Chairman Graves in POLITICO: A Small Business Plan All Can Agree On, Right?
Jul 11, 2012 -
A Small Business Plan All Can Agree On, Right?
By Chairman Sam Graves
Wednesday July 11, 2012
As the nation debates solutions to our stagnant economy and continuing unemployment crisis, more elected leaders now agree that small-business growth plays a crucial role in job creation. An estimated 27 million small businesses employ more than half the country’s private-sector workforce, creating 60 percent to 70 percent of all new jobs.
Congress has been debating various proposals aimed at helping small business — lower taxes, fewer regulations, greater access to credit. But one issue offers a surefire way to provide more opportunities: government contracting.
The federal government spends a half-trillion dollars on contracted goods and services. This offers small companies an extremely large market to provide services and products. With the federal government as a customer, small firms can grow and create jobs. When a large company wins a federal contract, it usually has the resources to do the work. But a small business will most likely need to hire new staff to meet the new contract’s demands.
The biggest problem for small firms that want to enter the federal procurement marketplace is limited opportunities. Roughly 90 percent of the businesses that bid on federal contracts are small. However, the governmentwide goal for using small contractors is only 23 percent.
Though this 23 percent goal is grossly unbalanced, it hasn’t even been met in six years. We learned last week that agencies not only missed the mark but went in the wrong direction — slipping back to 21.7 percent.
That represents $3.8 billion that should have been part of competitive contracts with small businesses. This lack of an ambitious effort to use small firms denies the government — and the nation — the innovation, quality and savings that small businesses can offer.
To address this issue, our committee embarked on an aggressive initiative to reform the procurement system to give small businesses a fair shot. We passed 11 bills with bipartisan support to help fix various small-business contracting problems. One that might be the most effective is legislation that raises the small-business goal from 23 percent to 25 percent, while also holding federal agencies accountable for meeting this in their employee performance plans. There is no question that with some extra effort and new thinking the government can accomplish this goal.
This effort to increase small-business contracts and enforce the goals has been endorsed by more than 25 business groups and has strong bipartisan support in the House. In addition, two Democratic senators have introduced companion legislation. The House Armed Services Committee liked the provision so much that its members voted to include it in the National Defense Authorization Act, and it won bipartisan support on the floor.
So everyone can agree on this small-business proposal to increase government contracting opportunities, right? Wrong. You’d be surprised where the opposition is coming from.
Just before House passage of the national defense authorization in May, the Obama administration announced its opposition to this proposal. The White House criticized the plan as an “overly ambitious governmentwide small-business procurement goal and unrealistic individual agency goals that could undermine the goals process and take away the government’s ability to focus its efforts where opportunities for small-business contractors are greatest.”
In other words, small companies should be content with areas the White House thinks are suitable — the leftovers — rather than being given every opportunity to fight for contracts where small firms could make a great difference.
The Obama administration’s objection to this modest 2-percentage-point increase is shocking. Especially given President Barack Obama’s statement last year that he is “committed to ensuring that small businesses, including firms owned by women, minorities, socially and economically disadvantaged individuals and service-disabled veterans, have fair access to federal government contracting.”
Yet the White House’s veto threat shows it is fine with perpetuating the current state of contracting — where only 20 percent goes to small companies.
Actions speak louder than words. Setting the goal at 25 percent is realistic and achievable — especially if Obama adheres to his 2008 campaign promise “to end contract bundling.” This would mean that big contracts would be broken up into smaller pieces — so that small businesses could compete, which would, in turn, save taxpayers money.
Ironically, the White House opposes one other bipartisan small-business provision in the NDAA — the one intended to restrict bundling.
Small businesses deserve more than rhetoric. They deserve to have Washington unite to help provide greater opportunities for them to compete in the federal procurement system. They can perform a service or produce goods for the government at a lower rate and often more quickly than their larger counterparts.
Government contracting offers a unique opportunity to invest in small businesses, create jobs and save the government money. If there was ever a small-business proposal that all of Washington could agree on, this should be it. But the Obama administration thinks otherwise.