hanna said the government also isn’t conducting the required analysis or submitting the required data so Congress can assess the impact that proposed or real contract bundling has on small companies.
Agencies haven’t come close to meeting the goal in seven years. In 2012, for example, the government awarded 22.25 percent of all contracts to small firms.
Graves said that total isn’t accurate and should be closer to 19.38 percent. He said he disagrees with how SBA calculates the small business goals. Graves said it should be based on the total amount of contracts available and not the total amount small firms are capable of bidding on.
Every administration over the last 20 years has made increasing contracts to small firms a priority, but few have lived up to the rhetoric . The Obama administration tried in June 2012 to make it easier for small businesses to win contracts by addressing three long-standing problems. The results of that effort are unclear.
The fiscal 2013 data are due out later this spring.