House lawmakers began the process earlier this month of reauthorizing the Small Business Administration. While much of the Defending America’s Small Contractors Act of 2016 (H.R. 4341) is routine, several interesting provisions are worth highlighting.
One of the most significant provisions is the extension of the ability of vendors to protest task orders worth more than $10 million. The current law will sunset in September, leaving only the Defense Department with this authority.
The extension of this authority is important because more and more federal procurement dollars are going through these types of contracts.
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In 2015, agencies spent more money through the General Services Administration’s schedules and governmentwide acquisition contracts than the previous year. Final 2015 spending numbers are not ready yet, but GSA officials have said many times publicly they expect spending on schedules and GWACs in 2015 to increase significantly.
In 2014, agencies spent more than $32.8 billion on the schedules. GSA officials estimated the amount of revenue could increase to $35 billion. Additionally, agencies spent more than $5.5 billion on GWACs last year, up from about $5 billion in 2014.
Congress granted GAO this authority in 2008 and GAO reaffirmed its jurisdiction in 2011. GAO said the number of protests of task or delivery orders have stayed fairly consistent over the last seven years.
In 2015, contractors filed 335 bid protests on task orders out of a total of 2,647 complaints filed, according to GAO’s annual bid protest report to Congress.
A second major change in Small Business Committee chairman Rep. Steve Chabot’s (R-Ohio), bill is the requirement to “unify the definitions and regulations” governmentwide for specific contracting programs for veterans and service-disabled veterans.
SBA and VA developed different requirements for the program, and it’s causing confusion across the government and within industry.
In March 2013, former committee chairman Rep. Richard Hanna (R-N.Y.) highlighted the problems from the disparate ways SBA and the Veterans Affairs Department oversee the program.
Hanna said at a hearing that the differences between the two programs have led to opportunities for fraud and bureaucratic impediments to small business generation.
“For example, the surviving spouses of service-disabled veterans are allowed to maintain the business status for a period of time at the VA, but not at the SBA,” Hanna said at the hearing. “In contrast, under the VA regulation, a service-disabled veteran in a community property state must convince their spouse to renounce any interest in the business in order to prove that the veteran controls the firm. SBA does not apply this restriction; instead, simply requiring that a firm updates its status when its ownership changes.”
Agencies spent about 3.7 percent of all federal procurement dollars with service disabled and veteran-owned small businesses in 2014.
The committee also is focusing on small business contracting goals.
One provision would increase transparency in governmentwide goal-setting by requiring the SBA to report two new pieces of information for each goal: the value of contracts credited to each goal if the contract is being performed by a company that is no longer small or no longer qualifies for that procurement program; and the value of contracts credited to each small business goal if a set-aside or sole-source program for a different goal was used for the award.
The second provision is trying to fix a long-standing disagreement between the committee and SBA.
Lawmakers want to amend the Small Business Act to make sure the governmentwide small business goals required by the act are measured against the total contract dollars spent that year. Currently, SBA measures agency progress based on “eligible” small business dollars, which are procurements that small firms could expect to be able to compete for. In fiscal 2014, “eligible” small business spending equaled $367 billion.
The committee says that lets SBA exclude up to 20 percent of all spending.
The proposed changes come on top of those already passed into law as part of the fiscal 2016 Defense authorization bill.
Chabot added a section to require SBA and agencies to improve their scorecard data.
For 2017, SBA must create a methodology and determine whether agencies are meeting their prime contract goals, their subcontracting goals and compare the number of small firms in a particular industry to the number of awards made by the government to that sector.